| Goodwill and Intangible Assets - Net |
| 4. |
GOODWILL AND Intangible Assets – NET |
Goodwill consists of the excess of the purchase
price over the fair value of identifiable net assets of businesses acquired. The following is the summary of the changes to the
carrying amount of goodwill for the years ended December 31, 2018 and 2017:
| |
|
December 31, 2018 |
|
|
December 31, 2017 |
|
| Beginning gross balance |
|
$ |
12,263,943 |
|
|
$ |
12,178,868 |
|
| Acquisitions |
|
|
329,852 |
|
|
|
85,075 |
|
| Ending gross balance |
|
$ |
12,593,795 |
|
|
$ |
12,263,943 |
|
At December 31, 2018, approximately $90,000
of goodwill was allocated to the Practice Management segment and the balance was allocated to the Healthcare IT segment. There
was only one reporting unit at December 31, 2017.
Below is a summary of intangible asset activity
for the years ended December 31, 2018 and 2017:
| |
|
Customer |
|
|
Non-Compete |
|
|
Other
Intangible
|
|
|
|
|
| |
|
Relationships |
|
|
Agreements |
|
|
Assets |
|
|
Total |
|
| COST |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2018 |
|
$ |
16,491,300 |
|
|
$ |
1,236,377 |
|
|
$ |
1,498,417 |
|
|
$ |
19,226,094 |
|
| Purchase of other intangible assets |
|
|
- |
|
|
|
- |
|
|
|
108,552 |
|
|
|
108,552 |
|
| Translation loss |
|
|
- |
|
|
|
- |
|
|
|
(129,910 |
) |
|
|
(129,910 |
) |
| Allocation from 2018 acquisition |
|
|
6,250,000 |
|
|
|
- |
|
|
|
- |
|
|
|
6,250,000 |
|
| Balance, December 31, 2018 |
|
$ |
22,741,300 |
|
|
$ |
1,236,377 |
|
|
$ |
1,477,059 |
|
|
$ |
25,454,736 |
|
| Useful lives |
|
|
3-12 Years |
|
|
|
3 Years |
|
|
|
3 Years |
|
|
|
|
|
| ACCUMULATED AMORTIZATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2018 |
|
$ |
14,685,190 |
|
|
$ |
1,227,601 |
|
|
$ |
803,759 |
|
|
$ |
16,716,550 |
|
| Amortization expense |
|
|
1,772,688 |
|
|
|
7,173 |
|
|
|
324,322 |
|
|
|
2,104,183 |
|
| Balance, December 31, 2018 |
|
|
16,457,878 |
|
|
|
1,234,774 |
|
|
|
1,128,081 |
|
|
|
18,820,733 |
|
| Net book value |
|
$ |
6,283,422 |
|
|
$ |
1,603 |
|
|
$ |
348,978 |
|
|
$ |
6,634,003 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COST |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2017 |
|
$ |
16,371,375 |
|
|
$ |
1,236,377 |
|
|
$ |
1,289,339 |
|
|
$ |
18,897,091 |
|
| Purchase of other intangible assets |
|
|
- |
|
|
|
- |
|
|
|
489,295 |
|
|
|
489,295 |
|
| Translation loss |
|
|
- |
|
|
|
- |
|
|
|
(280,217 |
) |
|
|
(280,217 |
) |
| Allocation from 2017 acquisition |
|
|
119,925 |
|
|
|
- |
|
|
|
- |
|
|
|
119,925 |
|
| Balance, December 31, 2017 |
|
$ |
16,491,300 |
|
|
$ |
1,236,377 |
|
|
$ |
1,498,417 |
|
|
$ |
19,226,094 |
|
| Useful lives |
|
|
3 Years |
|
|
|
3 Years |
|
|
|
3 Years |
|
|
|
|
|
| ACCUMULATED AMORTIZATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2017 |
|
$ |
11,497,555 |
|
|
$ |
1,106,706 |
|
|
$ |
459,124 |
|
|
$ |
13,063,385 |
|
| Amortization expense |
|
|
3,187,635 |
|
|
|
120,895 |
|
|
|
344,635 |
|
|
|
3,653,165 |
|
| Balance, December 31, 2017 |
|
|
14,685,190 |
|
|
|
1,227,601 |
|
|
|
803,759 |
|
|
|
16,716,550 |
|
| Net book value |
|
$ |
1,806,110 |
|
|
$ |
8,776 |
|
|
$ |
694,658 |
|
|
$ |
2,509,544 |
|
Other intangible assets primarily represent
software costs. Amortization expense was approximately $2.2 million and $3.7 million for the years ended December 31, 2018 and
2017, respectively. The weighted-average amortization period is seven years.
As of December 31, 2018, future amortization
expense scheduled to be expensed is as follows:
| Years ending |
|
|
|
|
| December 31 |
|
|
|
|
| 2019 |
|
|
$ |
1,823,140 |
|
| 2020 |
|
|
|
1,009,527 |
|
| 2021 |
|
|
|
942,226 |
|
| 2022 |
|
|
|
609,110 |
|
| 2023 |
|
|
|
300,000 |
|
| Thereafter |
|
|
|
1,950,000 |
|
| Total |
|
|
$ |
6,634,003 |
|
|