Goodwill

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

10. GOODWILL

On August 5, 2019, Southern Hills Rehab Center, LLC (“SHR”), a wholly-owned subsidiary of the Company, entered into an Operations Transfer Agreement (the “OTA”) with C. David Rhoades, Court-Appointed Receiver (the “Receiver”). Pursuant to terms of the OTA, SHR purchased the Operating Assets (as defined in the OTA) of Southern Hills Rehabilitation Center in Tulsa, Oklahoma (“Southern Hills”) from the Receiver on December 1, 2019, the date on which SHR completed licensing for Southern Hills. The purchase of the Operating Assets was accounted for as a business combination in accordance with ASC 805, “Business Combinations”. The goodwill of $379,479 arising from the acquisition was assigned to the Company’s Healthcare Services segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

The following table summarizes the consideration paid and the amounts of the assets acquired, and liabilities assumed recognized at the acquisition date.

Consideration
Write-off of note receivable from the Receiver	$	750,000
Cash (to be paid subsequent to December 31, 2019 in equal monthly installments of $8,000 over 22 months)		176,000
Cash (paid in advance)		24,000
Total consideration		950,000
Recognized amounts of identifiable assets acquired, and liabilities assumed
Cash and Cash Equivalents		39,831
Accounts Receivable		740,742
Property and Equipment		165,458
Prepaid Expenses and Other		710
Intangible Assets		42,185
Accounts Payable and Accrued Liabilities		(418,405	)
Total identifiable net assets		570,521
Goodwill	$	379,479
Acquisition-related costs (included in the Company’s consolidated statement of operations for the year ended December 31, 2019)	$	62,882

The unaudited pro forma amounts of SHR’s revenue and earning had the acquisition date been January 1, 2019 are as follows:

	Revenue		Net Income (Loss)
Actual from December 1, 2019 to December 31, 2019	$	526,787	$	(6,275	)
2019 supplemental pro forma from January 1, 2019 to December 31, 2019		13,005,638		(529,990	)

On February 27, 2020, Global Eastman, LLC (“Global Eastman”), a newly-formed, wholly-owned subsidiary of the Company, entered into an Operations Transfer Agreement (the “OTA”) with the court-appointed receiver of Eastman Healthcare & Rehab, LLC. On July 2, 2020, the Superior Court of Dodge County, Georgia approved the OTA from the receiver to Global Eastman. The OTA was made effective July 1, 2020, as that was the effective date of the nearly simultaneous issuance of operating license from the State of Georgia. Pursuant to the terms of the OTA, Global Eastman assumed all cash accounts, building improvements and equipment, and receivables and only selected critical ongoing liabilities associated with the prior operator. All other liabilities remain with the prior operator in the former entity. The acquisition of the assets and assumption of liabilities was accounted for as a business combination in accordance with ASC 805, “Business Combinations”. The goodwill of $697,429 arising from the acquisition was assigned to the Company’s Healthcare Services segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

The following table summarizes the amounts of the assets acquired and liabilities assumed recognized by the Company at the acquisition date.

Recognized amounts of identifiable assets acquired, and liabilities assumed
Cash and Cash Equivalents	$	532,690
Accounts Receivable		544,117
Property and Equipment		232,801
Prepaid Expenses		16,706
Intangible Assets		19,013
Accounts Payable and Accrued Liabilities		(2,042,756	)
Total identifiable net liabilities		(697,429	)
Goodwill	$	697,429
Acquisition-related costs (included in the Company’s consolidated statement of operations for the year ended December 31, 2020)	$	59,946

The unaudited pro forma amounts of Global Eastman’s revenue and earnings had the acquisition date been January 1, 2019 and 2020 are as follows:

	Revenue		Net Income (Loss)
Actual from July 1, 2020 to December 31, 2020	$	3,609,944	$	811,503
2020 supplemental pro forma from January 1, 2020 to December 31, 2020		24,689,774		3,441,898
2019 supplemental pro forma from January 1, 2019 to December 31, 2019		12,761,912		(841,035	)

All goodwill included in the consolidated balance sheets as of December 31, 2020 and 2019 has been assigned to the Healthcare Services segment. Goodwill is tested for impairment at a reporting unit level on an annual basis or when an event occurs, or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. During the years ended December 31, 2020 and 2019, the Company recorded no impairment of Goodwill.

Following is a summary of Activities in goodwill for the years ended December 31, 2020 and 2019:

Balance, December 31, 2018	$	-
Goodwill acquired in 2019		379,479
Balance, December 31, 2019		379,479
Goodwill acquired in 2020		697,429
Balance, December 31, 2020	$	1,076,908