Acquisition

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

ACQUISITION

NOTE 3 – ACQUISITIONS

On October 17, 2018, we acquired CareSpeak Communications, Inc., a New Jersey corporation and technology solutions company, which provides digital messaging services to the healthcare industry to expand our service offerings. Through its cloud based Mobile Health Messenger ("MHM") Platform, CareSpeak provides interactive health messaging for improved medication adherence, care coordination, and patient engagement. The total purchase price was $8,493,451. Acquisition costs of approximately $607,670 were expensed as incurred.

The purchase price contains a contingent element that will be paid only if the Company achieves certain patient engagement revenues in 2019 and 2020. The total contingent payment may be up to $3.0 million. The target patient engagement revenues were achieved in 2019 and are expected to be achieved in 2020. The calculated fair value of the contingent payment is $3,000,000 at December 31, 2019.

Purchase Price Allocation

The purchase price of the CareSpeak acquisition was allocated as follows:

Purchase Price
Cash paid	$	5,628,451
Common stock issued		500,000
Contingent payment		2,365,000
Total	$	8,493,451
Allocation
Current assets	$	254,263
Property and equipment		8,487
Intangibles
Goodwill, including assembled workforce in place		3,678,513
Patent		2,227,000
Tradename		982,000
Non-compete agreements		977,000
Customer relationships		492,000
Current liabilities assumed		(125,812	)
Total	$	8,493,451

As described in greater detail in Note 6, the amortizable intangible assets acquired have estimated useful lives ranging from 4 to 15 years. We determined the estimated fair value of the identifiable intangible assets acquired primarily by using the income approach.

On October 4, 2019, we acquired RMDY Health, Inc. ("RMDY"), a Delaware corporation and technology solutions company engaged in developing and marketing digital health SAAS solutions across a range of healthcare and life science initiatives, used by pharmaceutical companies, payers, medtech  companies, and medical associations nationwide to improve medication adherence and care coordination. The total purchase price was $17,822,162. Acquisition costs of approximately $799,623 were expensed as incurred. 

The purchase price contains a contingent element that will be paid only if the Company achieves certain revenues related to the legacy RMDY business in 2020 and 2021. The total contingent payment may be up to $30.0 million, with a minimum payment of $1.0 million each year. The calculated fair value of the contingent payment is $3,720,000 at December 31, 2019.

The purchase price of the RMDY acquisition was allocated as follows:

Purchase Price
Cash paid	$	8,994,369
Common stock issued		5,107,793
Contingent payment		3,720,000
Total	$	17,822,162
Allocation
Current assets
Accounts receivable	$	411,354
Prepaid Expense		12,139
Property and equipment		19,173
Intangibles
Goodwill, including assembled workforce in place		11,061,518
Web technology		5,125,000
Tradename		2,604,000
Non-compete agreements		116,000
Customer relationships		431,000
Current liabilities assumed
Accounts payable		(128,234	)
Accrued expenses		(931,828	)
Deferred tax liability		(897,960	)
Total	$	17,822,162

As described in greater detail in Note 6, the amortizable intangible assets acquired have estimated useful lives ranging from 2 to 15 years. We determined the estimated fair value of the identifiable intangible assets acquired primarily by using the income approach.

Included in accrued expenses is $800,000 withheld at closing as part of an indemnification provision against potential future claims.

We began consolidating the results of CareSpeak operations and cashflows into our consolidated financial statements after October 17, 2018, the date of acquisition and the results of RMDY operations and cashflows after October 3, 2019, the date of that acquisition. The unaudited Pro forma results of operations as if both acquisitions had occurred January 1, 2018 are presented in the following table:

	2019						2018
	As Reported			Pro Forma			As Reported		Pro Forma
Revenues	$	24,598,278		$	26,118,278		$	21,206,363	$	24,520,995
Net (Loss) Income		(3,142,576	)		(3,869,577	)		226,344		(564,340	)
(Loss) Earnings per common share:
Basic	$	(0.23	)	$	(0.29	)	$	0.02	$	(0.05	)
Diluted	$	(0.23	)	$	(0.29	)	$	0.02	$	(0.05	)