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NOTE 4 - MATERIAL ACQUISITIONS
 12 Months Ended
Dec. 31, 2011
Business Combination Disclosure [Text Block]
NOTE 4 – MATERIAL ACQUISITIONS

Material acquisitions completed in 2011

On November 7, 2011, we completed our acquisition of RH.  We have determined that this acquisition was material.  Accordingly, as required under ASC 805-10-50, Business Combinations – Disclosure, we are providing below certain additional disclosures relating to this acquisition.

The total purchase price for the above business is as follows (in thousands):

Cash
  $ 28,210  
Equipment-related debt
    3,227  
Promissory note
    9,000  
Total combined purchase price
  $ 40,437  

Under the acquisition method of accounting, the determination of the net tangible and intangible assets acquired and liabilities assumed is based on the estimated fair values of the acquired assets and liabilities assumed as of the date of acquisition.  The following table summarizes the preliminary fair value determination (in thousands).

Working capital
  $ 2,909  
Assets held for sale
    2,300  
Property and equipment
    30,996  
Joint venture interests
    952  
Goodwill
    3,918  
Other assets
    279  
Other liabilities
    (917 )
    $ 40,437  

We have estimated the fair value of working capital which consists of $3.6 million of cash, $8.3 million of accounts receivable, $900,000 of prepaid expenses, $9.2 million of accounts payable and accrued expenses and 700,000 of payables to non-consolidated joint ventures.

We have estimated the fair value of certain assets that we agreed to sell shortly after acquisition and have classified their fair value as assets held for sale.  We expect to complete this sale by the end our first quarter 2012 for the agreed upon price of $2.3 million.

We have estimated the fair value of tangible assets acquired and liabilities assumed. Some of these estimates are subject to change, particularly those estimates relating to the valuation of property and equipment. The final fair value determination will be based upon the fair value of assets and liabilities assumed, and in these cases, we will use the services of an external valuation firm to assist us in determining the final fair values which we expect to have completed during our second quarter ended June 30, 2012.

The revenue and earnings of RH included in our consolidated statement of operations from the respective actual acquisition date to the period ended December 31, 2011 are as follows (in thousands):

Net revenue
  $ 11,471  
Net income
    683  

The following unaudited pro-forma financial information for the years ended December 31, 2011 and 2010 represents the combined results of operations of us and RH as if RH’s acquisition had occurred on a single date of January 1, 2010.  The unaudited pro-forma financial information does not necessarily reflect the results of operations that would have occurred had the entities comprising RH constituted a single entity during such periods (in thousands).

   
Years Ended
 
   
December 31,
 
   
2011
   
2010
 
 Net revenue
  $ 695,136     $ 656,457  
 Net loss
    (11,160 )     (77,965 )
 Pro-forma net loss per share
    (0.29 )     (2.12 )

Material acquisitions completed in 2010

On October 1, 2010, we completed our acquisition of Image Medical Corporation, parent of eRAD, Inc., and our acquisition of five imaging centers in Northern New Jersey and a 50% equity interest in a sixth center from Progressive Health, LLC and certain affiliates and related entities. We determined that each of these acquisitions was material.  Accordingly, as required under ASC 805-10-50, we are providing below certain additional disclosures on an aggregate basis relating to these two acquisitions.

The total purchase price for the above businesses (collectively, the “Group”) is as follows (in thousands):

Cash
  $ 25,636  
Fair value of warrant issued
    306  
Promissory note
    2,250  
Total combined purchase price  for the Group
  $ 28,192  

Under the acquisition method of accounting, the determination of the Group’s net tangible and intangible assets acquired and liabilities assumed is based on the fair values of the acquired assets and liabilities assumed as of the date of each individual acquisition.  The following table summarizes the final fair value determination (in thousands).

Current assets
  $ 1,903  
Property and equipment, net
    3,585  
Identifiable intangible assets
    2,550  
Goodwill
    23,995  
Current liabilities
    (2,426 )
Capital lease obligations and other
    (1,415 )
    $ 28,192  

Identifiable intangible assets consist of the following (in thousands):

       
Amortization
 
Annual
 
   
Fair Value
 
Period
 
Amortization
 
Trade Name
  $ 1,500  
Indefinite
 
Not applicable
 
Customer Relationships
    250  
5 Years
    50  
Developed Technology
    800  
5 Years
    160  
    $ 2,550       $ 210  

Intangible assets are being amortized using the straight-line method, considering the pattern in which the economic benefits of the intangible assets are consumed.