Note 4 - Connect

12 Months Ended

Dec. 31, 2015

Noncontrolling Interest Disclosure [Text Block]

(4)

Connect

Connect was formed in June 2013 to develop and commercialize the Connect programs. Connect programs provide healthcare organizations the technology to engage patients through real-time identification and management of individual patient needs, preferences, risks, and experiences. The platform ensures that organizations have access to a longitudinal view of the patient to more effectively manage patient engagement across the continuum of care. At inception, NRC had a 49% ownership interest in Connect. NG Customer-Connect, LLC held a 25% interest, and the remaining 26% was held by Illuminate Health, LLC. NRC has agreed to lease certain employees to Connect. In return for a fee, Connect services the Company’s discharge call program clients. NRC made initial capital contributions of $2.8 million to Connect, and will make additional capital contributions for up to $1.3 million on an as-needed basis as determined by the Board of Directors of Connect. Profits and losses are allocated under the hypothetical liquidation at book value approach.

In July 2015, the Company acquired all of NG Customer-Connect, LLC’s interest in Connect and a portion of Illuminate Health, LLC’s interest in Connect for combined consideration of $2.8 million. Since the Company previously consolidated Connect, the transaction was accounted for as an equity transaction, resulting in a reduction to additional paid in capital. Following the transaction, the Company owns approximately 89% of Connect and Illuminate Health, LLC owns 11% of Connect. Under the amended Connect operating agreement, NRC has the option to acquire additional equity units from Illuminate Health when new annual recurring contract value reaches targeted levels. NRC has the option to acquire approximately one-third of Illuminate Health, LLC’s equity units when new annual recurring contract value reaches each of $7 million, $14 million, and $20 million

All of Connect’s net losses to date are attributable to NRC. The following table summarizes the impact of changes in the Company’s ownership in Connect had on consolidated shareholders’ equity (in thousands):

	2015			2014			2013

Connect net loss attributable to NRC	$	(533	)	$	(1,488	)	$	(837	)
Decrease in NRC paid in capital due to acquisitions of non-controlling interest		(2,789	)		--			--
Change to NRC equity resulting from Connect net loss and acquisitions of non-controlling interest	$	(3,322	)	$	(1,488	)	$	(837	)