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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets [Abstract]

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

Our goodwill is related to the acquisitions of Medicx Health in 2023, EvinceMed in 2022, RMDY Health, Inc. in 2019 and CareSpeak Communications in 2018. Goodwill is not amortizable for financial statement purposes.

The Company performed its annual goodwill impairment review in the fourth quarters of each of the years ended December 31, 2023 and 2022, and also performed an interim impairment review as of November 30, 2023, following the completion of the transaction with Mercalis, Inc., which is discussed below. In both cases it was determined that the fair value of the Company’s single reporting unit was greater than its carrying value.

The fair value of any reporting units, used in the annual assessments in 2023 and 2022, is classified as Level 3 measurements within the fair value hierarchy due to significant unobservable inputs such as discount rates, projections of revenue, cost of revenue and operating expense growth rates, long-term growth rates and income tax rates.

Changes in the carrying amount of goodwill on the consolidated balance sheet consist of the following:

Balance at January 1, 2022	$	14,740,031
Acquisitions		7,933,789
Impairments		—
Balance January 1, 2023	$	22,673,820
Acquisitions		56,993,258
Disposal of business		(1,310,004	)
Impairments		—
Balance December 31, 2023	$	78,357,074

During the year ended December 31, 2023, we entered into various agreements, including a Product License Agreement and Platform Assets Purchase Agreement, with Mercalis, Inc.(“Mercalis”), collectively the “Transaction”. Under the terms of the Transaction, Mercalis agreed to purchase certain customer contract assets and liabilities related to the Company’s Access and Patient Engagement technologies. In addition, Mercalis was granted a perpetual license to the Access products and a non-exclusive two-year term license to the Patient Engagement products. Total consideration due for the Transaction was $3,740,000 including $2,540,000 related to the Access products.

The Access products portion of the Transaction was deemed to be the disposal of a business for accounting purposes and accordingly the Company recorded a loss on disposal of $2,142,319 including the allocation of a portion of the Company’s goodwill balance of $1,310,004 and the net book value of the underlying technology assets of $3,327,844.

Intangible Assets

Intangible assets included on the consolidated balance sheets consist of the following:

	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life Remaining
Patent rights	$	7,163,729	$	978,987	$	6,184,742		8.8
Technology assets		12,387,622		3,374,866		9,012,756		6.6
Other intangible assets
Tradename		134,000		—		134,000		10.7
Non-compete agreements		1,093,000		1,093,000		—		—
Customer relationships		34,923,000		858,916		34,064,084		14.6
Total Tradename and customer relationships		36,150,000		1,951,916		34,198,084
Total intangible assets	$	55,701,351	$	6,305,769	$	49,395,582

	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net		Weighted Average Life Remaining
Patent rights	$	3,364,729	$	1,424,551	$	1,940,178		8.5
Technology assets		12,859,660		5,156,765		7,702,895		5.1
Other intangible assets
Tradename		3,586,000		776,966		2,809,034		11.7
Non-compete agreements		1,093,000		1,093,000		—		—
Customer relationships		923,000		352,196		570,804		7.4
Total other		5,602,000		2,222,162		3,379,838
Total intangible assets	$	21,826,389	$	8,803,478	$	13,022,911

During the year ended December 31, 2023, we recorded asset impairment charges of $6,737,580 relating to Technology assets patent rights and tradenames that were not considered to be core solutions on a go forward basis, resulting in lower projected revenues for these solutions, as well as the outcome of the disposal of the Access products discussed above.

Intangibles are being amortized on a straight-line basis over the following estimated useful lives.

Patents		15 – 17 years
Tradenames		15 years
Non-compete agreements		2 – 4 years
Customer relationships		8 years
Technology assets		3 – 10 years

The Company recorded amortization expense of $2,301,779 and $1,936,304 in the years ended December 31, 2023 and 2022, respectively. Expected future amortization expense of the intangibles assets as of December 31, 2023 is as follows:

Year ended December 31,
2024	$	4,202,841
2025		4,128,899
2026		4,079,117
2027		3,972,613
2028		3,724,330
Thereafter		29,287,782
Total	$	49,395,582