Exhibit 99.1

Overview Financial Statements

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LifeWatch AG

Consolidated Balance Sheets

* Reclassified (note 2h5, 11d)

The accompanying notes are an integral part of these consolidated financial statements.

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The accompanying notes are an integral part of these consolidated financial statements.

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LifeWatch AG

Consolidated Statements of Operations

The accompanying notes are an integral part of these consolidated financial statements.

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LifeWatch AG

Consolidated Statements of Comprehensive (Loss) Income

The accompanying notes are an integral part of these consolidated financial statements.

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LifeWatch AG

Consolidated Statements of Changes in Shareholders’ Equity

The accompanying notes are an integral part of these consolidated financial statements.

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LifeWatch AG

Consolidated Statements of Cash Flows

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LifeWatch AG

Consolidated Statements of Cash Flows

The accompanying notes are an integral part of these consolidated financial statements.

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LifeWatch AG

Notes to the Consolidated Financial Statements

Note 1

Formation and Business of the Company

LifeWatch AG (the “Company”) was incorporated in July 2001, under the name “Remmedtech AG”. On August 14, 2001, the Company changed its name to “Card Guard AG”. The Company was incorporated in order to become the parent company of Card Guard Scientific Survival Ltd. and its subsidiaries. On May 26, 2009, the Company changed its name to “LifeWatch AG” and in June 2012, Card Guard Scientific Survival Ltd. changed its name to LifeWatch Technologies Ltd (hereafter — “LWT” or the “Israeli Company”).

The Company’s shares are traded on the main Board of SIX- Swiss Exchange (hereafter — the “SIX”) since October 29, 2001. On December 31, 2016, the Company’s closing share price was CHF 10.25 ($10.04).

The Company and its subsidiaries provide monitoring services and develop, manufacture and market advanced telehealth systems for high-risk and chronically ill patients. For segment information, see note 16.

On November 9, 2015, the Company entered into a Stock Purchase Agreement (SPA) to acquire 100% of FlexLife Health Inc., an Ohio corporation (hereafter — “FlexLife”). FlexLife offers international normalized ratio (INR) monitoring services via a proprietary web-based digital health platform, see note 5a. In January 2017, the Company announced its decision to cease INR service for commercial business reasons effective February 20, 2017. See notes 5a and 17a.

In July 2015, the Company established a Joint Venture with IKSIR TEKNOLOJI SAGLIK VE KIMYA SAN. ve TIC. A.S. (hereafter —“JV partner”), a company located in Ankara, Turkey, to provide digital health solutions in the Turkish market. The Company transferred shares of LifeWatch Mobile Switzerland AG to the JV partner and recorded the transaction in the share register of LifeWatch Mobile Switzerland AG. In October 2015, LifeWatch Mobile Switzerland AG was renamed LifeWatch Turkey Holding AG. See note 5b.

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In November 2015, LifeWatch Saglik Hizmetleri Anonim Sirketi, the Turkish affiliated company which is wholly owned by Lifewatch Turkey Holding AG and is the entity that will conduct business operations, was established and registered in Ankara, Turkey.

Note 2

Significant Accounting Policies

a.     General

The significant accounting policies, applied on a consistent basis are as follows:

1)    Accounting principles

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), applied on a consistent basis, unless otherwise indicated below. All amounts are presented in United States dollars ($ or USD) in thousand unless otherwise stated. The par value of capital stock is denominated in Swiss francs.

2)    Use of estimates in the preparation of financial statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates are assumptions related to revenue and receivables allowances, deferred taxes, contingencies and valuation of goodwill and other intangibles.

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3)    Functional currency

The currency of the primary economic environment in which the operations of the Company and most of its subsidiaries are conducted, is U.S. dollars. Thus, the functional and reporting currency of the Company and most of the subsidiaries is the U.S. dollar.

Balances in non-dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items (stated below) reflected in the statements of operations, the following exchange rates are used: (i) for transactions: exchange rates at transaction dates or average period rates and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, changes in inventories, etc.) historical exchange rates. The resulting currency exchange effects are reported as financial income or expenses, as appropriate.

The financial statements of subsidiaries whose functional currency is their respective local currency are translated into U.S. dollars as follows: assets and liabilities are translated using the year-end rate of exchange; results of operations are translated at average exchange rates during the year or at exchange rates at transaction dates if average rate is not a reasonable estimation. The resulting aggregate translation adjustments are reported in shareholders’ equity as a component of “accumulated other comprehensive loss”.

4)    Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries (see note 18). Intercompany balances and transactions have been eliminated. Profits from intercompany transactions not yet realized outside the Company have also been eliminated.

The Company includes the results of operation of acquired business from the date of acquisition.

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5)    Investee companies

Investments in entities in which the Company has a significant influence, but does not control, are accounted for using the equity method and included within other non-current assets. Under the equity method, the Company generally recognizes its proportionate share of comprehensive income or loss of the entity. The Company also reviews these investments for impairment whenever events indicate the carrying amount may not be recoverable. Impairments on investee companies are recorded in the income statement under share in losses of affiliate company.

6)    Basis of presentation

The consolidated financial statements include the accounts of the Company and those of the subsidiaries that it controls due to ownership of a majority voting interest. The Company uses the voting interest entity model and the variable interest entity model (VIEs) to evaluate the inclusion of affiliate financial results using the consolidation or the equity method. The Company’s share of earnings or losses of nonconsolidated affiliates is included in its consolidated operating results using the equity method of accounting when it is able to exercise significant influence over, but does not control, the operating and financial decisions of the affiliate.

7)    Reclassification

Certain comparative figures have been reclassified to conform to the current year presentation.

b.     Cash and cash equivalents

The Company considers all highly liquid investments, which include short-term bank deposits and petty cash (up to three months from the date of deposit) that are not restricted as to withdrawal or use, to be cash equivalents.

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c.      Inventories

Inventory is stated at the lower of cost or market. Cost is determined using the weighted average basis. Inventory costs include direct materials, direct labor costs and manufacturing overhead.

Allowances are established to reduce the cost of excess and obsolete inventories to their estimated realizable value based on historical information and estimates of excess quantities and obsolescence on a product-by-product basis.

d.     Marketable securities

Investments in marketable securities that are to be held to maturity are stated at amortized cost with the addition of computed interest accrued as of the balance sheet date (such interest represents the computed yield on cost from acquisition to maturity). Interest and amortization of premium or discount for debt securities are reported as financial income or expenses.

Investments in marketable securities that are held to maturity are stated at amortized cost, net of write-down for any decrease in value that is not of a temporary nature. The fair value of those investments is based on current value or estimated upon the occurrence of identified events or changes in circumstances that might indicate that a write down of the investments is needed.

During 2016, marketable securities in the amount of $52 thousand were written off (no write-offs were recorded in 2015).

As to the fair value of marketable securities, see note 12c.

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e.      Property plant and equipment

Property plant and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives as follows

Leasehold improvements are amortized using the straight-line method over the shorter of the term of the lease and the estimated useful life of the improvements.

Property plant and equipment, mainly monitoring units, that are leased by the Company under capital leases are classified as Company assets and are recorded at the inception of the lease, at the lower of the assets’ fair value or the present value of the minimum lease payments (not including the financial component).

f.       Goodwill and intangible assets

Intangible assets

Intangible assets includes capitalized software costs for internal and external use, acquired technology, licensing agreement, customer list, patents and rights of use and other intangible assets (see note 6).

Assets that represent acquired technology and patents are stated at cost. The intangible assets, except for capitalized software costs, are amortized using the straight-line method over their estimated useful lives (5 to 8 years).

Software costs for internal use

Costs directly attributable to the development of computer software for internal use are capitalized under standard ASC 350-40 as intangible assets when the preliminary project stage is completed, the Company has an intention and ability to complete the project and the software will be used to perform the function intended. Such costs include external direct costs of services and payroll and payroll-related costs of employees directly involved in the project and related to software only. Software costs that do not meet capitalization criteria are expensed when incurred.

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Capitalization will cease no later than the point at which a computer software project is substantially completed and the software is ready for its untended use, that is, after all substantial testing is completed.

Software costs for external use

Costs directly attributable to the development of computer software for external use (costs of software to be sold, leased, or marketed) are capitalized under standard ASC 985-20 as intangible assets when technological feasibility of the project has been established and all research and development activities for the other components of the product or process have been completed. Such costs include external direct costs of services and payroll and payroll-related costs of employees directly involved in the project and related to software only. In addition, the Company capitalizes an allocated amount of indirect costs, such as overhead related to programmers and the facilities they occupy.

Capitalization of computer software costs will cease when the product is available for general release to customers.

Capitalized computer software costs are amortized using the straight-line method over a period of 3 to 5 years, unless the software is deemed to be unusable and then costs will be written-off within the current period.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

Goodwill is not amortized systematically, but instead the group tests goodwill for impairment at the reporting unit level on an annual basis or whenever circumstances change, which would indicate that impairment may have occurred. If the carrying value of goodwill exceeds its fair value, an impairment loss is recognized.

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Goodwill impairment testing is a two-step process. The first step involves comparing the fair value of the Company’s reporting units to their carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded.

For purposes of step one, the fair value of the reporting unit is determined using the income approach, whereby the fair value is calculated based on the present value of estimated future cash flows, applying a discount rate. The cash flow projections are based on revenues and expenses included in the current operating plan as well as a terminal value. The cash flow projections require significant estimates and judgments for variables such as selling price, number of enrollments, sales growth, operating costs, capital expenditures and market and economic conditions. The discount rate represents management’s estimate of the weighted average cost of capital, considering the capital structure of the Company and external industry data. For 2016, the discount rate was 13.5%. The fair value exceeded book value by approximately 36.3%. A one percentage increase in the discount rate would reduce the calculated fair value by approximately 10.0%. A one percentage decrease in the terminal value growth rate would reduce the calculated fair value by approximately 4.4%.

Pursuant to the Company’s decision to cease INR service, a goodwill impairment of $883 thousand was recorded in the financial statements for the year ended December 31, 2016. No goodwill impairment was recorded in 2015 and 2014.

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g.      Impairment of long-lived assets

The Company tests long-lived assets, including definite lived intangible assets, for impairment, whenever events or circumstances present an indication of impairment. When required, the Company records charges for impairment of long-lived assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying value of these assets. Pursuant to the Company’s decision to cease INR service, the long-lived assets of FlexLife were impaired and a write-off of $358 thousand was recorded in the financial statements for the year ended December 31, 2016. No impairment losses were recorded in 2015 and 2014.

h.     Deferred income taxes

1)    Deferred income taxes are determined by the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax basis of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the tax rates expected to be in effect when these differences reverse. Valuation allowances in respect of deferred tax assets are provided when it is more likely than not that all or a portion of the deferred income tax assets will not be realized. See note 11d for additional information regarding the composition of the deferred taxes.

2)    Upon the distribution of dividends from tax-exempt income of “Approved Enterprises” (see also note 11b (1)), the amount distributed will be subject to tax at the rate that would have been applicable had the Israeli Company not been exempt from payment thereof. The Company intends to permanently reinvest the amounts of tax-exempt income and does not intend to cause distribution of such income as dividends. Therefore, no deferred income taxes have been provided in respect of such tax-exempt income.

3)    The Company may incur an additional tax liability in the event of an intercompany dividend distribution from foreign subsidiaries; no additional deferred income taxes have been provided, since it is the Company’s policy and intention not to distribute dividends in the foreseeable future.

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4)    Taxes that would apply in the event of disposal of investments in foreign subsidiaries have not been taken into account in computing deferred income taxes, as it is the Company’s policy to hold these investments, and not to realize them.

5)    Deferred tax assets and liabilities are classified as noncurrent based on early adoption ASU 2015—17 simplifying the presentation of deferred income taxes.

i.   Income tax uncertainties

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on the two-step process prescribed by applicable accounting principles. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company reevaluates these uncertain tax positions. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an additional charge to the tax provision in the period.

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j.        Revenue recognition

The Company’s revenue is derived from rendering services and sale of its systems. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery does not occur until services have been provided to the customer or products have been delivered, title has passed to the customer and risk of loss has transferred.

For services provided to patients, the Company principally receives payment from third party payers, such as Medicare, and various medical insurance providers rather than individual customers. The Company records a contractual allowance reserve to account for potential differences in the amount billed and the amount expected to be received from the payer. The Company uses historical information to estimate the contractual allowance. These adjustments are recorded as a reduction of revenue at the time of sale. Accounts receivable are recorded at the invoice amount less these contractual adjustments.

The Company also reduces revenue for product returns and service issues. Revenue is recognized only if these estimates can be reliably determined. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

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Revenue is recognized as follows:

1)    Services revenue

The Company’s primary service offerings are cardiac monitoring.

The Company provides cardiac services using six types of monitors: Mobile Cardiac Telemetry (MCT), MCT Patch, Event, Holter, INR and Pacemaker. MCT, MCT Patch and Event monitors are generally worn by the patient for a period of mainly 21 and 30 days, respectively, and revenue for these services is recognized on a straight-line basis over this period (the “wear” period). Straight-line revenue recognition is used because the MCT, MCT Patch and Event monitoring results are delivered to physicians throughout the wear period, the monitoring is continuous during the period, and no other discernible pattern of delivery exists. Holter monitoring services are recognized at the end of the wear period at the time the results are communicated to the physician. The INR monitoring service revenue is recognized upon the completion of four INR blood measurements, not exceeding one test per week. The Pacemaker monitoring service does not require a wear period, and the revenue is recognized at the time the service is performed. MCT, MCT Patch, Event, Holter and Pacemaker services are not typically provided to the same patient at the same time.

The Company’s services are generally billed in advance and, where appropriate for MCT, MCT Patch and Event, revenue recognition is deferred and included within “Accounts payable and accruals” in the accompanying consolidated balance sheets.

Billings for services reimbursed by third party payers, including Medicare and Medicaid, are recorded as revenues net of allowances for differences between amounts billed and the estimated receipts from such payers. Adjustments to the estimated receipts, based on final settlement with the third party payers, are recorded upon settlement. If the Company does not have enough historical information regarding the collectability of the agreed proceeds for services or products, revenue is recorded on a cash basis.

Adjustments to the estimated proceeds, based on final settlement with the third party payers, are recorded upon settlement (see also note 9c).

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2)    Sale of systems

Revenues from sales of systems are recognized when an arrangement (usually in the form of a purchase order) exists, delivery has occurred, title has passed to the customer, the Company’s fee is fixed or determinable and collectability is reasonably assured.

k.     Research and development

Research and development expenses are charged to the statement of operations as incurred except when software costs are capitalized for internal or external use. (See note 2f.)

l.         Allowance for doubtful accounts

For the sale of systems, the allowance for doubtful receivables is determined on the basis of rates that change according to the age of the customers’ balances and specific receivables doubtful of collection.

The Company makes judgments as to its ability to collect its receivable balances. The Company uses historical information to estimate the allowance for doubtful accounts. These provision amounts are reflected in general and administrative expenses.

m. Basic and diluted net income (loss) per share

Basic net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding during each year (net of treasury shares). Diluted net income per share includes the potential effect of stock option and warrants outstanding during the year, in accordance with ASC 260 “Earnings per Share”, using the treasury stock method.

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The table below sets forth the weighted average number of shares used in the calculation of basic and diluted loss per share.

n.     Stock-based compensation

The Company accounts for employee’s share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures based on historical experience and anticipated future conditions.

The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule using the straight-line method over the requisite service period for the entire award.

o.     Comprehensive income (loss)

The Company’s comprehensive income (loss) consists of actuarial pension funds income (loss), which is presented net of income taxes.

p.     Treasury shares

Company shares held by the Company are presented as a reduction of shareholders’ equity at their cost to the Company.

q.     Concentration of credit risk

The majority of cash and cash equivalents as of December 31, 2016 and 2015 were deposited with large bank corporations. The marketable securities held by the Company are mainly corporate bonds. The Company believes that the credit risk relating to those balances is low.

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Accounts receivable from third party payers potentially expose the Company to credit risk. The Company generally does not require collateral or other forms of security and maintains an allowance for potential credit losses. Management believes this risk is limited due to the large number of doctors and patients that comprise the Company’s customer base, supported by a large number of insurance companies — see note 16c.

The Company recorded sufficient allowance for doubtful accounts. As to revenue generated from principal customers in 2016, 2015 and 2014 see note 16c.

r.        Fair value of financial instruments

The Company measures fair value and discloses fair value measurements for financial and non-financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1

Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2

Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3

Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

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s.       Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and estimated legal fees, if any, and accrues for these costs. Such contingencies are recorded as accrued expenses in the financial statements of the Company. Such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

t.        Recently issued accounting guidance not yet adopted

1.     In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers”. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. Early adoption is possible for reporting periods beginning January 1, 2017. The Company is still evaluating the potential impact of ASU 2014-09 on its financial statements.

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2.     In February 2016, the FASB issued Accounting Standards Update intended to improve financial reporting about leasing transactions. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. The new ASU will require both types of leases to be recognized on the balance sheet. The ASU on leases will take effect for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 (early adoption will be permitted). The Company is still evaluating the potential impact of the guidance on its financial statements.

Note 3

Legal settlements and other

During 2016, expenses associated with legal settlements and other included legal settlements expenses of $3.754 million on a net basis, other expenses of $1.811 million for the write of INR business assets and $0.150 million for legal fees (see also note 5).

During 2016, the preliminary settlement of the case of United States, et. al., ex. rel. Cieszynski v. LifeWatch Services, Inc. (qui tam action) was agreed. This case contained allegations related to billing processes for clinical services provided off shore and was filed against LifeWatch in May 2013. While LifeWatch vehemently denies any wrongdoing, the Company nonetheless agreed to a settlement to eliminate any possible unknown exposure and to allow LifeWatch to focus on the future rather than the past. The Relator (whistleblower) and LifeWatch settled the case for $12.75 million pending final approval by the United States Federal Government. Final approval was received in March 2017 and the settlement amount was paid in full — see note 17d.

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During 2015, the Company initiated an arbitration process to settle an overpayment claim by an insurance company and counter claim by the Company for unpaid services. Arbitration occurred in August 2015 and in March 2016, an arbitrator from the International Centre for Dispute Resolution issued a material adverse decision against LifeWatch Services Inc., relating to its dispute with a private health insurer over billing and payment practices. The arbitrator found LifeWatch Services Inc. liable for damages for the years 2009 — 2010 in the approximate amount of $18.7 million plus 6% per annum simple pre-judgement interest from January 2013. This amount was reduced by approximately $0.7 million in offsets which were previously taken for a net amount of settlement for $18 million, which was recorded as a reduction of service revenue on the consolidated statement of operations and a current liability under provision for settlement on the consolidated balance sheets as of December 31, 2015. In 2016, the Company renegotiated the case with the insurance company with a reduced award of $13 million. As part of the settlement the Company dismissed the insurance company from another pending case.

During 2014, costs associated with legal settlements and other include the net effect of income from reduction of provision for legal settlements of $750 thousand and expenses related to the re-organization process which the Company made following a change of management of the Company in the beginning of 2014 of $251 thousand.

During 2011, LifeWatch Services Inc. was under a civil investigation by U.S. Office of Inspector General (OIG) and U.S. Department of Justice (DOJ) regulatory bodies that audit Medicare and TriCare payments. LifeWatch Services, Inc. cooperated fully with the OIG and the DOJ throughout the investigation. According to the final settlement agreement, the Company was required to pay the United States Department of Treasury the sum $18.5 million plus interest accrued at the rate of 1.625% per annum from October 20, 2011, over six years. During 2016, the final installment of this settlement agreement was paid in full.

The provision for settlement as of December 31, 2016 and December 31, 2015 is $12,975 thousand and $22,284 thousand, respectively.

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Note 4

Property plant and equipment, net

a.     Composition of property plant and equipment, grouped by major classifications, is as follows:

b.     Depreciation expenses totaled $9,234 thousand, $8,005 thousand and $5,643 thousand in 2016, 2015 and 2014, respectively.

c.      Property plant and equipment as of December 31, 2016 and 2015 include assets, mainly monitoring units, leased under capital lease agreements (see note 7), in the amount of approximately $5,424 thousand and $6,546 thousand, respectively, and the accumulated depreciation in respect of those assets is $3,479 thousand and $3,918 thousand in 2016 and 2015, respectively.

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Note 5

Investments

a.     Acquisition of FlexLife Health Inc.

Impairment of FlexLife Health Inc.

In January 2017, the Company announced its decision to cease offering remote INR patient monitoring for commercial business reasons effective February 20, 2017. INR services were added to the Company’s service offerings upon the acquisition of FlexLife during the year ended December 31, 2015 as described below. See note 17a.

The following table summarizes the write-off of the assets and liabilities that was recorded in the financial statements for the year ended December 31, 2016:

The write-off was recorded as legal settlements and other expenses in the consolidated statement of operations.

Summary of acquisition

On November 9, 2015, the Company entered into a Stock Purchase Agreement (the “FlexLife Acquisition”) to acquire 100% of the issued and outstanding voting capital of FlexLife Health Inc., an Ohio corporation (FlexLife). FlexLife offers INR (international normalized ratio) monitoring services via a proprietary web-based digital health platform. Monitoring of the INR is essential for patients taking anticoagulant drugs, which pose a risk of bleeding or clotting if dosing is not properly monitored.

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Purchase consideration

The Company acquired FlexLife for a total purchase price of approximately $1.82 million, which was payable in $1.5 million of cash plus an estimated $0.32 million earn-out provision for the achievement of defined future revenue. The acquired assets met the definition of a business combination, and accordingly, was accounted for using the purchase method of accounting prescribed by ASC 805 — Business Combinations.

The following table summarizes the fair value of the assets acquired and liabilities assumed and resulting goodwill for the FlexLife Acquisition, as recorded in the Company’s financial statements for the period ended December 31, 2015:

Revenue and profit consideration

Revenue of $87 thousand and $9 thousand was included in the Company’s financial statements for period ended December 31, 2016 and December 31, 2015 respectively.

Goodwill consideration

The Company identified the value of customers and the software licensing agreement as finite-lived intangible assets acquired as part of the FlexLife Acquisition, and accordingly, assigned five-year expected useful lives to each asset. Both of these assets were valued based on the projected net present value of future cash flows to be generated from these assets. Goodwill represents both expected synergies and intangible assets that do not qualify for separate recognition, and equals the excess of purchase price over the fair value of the identifiable and tangible assets (net of liabilities assumed) acquired.

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b.     Joint Venture

In July 2015, the Company invested a capital contribution of $58 thousand for a 55% equity interest in a Joint Venture. In the initial agreement the Company agreed to provide cash financing to the Joint Venture, if necessary, until the Joint Venture becomes cash-flow positive, limited to CHF3 million. The financing was agreed to be provided as follows: share capital of CHF100 thousand, a loan of CHF1.9 million to LifeWatch Turkey Holding AG to be repaid within a 10 year period and a loan of CHF1 million to LifeWatch Saglik Hizmetleri A.S. to be repaid within a 3 year period.

During 2016, based on the updated timeline for the launch of monitoring services in Turkey, together with the revised budget and forecast of Joint Venture enrolments, operating performance and cash requirements, significantly more funding was required for the Joint Venture to reach breakeven and generate positive cash flows. Based on the developments that occurred, including a contract amendment signed on January 4, 2017, the Company reassessed its interest in the Joint Venture and determined that the financing of the Joint Venture has become a much more significant element and is considered the activity that most significantly affects the operating performance of the Joint Venture. Given the Company, as the sole funding source, has control over this activity, the Joint Venture will be consolidated beginning in 2017. As of December 31, 2016, the Company will provide, if necessary and provided that the updated budget and forecasts are met, the cash financing to the Joint Venture until the Joint Venture is cash flow positive.

As of December 31, 2016 the Company has financed the Joint Venture with a cumulative loan of $4,518 thousand. The Company has recorded 100% of the accumulated operating loss of the Joint Venture of $2,402 thousand since the Company is legally obligated by contract to fund the Joint Venture. The Company’s interest in the Joint Venture is recorded in the Company’s financial statements using the equity method of accounting.

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Composition of the investment and loans to the Joint Venture is as follows:

Note 6

Intangible assets, net

a.     Composition of intangible assets, grouped by major classifications, is as follows:

Amortization expenses totaled $3,780 thousand (including write-off of $3,191 thousand, see (1) and (2) below), $36 thousand and $6 thousand in 2016, 2015 and 2014, respectively.