Goodwill, Other Intangible Assets and Software Development Costs

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Other Intangible Assets and Software Development Costs

Intangibles acquired in the CorrectMed transaction are comprised of the following intangible assets:


•	patient base - relationships with primary-care patients that drive volume into the acquired centers and results in a repeatable revenue stream.


•	trade name - ability to utilize the trade name of the acquired assets/business.

The remaining excess purchase price is allocated to goodwill that is not subject to amortization.

Other intangible assets and related accumulated amortization consists of the following as of the dates presented:



(in thousands)	June 30, 2014			December 31, 2013
Gross carrying amount of urgent and primary care intangibles:
Patient base	$	263		$	—
Licensed trade name	34			—
	297			—
Accumulated amortization	(5		)	—
Urgent and primary care intangibles, net	292			—

Gross carrying amount of other intangibles:
Ancillary provider network	1,921			1,921
Software	428			428
	2,349			2,349
Accumulated amortization	(1,773		)	(1,709		)
Other intangibles, net	576			640
Total intangibles, net	$	868		$	640

Total amortization expense, for acquisition related intangibles, was approximately $5,300 during the three and six months ended June 30, 2014. No amortization expense related to acquisition intangibles was recorded in the same periods in 2013.

The allocation of urgent and primary care intangible assets is summarized in the following table:



	June 30, 2014
(in thousands)	Gross Carrying Amount		Weighted Average Amortization Period	Accumulated Amortization
Non-amortizable intangibles:
Goodwill	$	1,948	—	$	—
Amortizable intangibles:
Patient base	263		5 years	(4		)
Licensed trade name	34		3 years	(1		)

Estimated annual amortization expense relating to urgent and primary care intangibles is as follows (amounts in thousands):



Years ending December 31,
2014	$	37
2015	64
2016	64
2017	57
2018	53
Thereafter	22

The Company capitalizes costs associated with internally developed software, developed for internal use only, during the application development stage. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality also are capitalized, whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software projects. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. Capitalized costs are amortized using the straight-line method over the useful life of the software, which is typically five years.

During the three and six months ended June 30, 2014, the Company capitalized approximately $39,000 and $138,000 respectively. During the three and six months ended June 30, 2013, the Company capitalized approximately $22,000 and $176,000 respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details