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Note 14 - Goodwill and Intangible Assets, Net
12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

Note 14. Goodwill and Intangible Assets, net

 

Goodwill

 

The following table reflects changes in the carrying amount of goodwill during the periods presented by reportable segments (in thousands):

 

  

e-Commerce Operations

  

Healthcare Operations

  

Total

 

Balances as of December 31, 2021

            

Goodwill

 $-  $-  $- 

Accumulated impairment losses

  -   -   - 

Goodwill, net as of December 31, 2021

  -   -   - 
             

Changes in Goodwill during the year ended December 31, 2022:

            

Goodwill acquired

  -   -   - 

Impairment losses

  -   -   - 
             

Balances as of December 31, 2022

            

Goodwill

  -   -   - 

Accumulated impairment losses

  -   -   - 

Goodwill, net as of December 31, 2022

  -   -   - 
             

Changes in Goodwill during the year ended December 31, 2023:

            

Goodwill acquired

  -   14,626   14,626 

Impairment losses

  -   (13,895)  (13,895)
             

Balances as of December 31, 2023

            

Goodwill

  -   14,626   14,626 

Accumulated impairment losses

  -   (13,895)  (13,895)

Goodwill, net as of December 31, 2023

 $-  $731  $731 

 

 

1.

Increase related to book tax difference of intangible assets arising from the business combination without transfer of consideration.

 

The initial recognition of goodwill resulting from the acquisition of Progressive Care on July 1, 2023. The Company performed an annual impairment test for goodwill as of December 31, 2023. 

 

The Company performed an annual impairment test as of December 31, 2023, for our healthcare operations reporting segments. The fair value of each reporting unit was estimated using the income valuation approach. The income approach applied a fair value methodology to each reporting unit based on discounted cash flows. The various inputs to this fair value model are considered Level 3. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur, and determination of the weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. The weighted average cost of capital used in the impairment test ranged from 11% to 13.5%. 

 

As a result of the 2023 annual impairment test, the Company concluded that the carrying amount of the Pharmacy Operations reporting unit goodwill exceeded its fair value by 95% and recorded a non-cash goodwill impairment charge of approximately $13.9 million for the year ended December 31, 2023. This was included in goodwill impairment charge on the Consolidated Statements of Operations for the year ended December 31, 2023.

 

Intangible Assets

 

Intangible assets, net consisted of the following (in thousands):

 

 

  

December 31, 2023

 
  

Gross amount

  

Accumulated amortization

  

Net Amount

 

Pharmacy records

 $8,130  $(807) $7,323 

Trade names

  4,700   (224)  4,476 

Developed technology

  2,880   (281)  2,599 

Customer Contracts

  250   (225)  25 

Total intangible assets

 $15,960  $(1,537) $14,423 

 

 

  

December 31, 2022

 
  

Gross amount

  

Accumulated amortization

  

Net Amount

 

Pharmacy records

 $-  $-  $- 

Trade names

  -   -   - 

Developed technology

  -   -   - 

Customer Contracts

  250   (200)  50 

Total intangible assets

 $250  $(200) $50 

 

 

Amortization of pharmacy records, trade names, developed technology, and customer contracts is included in depreciation and amortization in the accompanying Consolidated Statements of Comprehensive Income Loss. For the twelve months ended December 31, 2023 and 2022, the Company recognized amortization expense of approximately $1.3 million and $25,000, respectively. Future amortization of intangible assets is as follows (in thousands):

 

2024

 $2,721 

2025

  2,672 

2026

  2,672 

2027

  2,672 

2028

  1,571 

Thereafter

  2,115 

Total

 $14,423