Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

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Property and Equipment
6 Months Ended
Jun. 30, 2018
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 5 – Property and Equipment

 

Property and equipment at June 30, 2018 (unaudited) and December 31, 2017 consisted of the following:

 

    June 30, 2018     December 31, 2017  
Medical equipment   $ 2,173,488     $ 696,195  
Land     550,700       -  
Building     6,478,284       1,359,472  
Equipment     437,029       476,548  
Equipment under capital leases     4,253,123       4,686,736  
Furniture     244,829       222,824  
Leasehold improvements     1,303,131       1,303,131  
Vehicles     56,625       196,534  
Computer equipment     224,447       226,441  
Software     724,126       631,033  
      16,445,782       9,798,914  
Less accumulated depreciation     (7,008,958 )     (7,103,474 )
Property and equipment, net   $ 9,436,824     $ 2,695,440  

 

On January 13, 2017, the Company completed an asset purchase agreement to acquire certain assets related to Scott County Community Hospital, based in Oneida, Tennessee (the “Hospital Assets”). The Hospital Assets include a 52,000 square foot hospital building and 6,300 square foot professional building on approximately 4.3 acres. Scott County Community Hospital, which has since been renamed as Big South Fork Medical Center, is classified as a Critical Access Hospital (rural). The Company acquired the Hospital Assets out of bankruptcy for a purchase price of $1.0 million, and the purchase price has been recorded as property and equipment in the Company’s condensed consolidated balance sheet. The Company opened the hospital on August 8, 2017.

 

On January 31, 2018, the Company entered into a purchase agreement to acquire certain assets and liabilities related to Jamestown Regional Medical Center. The purchase was completed on June 1, 2018. The Company has valued the net assets acquired, subject to completion of a valuation study, at approximately $7.1 million, of which $6.5 million was recorded as property and equipment. The purchase is more fully discussed in Notes 1 and 6.

 

Depreciation expense on property and equipment was $0.3 million and $0.4 million for the three months ended June 30, 2018 and 2017, respectively, and $0.6 million and $0.8 million for the six months ended June 30, 2018 and 2017, respectively.

 

Management periodically reviews the valuation of long-lived assets, including property and equipment, for potential impairment. Management did not recognize any impairment of these assets during the three and six months ended June 30, 2018 and 2017.