XML 31 R10.htm IDEA: XBRL DOCUMENT

Acquisitions

12 Months Ended

Dec. 31, 2023

NOTE 3 – ACQUISITIONS

On October 24, 2023, the Company acquired 100% of the issued and outstanding preferred and common stock of Healthy Offers, Inc., a Nevada corporation d/b/a Medicx Health. Medicx Health is a healthcare consumer-focused omnichannel marketing and analytics company. The acquisition of Medicx Health is expected to enhance and expand the Company’s technology offerings, providing additional opportunities for revenue growth.

The acquisition date fair value of consideration transferred was calculated as follows:

Net cash transferred	$	83,888,239
Fair value of common stock transferred		12,091,142
Fair value of consideration transferred	$	95,979,381

The goodwill balance reflects the benefits associated with future iterations of the technology platforms, new customer relationships anticipated as a result of the transaction and market participant synergies from economies of scale and is not deductible for tax purposes.

In addition, the Company is required to remit, upon collection from the appropriate authorities, approximately $1.0 million related to certain state and federal income tax receivables which were included on Medicx Health’s balance sheet at the date of acquisition. The Company has recorded $1.0 million in Taxes receivable, to reflect the receivables due to the Company and $1.0 million in Accrued expenses, to reflect the total amount due to the former stockholders of Medicx Health.

The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the acquisition date:

Assets Acquired
Cash	$	940,974
Accounts receivable		6,028,048
Taxes receivable		1,035,754
Prepaid expenses and other		912,719
Property and equipment		33,476
Customer relationships intangible		34,000,000
Trademark and patent intangible		5,700,000
Technology intangibles		8,300,000
Operating lease right-of-use assets		145,075
Deposits		9,727
		57,105,773
Liabilities Assumed
Accounts payable		1,997,348
Accrued expenses		3,848,403
Lease liabilities		166,098
Deferred revenue		75,003
Deferred tax liabilities		12,032,798
		18,119,650
Net assets acquired		38,986,123
Goodwill		56,993,258

Fair value of consideration transferred	$	95,979,381

The Company used a third-party valuation specialist to value the intangible assets acquired. The identifiable intangibles are being amortized on a straight line basis over the following estimated useful lives:

Customer relationship intangible		15 years
Trademark and patent intangible		10 years
Technology intangibles		4 to 10 years

The Company recognized $4.3 million of acquisition related costs that were expensed in the current period. These costs are included in the consolidated statement of operations in the line item entitled “Other sales, general and administrative expenses.”

The results of operations of Medicx Health have been included in the consolidated statement of operations since the date of acquisition.

The amounts of revenue and net income of Medicx Health included in the Company’s consolidated statement of operations for the period from the acquisition date until December 31, 2023, are as follows:

Revenue		$	4,546,497
Net income			314,082

The following represents the pro-forma consolidated statement of operations as if Medicx Health had been included in the consolidated results of the Company for the full years ended December 31, 2023, and 2022:

	Year ended December 31, 2022
Pro-forma consolidated statement of operations	2023			2022
Revenue	$	97,066,241		$	90,521,236
Net loss		(18,616,303	)		(16,157,521	)

These amounts have been calculated after applying the Company’s accounting policies, adjusting Medicx Health results to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied on January 1, 2022, full year interest expense associated with the term loan and elimination of interest income on short-term investments that were used to fund the acquisition, one time transaction related items, including the amounts incurred by the Company, discussed above and $9.6 million in transaction related expenses incurred by Medicx Health.

On April 14, 2022, we completed the acquisition of substantially all of the assets of EvinceMed Corp., a privately held leading provider of delivering end-to-end automation for specialty pharmaceutical transactions. We completed the acquisition to expand the breadth of the solutions we offer our customers, particularly where specialty medications are involved, The acquisition included the full Market Access Management Platform for supporting pharma manufacturers, hub providers and pharmacies to improve patient access, speed to therapy and activation of affordability programs.

The consideration was comprised of $2.0 million in cash, the issuance of 240,741 shares of common stock valued at $9,374,455, and $708,334 of amounts previously paid. The total purchase price was $12,082,789. Of the 240,741 shares of common stock, 185,185 were issued at closing and 55,556 were issued but held back to secure potential adjustments to the purchase price that may result from the indemnification obligations of and the EvinceMed shareholder indemnitors. The holdback amount will be released twelve months from the closing, subject to any adjustments for the payment by EvinceMed and the shareholder indemnitors for its and their indemnification obligations. The purchase price was allocated to acquired technology totaling $4,149,000 with an estimated useful life of 8 years and the remaining $7,933,789 was allocated to goodwill. Goodwill represents the processes and synergies expected by integrating those processes with our own. The full amount of goodwill will be deductible for tax purposes using a 15 year life. The increase in goodwill for the period is fully accounted for by this acquisition. We determined pro forma data was immaterial for financial reporting purposes.

Acquisition costs of approximately $19,739 were expensed as incurred.