Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 15, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37888 | |
Entity Registrant Name | Tabula Rasa HealthCare, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5726437 | |
Entity Address, Address Line One | 228 Strawbridge Drive, Suite 100 | |
Entity Address, City or Town | Moorestown | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08057 | |
City Area Code | 866 | |
Local Phone Number | 648 - 2767 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | TRHC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,124,287 | |
Entity Central Index Key | 0001651561 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 80,783 | $ 9,395 |
Restricted cash | 7,389 | 6,038 |
Accounts receivable, net of allowance of $107 and $110, respectively | 18,960 | 21,405 |
Inventories | 5,735 | 5,444 |
Prepaid expenses | 3,484 | 3,812 |
Client claims receivable | 16,193 | 11,257 |
Other current assets | 20,439 | 18,033 |
Current assets of discontinued operations | 26,861 | 14,511 |
Total current assets | 179,844 | 89,895 |
Contingent consideration receivable | 7,000 | |
Property and equipment, net | 10,038 | 11,778 |
Operating lease right-of-use assets | 14,069 | 16,323 |
Software development costs, net | 32,606 | 29,254 |
Goodwill | 115,323 | 115,323 |
Intangible assets, net | 40,275 | 45,358 |
Other assets | 4,691 | 3,929 |
Noncurrent assets of discontinued operations | 187,558 | |
Total assets | 403,846 | 499,418 |
Current liabilities: | ||
Current operating lease liabilities | 3,195 | 3,275 |
Accounts payable | 14,685 | 8,870 |
Client claims payable | 9,537 | 8,398 |
Accrued expenses and other liabilities | 59,507 | 40,997 |
Current liabilities of discontinued operations | 11,132 | 12,380 |
Total current liabilities | 98,056 | 73,920 |
Line of credit | 29,500 | |
Long-term debt, net of discount of $3,404 and $5,701, respectively | 231,868 | 319,299 |
Long-term debt - related party, net of discount of $1,299 and $0, respectively | 88,429 | |
Noncurrent operating lease liabilities | 13,223 | 15,792 |
Deferred income tax liability, net | 889 | 1,402 |
Other long-term liabilities | 3,032 | 176 |
Noncurrent liabilities of discontinued operations | 3,573 | |
Total liabilities | 435,497 | 443,662 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2022 and December 31, 2021 | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, 27,967,305 and 26,036,236 shares issued and 27,081,443 and 25,666,434 shares outstanding at September 30, 2022 and December 31, 2021, respectively | 3 | 3 |
Treasury stock, at cost; 885,862 and 369,802 shares at September 30, 2022 and December 31, 2021, respectively | (3,350) | (4,292) |
Additional paid-in capital | 349,911 | 320,392 |
Accumulated deficit | (378,215) | (260,347) |
Total stockholders' equity (deficit) | (31,651) | 55,756 |
Total liabilities and stockholders' equity (deficit) | $ 403,846 | $ 499,418 |
CONSOLIDATED BALANCE SHEETS (pa
CONSOLIDATED BALANCE SHEETS (parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for accounts receivable | $ 107 | $ 110 |
Long-term debt, discount | 3,404 | 5,701 |
Long-term debt - related party, discount | $ 1,299 | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,967,305 | 26,036,236 |
Common stock, shares outstanding | 27,081,443 | 25,666,434 |
Treasury stock (in shares) | 885,862 | 369,802 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 77,101 | $ 67,910 | $ 216,808 | $ 190,985 |
Cost of revenue, exclusive of depreciation and amortization shown below: | ||||
Total cost of revenue, exclusive of depreciation and amortization | 60,235 | 51,215 | 169,587 | 142,814 |
Operating expenses: | ||||
Research and development | 4,018 | 3,699 | 11,226 | 11,069 |
Sales and marketing | 2,857 | 2,719 | 7,678 | 8,225 |
General and administrative | 27,917 | 14,393 | 58,945 | 45,725 |
Long-lived asset impairment charge | 4,062 | |||
Depreciation and amortization | 5,723 | 5,328 | 16,954 | 15,109 |
Total operating expenses | 40,515 | 26,139 | 98,865 | 80,128 |
Loss from operations | (23,649) | (9,444) | (51,644) | (31,957) |
Other income (expense): | ||||
Interest expense, net | 2,717 | 2,230 | 7,430 | 6,959 |
Other income | 479 | 479 | ||
Total other expense, net | (2,238) | (2,230) | (6,951) | (6,959) |
Loss from continuing operations before income taxes | (25,887) | (11,674) | (58,595) | (38,916) |
Income tax (benefit) expense | (7) | 82 | 368 | 284 |
Net loss from continuing operations | (25,880) | (11,756) | (58,963) | (39,200) |
Net loss from discontinued operations, net of tax | (14,185) | (5,355) | (58,905) | (18,484) |
Net loss | $ (40,065) | $ (17,111) | $ (117,868) | $ (57,684) |
Net loss per share: | ||||
Net loss per share from continuing operations, basic (in dollars per share) | $ (1.07) | $ (0.50) | $ (2.45) | $ (1.68) |
Net loss per share from discontinued operations, basic (in dollars per share) | (0.58) | (0.23) | (2.45) | (0.80) |
Total net loss per share, basic (in dollars per share) | (1.65) | (0.73) | (4.90) | (2.48) |
Net loss per share from continuing operations, diluted (in dollars per share) | (1.07) | (0.50) | (2.45) | (1.68) |
Net loss per share from discontinued operations, diluted (in dollars per share) | (0.58) | (0.23) | (2.45) | (0.80) |
Total net loss per share, diluted (in dollars per share) | $ (1.65) | $ (0.73) | $ (4.90) | $ (2.48) |
Weighted average common shares outstanding: | ||||
Weighted average common shares outstanding, basic (in shares) | 24,350,182 | 23,407,391 | 24,075,666 | 23,230,138 |
Weighted average common shares outstanding, diluted (in shares) | 24,350,182 | 23,407,391 | 24,075,666 | 23,230,138 |
Product | ||||
Revenue: | ||||
Total revenue | $ 59,780 | $ 50,321 | $ 166,645 | $ 139,021 |
Cost of revenue, exclusive of depreciation and amortization shown below: | ||||
Total cost of revenue, exclusive of depreciation and amortization | 46,221 | 38,518 | 129,157 | 104,939 |
Service | ||||
Revenue: | ||||
Total revenue | 17,321 | 17,589 | 50,163 | 51,964 |
Cost of revenue, exclusive of depreciation and amortization shown below: | ||||
Total cost of revenue, exclusive of depreciation and amortization | $ 14,014 | $ 12,697 | $ 40,430 | $ 37,875 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 2 | $ (4,018) | $ (74,850) | $ 352,445 | $ (1,392) | $ (179,900) | $ (76,242) | $ 168,529 |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 24,222,674 | |||||||
Balance at beginning of period, treasury stock (in shares) at Dec. 31, 2020 | (217,778) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock awards (in shares) | 1,416 | |||||||
Issuance of restricted stock (in shares) | 629,088 | |||||||
Forfeitures of restricted shares (in shares) | (12,880) | |||||||
Exercise of stock options, net of shares withheld | $ (274) | 2,501 | 2,227 | |||||
Exercise of stock options, net of shares withheld (in shares) | 224,503 | (6,218) | ||||||
Stock-based compensation expense | 8,602 | 8,602 | ||||||
Net loss | (19,492) | (19,492) | ||||||
Balance at end of period at Mar. 31, 2021 | $ 2 | $ (4,292) | 288,698 | (200,784) | 83,624 | |||
Balance at end of period (in shares) at Mar. 31, 2021 | 25,077,681 | |||||||
Balance at end of period, treasury stock (in shares) at Mar. 31, 2021 | (236,876) | |||||||
Balance at beginning of period at Dec. 31, 2020 | $ 2 | $ (4,018) | $ (74,850) | 352,445 | $ (1,392) | (179,900) | $ (76,242) | 168,529 |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 24,222,674 | |||||||
Balance at beginning of period, treasury stock (in shares) at Dec. 31, 2020 | (217,778) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net loss | (57,684) | |||||||
Balance at end of period at Sep. 30, 2021 | $ 2 | $ (4,292) | 310,514 | (238,976) | 67,248 | |||
Balance at end of period (in shares) at Sep. 30, 2021 | 25,323,087 | |||||||
Balance at end of period, treasury stock (in shares) at Sep. 30, 2021 | (290,775) | |||||||
Balance at beginning of period at Mar. 31, 2021 | $ 2 | $ (4,292) | 288,698 | (200,784) | 83,624 | |||
Balance at beginning of period (in shares) at Mar. 31, 2021 | 25,077,681 | |||||||
Balance at beginning of period, treasury stock (in shares) at Mar. 31, 2021 | (236,876) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock (in shares) | 120,598 | |||||||
Forfeitures of restricted shares (in shares) | (22,913) | |||||||
Exercise of stock options, net of shares withheld | 885 | 885 | ||||||
Exercise of stock options, net of shares withheld (in shares) | 84,396 | |||||||
Stock-based compensation expense | 12,349 | 12,349 | ||||||
Net loss | (21,081) | (21,081) | ||||||
Balance at end of period at Jun. 30, 2021 | $ 2 | $ (4,292) | 301,932 | (221,865) | 75,777 | |||
Balance at end of period (in shares) at Jun. 30, 2021 | 25,282,675 | |||||||
Balance at end of period, treasury stock (in shares) at Jun. 30, 2021 | (259,789) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock (in shares) | 13,290 | |||||||
Forfeitures of restricted shares (in shares) | (30,986) | |||||||
Exercise of stock options, net of shares withheld | 571 | 571 | ||||||
Exercise of stock options, net of shares withheld (in shares) | 27,122 | |||||||
Stock-based compensation expense | 8,011 | 8,011 | ||||||
Net loss | (17,111) | (17,111) | ||||||
Balance at end of period at Sep. 30, 2021 | $ 2 | $ (4,292) | 310,514 | (238,976) | 67,248 | |||
Balance at end of period (in shares) at Sep. 30, 2021 | 25,323,087 | |||||||
Balance at end of period, treasury stock (in shares) at Sep. 30, 2021 | (290,775) | |||||||
Balance at beginning of period at Dec. 31, 2021 | $ 3 | $ (4,292) | 320,392 | (260,347) | $ 55,756 | |||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 26,036,236 | |||||||
Balance at beginning of period, treasury stock (in shares) at Dec. 31, 2021 | (369,802) | (369,802) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock awards (in shares) | 16,471 | |||||||
Issuance of restricted stock (in shares) | 297,434 | |||||||
Forfeitures of restricted shares (in shares) | (138,882) | |||||||
Exercise of stock options, net of shares withheld | 60 | $ 60 | ||||||
Exercise of stock options, net of shares withheld (in shares) | 11,646 | |||||||
Stock-based compensation expense | 8,609 | 8,609 | ||||||
Net loss | (28,193) | (28,193) | ||||||
Balance at end of period at Mar. 31, 2022 | $ 3 | $ (4,292) | 329,061 | (288,540) | 36,232 | |||
Balance at end of period (in shares) at Mar. 31, 2022 | 26,361,787 | |||||||
Balance at end of period, treasury stock (in shares) at Mar. 31, 2022 | (508,684) | |||||||
Balance at beginning of period at Dec. 31, 2021 | $ 3 | $ (4,292) | 320,392 | (260,347) | $ 55,756 | |||
Balance at beginning of period (in shares) at Dec. 31, 2021 | 26,036,236 | |||||||
Balance at beginning of period, treasury stock (in shares) at Dec. 31, 2021 | (369,802) | (369,802) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net loss | $ (117,868) | |||||||
Balance at end of period at Sep. 30, 2022 | $ 3 | $ (3,350) | 349,911 | (378,215) | $ (31,651) | |||
Balance at end of period (in shares) at Sep. 30, 2022 | 27,967,305 | |||||||
Balance at end of period, treasury stock (in shares) at Sep. 30, 2022 | (885,862) | (885,862) | ||||||
Balance at beginning of period at Mar. 31, 2022 | $ 3 | $ (4,292) | 329,061 | (288,540) | $ 36,232 | |||
Balance at beginning of period (in shares) at Mar. 31, 2022 | 26,361,787 | |||||||
Balance at beginning of period, treasury stock (in shares) at Mar. 31, 2022 | (508,684) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock awards (in shares) | 12,262 | |||||||
Issuance of restricted stock (in shares) | 424,540 | |||||||
Forfeitures of restricted shares (in shares) | (30,542) | |||||||
Exercise of stock options, net of shares withheld | 3 | 3 | ||||||
Exercise of stock options, net of shares withheld (in shares) | 927 | (109) | ||||||
Stock-based compensation expense | 6,692 | 6,692 | ||||||
Net loss | (49,610) | (49,610) | ||||||
Balance at end of period at Jun. 30, 2022 | $ 3 | $ (4,292) | 335,756 | (338,150) | (6,683) | |||
Balance at end of period (in shares) at Jun. 30, 2022 | 26,799,516 | |||||||
Balance at end of period, treasury stock (in shares) at Jun. 30, 2022 | (539,335) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock awards | $ 3,082 | (3,082) | ||||||
Issuance of common stock awards (in shares) | 615,066 | |||||||
Issuance of restricted stock (in shares) | 1,167,532 | |||||||
Forfeitures of restricted shares (in shares) | (507,299) | |||||||
Exercise of stock options, net of shares withheld | 1 | 1 | ||||||
Exercise of stock options, net of shares withheld (in shares) | 257 | |||||||
Shares withheld for payment of employee taxes | $ (2,140) | (2,140) | ||||||
Shares withheld for payment of employee taxes (in shares) | (454,294) | |||||||
Stock-based compensation expense | 17,236 | 17,236 | ||||||
Net loss | (40,065) | (40,065) | ||||||
Balance at end of period at Sep. 30, 2022 | $ 3 | $ (3,350) | $ 349,911 | $ (378,215) | $ (31,651) | |||
Balance at end of period (in shares) at Sep. 30, 2022 | 27,967,305 | |||||||
Balance at end of period, treasury stock (in shares) at Sep. 30, 2022 | (885,862) | (885,862) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Cash flows from operating activities: | |||
Net loss | $ (117,868) | $ (57,684) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 24,285 | 35,343 | |
Amortization of deferred financing costs and debt discount | 1,972 | 1,714 | |
Deferred taxes | (513) | 337 | |
Stock-based compensation | 32,537 | 28,962 | |
Acquisition-related contingent consideration paid | (67) | ||
Impairment charges | 46,355 | ||
Loss on divestiture of business | 2,879 | ||
Other noncash items | (9) | 9 | |
Changes in operating assets and liabilities, net of effect of divestiture: | |||
Accounts receivable, net | 5,107 | 789 | |
Inventories | (291) | (866) | |
Prepaid expenses and other current assets | (1,375) | (6,084) | |
Client claims receivables | (4,936) | (872) | |
Other assets | (1,357) | (2,604) | |
Accounts payable | 5,074 | 1,587 | |
Accrued expenses and other liabilities | 13,534 | 2,138 | |
Client claims payables | 1,139 | 423 | |
Other long-term liabilities | 3,220 | (108) | |
Net cash provided by operating activities | 9,753 | 3,017 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (1,021) | (1,611) | |
Software development costs | (23,860) | (22,649) | |
Proceeds from divestiture of business | [1] | 118,561 | |
Net cash provided by (used in) investing activities | 93,680 | (24,260) | |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 64 | 3,683 | |
Payments for employee taxes for shares withheld | (1,112) | ||
Payments for debt financing costs | (350) | (8) | |
Borrowings on line of credit | 27,700 | 17,500 | |
Repayments of line of credit | (57,200) | ||
Payment of acquisition-related notes payable | (13,000) | ||
Payments of acquisition-related contingent consideration | (99) | ||
Repayments of long-term debt and finance leases | (4) | ||
Net cash (used in) provided by financing activities | (30,898) | 8,072 | |
Net increase (decrease) in cash and restricted cash | 72,535 | (13,171) | |
Cash and restricted cash, beginning of period | 15,706 | 28,532 | |
Cash and restricted cash, end of period | [2] | 88,241 | 15,361 |
Supplemental disclosure of cash flow information: | |||
Purchases of property and equipment and software development included in accounts payable and accrued expenses | 1,082 | 370 | |
Cash paid for interest | 7,204 | 8,169 | |
Cash paid for taxes | 137 | 44 | |
Interest costs capitalized to software development costs | 257 | $ 216 | |
Employee taxes for shares withheld included in accrued expenses | $ 1,028 | ||
[1] The cash proceeds received from divestiture of business do not include $1,477 of additional consideration subsequently received by the Company in October 2022 due to customary post-closing adjustments or $3,000 of transaction costs incurred as of the sale date and expected to be paid in the fourth quarter of 2022. See Note 3 for additional information. The cash flows related to discontinued operations have not been segregated. Accordingly, the unaudited consolidated statements of cash flows include the results of continuing and discontinued operations. As a result of the divestiture, the changes in operating assets and liabilities for the nine months ended September 30, 2022 exclude changes related to the divested business. See Note 3 for discussion of discontinued operations and divestiture of business. |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of cash and restricted cash: | |||
Cash | $ 80,783 | $ 10,757 | |
Restricted cash | 7,389 | 4,014 | |
Cash from discontinued operations | 69 | 590 | |
Total cash and restricted cash | [1] | $ 88,241 | $ 15,361 |
[1] The cash flows related to discontinued operations have not been segregated. Accordingly, the unaudited consolidated statements of cash flows include the results of continuing and discontinued operations. As a result of the divestiture, the changes in operating assets and liabilities for the nine months ended September 30, 2022 exclude changes related to the divested business. See Note 3 for discussion of discontinued operations and divestiture of business. |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2022 | |
Nature of Business | |
Nature of Business | 1. Nature of Business Tabula Rasa HealthCare, Inc. (the “Company”) is a healthcare technology company advancing the safe use of medications by creating solutions designed to empower pharmacists, providers, and patients to optimize medication regimens, combating medication overload and reducing adverse drug events. The Company’s advanced proprietary technology solutions, including MedWise®, identify causes of and risks for medication-related problems so healthcare professionals can minimize harm and reduce medication-related risks. The Company’s software and services help improve patient outcomes and lower healthcare costs through reduced hospitalizations, emergency department visits, and healthcare utilization. The Company serves a number of different organizations within the healthcare industry, including health plans, and at-risk provider groups, the majority of which are organizations with Programs of All-Inclusive Care for the Elderly (“PACE”). |
Basis of Presentation, Summary
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements | |
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements | 2. Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements (a) Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the Company’s interim consolidated financial position for the periods indicated. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022 (the “2021 Form 10-K”). Except as described below, there have been no material changes to the Company’s significant accounting policies described in the 2021 Form 10-K that have a material impact on the Company’s accompanying unaudited consolidated financial statements and related notes. (b) Assets and Liabilities Held for Sale and Discontinued Operations A long-lived asset (or disposal group) is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable within a year. A long-lived asset (or disposal group) classified as held for sale is initially measured at the lower of its carrying amount or fair value less costs to sell. An impairment loss is recognized for any initial or subsequent write-down of the long-lived asset (or disposal group) to fair value less costs to sell. A gain or loss not previously recognized by the date of the sale of the long-lived asset (or disposal group) is recognized at the date of derecognition. Long-lived assets (including those that are part of a disposal group) are not depreciated or amortized while they are classified as held for sale. Long-lived assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet. Unless otherwise noted, amounts and disclosures throughout the notes to the unaudited consolidated financial statements relate to the Company’s continuing operations. Additional details surrounding the Company’s assets and liabilities held for sale and discontinued operations are included in Note 3. (c) Cloud Computing Arrangements Costs to implement cloud computing arrangements that are hosted by third-party vendors are capitalized when incurred during the application development phase. Capitalized implementation costs are amortized on a straight-line basis over the reasonably certain term of the hosting arrangement, beginning when the service is ready for its intended use. As of September 30, 2022 and December 31, 2021, capitalized implementation costs of $882 and $747, respectively, were included in prepaid expenses, and $1,276 and $0, respectively, were included in other assets on the Company’s consolidated balance sheets. Accumulated amortization for these arrangements was $554 and $398 as of September 30, 2022 and December 31, 2021, respectively. Amortization expense for the three months ended September 30, 2022 and 2021, was $51 and $53, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021, was $156 and $155, respectively. (d) Vendor Financing Arrangements On February 24, 2022, the Company expanded its existing relationship with a third-party service provider for business process outsourcing and technology services for its third-party administration services and electronic health records solutions. As a result, the third-party provider hired approximately 180 employees from the Company, hired to fill existing open positions and will augment with additional resources to meet client demand. The agreement term is seven years and includes total estimated fees of $115,300. The arrangement includes extended payment terms for cloud computing implementation costs, internally developed software support, and business process support. In order to determine the present value of the commitment, the Company used an imputed interest rate of 9.5%, which was reflective of its estimated uncollateralized borrowing rate at signing. As of September 30, 2022, the outstanding principal balance of the financing arrangement was $3,772 with an unamortized discount of $876, and was included in accrued expenses and other liabilities and other long-term liabilities on the Company’s consolidated balance sheet. Imputed interest expense from the arrangement was $53 and $89 for the three and nine months ended September 30, 2022, respectively. (e) Concentrations of Credit Risk The Company is subject to concentrations of credit risk related to cash, restricted cash, accounts receivable, and client claims receivable. While the Company maintains its cash and restricted cash with financial institutions with high credit ratings, it often maintains these deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any realized losses on cash or restricted cash to date. The Company’s medication fulfillment services clients are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) and, therefore, subject to the payment regulations established by the Centers for Medicare & Medicaid Services (“CMS”). Under CMS guidelines, Medicare Part D sponsors are required to remit payment for claims within 14 The Company’s clients also include health plans and other healthcare providers. Credit associated with these accounts is extended based upon management’s evaluation of creditworthiness and is monitored on an on-going basis. As of September 30, 2022 and December 31, 2021, no client represented more than 10% of net accounts receivable. As of September 30, 2022 one client represented 21% of client claims receivable. As of December 31, 2021, two clients represented 13% and 11%, respectively, of client claims receivable. One client accounted for 15% and 13% of total revenue for the three months ended September 30, 2022 and 2021, respectively, and 16% and 14% of total revenue for the nine months ended September 30, 2022 and 2021, respectively. (f) Recent Accounting Pronouncement In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under ASC Topic 606 (Revenue from Contracts with Customers) in order to align the recognition of a contract liability with the definition of performance obligation. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 is effective for financial statements issued for fiscal years beginning after December 15, 2022; early adoption is permitted. The Company plans to adopt ASU 2021-08 on January 1, 2023 and does not expect it to have a significant impact on the consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations | |
Discontinued Operations | 3. Discontinued Operations In February 2022, the Company announced plans to evaluate non-core assets, refocus its corporate strategy, and increase stockholder value, and the Company commenced a plan to sell the DoseMe business, which the Company acquired in January 2019. In March 2022, the Company completed its evaluation of additional divestiture opportunities and commenced plans to sell the SinfoníaRx and PrescribeWellness businesses, which were acquired in September 2017 and March 2019, respectively. As described below, the Company completed the sale of its unincorporated PrescribeWellness business division (the “PrescribeWellness Business”) in August 2022. The DoseMe, SinfoníaRx, and PrescribeWellness businesses comprised the majority of the Company’s MedWise HealthCare segment. The Company’s completed sale of the PrescribeWellness Business and plan of sale with respect to DoseMe and SinfoníaRx represent a strategic business shift having a significant effect on the Company’s operations and financial results. As a result, the Company determined that these businesses met such requirements to be classified as held for sale and discontinued operations as of March 31, 2022 and continued to meet the requirements as of September 30, 2022. Accordingly, unless otherwise indicated, the accompanying consolidated financial statements have been recast for all periods presented to reflect the assets, liabilities, revenue, and expenses related to these businesses as discontinued operations. Divestiture of Business On August 1, 2022 (the “Sale Date”), the Company completed the sale of its PrescribeWellness Business, including the assets, properties, and rights that were primarily used or held for use in connection with the PrescribeWellness Business, as well as the KD Assets (as defined below) to Transaction Data Systems, Inc. (“TDS”). On the Sale Date, the Company also completed the acquisition of certain intellectual property from karmadata, Inc. (“KD”) that had historically been licensed to the Company, (the “KD Assets”). The KD Assets acquired were simultaneously transferred to TDS on the Sale Date. The purchase consideration included $125,000 in cash, subject to certain customary post-closing adjustments, of which $118,561 was paid directly to the Company and $5,900 was paid to KD on the Sale Date. In October 2022, TDS also paid the Company $1,477 for certain customary post-closing adjustments subsequent to the Sale Date. The Company is also entitled to receive up to $15,000 contingent consideration to be paid by TDS based upon the PrescribeWellness Business’s achievement of certain performance-based metrics during the fiscal years ending December 31, 2023 and 2024. The contingent consideration had an estimated fair value of $7,000 on the Sale Date. See Note 14 for additional discussion on the fair value assessment of the contingent consideration receivable. In connection with the sale of the PrescribeWellness Business, the Company entered into a transition services agreement (“TSA)” with TDS pursuant to which the Company is providing services, including, but not limited to, business support services for the PrescribeWellness business after the sale through April 2023. The Company recognized $479 of income related to the TSA for the three and nine months ended September 2022, which is reported in other income on the Company’s consolidated statement of operations. During the six months ended June 30, 2022, as a result of the Company’s intention to sell the PrescribeWellness Business, the Company prepared an impairment test on the related net assets held for sale. Using a market approach to determine fair value, the Company concluded that the carrying value of the net assets held for sale for the PrescribeWellness Business did not exceed its fair value, less costs to sell. As a result, the Company recorded goodwill impairment charges of $12,145 and impairment charges of $8,500 on net assets held for sale, summarized in the results of the PrescribeWellness business presented below. On August 1, 2022, the Company recorded an additional $2,879 for the final loss on the sale of the PrescribeWellness Business, resulting in an aggregate loss of $11,379 on the net assets sold for the nine months ended September 30, 2022. The following table summarizes the net assets sold as finally reported on the sale date of August 1, 2022 and as of December 31, 2021, classified as discontinued operations on the consolidated balance sheets as of December 31, 2021: August 1, December 31, 2022 2021 Accounts receivable, net $ 5,020 8,002 Prepaid expenses and other assets 1,751 1,038 Property and equipment, net 371 — Operating lease right-of-use assets 1,252 — Software development costs, net 14,536 — Goodwill 35,314 — Intangible assets, net 81,504 — Impairment of carrying value (8,500) — Total current assets of discontinued operations $ 131,248 $ 9,040 Property and equipment, net $ — $ 412 Operating lease right-of-use assets — 1,434 Software development costs, net — 11,474 Goodwill — 47,459 Intangible assets, net — 84,617 Other assets — 64 Total noncurrent assets of discontinued operations $ — $ 145,460 Operating lease liabilities $ 1,086 $ 620 Accounts payable 491 913 Accrued expenses and other liabilities 2,754 3,529 Total current liabilities of discontinued operations $ 4,331 $ 5,062 Noncurrent operating lease liabilities $ — $ 830 Other long-term liabilities — 135 Total noncurrent liabilities of discontinued operations $ — $ 965 The following table summarizes the results of operations of the PrescribeWellness Business, which are included in loss from discontinued operations, net of tax in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 2,537 $ 10,533 $ 19,306 $ 27,629 Cost of revenue, exclusive of depreciation and amortization 1,229 3,426 7,747 9,883 Operating expenses 2,336 8,373 14,930 24,427 Impairment charges — — 20,645 — Loss on disposal of business 2,879 — 2,879 — Loss from discontinued operations before income taxes (3,907) (1,266) (26,895) (6,681) Income tax (benefit) expense (11) 12 (299) 66 Net loss from discontinued operations, net of tax $ (3,896) $ (1,278) $ (26,596) $ (6,747) The following table summarizes the significant operating non-cash items and investing activities of PrescribeWellness Business: Nine Months Ended September 30, 2022 2021 Depreciation and amortization $ 4,551 $ 12,059 Impairment charges 20,645 — Stock-based compensation 1,697 2,352 Loss on disposal of business 2,879 — Purchases of property and equipment (22) (305) Software development costs (4,443) (9,783) Held for Sale The Company considers the sale of the DoseMe and SinfoníaRx businesses to be highly probable within one year. During the three and nine months ended September 30, 2022, as a result of the Company’s intention to sell the DoseMe and SinfoníaRx businesses, the Company prepared an impairment test on the related net assets held for sale. Using a market approach to determine fair value, the Company concluded that the carrying values of the net assets held for sale for the SinfoníaRx and DoseMe businesses did not exceed their fair values, less costs to sell. As a result, the Company recorded goodwill impairment charges of $6,127 and $15,521 of impairment charges on the net assets held for sale related to the DoseMe and SinfoníaRx businesses for the nine months ended September 30, 2022. For the three months ended September 30, 2022, the Company recorded $5,845 of impairment charges on the net assets held for sale related to the DoseMe and SinfoníaRx businesses. No goodwill impairment charges related to the DoseMe and SinfoníaRx businesses were recorded for the three months ended September 30, 2022. The following table s ummarizes the results of operations of the businesses, which are included in loss from discontinued operations, net of tax in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 6,407 $ 8,143 $ 23,094 $ 26,961 Cost of revenue, exclusive of depreciation and amortization 7,055 6,521 20,479 19,755 Operating expenses 3,879 5,659 13,639 18,827 Impairment charges 5,845 — 21,648 — Loss from discontinued operations before income taxes (10,372) (4,037) (32,672) (11,621) Income tax (benefit) expense (83) 40 (363) 116 Net loss from discontinued operations, net of tax $ (10,289) $ (4,077) $ (32,309) $ (11,737) The following table summarizes the DoseMe and SinfoníaRx businesses’ current and noncurrent assets and liabilities classified as discontinued operations on the consolidated balance sheets as of September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Cash $ 69 $ 273 Accounts receivable, net 4,964 4,644 Prepaid expenses and other assets 796 554 Property and equipment, net 1,349 — Operating lease right-of-use assets 3,732 — Software development costs, net 6,910 — Goodwill 1,927 — Intangible assets, net 22,635 — Impairment of carrying value (15,521) — Total current assets of discontinued operations $ 26,861 $ 5,471 Property and equipment, net $ — $ 1,485 Operating lease right-of-use assets — 3,296 Software development costs, net — 4,466 Goodwill — 8,053 Intangible assets, net — 24,675 Other assets — 123 Total noncurrent assets of discontinued operations $ — $ 42,098 Operating lease liabilities $ 3,458 $ 793 Accounts payable 3,077 3,395 Accrued expenses and other liabilities 4,597 3,130 Total current liabilities of discontinued operations $ 11,132 $ 7,318 Noncurrent operating lease liabilities — $ 2,608 Other long-term liabilities — — Total noncurrent liabilities of discontinued operations $ — $ 2,608 The following table summarizes the DoseMe and SinfoníaRx businesses’ significant operating non-cash items and investing activities of discontinued operations: Nine Months Ended September 30, 2022 2021 Depreciation and amortization $ 2,780 $ 8,175 Impairment charges 21,648 — Stock-based compensation 2,667 2,510 Purchases of property and equipment (50) (1,323) Software development costs (2,998) (6,155) |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue. | |
Revenue | 4. Revenue The Company generates the majority of its revenue from its CareVention HealthCare segment. Client contracts generally have a term of one 0 The Company does not disclose the amount of variable consideration that the Company expects to recognize in future periods as the variable consideration in the Company’s contracts is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation, and the terms of that variable consideration relate specifically to the Company’s efforts to transfer the distinct service, or to a specific outcome from transferring the distinct service. The Company’s contracts primarily include monthly fees associated with unspecified quantities of medications, members, claims, medication safety reviews, or user subscriptions that fluctuate throughout the contract. See below for a description of the Company’s revenues. CareVention HealthCare PACE Product Revenue The Company provides medication fulfillment pharmacy services to PACE organizations. While the majority of medications are routinely filled in order to treat chronic conditions, the mix and quantity of medications can vary. Revenue from medication fulfillment services is generally billed monthly or weekly, depending on whether the PACE organization is contracted with a pharmacy benefit manager, and is recognized when medications are delivered and control has passed to the client. At the time of delivery, the Company has performed substantially all of its performance obligations under its client contracts. The Company does not experience a significant level of returns or reshipments. PACE Solutions The Company provides medication safety services and health plan management services to PACE organizations. These services primarily include medication reviews, risk adjustment services, third-party administration services, pharmacy benefit management (“PBM”) solutions, and electronic health records software. Revenue related to these services primarily consists of a fixed monthly fee assessed based on number of members served (“per member per month”), a fee for each claim adjudicated, and subscription fees. These fees are recognized when the Company satisfies its performance obligation to stand ready to provide PACE services, which occurs when the Company’s clients have access to the PACE services. The Company generally bills for PACE services on a monthly basis. For client contracts for which the Company performs both medication fulfillment and PBM services, the Company recognizes revenue using the gross method at the contract price negotiated with its clients and when the Company has concluded it controls the prescription drug before it is transferred to the client plan members. The Company controls prescription drugs dispensed indirectly through its retail pharmacy network because it has separate contractual arrangements with those pharmacies, has discretion in setting the price for the transaction, and assumes primary responsibility for fulfilling the promise to provide prescription drugs to its client plan members while performing the related PBM services. These factors indicate that the Company is the principal and, as such, the Company recognizes the total prescription price contracted with clients in revenue. MedWise HealthCare Medication Safety Services The Company provides medication safety services, which include identification of high-risk individuals, medication regimen reviews including patient and prescriber counseling, and targeted interventions to increase adherence and close gaps in care. Revenue related to these services primarily consists of per member per month fees and fees for each medication review and clinical assessment completed. Revenue is recognized when the Company satisfies its performance obligation to stand ready to provide medication safety services, which occurs when the Company’s clients have access to the medication safety services and when medication reviews and clinical assessments are completed. The Company generally bills for the medication reviews and clinical assessments when they are completed. The Company generally bills for the medication safety services on a monthly basis. Software Subscription and Services The Company provides software as a service (“SaaS”) solutions which allow for the identification of individuals with high medication-related risk and for optimizing medication therapy. Revenues related to these software services primarily consist of monthly subscription fees and are recognized monthly as the Company meets its performance obligation to provide access to the software. Revenue for implementation and set-up services is generally recognized over the contract term as the software services are provided. The Company generally bills for the software services on a monthly basis. Disaggregation of Revenue In the following table, revenue is disaggregated by operating segment. Substantially all of the Company’s revenue is recognized in the U.S. Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 CareVention HealthCare: PACE product revenue $ 59,780 $ 50,321 $ 166,645 $ 139,021 PACE solutions 16,416 14,707 47,604 42,973 $ 76,196 $ 65,028 $ 214,249 $ 181,994 MedWise HealthCare: Medication safety services $ 843 $ 2,820 $ 2,336 $ 8,817 Software subscription and services 62 62 223 174 $ 905 $ 2,882 $ 2,559 $ 8,991 Total revenue $ 77,101 $ 67,910 $ 216,808 $ 190,985 Contract Balances Assets and liabilities related to the Company’s contracts are reported on a contract-by-contract basis at the end of each reporting period. Contract balances consist of contract assets and contract liabilities. Contract assets are recorded when the right to consideration for services is conditional on something other than the passage of time. Contract assets relating to unbilled receivables are transferred to accounts receivable when the right to consideration becomes unconditional. Contract assets are classified as current or non-current based on the timing of the Company’s rights to the unconditional payments. Contract assets are generally classified as current and recorded within other current assets on the Company’s consolidated balance sheets. Contract liabilities include advance customer payments and billings in excess of revenue recognized. The Company generally classifies contract liabilities in accrued expenses and other current liabilities and in other long-term liabilities on the Company’s consolidated balance sheets. The Company anticipates that it will satisfy most of its performance obligations associated with its contract liabilities within one year. The following table provides information about the Company’s contract assets and contract liabilities from contracts with clients as of September 30, 2022 and December 31, 2021. September 30, December 31, 2022 2021 Contract assets $ 15,072 $ 12,695 Contract liabilities 4,110 2,191 Significant changes in the contract assets and the contract liabilities balances during the period are as follows: September 30, 2022 Contract assets: Contract assets, beginning of period $ 12,695 Decreases due to cash received (12,466) Changes to the contract assets at the beginning of the period as a result of changes in estimates 451 Changes during the year, net of reclassifications to receivables 14,392 Contract assets, end of period $ 15,072 Contract liabilities: Contract liabilities, beginning of period $ 2,191 Revenue recognized that was included in the contract liabilities balance at the beginning of the period (1,903) Increases due to cash received, excluding amounts recognized as revenue during the year 3,822 Contract liabilities, end of period $ 4,110 During the nine months ended September 30, 2021, the Company recognized $1,404 of revenue that was included in the December 31, 2020 contract liability balance of $1,982. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2022 | |
Net Loss per Share | |
Net Loss per Share | 5. Net Loss per Share Basic and diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock of the Company outstanding during the period. The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator (basic and diluted): Net loss from continuing operations $ (25,880) $ (11,756) $ (58,963) $ (39,200) Net loss from discontinued operations (14,185) (5,355) (58,905) (18,484) Net loss $ (40,065) $ (17,111) $ (117,868) $ (57,684) Denominator (basic and diluted): Weighted average shares of common stock outstanding, basic and diluted 24,350,182 23,407,391 24,075,666 23,230,138 Net loss per share from continuing operations, basic and diluted $ (1.07) $ (0.50) $ (2.45) $ (1.68) Net loss per share from discontinued operations, basic and diluted (0.58) (0.23) (2.45) (0.80) Total net loss per share, basic and diluted $ (1.65) $ (0.73) $ (4.90) $ (2.48) The following potential common shares, presented based on amounts outstanding as of September 30, 2022 and 2021, were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect. September 30, 2022 2021 Stock options to purchase common stock 1,402,931 1,671,680 Unvested restricted stock and restricted stock units 2,217,033 1,624,523 Common stock warrants 4,646,393 4,646,393 Conversion of convertible senior subordinated notes 4,646,393 4,646,393 12,912,750 12,588,989 For the three and nine months ended September 30, 2022 and 2021, shares related to the conversion of the convertible senior subordinated notes were included in the table above using the if-converted method. For the three and nine months ended September 30, 2022, shares related to performance stock units were excluded from the table above, as the performance conditions were unmet as of September 30, 2022 (see Note 13). |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Other Current Assets | |
Other Current Assets | 6. Other Current Assets As of September 30, 2022 and December 31, 2021, other current assets consisted of the following: September 30, 2022 December 31, 2021 Contract assets $ 15,072 $ 12,695 Non-trade receivables 1,235 3,289 Divestiture related consideration receivables 1,477 — Other 2,655 2,049 Total other current assets $ 20,439 $ 18,033 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment. | |
Property and Equipment | 7. Property and Equipment Accumulated depreciation was $18,890 and $17,427 as of September 30, 2022 and December 31, 2021, respectively. Depreciation expense on property and equipment for the three months ended September 30, 2022 and 2021 was $801 and $825, respectively. Depreciation expense on property and equipment for the nine months ended September 30, 2022 and 2021 was $2,862 and $2,672, respectively. |
Software Development Costs
Software Development Costs | 9 Months Ended |
Sep. 30, 2022 | |
Software Development Costs | |
Software Development Costs | 8. Software Development Costs The Company capitalizes certain costs incurred in connection with obtaining or developing its proprietary software platforms, which support its product and service contracts. These costs include third-party contractors and payroll for employees directly involved with the software development, including external direct costs of material and services, and interest expense related to the borrowings attributable to software development. As of September 30, 2022 and December 31, 2021, capitalized software costs consisted of the following: September 30, 2022 December 31, 2021 Software development costs $ 51,305 $ 49,481 Less: accumulated amortization (18,699) (20,227) Software development costs, net $ 32,606 $ 29,254 Capitalized software development costs included above not yet subject to amortization $ 4,505 $ 5,328 Amortization expense for the three months ended September 30, 2022 and 2021 was $3,224 and $2,579, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021 was $9,005 and $6,682, respectively. During the first quarter of 2022, the Company became aware of changes in circumstances impacting the future functionality of certain capitalized software development costs in the MedWise HealthCare segment and evaluated the recoverability of the related long-lived assets by comparing their carrying amount to the future net undiscounted cash flows expected to be generated by the assets to determine if the carrying value was not recoverable. The recoverability test indicated that certain capitalized software development costs were impaired and, as a result, the Company used an income approach to measure the fair value of the assets and recognized non-cash impairment charges of $4,062 for the nine months ended September 30, 2022. There were no identified circumstances that would impact the future functionality of capitalized software development costs during the three months ended September 30, 2022. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 9. Goodwill and Intangible Assets The Company’s goodwill as of September 30, 2022 and December 31, 2021 was $115,323, which relates to the Company’s CareVention HealthCare segment. During the first and second quarters of 2022, the Company experienced a sustained decline in the market price of its common stock and determined that an indicator of impairment was present. The Company performed a quantitative goodwill impairment assessment as of June 30, 2022, estimating the fair value of the Company’s reporting unit using a market approach. Based on the analysis performed, the Company determined that the estimated fair value of the Company’s reporting unit exceeded its carrying value, and, as a result, goodwill was not impaired as of June 30, 2022. No indicators of impairment were identified for the three months ended September 30, 2022. Intangible assets consisted of the following as of September 30, 2022 and December 31, 2021: Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net September 30, 2022 Trade names 2.6 $ 1,340 $ (982) $ 358 Client relationships 11.7 51,264 (14,438) 36,826 Non-competition agreements 5.0 1,640 (1,221) 419 Developed technology 6.2 14,720 (12,076) 2,644 Domain name 10.0 59 (31) 28 Total intangible assets $ 69,023 $ (28,748) $ 40,275 Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2021 Trade names 2.9 $ 1,340 $ (853) $ 487 Client relationships 11.7 51,264 (11,042) 40,222 Non-competition agreements 5.0 1,640 (975) 665 Developed technology 6.2 14,720 (10,768) 3,952 Domain name 10.0 59 (27) 32 Total intangible assets $ 69,023 $ (23,665) $ 45,358 Amortization expense for intangible assets for the three months ended September 30, 2022 and 2021 was $1,694 and $1,907, respectively. Amortization expense for intangible assets for the nine months ended September 30, 2022 and 2021 was $5,083 and $5,738, respectively. The estimated amortization expense for the remainder of 2022 and each of the next five years and thereafter is as follows: Years Ending December 31, 2022 (October 1 – December 31) $ 1,669 2023 6,162 2024 4,684 2025 4,466 2026 4,338 2027 4,271 Thereafter 14,685 Total estimated amortization expense $ 40,275 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 10. Accrued Expenses and Other Liabilities As of September 30, 2022 and December 31, 2021, accrued expenses and other liabilities consisted of the following: September 30, 2022 December 31, 2021 Employee related expenses $ 8,961 $ 8,595 Contract liability 3,864 2,015 Customer deposits 903 904 Client funds obligations* 7,389 6,038 Contract labor 2,852 838 Divestiture closing fees 3,000 — Interest 711 2,281 Vendor financing arrangements 176 — Professional fees 2,161 1,327 Consideration payable to customer 24,500 15,971 Income and non-income taxes payable 95 15 Other expenses 4,895 3,013 Total accrued expenses and other liabilities $ 59,507 $ 40,997 *This amount represents client funds held by the Company, with an offsetting amount included in restricted cash. |
Line of Credit and Long-Term De
Line of Credit and Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Lines of Credit and Long-Term Debt | |
Line of Credit and Long-Term Debt | 11. Line of Credit and Long-Term Debt (a) Line of Credit On December 18, 2020, the Company and its subsidiaries entered into a Loan and Security Agreement (the “2020 Credit Facility”), with Western Alliance Bank (“WAB”). The 2020 Credit Facility provided for a $120,000 secured revolving credit facility, with a $1,000 sublimit for cash management services and letters of credit and foreign exchange transactions. Amounts under the 2020 Credit Facility could be borrowed, repaid, and re-borrowed from time to time until the maturity date on May 16, 2025, and were permitted to be used for, among other things, working capital and other general corporate purposes. Loans under the 2020 Credit Facility bore interest at a rate equal to the LIBOR rate plus 3.25%. The obligations under the 2020 Credit Facility were secured by all of the assets of the borrowers, subject to certain exceptions and exclusions as set forth in the 2020 Credit Facility. The 2020 Credit Facility was subject to a commitment fee of 0.50% of the total commitment amount payable on the closing date, and 0.25% of the total commitment amount payable on each anniversary thereafter. Additionally, the 2020 Credit Facility was subject to an unused line fee. On August 1, 2022, the Company entered into a payoff letter with WAB with respect to the 2020 Credit Facility, pursuant to which the Company voluntarily elected to pay all amounts outstanding, including principal and interest, under the 2020 Credit Facility and related loan documents (the “Pay Off”) using cash on hand and proceeds from the sale of the PrescribeWellness Business. Accordingly, the Company paid a total of $57,406 to WAB for the Pay Off, and terminated the 2020 Credit Facility and related loan documents (the “Termination”). The Company did not incur any prepayment or early termination penalties in connection with either the Pay Off or the Termination. Upon the Termination and in connection with the Pay Off, all security interests and pledges granted to the secured parties thereunder were terminated and released. Interest expense on the 2020 Credit Facility was $266 and $1,363 for the three and nine months ended September 30, 2022, respectively. Interest expense on the 2020 Credit Facility was $314 and $842 for the three and nine months ended September 30, 2021, respectively. In connection with the 2020 Credit Facility, the Company recorded deferred financing costs of $1,534. The Company amortized the associated deferred financing costs to interest expense using the effective-interest method over the term of the agreement. On August 1, 2022, in connection with the Termination, the remaining balance of deferred financing costs was amortized to interest expense. The Company amortized $698 and $973 to interest expense for the three and nine months ended September 30, 2022, respectively, for deferred financing costs. The Company amortized $136 and $404 to interest expense during the three and nine months ended September 30, 2021, respectively, for deferred financing costs. (b) Convertible Senior Subordinated Notes On February 12, 2019, the Company issued and sold an aggregate principal amount of $325,000 of 1.75% convertible senior subordinated notes (the “2026 Notes”) in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2026 Notes bear interest at a rate of 1.75% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2019. The 2026 Notes will mature on February 15, 2026, unless earlier converted or repurchased. The initial conversion rate for the notes is 14.2966 shares of the Company’s common stock per $1 principal amount of the 2026 Notes. This conversion rate is equal to an initial conversion price of approximately $69.95 per share of the Company’s common stock. Holders may convert all or any portion of their 2026 Notes at any time prior to the close of business on the business day immediately preceding August 15, 2025 only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2026 Notes) per $1 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change or make-whole fundamental change (as defined in the indenture governing the 2026 Notes) or a transaction resulting in the Company’s common stock converting into other securities or property or assets. On or after August 15, 2025 until the close of business on the first scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2026 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver shares of our common stock, cash or a combination thereof at the Company’s option. As of September 30, 2022, none of the conditions allowing holders of the 2026 Notes to convert had been met. Debt issuance costs related to the 2026 Notes of $9,372 are being amortized to interest expense using the effective interest method over the contractual term, resulting in an effective interest rate of 2.20%. During the three months ended September 30, 2022, the Company recognized $1,757 of interest expense related to the 2026 Notes, of which $1,422 was paid or accrued and $335 was non-cash accretion of the debt discounts recorded. During the nine months ended September 30, 2022, the Company recognized $5,265 of interest expense related to the 2026 Notes, of which $4,266 was paid or accrued and $999 was non-cash accretion of the debt discounts recorded. During the three months ended September 30, 2021, the Company recognized $1,750 of interest expense related to the 2026 Notes, of which $1,423 was paid or accrued, and $327 was non-cash accretion of the debt discounts recorded. During the nine months ended September 30, 2021, the Company recognized $5,243 of interest expense related to the 2026 Notes, of which $4,266 was paid or accrued, and $977 was non-cash accretion of the debt discounts recorded. In addition, unpaid additional interest payable as a result of the failure to remove the restrictive legend on the 2026 Notes had accrued on the 2026 Notes from and including February 17, 2020, but ceased accruing on February 16, 2021 as a result of the restrictive legend being removed. The Company recorded $212 of additional interest expense for the nine months ended September 30, 2021. As of September 30, 2022, total accrued interest payable related to the 2026 Notes was $711, which is included in accrued expenses and other liabilities on the consolidated balance sheets. The 2026 Notes have a carrying value of $320,297 as of September 30, 2022. The 2026 Notes are classified as long-term debt on the Company’s consolidated balance sheets, and will be until such 2026 Notes are within one year of maturity. (c) Convertible Note Hedge and Warrant Transactions In connection with the offering of the 2026 Notes, the Company entered into convertible note hedge transactions with affiliates of certain of the initial purchasers (the “option counterparties”) of the 2026 Notes pursuant to the terms of call option confirmations. The Company has the option to purchase a total of 4,646,393 shares of its common stock at a price of approximately $69.95 per share. The total premiums paid for the note hedges were $101,660. The Company also entered into warrant transactions with the option counterparties whereby they have the option to purchase 4,646,393 shares of the Company’s common stock at a price of $105.58 per share. The Company received $65,910 in cash proceeds from the sale of the warrants. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the convertible note hedges and warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the convertible note hedge and warrant transactions were recorded as a reduction to additional paid-in capital on the Company’s consolidated balance sheets. The convertible note hedge transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the 2026 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2026 Notes, as the case may be. The warrant transactions could separately have a dilutive effect on the Company’s common stock to the extent that the market price per share of the Company’s common stock exceeds the strike price of the warrants. As of September 30, 2022, no warrants have been exercised and all warrants to purchase shares of the Company’s common stock were outstanding. (d) Long-Term Debt The following table represents the total long-term debt obligations of the Company at September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Convertible senior subordinated notes $ 235,272 $ 325,000 Convertible senior subordinated notes - related party 89,728 — Unamortized discount, including debt issuance costs, on convertible senior subordinated notes (4,703) (5,701) Total long-term debt, net $ 320,297 $ 319,299 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes For the three months ended September 30, 2022 and 2021, the Company recorded income tax benefit of $7 and income tax expense of $82, respectively, which resulted in effective tax rates of 0.0% and (0.7)%, respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded income tax expense of $368 and $284, respectively, which resulted in effective tax rates of (0.6)% and (0.7)%, respectively. The effective tax rates differ from the U.S. statutory tax rate primarily due to the full valuation allowance recorded that is currently limiting the realizability of the Company’s net deferred tax assets as of the end of the periods presented. Accordingly, the tax benefit was limited due to unbenefited losses in the three and nine months ended September 30, 2022 and 2021, respectively. On February 12, 2021, the Company received a private letter ruling from the Internal Revenue Service, which determined, based on information submitted and representations made by the Company, that the Company met the requirements to deduct the interest expense resulting from the amortization of the debt discount associated with the 2026 Notes. As a result, the Company recorded a deferred tax asset of $26,313 and a corresponding $26,313 increase to its valuation allowance. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 13. Stock-Based Compensation In September 2016, the Company adopted the 2016 Equity Compensation Plan ( Restricted Common Stock and Restricted Stock Units The Company issues restricted stock awards and restricted stock units pursuant to the 2016 Plan to employees and non-employee directors. Restricted stock awards and restricted stock units generally vest over a one The following table summarizes the aggregate restricted stock award activity, inclusive of performance based restricted stock awards, and restricted stock unit activity under the 2016 Plan for the nine months ended September 30, 2022: Weighted average Number grant-date of shares fair value Outstanding at December 31, 2021 2,196,566 $ 40.19 Granted 1,935,883 4.44 Vested (1,224,471) 34.32 Forfeited (676,723) 16.40 Outstanding at September 30, 2022 2,231,255 $ 19.61 The table above includes 14,222 restricted stock units which had vested but had not been issued as of September 30, 2022. For the three months ended September 30, 2022 and 2021, an aggregate of $13,061 and $6,447 of expense, respectively, was recognized related to restricted stock awards and restricted stock units, excluding performance-based restricted stock awards described below. For the nine months ended September 30, 2022 and 2021, an aggregate of $26,129 and $22,846 of expense, respectively, was recognized related to restricted stock awards and restricted stock units, excluding performance-based restricted stock awards as described below. As of September 30, 2022, there was unrecognized compensation expense of $30,976 related to unvested restricted stock awards and unvested restricted stock units, excluding performance-based restricted stock awards described below, under the 2016 Plan, which is expected to be recognized over a weighted average period of 2.4 years. Expense related to restricted stock awards for the three and nine months ended September 30, 2022 includes $8,143 for the accelerated vesting of unvested shares of restricted stock related to separation agreements with two retired named executive officers. See Note 17 for additional information. Performance-Based Equity Awards On October 29, 2020, pursuant to the 2016 Plan, the Board approved grants totaling 26,400 shares of restricted stock to certain employees, of which 1,400 expired on April 30, 2021 and 12,500 expired on December 31, 2021. The remaining 12,500 shares fully vested subject to the achievement of certain milestones on December 31, 2021. The awards had a grant-date fair value of $35.95 per share based on the Company’s closing stock price on the grant date. Stock-based compensation costs associated with these grants were recognized over the service period based upon the Company’s assessment of the probability that the performance conditions would be achieved. The Company recognized $194 and $556 of stock-based compensation expense related to these grants for the three and nine months ended September 30, 2021, respectively. On April 27, 2021, pursuant to the 2016 Plan, the Board approved awards of performance stock units to certain employees. Each award reflects a target number of shares (“Target 2021 Shares”) that may be issued to the award recipient. The awards are earned upon the Company’s achievement of certain revenue performance targets during the three-year performance period ending December 31, 2023. Depending on the results achieved during the performance period, the actual number of shares that a grant recipient may receive at the end of the performance period may range from 0% to 200% of the Target 2021 Shares granted. The performance stock unit awards have a grant-date fair value of $44.13 per share based on the Company’s closing stock price on the grant date. Stock-based compensation costs associated with these grants are recognized over the performance period based upon the Company’s assessment of the probability that the performance targets will be achieved. The Company did not recognize any stock-based compensation expense related to the performance stock units for the three and nine months ended September 30, 2022, as the achievement of the underlying performance targets was considered unlikely. During the nine months ended September 30, 2022, 47,175 performance stock units expired. As of September 30, 2022, the number of Target 2021 Shares was 45,550 shares. As of September 30, 2022, the maximum number of achievable performance stock units was 91,100 and the maximum unrecognized compensation expense was $4,020. On August 22, 2022, pursuant to the 2016 Plan, the Board approved awards of performance stock units to certain executives. Each award reflects a target number of shares (“Target 2022 Shares”) that may be issued to the award recipient. The awards are earned upon the Company’s achievement of certain market performance targets during the three-year performance period ending December 31, 2024. Depending on the results achieved during the performance period, the actual number of shares that a grant recipient may receive at the end of the performance period may range from 0% to 200% of the Target 2022 Shares granted. The performance stock unit awards have a grant-date fair value of $4.38 per share based on the fair value of the Company’s stock price at grant date and the expected vesting units, taking into consideration the possibilities of all possible performance achievement levels. Stock-based compensation costs associated with these grants are recognized over the performance period. The Company recognized $69 of stock-based compensation expense related to the performance stock units for the three and nine months ended September 30, 2022. As of September 30, 2022, the number of Target 2022 Shares was 350,000 shares. As of September 30, 2022, the maximum number of achievable performance stock units was 700,000 and the remaining unrecognized compensation expense was $1,463. Other Stock Awards During the first quarter of 2021, the Board approved the grant of stock awards to certain non-employee directors and to a consultant pursuant to the 2016 Plan. The awards provided for the issuance of 1,416 shares of the Company’s common stock, which immediately vested on the grant date. These grants had a weighted average grant-date fair value of $40.85 per share. For the nine months ended September 30, 2021, the Company recorded $58 of expense related to these stock awards. During the first quarter of 2022, the Board approved grants of stock awards to certain non-employee directors and employees pursuant to the 2016 Plan. The awards provided for the issuance of 16,471 shares of the Company’s common stock, which immediately vested on the grant date. These grants had a weighted average grant-date fair value of $5.57 per share. For the nine months ended September 30, 2022, the Company recorded $92 of expense related to these stock awards. During the second quarter of 2022, the Board approved grants of stock awards to certain non-employee directors pursuant to the 2016 Plan. The awards provided for the issuance of 12,262 shares of the Company’s common stock, which immediately vested on the grant date. These grants had a weighted average grant-date fair value of $3.64 per share. For the nine months ended September 30, 2022, the Company recorded $45 of expense related to these stock awards. During the third quarter of 2022, the Board approved grants of stock awards to certain employees pursuant to the 2016 Plan. The awards provided for the issuance of 615,066 shares of the Company’s common stock, which immediately vested on the grant date. These grants had a weighted average grant-date fair value of $5.01 per share. For the three and nine months ended September 30, 2022, the Company recorded $3,081 of expense related to these stock awards. Stock Options The Company recorded $1,025 and $1,586 of stock-based compensation expense related to employee and non-employee director stock options for the three months ended September 30, 2022 and 2021, respectively. The Company recorded $3,121 and $5,502 of stock-based compensation expense related to employee and non-employee stock options for the nine months ended September 30, 2022 and 2021, respectively. The Company records forfeitures as they occur. No grants for employee and non-employee stock options were made during the nine months ended September 30, 2022. The table below sets forth the weighted average assumptions for employee grants during the nine months ended September 30, 2021: Nine Months Ended Valuation assumptions: September 30, 2021 Expected volatility 58.57 % Expected term (years) 5.48 Risk-free interest rate 0.50 % Dividend yield — The weighted average grant date fair value of employee options granted during the nine months ended September 30, 2021 was $28.26 per share. The following table summarizes stock option activity under the 2016 Plan for the nine months ended September 30, 2022: Weighted Weighted average average remaining Aggregate Number exercise contractual intrinsic of shares price term value Outstanding at December 31, 2021 1,604,226 $ 29.90 Exercised (12,830) 4.96 Forfeited (188,465) 44.18 Outstanding at September 30, 2022 1,402,931 $ 28.21 3.8 $ 260 Options vested and expected to vest at September 30, 2022 1,402,931 $ 28.21 3.8 $ 260 Exercisable at September 30, 2022 1,370,302 $ 27.57 3.8 $ 260 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the Company’s closing stock price or estimated fair value on the last trading day of the fiscal quarter for those stock options that had exercise prices lower than the fair value of the Company's common stock. This amount changes based on the fair market value of the Company’s stock. The total intrinsic value of options exercised during the nine months ended September, 2022 and 2021 was $109 and $11,113, respectively. As of September 30, 2022, there was $867 of total unrecognized compensation cost related to nonvested stock options granted under the 2016 Plan, which is expected to be recognized over a weighted average period of 0.4 years. Cash received from option exercises for the nine months ended September 30, 2022 and 2021 was $64 and $3,683, respectively. The Company recorded total stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021 in the following expense categories of its consolidated statements of operations: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenue - product $ 331 $ 256 $ 778 $ 852 Cost of revenue - service 793 883 2,264 2,631 Research and development 1,741 1,261 4,021 4,533 Sales and marketing 285 209 593 1,251 General and administrative 12,228 4,292 20,517 14,833 Discontinued operations 1,858 1,110 4,364 4,862 Total stock-based compensation expense $ 17,236 $ 8,011 $ 32,537 $ 28,962 Employee Stock Purchase Plan In February 2021, the Board, subject to stockholder approval, adopted the Tabula Rasa HealthCare, Inc. Employee Stock Purchase Plan (the “ESPP”), which allows eligible employees to purchase common shares of Company stock through payroll deductions at a 15% discount off the lower of (i) the fair market value per share of common stock on the start date of the applicable offering period or (ii) the fair market value per share of common stock on the purchase date. The ESPP was approved by the Company’s stockholders at the 2021 annual meeting of stockholders in June 2021. The number of shares of common stock reserved for issuance under the ESPP will initially be 480,097 shares, subject to adjustment as provided in the ESPP, all of which remained available as of September 30, 2022. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 14. Fair Value Measurements The Company’s financial instruments consist of accounts receivable, client claims receivables, contract assets, contingent consideration receivable, accounts payable, client claims payable, contract liabilities, accrued expenses, vendor financing arrangements, and long-term debt, which includes the Company’s convertible senior subordinated notes. The carrying values of accounts receivable, client claims receivables, contract assets, accounts payable, client claims payable, contract liabilities, and accrued expenses are representative of their fair values due to the relatively short-term nature of those instruments. Vendor financing arrangements are recorded at net carrying value, which approximates fair value. See below for additional information on the Company’s convertible senior subordinated notes. The Company had classified assets measured at fair value on a recurring basis at September 30, 2022 as follows: Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 September 30, 2022 Assets Contingent consideration receivable - long-term $ — $ — $ 7,000 $ 7,000 In connection with the sale of the PrescribeWellness Business on August 1, 2022, additional consideration may be payable to the Company based on the achievement of certain customer and revenue metrics, as defined in the purchase agreement, for the periods ending December 31, 2023 and 2024. See Note 3 for additional information regarding the sale of the PrescribeWellness Business. The contingent consideration is measured at fair value on a recurring basis and may include the use of significant unobservable inputs, hence these instruments represent Level 3 measurements within the fair value hierarchy. All changes in contingent consideration subsequent to the initial sale-date measurement are recorded in net income or loss. The fair value of the contingent consideration receivable was determined using an income-approach based on projections for the achievement of the performance metrics. Changes in the projected customer and revenue metrics or discount rate may result in higher or lower fair value measurements. The following table presents the financial instruments that are not carried at fair value but require fair value disclosure as of September 30, 2022: Face Value Carrying Value Fair Value 1.75% Convertible Senior Subordinated Notes due 2026 $ 325,000 $ 320,297 $ 258,131 The fair value of the 2026 Notes at each balance sheet date is determined based on recent quoted market prices for these notes which is a Level 2 measurement. As discussed in Note 11, the 2026 Notes are carried at their aggregate face value of $325,000, less any unamortized debt issuance costs. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. Commitments and Contingencies (a) Employment Agreements The Company has change-in-control and severance agreements with each of the Company’s named executive officers and other key members of management that provide for, among other things, salary, performance bonuses or other incentive compensation, payments in the event of termination of the executives upon the occurrence of a change in control, and restrictive covenants pursuant to which the employees have agreed to refrain from competing with the Company or soliciting the Company’s employees or clients for a period following the employee’s termination of employment. (b) Legal Proceedings The Company is not currently involved in any significant claims or legal actions that, in the opinion of management, are expected to have a material adverse impact on the Company. (c) Vendor Purchase Agreements On March 29, 2019, the Company entered into an Affiliated Pharmacy Agreement and Pharmaceutical Program Supply Agreement (the “Prior Thrifty Drug Agreements”) with Thrifty Drug Stores, Inc. (“Thrifty Drug”). On July 1, 2020, the Company entered into a new Affiliated Pharmacy Agreement and Pharmaceutical Program Supply Agreement with Thrifty Drug (the “Thrifty Drug Agreements”) to replace the Prior Thrifty Drug Agreements, which, among other things, extended the Company’s agreement with Thrifty Drug through September 30, 2023. Pursuant to the terms of the Thrifty Drug Agreements, the Company has agreed to purchase not less than 98% of the Company’s total prescription product requirements from Thrifty Drug. The Company commenced purchasing prescription products under the Prior Thrifty Drug Agreements in May 2019 and has continued to do so under the Thrifty Drug Agreements beginning in July 2020. Both the Prior Thrifty Drug Agreements and the Thrifty Drug Agreements authorize Thrifty Drug to hold a security interest in all of the products purchased by the Company under the respective agreements. As of September 30, 2022 and December 31, 2021 the Company had $1,993 and $1,854, respectively, due to Thrifty Drug as a result of prescription drug purchases. In December 2019, the Company entered into an updated agreement with its data aggregation partner related to the Company’s pharmacy cost management services. The agreement is effective January 1, 2020 with a three-year term expiring December 31, 2022 and commits the Company to a monthly minimum purchase obligation of $30. In June 2021 and October 2021, the Company entered into agreements with a provider for cloud hosting and support services. The June 2021 agreement was effective June 3, 2021 and expires on April 28, 2024. Pursuant to the June 2021 agreement, the Company is committed to a minimum purchase obligation of $1,272 over the term of the agreement. The October 2021 agreement was effective October 1, 2021 and expires on September 30, 2024. Pursuant to the October 2021 agreement, the Company is committed to a minimum purchase obligation of $7,050 over the term of the agreement. Commitments under the October 2021 agreement are inclusive of commitments under the June 2021 agreement. As of September 30, 2022, the Company had a remaining commitment of $4,700 under the October 2021 agreement, of which $691 pertained to the June 2021 agreement. In August 2021, the Company entered into an agreement with a third party to provide enterprise support and information technology services. The agreement is effective November 1, 2021 and expires on October 31, 2026 and commits the Company to a minimum purchase obligation of $8,960 through October 31, 2024. As of September 30, 2022, the Company had a remaining commitment of $6,222. In November 2021, the Company entered into an agreement with a provider for cloud hosting services. The agreement is effective November 25, 2021 and expires on November 25, 2022 and commits the Company to a minimum purchase obligation of $1,598 over the contract term. As of September 30, 2022, the Company had a remaining commitment of $243. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting | |
Segment Reporting | 16. Segment Reporting The Company operates its business through two segments. As discussed in Note 3 above, the divestiture of the PrescribeWellness Business and the planned SinfoníaRx businesses, which collectively comprised the majority of the Company’s MedWise HealthCare segment, The Company's chief operating decision maker (“CODM”), the Chief Executive Officer, allocates resources and assesses performance based upon financial information at the reportable segment level. Substantially all revenues are generated and substantially all tangible assets are held in the U.S. CareVention HealthCare primarily provides services to PACE organizations that include medication fulfillment pharmacy services and PACE solutions, such as medication safety services, PBM solutions, and health plan management services . MedWise HealthCare primarily generates revenues from medication safety services and software subscription solutions, Shared services primarily consist of unallocated corporate sales and marketing expenses and general and administrative expenses associated with the management and administration of the Company’s business objectives. The CODM uses revenue in accordance with GAAP and Adjusted EBITDA as the relevant segment performance measures to evaluate the performance of the segments and allocate resources. Adjusted EBITDA is a segment performance financial measure that offers a useful view of the overall operation of the Company’s businesses and may be different from similarly titled segment performance financial measures used by other companies. Adjusted EBITDA consists of net loss plus certain other expenses, which include interest expense, provision for income taxes, depreciation and amortization, impairment charges, business optimization expenses, severance costs, executive transition costs, cooperation agreement costs, divestiture-related expense, acquisition-related expense, stock-based compensation expense, loss on disposal of business, and settlement costs. The Company considers business optimization expenses to include contract termination payments, severance, retention payments, and other employee and non-recurring vendor costs incurred related to its business optimization initiatives during 2022. The Company considers severance costs to include severance payments related to the realignment of its resources. The Company considers executive transition costs to include nonrecurring costs related to the hiring and onboarding of new named executive officers and separation costs related to former named executive officers. The Company considers cooperation agreement costs to include legal, professional services, and other non-recurring costs related to the Company’s cooperation agreement with Indaba Capital Management. The Company considers divestiture-related expense to include nonrecurring direct transaction costs. The Company considers acquisition-related expense to include nonrecurring direct transaction and integration costs. The Company considers loss on disposal of business to include nonrecurring loss resulting from the sale of PrescribeWellness Business. The Company considers settlement costs to include amounts payable by the Company or reductions to amounts owed to the Company as a result of a contractual settlement. Management considers revenue and Adjusted EBITDA to be the appropriate metric to evaluate and compare the ongoing operating performance of the Company’s segments on a consistent basis across reporting periods as it eliminates the effect of items which are not indicative of each segment’s core operating performance. The following tables present the Company’s segment information: CareVention HealthCare Shared Services and Other Consolidated Revenue: Three Months Ended September 30, 2022 Product revenue $ 59,780 $ — $ 59,780 Service revenue PACE solutions 16,416 — 16,416 Medication safety services — 843 843 Software subscription and services — 62 62 Total service revenue 16,416 905 17,321 Total revenue $ 76,196 $ 905 $ 77,101 Three Months Ended September 30, 2021 Product revenue $ 50,321 $ — $ 50,321 Service revenue PACE solutions 14,707 — 14,707 Medication safety services — 2,820 2,820 Software subscription and services — 62 62 Total service revenue 14,707 2,882 17,589 Total revenue $ 65,028 $ 2,882 $ 67,910 Nine Months Ended September 30, 2022 Product revenue $ 166,645 $ — $ 166,645 Service revenue PACE solutions 47,604 — 47,604 Medication safety services — 2,336 2,336 Software subscription and services — 223 223 Total service revenue 47,604 2,559 50,163 Total revenue $ 214,249 $ 2,559 $ 216,808 Nine Months Ended September 30, 2021 Product revenue $ 139,021 $ — $ 139,021 Service revenue PACE solutions 42,973 — 42,973 Medication safety services — 8,817 8,817 Software subscription and services — 174 174 Total service revenue 42,973 8,991 51,964 Total revenue $ 181,994 $ 8,991 $ 190,985 CareVention HealthCare Shared Services and Other Consolidated Adjusted EBITDA (loss) from Continuing Operations: Three Months Ended September 30, 2022 Adjusted EBITDA (loss) $ 14,051 $ (11,998) $ 2,053 Three Months Ended September 30, 2021 Adjusted EBITDA (loss) $ 14,014 $ (10,875) $ 3,139 Nine Months Ended September 30, 2022 Adjusted EBITDA (loss) $ 39,531 $ (34,339) $ 5,192 Nine Months Ended September 30, 2021 Adjusted EBITDA (loss) $ 40,983 $ (32,998) $ 7,985 The following table presents the Company’s reconciliation net loss as presented in the consolidated statements of operations to the segments’ total Adjusted EBITDA: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reconciliation of Net Loss to Adjusted EBITDA from Continuing Operations Net loss $ (40,065) $ (17,111) $ (117,868) $ (57,684) Add: Interest expense, net 2,717 2,230 7,430 6,959 Income tax (benefit) expense (7) 82 368 284 Depreciation and amortization 5,723 5,328 16,954 15,109 Impairment charges — — 4,062 — Business optimization expenses — — 787 — Severance costs 122 354 697 516 Executive transition 1,821 — 1,971 — Cooperation agreement costs 1,122 — 1,122 — Divestiture-related expense 1,057 — 2,591 — Acquisition-related expense — — — 217 Stock-based compensation expense 15,378 6,901 28,173 24,100 Loss from discontinued operations 14,185 5,355 58,905 18,484 Adjusted EBITDA from continuing operations $ 2,053 $ 3,139 $ 5,192 $ 7,985 Adjusted EBITDA (loss) from discontinued operations (3,593) 2,578 (1,036) 7,294 Total Adjusted EBITDA (loss) $ (1,540) $ 5,717 $ 4,156 $ 15,279 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reconciliation of Net Loss from Discontinued Operations, net of tax to Adjusted EBITDA (Loss) from Discontinued Operations Net loss from discontinued operations, net of tax $ (14,185) $ (5,355) $ (58,905) $ (18,484) Add: Income tax (benefit) expense (94) 52 (662) 182 Depreciation and amortization — 6,771 7,331 20,234 Impairment charges 5,845 — 42,293 — Loss on disposal of business 2,879 — 2,879 — Settlement — — 1,448 500 Divestiture-related expense 104 — 216 — Stock-based compensation expense 1,858 1,110 4,364 4,862 Adjusted EBITDA (loss) from discontinued operations $ (3,593) $ 2,578 $ (1,036) $ 7,294 Asset information by segment is not a key measure of performance used by the CODM. Accordingly, the Company has not disclosed asset information by segment. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | 17. Related Party Transactions The Company’s CareVention HealthCare segment provides medication fulfillment pharmacy services and certain PACE solutions services to a client whose Chief Executive Officer is a member of the Board. For the three months ended September 30, 2022 and 2021, $1,894 and $1,679 , respectively, of revenue related to this client was included in the Company’s consolidated statements of operations. For the nine months ended September 30, 2022 and 2021, $5,541 and $4,834 , respectively, of revenue related to this client was included in the Company’s consolidated statements of operations. As of September 30, 2022 and December 31, 2021, $225 and $67 , respectively, was included in accounts receivable, net, on the Company’s consolidated balance sheets. During the second quarter of 2022, a holder of the Company’s convertible senior subordinated notes became a significant stockholder. The stockholder held approximately $88,429 of the Company’s convertible senior subordinated notes, net of discount, which is presented on the Company’s consolidated balance sheet as of September 30, 2022. See Note 11 for more information on the Company’s convertible senior subordinated notes. On September 13, 2022, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with a significant stockholder of the Company, pursuant to which, among other matters, the Company agreed to effect certain changes to its management team and the composition of the Board of Directors and implement certain corporate governance changes. In connection with the Cooperation Agreement, the Company agreed to reimburse the stockholder $464 of fees incurred, which are included within the accrued expenses and other liabilities on the Company’s consolidated balance sheet as of September 30, 2022. On September 13, 2022, in connection with the entry into separation agreements with two retired named executive officers, the Company incurred $9,927 of separation costs, which included stock-based compensation related to the accelerated vesting of unvested shares of restricted stock, severance payments and benefits, relevant payroll taxes, and outplacement services. These costs are included within general and administrative expenses on the Company’s consolidated statement of operations, of which $1,616 are included within accrued expenses and other liabilities on the Company’s consolidated balance sheet as of September 30, 2022. On September 13, 2022, the Company entered into |
Rights Plan
Rights Plan | 9 Months Ended |
Sep. 30, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Rights Plan | 18. Rights Plan On July 25, 2022, the Board approved and adopted a Rights Agreement (the “Rights Agreement”), by and between the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent. Pursuant to the Rights Agreement, the Board declared a dividend of one preferred share purchase right (each, a “Right”) for each outstanding share of common stock. The Rights are distributable to stockholders of record as of the close of business on August 5, 2022 and are not exercisable initially. If the Rights become exercisable, each Right entitles the registered holder to purchase from the Company one |
Basis of Presentation, Summar_2
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements | |
Basis of Presentation | (a) Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the Company’s interim consolidated financial position for the periods indicated. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2022 (the “2021 Form 10-K”). Except as described below, there have been no material changes to the Company’s significant accounting policies described in the 2021 Form 10-K that have a material impact on the Company’s accompanying unaudited consolidated financial statements and related notes. |
Assets and Liabilities Held for Sale and Discontinued Operations | (b) Assets and Liabilities Held for Sale and Discontinued Operations A long-lived asset (or disposal group) is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable within a year. A long-lived asset (or disposal group) classified as held for sale is initially measured at the lower of its carrying amount or fair value less costs to sell. An impairment loss is recognized for any initial or subsequent write-down of the long-lived asset (or disposal group) to fair value less costs to sell. A gain or loss not previously recognized by the date of the sale of the long-lived asset (or disposal group) is recognized at the date of derecognition. Long-lived assets (including those that are part of a disposal group) are not depreciated or amortized while they are classified as held for sale. Long-lived assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet. Unless otherwise noted, amounts and disclosures throughout the notes to the unaudited consolidated financial statements relate to the Company’s continuing operations. Additional details surrounding the Company’s assets and liabilities held for sale and discontinued operations are included in Note 3. |
Cloud Computing Arrangements | (c) Cloud Computing Arrangements Costs to implement cloud computing arrangements that are hosted by third-party vendors are capitalized when incurred during the application development phase. Capitalized implementation costs are amortized on a straight-line basis over the reasonably certain term of the hosting arrangement, beginning when the service is ready for its intended use. As of September 30, 2022 and December 31, 2021, capitalized implementation costs of $882 and $747, respectively, were included in prepaid expenses, and $1,276 and $0, respectively, were included in other assets on the Company’s consolidated balance sheets. Accumulated amortization for these arrangements was $554 and $398 as of September 30, 2022 and December 31, 2021, respectively. Amortization expense for the three months ended September 30, 2022 and 2021, was $51 and $53, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021, was $156 and $155, respectively. |
Vendor Financing Arrangements | (d) Vendor Financing Arrangements On February 24, 2022, the Company expanded its existing relationship with a third-party service provider for business process outsourcing and technology services for its third-party administration services and electronic health records solutions. As a result, the third-party provider hired approximately 180 employees from the Company, hired to fill existing open positions and will augment with additional resources to meet client demand. The agreement term is seven years and includes total estimated fees of $115,300. The arrangement includes extended payment terms for cloud computing implementation costs, internally developed software support, and business process support. In order to determine the present value of the commitment, the Company used an imputed interest rate of 9.5%, which was reflective of its estimated uncollateralized borrowing rate at signing. As of September 30, 2022, the outstanding principal balance of the financing arrangement was $3,772 with an unamortized discount of $876, and was included in accrued expenses and other liabilities and other long-term liabilities on the Company’s consolidated balance sheet. Imputed interest expense from the arrangement was $53 and $89 for the three and nine months ended September 30, 2022, respectively. |
Concentration of Credit Risk | (e) Concentrations of Credit Risk The Company is subject to concentrations of credit risk related to cash, restricted cash, accounts receivable, and client claims receivable. While the Company maintains its cash and restricted cash with financial institutions with high credit ratings, it often maintains these deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any realized losses on cash or restricted cash to date. The Company’s medication fulfillment services clients are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) and, therefore, subject to the payment regulations established by the Centers for Medicare & Medicaid Services (“CMS”). Under CMS guidelines, Medicare Part D sponsors are required to remit payment for claims within 14 The Company’s clients also include health plans and other healthcare providers. Credit associated with these accounts is extended based upon management’s evaluation of creditworthiness and is monitored on an on-going basis. As of September 30, 2022 and December 31, 2021, no client represented more than 10% of net accounts receivable. As of September 30, 2022 one client represented 21% of client claims receivable. As of December 31, 2021, two clients represented 13% and 11%, respectively, of client claims receivable. One client accounted for 15% and 13% of total revenue for the three months ended September 30, 2022 and 2021, respectively, and 16% and 14% of total revenue for the nine months ended September 30, 2022 and 2021, respectively. |
Recent Accounting Pronouncement | (f) Recent Accounting Pronouncement In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under ASC Topic 606 (Revenue from Contracts with Customers) in order to align the recognition of a contract liability with the definition of performance obligation. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 is effective for financial statements issued for fiscal years beginning after December 15, 2022; early adoption is permitted. The Company plans to adopt ASU 2021-08 on January 1, 2023 and does not expect it to have a significant impact on the consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | |
Discontinued Operations | |
Schedules of discontinued operations | The following table summarizes the net assets sold as finally reported on the sale date of August 1, 2022 and as of December 31, 2021, classified as discontinued operations on the consolidated balance sheets as of December 31, 2021: August 1, December 31, 2022 2021 Accounts receivable, net $ 5,020 8,002 Prepaid expenses and other assets 1,751 1,038 Property and equipment, net 371 — Operating lease right-of-use assets 1,252 — Software development costs, net 14,536 — Goodwill 35,314 — Intangible assets, net 81,504 — Impairment of carrying value (8,500) — Total current assets of discontinued operations $ 131,248 $ 9,040 Property and equipment, net $ — $ 412 Operating lease right-of-use assets — 1,434 Software development costs, net — 11,474 Goodwill — 47,459 Intangible assets, net — 84,617 Other assets — 64 Total noncurrent assets of discontinued operations $ — $ 145,460 Operating lease liabilities $ 1,086 $ 620 Accounts payable 491 913 Accrued expenses and other liabilities 2,754 3,529 Total current liabilities of discontinued operations $ 4,331 $ 5,062 Noncurrent operating lease liabilities $ — $ 830 Other long-term liabilities — 135 Total noncurrent liabilities of discontinued operations $ — $ 965 The following table summarizes the results of operations of the PrescribeWellness Business, which are included in loss from discontinued operations, net of tax in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 2,537 $ 10,533 $ 19,306 $ 27,629 Cost of revenue, exclusive of depreciation and amortization 1,229 3,426 7,747 9,883 Operating expenses 2,336 8,373 14,930 24,427 Impairment charges — — 20,645 — Loss on disposal of business 2,879 — 2,879 — Loss from discontinued operations before income taxes (3,907) (1,266) (26,895) (6,681) Income tax (benefit) expense (11) 12 (299) 66 Net loss from discontinued operations, net of tax $ (3,896) $ (1,278) $ (26,596) $ (6,747) The following table summarizes the significant operating non-cash items and investing activities of PrescribeWellness Business: Nine Months Ended September 30, 2022 2021 Depreciation and amortization $ 4,551 $ 12,059 Impairment charges 20,645 — Stock-based compensation 1,697 2,352 Loss on disposal of business 2,879 — Purchases of property and equipment (22) (305) Software development costs (4,443) (9,783) |
DoseMe and SinfonaRx businesses | Discontinued Operations, Held-for-sale | |
Discontinued Operations | |
Schedules of discontinued operations | The following table s ummarizes the results of operations of the businesses, which are included in loss from discontinued operations, net of tax in the consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue $ 6,407 $ 8,143 $ 23,094 $ 26,961 Cost of revenue, exclusive of depreciation and amortization 7,055 6,521 20,479 19,755 Operating expenses 3,879 5,659 13,639 18,827 Impairment charges 5,845 — 21,648 — Loss from discontinued operations before income taxes (10,372) (4,037) (32,672) (11,621) Income tax (benefit) expense (83) 40 (363) 116 Net loss from discontinued operations, net of tax $ (10,289) $ (4,077) $ (32,309) $ (11,737) The following table summarizes the DoseMe and SinfoníaRx businesses’ current and noncurrent assets and liabilities classified as discontinued operations on the consolidated balance sheets as of September 30, 2022 and December 31, 2021: September 30, December 31, 2022 2021 Cash $ 69 $ 273 Accounts receivable, net 4,964 4,644 Prepaid expenses and other assets 796 554 Property and equipment, net 1,349 — Operating lease right-of-use assets 3,732 — Software development costs, net 6,910 — Goodwill 1,927 — Intangible assets, net 22,635 — Impairment of carrying value (15,521) — Total current assets of discontinued operations $ 26,861 $ 5,471 Property and equipment, net $ — $ 1,485 Operating lease right-of-use assets — 3,296 Software development costs, net — 4,466 Goodwill — 8,053 Intangible assets, net — 24,675 Other assets — 123 Total noncurrent assets of discontinued operations $ — $ 42,098 Operating lease liabilities $ 3,458 $ 793 Accounts payable 3,077 3,395 Accrued expenses and other liabilities 4,597 3,130 Total current liabilities of discontinued operations $ 11,132 $ 7,318 Noncurrent operating lease liabilities — $ 2,608 Other long-term liabilities — — Total noncurrent liabilities of discontinued operations $ — $ 2,608 The following table summarizes the DoseMe and SinfoníaRx businesses’ significant operating non-cash items and investing activities of discontinued operations: Nine Months Ended September 30, 2022 2021 Depreciation and amortization $ 2,780 $ 8,175 Impairment charges 21,648 — Stock-based compensation 2,667 2,510 Purchases of property and equipment (50) (1,323) Software development costs (2,998) (6,155) |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue. | |
Schedule of disaggregation of revenue | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 CareVention HealthCare: PACE product revenue $ 59,780 $ 50,321 $ 166,645 $ 139,021 PACE solutions 16,416 14,707 47,604 42,973 $ 76,196 $ 65,028 $ 214,249 $ 181,994 MedWise HealthCare: Medication safety services $ 843 $ 2,820 $ 2,336 $ 8,817 Software subscription and services 62 62 223 174 $ 905 $ 2,882 $ 2,559 $ 8,991 Total revenue $ 77,101 $ 67,910 $ 216,808 $ 190,985 |
Schedule of contract assets and contract liabilities from contracts with customers | September 30, December 31, 2022 2021 Contract assets $ 15,072 $ 12,695 Contract liabilities 4,110 2,191 |
Schedule of significant changes in the contract assets and the contract liabilities balances | September 30, 2022 Contract assets: Contract assets, beginning of period $ 12,695 Decreases due to cash received (12,466) Changes to the contract assets at the beginning of the period as a result of changes in estimates 451 Changes during the year, net of reclassifications to receivables 14,392 Contract assets, end of period $ 15,072 Contract liabilities: Contract liabilities, beginning of period $ 2,191 Revenue recognized that was included in the contract liabilities balance at the beginning of the period (1,903) Increases due to cash received, excluding amounts recognized as revenue during the year 3,822 Contract liabilities, end of period $ 4,110 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Net Loss per Share | |
Schedule of calculation of basic and diluted net loss per share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator (basic and diluted): Net loss from continuing operations $ (25,880) $ (11,756) $ (58,963) $ (39,200) Net loss from discontinued operations (14,185) (5,355) (58,905) (18,484) Net loss $ (40,065) $ (17,111) $ (117,868) $ (57,684) Denominator (basic and diluted): Weighted average shares of common stock outstanding, basic and diluted 24,350,182 23,407,391 24,075,666 23,230,138 Net loss per share from continuing operations, basic and diluted $ (1.07) $ (0.50) $ (2.45) $ (1.68) Net loss per share from discontinued operations, basic and diluted (0.58) (0.23) (2.45) (0.80) Total net loss per share, basic and diluted $ (1.65) $ (0.73) $ (4.90) $ (2.48) |
Schedule of shares excluded from the calculation of diluted net loss per share attributable to common stockholders | September 30, 2022 2021 Stock options to purchase common stock 1,402,931 1,671,680 Unvested restricted stock and restricted stock units 2,217,033 1,624,523 Common stock warrants 4,646,393 4,646,393 Conversion of convertible senior subordinated notes 4,646,393 4,646,393 12,912,750 12,588,989 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Current Assets | |
Schedule of Other Current Assets | September 30, 2022 December 31, 2021 Contract assets $ 15,072 $ 12,695 Non-trade receivables 1,235 3,289 Divestiture related consideration receivables 1,477 — Other 2,655 2,049 Total other current assets $ 20,439 $ 18,033 |
Software Development Costs (Tab
Software Development Costs (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Software Development Costs | |
Schedule of capitalized software costs | September 30, 2022 December 31, 2021 Software development costs $ 51,305 $ 49,481 Less: accumulated amortization (18,699) (20,227) Software development costs, net $ 32,606 $ 29,254 Capitalized software development costs included above not yet subject to amortization $ 4,505 $ 5,328 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets | Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net September 30, 2022 Trade names 2.6 $ 1,340 $ (982) $ 358 Client relationships 11.7 51,264 (14,438) 36,826 Non-competition agreements 5.0 1,640 (1,221) 419 Developed technology 6.2 14,720 (12,076) 2,644 Domain name 10.0 59 (31) 28 Total intangible assets $ 69,023 $ (28,748) $ 40,275 Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2021 Trade names 2.9 $ 1,340 $ (853) $ 487 Client relationships 11.7 51,264 (11,042) 40,222 Non-competition agreements 5.0 1,640 (975) 665 Developed technology 6.2 14,720 (10,768) 3,952 Domain name 10.0 59 (27) 32 Total intangible assets $ 69,023 $ (23,665) $ 45,358 |
Schedule of estimated amortization expense | Years Ending December 31, 2022 (October 1 – December 31) $ 1,669 2023 6,162 2024 4,684 2025 4,466 2026 4,338 2027 4,271 Thereafter 14,685 Total estimated amortization expense $ 40,275 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | September 30, 2022 December 31, 2021 Employee related expenses $ 8,961 $ 8,595 Contract liability 3,864 2,015 Customer deposits 903 904 Client funds obligations* 7,389 6,038 Contract labor 2,852 838 Divestiture closing fees 3,000 — Interest 711 2,281 Vendor financing arrangements 176 — Professional fees 2,161 1,327 Consideration payable to customer 24,500 15,971 Income and non-income taxes payable 95 15 Other expenses 4,895 3,013 Total accrued expenses and other liabilities $ 59,507 $ 40,997 *This amount represents client funds held by the Company, with an offsetting amount included in restricted cash. |
Line of Credit and Long-Term _2
Line of Credit and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Lines of Credit and Long-Term Debt | |
Schedule of long-term debt obligations | September 30, 2022 December 31, 2021 Convertible senior subordinated notes $ 235,272 $ 325,000 Convertible senior subordinated notes - related party 89,728 — Unamortized discount, including debt issuance costs, on convertible senior subordinated notes (4,703) (5,701) Total long-term debt, net $ 320,297 $ 319,299 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation | |
Summary of restricted stock award activity | Weighted average Number grant-date of shares fair value Outstanding at December 31, 2021 2,196,566 $ 40.19 Granted 1,935,883 4.44 Vested (1,224,471) 34.32 Forfeited (676,723) 16.40 Outstanding at September 30, 2022 2,231,255 $ 19.61 |
Schedule of weighted average assumptions for employee grants | Nine Months Ended Valuation assumptions: September 30, 2021 Expected volatility 58.57 % Expected term (years) 5.48 Risk-free interest rate 0.50 % Dividend yield — |
Summary of stock option activity | Weighted Weighted average average remaining Aggregate Number exercise contractual intrinsic of shares price term value Outstanding at December 31, 2021 1,604,226 $ 29.90 Exercised (12,830) 4.96 Forfeited (188,465) 44.18 Outstanding at September 30, 2022 1,402,931 $ 28.21 3.8 $ 260 Options vested and expected to vest at September 30, 2022 1,402,931 $ 28.21 3.8 $ 260 Exercisable at September 30, 2022 1,370,302 $ 27.57 3.8 $ 260 |
Schedule of recorded stock-based compensation expense related to stock options | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cost of revenue - product $ 331 $ 256 $ 778 $ 852 Cost of revenue - service 793 883 2,264 2,631 Research and development 1,741 1,261 4,021 4,533 Sales and marketing 285 209 593 1,251 General and administrative 12,228 4,292 20,517 14,833 Discontinued operations 1,858 1,110 4,364 4,862 Total stock-based compensation expense $ 17,236 $ 8,011 $ 32,537 $ 28,962 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Schedule of assets measured at fair value on a recurring basis | Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 September 30, 2022 Assets Contingent consideration receivable - long-term $ — $ — $ 7,000 $ 7,000 |
Schedule of financial instruments not carried at fair value | Face Value Carrying Value Fair Value 1.75% Convertible Senior Subordinated Notes due 2026 $ 325,000 $ 320,297 $ 258,131 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting | |
Schedule of reportable operating segment information | CareVention HealthCare Shared Services and Other Consolidated Revenue: Three Months Ended September 30, 2022 Product revenue $ 59,780 $ — $ 59,780 Service revenue PACE solutions 16,416 — 16,416 Medication safety services — 843 843 Software subscription and services — 62 62 Total service revenue 16,416 905 17,321 Total revenue $ 76,196 $ 905 $ 77,101 Three Months Ended September 30, 2021 Product revenue $ 50,321 $ — $ 50,321 Service revenue PACE solutions 14,707 — 14,707 Medication safety services — 2,820 2,820 Software subscription and services — 62 62 Total service revenue 14,707 2,882 17,589 Total revenue $ 65,028 $ 2,882 $ 67,910 Nine Months Ended September 30, 2022 Product revenue $ 166,645 $ — $ 166,645 Service revenue PACE solutions 47,604 — 47,604 Medication safety services — 2,336 2,336 Software subscription and services — 223 223 Total service revenue 47,604 2,559 50,163 Total revenue $ 214,249 $ 2,559 $ 216,808 Nine Months Ended September 30, 2021 Product revenue $ 139,021 $ — $ 139,021 Service revenue PACE solutions 42,973 — 42,973 Medication safety services — 8,817 8,817 Software subscription and services — 174 174 Total service revenue 42,973 8,991 51,964 Total revenue $ 181,994 $ 8,991 $ 190,985 CareVention HealthCare Shared Services and Other Consolidated Adjusted EBITDA (loss) from Continuing Operations: Three Months Ended September 30, 2022 Adjusted EBITDA (loss) $ 14,051 $ (11,998) $ 2,053 Three Months Ended September 30, 2021 Adjusted EBITDA (loss) $ 14,014 $ (10,875) $ 3,139 Nine Months Ended September 30, 2022 Adjusted EBITDA (loss) $ 39,531 $ (34,339) $ 5,192 Nine Months Ended September 30, 2021 Adjusted EBITDA (loss) $ 40,983 $ (32,998) $ 7,985 |
Schedules of reconciliation of net loss to Adjusted EBITDA | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reconciliation of Net Loss to Adjusted EBITDA from Continuing Operations Net loss $ (40,065) $ (17,111) $ (117,868) $ (57,684) Add: Interest expense, net 2,717 2,230 7,430 6,959 Income tax (benefit) expense (7) 82 368 284 Depreciation and amortization 5,723 5,328 16,954 15,109 Impairment charges — — 4,062 — Business optimization expenses — — 787 — Severance costs 122 354 697 516 Executive transition 1,821 — 1,971 — Cooperation agreement costs 1,122 — 1,122 — Divestiture-related expense 1,057 — 2,591 — Acquisition-related expense — — — 217 Stock-based compensation expense 15,378 6,901 28,173 24,100 Loss from discontinued operations 14,185 5,355 58,905 18,484 Adjusted EBITDA from continuing operations $ 2,053 $ 3,139 $ 5,192 $ 7,985 Adjusted EBITDA (loss) from discontinued operations (3,593) 2,578 (1,036) 7,294 Total Adjusted EBITDA (loss) $ (1,540) $ 5,717 $ 4,156 $ 15,279 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reconciliation of Net Loss from Discontinued Operations, net of tax to Adjusted EBITDA (Loss) from Discontinued Operations Net loss from discontinued operations, net of tax $ (14,185) $ (5,355) $ (58,905) $ (18,484) Add: Income tax (benefit) expense (94) 52 (662) 182 Depreciation and amortization — 6,771 7,331 20,234 Impairment charges 5,845 — 42,293 — Loss on disposal of business 2,879 — 2,879 — Settlement — — 1,448 500 Divestiture-related expense 104 — 216 — Stock-based compensation expense 1,858 1,110 4,364 4,862 Adjusted EBITDA (loss) from discontinued operations $ (3,593) $ 2,578 $ (1,036) $ 7,294 |
Basis of Presentation, Summar_3
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements - Cloud Computing Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Other assets | |||||
Accumulated amortization, cloud computing implementation costs | $ 554 | $ 554 | $ 398 | ||
Amortization expense, cloud computing implementation costs | 51 | $ 53 | 156 | $ 155 | |
Prepaid expenses | |||||
Other assets | |||||
Capitalized cloud computing implementation costs | 882 | 882 | 747 | ||
Other assets | |||||
Other assets | |||||
Capitalized cloud computing implementation costs | $ 1,276 | $ 1,276 | $ 0 |
Basis of Presentation, Summar_4
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements - Vendor Financing Arrangements (Details) - Business process support and technology services partner $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 24, 2022 USD ($) employee | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Financing Arrangements | |||
Number of Company employees hired by third-party provider. | employee | 180 | ||
Term of business partnership agreement. | 7 years | ||
Total estimated fees under business partnership agreement | $ 115,300 | ||
Vendor Financing Arrangements, Imputed interest rate (as a percent) | 9.50% | ||
Vendor Financing Arrangements, Non-cash interest expense | $ 53 | $ 89 | |
Accrued expenses and other liabilities, Current and noncurrent | |||
Financing Arrangements | |||
Vendor Financing Arrangements, Outstanding principal balance | 3,772 | 3,772 | |
Vendor Financing Arrangements, Unamortized discount | $ 876 | $ 876 |
Basis of Presentation, Summar_5
Basis of Presentation, Summary of Significant Accounting Policies, and Recent Accounting Pronouncements - Concentrations (Details) - customer | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Concentration Risk | ||||||
Electronic payment term of claims | 14 days | |||||
Nonelectronic payment term of claims | 30 days | |||||
Client Claims Receivable | Credit risk | ||||||
Concentration Risk | ||||||
Number of clients | 2 | |||||
Client Claims Receivable | Credit risk | Client One | ||||||
Concentration Risk | ||||||
Number of clients | 1 | |||||
Concentration risk (as a percent) | 21% | 13% | ||||
Client Claims Receivable | Credit risk | Client Two | ||||||
Concentration Risk | ||||||
Concentration risk (as a percent) | 11% | |||||
Revenue | Customer risk | Client One | ||||||
Concentration Risk | ||||||
Number of clients | 1 | 1 | 1 | 1 | ||
Concentration risk (as a percent) | 15% | 13% | 16% | 14% |
Discontinued Operations - Dives
Discontinued Operations - Divestiture of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Aug. 01, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Oct. 31, 2022 | ||
Discontinued Operations | ||||||
Contingent consideration receivable | $ 7,000 | $ 7,000 | $ 7,000 | |||
Loss on divestiture of business | 2,879 | |||||
Proceeds from sale of business | [1] | 118,561 | ||||
Other income | 479 | 479 | ||||
TDS | Transition Services Agreement | ||||||
Discontinued Operations | ||||||
Other income | $ 479 | 479 | ||||
PrescribeWellness business and KD assets | Discontinued Operations, Disposed of by Sale | ||||||
Discontinued Operations | ||||||
Cash consideration received | 125,000 | |||||
PrescribeWellness business | Subsequent Event. | ||||||
Discontinued Operations | ||||||
Amount of cash received for certain adjustments related to net working capital subsequent to date of sale | $ 1,477 | |||||
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | ||||||
Discontinued Operations | ||||||
Cash consideration received | 118,561 | |||||
Contingent consideration receivable | 7,000 | |||||
Loss on divestiture of business | 2,879 | |||||
Aggregate gain/(loss) including impairment | $ 11,379 | |||||
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | Subsequent Event. | ||||||
Discontinued Operations | ||||||
Amount of cash received for certain adjustments related to net working capital subsequent to date of sale | $ 1,477 | |||||
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | Maximum | ||||||
Discontinued Operations | ||||||
Contingent consideration receivable | 15,000 | |||||
PrescribeWellness business | Discontinued Operations, Held-for-sale | ||||||
Discontinued Operations | ||||||
Goodwill impairment | $ 12,145 | |||||
Impairment charge on net assets held for sale | $ 8,500 | |||||
KD assets | Discontinued Operations, Disposed of by Sale | KD | ||||||
Discontinued Operations | ||||||
Cash consideration received | $ 5,900 | |||||
[1] The cash proceeds received from divestiture of business do not include $1,477 of additional consideration subsequently received by the Company in October 2022 due to customary post-closing adjustments or $3,000 of transaction costs incurred as of the sale date and expected to be paid in the fourth quarter of 2022. See Note 3 for additional information. |
Discontinued Operations - Div_2
Discontinued Operations - Divestiture of Business, Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Aug. 01, 2022 | Dec. 31, 2021 |
Current assets of discontinued operations | |||
Total current assets of discontinued operations | $ 26,861 | $ 14,511 | |
Noncurrent assets of discontinued operations | |||
Total noncurrent assets of discontinued operations | 187,558 | ||
Current liabilities of discontinued operations | |||
Total current liabilities of discontinued operations | $ 11,132 | 12,380 | |
Noncurrent liabilities of discontinued operations | |||
Total noncurrent liabilities of discontinued operations | 3,573 | ||
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | |||
Current assets of discontinued operations | |||
Accounts receivable, net | $ 5,020 | ||
Prepaid expenses and other assets | 1,751 | ||
Property and equipment, net | 371 | ||
Operating lease right-of-use assets | 1,252 | ||
Software development costs, net | 14,536 | ||
Goodwill | 35,314 | ||
Intangible assets, net | 81,504 | ||
Impairment of carrying value | (8,500) | ||
Total current assets of discontinued operations | 131,248 | ||
Current liabilities of discontinued operations | |||
Operating lease liabilities | 1,086 | ||
Accounts payable | 491 | ||
Accrued expenses and other liabilities | 2,754 | ||
Total current liabilities of discontinued operations | $ 4,331 | ||
PrescribeWellness business | Discontinued Operations, Held-for-sale | |||
Current assets of discontinued operations | |||
Accounts receivable, net | 8,002 | ||
Prepaid expenses and other assets | 1,038 | ||
Total current assets of discontinued operations | 9,040 | ||
Noncurrent assets of discontinued operations | |||
Property and equipment, net | 412 | ||
Operating lease right-of-use assets | 1,434 | ||
Software development costs, net | 11,474 | ||
Goodwill | 47,459 | ||
Intangible assets, net | 84,617 | ||
Other assets | 64 | ||
Total noncurrent assets of discontinued operations | 145,460 | ||
Current liabilities of discontinued operations | |||
Operating lease liabilities | 620 | ||
Accounts payable | 913 | ||
Accrued expenses and other liabilities | 3,529 | ||
Total current liabilities of discontinued operations | 5,062 | ||
Noncurrent liabilities of discontinued operations | |||
Noncurrent operating lease liabilities | 830 | ||
Other long-term liabilities | 135 | ||
Total noncurrent liabilities of discontinued operations | $ 965 |
Discontinued Operations - Div_3
Discontinued Operations - Divestiture of Business, Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Aug. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loss from discontinued operations | |||||
Loss on divestiture of business | $ 2,879 | ||||
Net loss from discontinued operations, net of tax | $ (14,185) | $ (5,355) | (58,905) | $ (18,484) | |
PrescribeWellness business | Discontinued Operations, Held-for-sale or Disposed of by Sale | |||||
Loss from discontinued operations | |||||
Revenue | 2,537 | 19,306 | |||
Cost of revenue, exclusive of depreciation and amortization | 1,229 | 7,747 | |||
Operating expenses | 2,336 | 14,930 | |||
Impairment charges | 20,645 | ||||
Loss on divestiture of business | 2,879 | 2,879 | |||
Loss from discontinued operations before income taxes | (3,907) | (26,895) | |||
Income tax (benefit) expense | (11) | (299) | |||
Net loss from discontinued operations, net of tax | $ (3,896) | $ (26,596) | |||
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | |||||
Loss from discontinued operations | |||||
Loss on divestiture of business | $ 2,879 | ||||
PrescribeWellness business | Discontinued Operations, Held-for-sale | |||||
Loss from discontinued operations | |||||
Revenue | 10,533 | 27,629 | |||
Cost of revenue, exclusive of depreciation and amortization | 3,426 | 9,883 | |||
Operating expenses | 8,373 | 24,427 | |||
Loss from discontinued operations before income taxes | (1,266) | (6,681) | |||
Income tax (benefit) expense | 12 | 66 | |||
Net loss from discontinued operations, net of tax | $ (1,278) | $ (6,747) |
Discontinued Operations - Div_4
Discontinued Operations - Divestiture of Business, Operating non-cash items and investing activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating non-cash items and investing activities of discontinued operations: | ||||
Loss on divestiture of business | $ 2,879 | |||
PrescribeWellness business | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||
Operating non-cash items and investing activities of discontinued operations: | ||||
Depreciation and amortization | 4,551 | |||
Impairment charges | 20,645 | |||
Stock-based compensation | 1,697 | |||
Loss on divestiture of business | $ 2,879 | 2,879 | ||
Purchases of property and equipment | (22) | |||
Software development costs | $ (4,443) | |||
PrescribeWellness business | Discontinued Operations, Disposed of by Sale | ||||
Operating non-cash items and investing activities of discontinued operations: | ||||
Loss on divestiture of business | $ 2,879 | |||
PrescribeWellness business | Discontinued Operations, Held-for-sale | ||||
Operating non-cash items and investing activities of discontinued operations: | ||||
Depreciation and amortization | $ 12,059 | |||
Stock-based compensation | 2,352 | |||
Purchases of property and equipment | (305) | |||
Software development costs | $ (9,783) |
Discontinued Operations - Held
Discontinued Operations - Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | ||
Discontinued Operations | |||
Proceeds from sale of business | [1] | $ 118,561 | |
DoseMe and SinfonaRx businesses | |||
Discontinued Operations | |||
Period within which sale is highly probable | 1 year | ||
DoseMe and SinfonaRx businesses | Discontinued Operations, Held-for-sale | |||
Discontinued Operations | |||
Goodwill impairment | $ 0 | $ 6,127 | |
Impairment charge on net assets held for sale | $ 5,845 | $ 15,521 | |
[1] The cash proceeds received from divestiture of business do not include $1,477 of additional consideration subsequently received by the Company in October 2022 due to customary post-closing adjustments or $3,000 of transaction costs incurred as of the sale date and expected to be paid in the fourth quarter of 2022. See Note 3 for additional information. |
Discontinued Operations - Hel_2
Discontinued Operations - Held for Sale, Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Loss from discontinued operations | ||||
Net loss from discontinued operations, net of tax | $ (14,185) | $ (5,355) | $ (58,905) | $ (18,484) |
DoseMe and SinfonaRx businesses | Discontinued Operations, Held-for-sale | ||||
Loss from discontinued operations | ||||
Revenue | 6,407 | 8,143 | 23,094 | 26,961 |
Cost of revenue, exclusive of depreciation and amortization | 7,055 | 6,521 | 20,479 | 19,755 |
Operating expenses | 3,879 | 5,659 | 13,639 | 18,827 |
Impairment charges | 5,845 | 21,648 | ||
Loss from discontinued operations before income taxes | (10,372) | (4,037) | (32,672) | (11,621) |
Income tax (benefit) expense | (83) | 40 | (363) | 116 |
Net loss from discontinued operations, net of tax | $ (10,289) | $ (4,077) | $ (32,309) | $ (11,737) |
Discontinued Operations - Hel_3
Discontinued Operations - Held for Sale, Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets of discontinued operations | ||
Total current assets of discontinued operations | $ 26,861 | $ 14,511 |
Noncurrent assets of discontinued operations | ||
Total noncurrent assets of discontinued operations | 187,558 | |
Current liabilities of discontinued operations | ||
Total current liabilities of discontinued operations | 11,132 | 12,380 |
Noncurrent liabilities of discontinued operations | ||
Total noncurrent liabilities of discontinued operations | 3,573 | |
DoseMe and SinfonaRx businesses | Discontinued Operations, Held-for-sale | ||
Current assets of discontinued operations | ||
Cash | 69 | 273 |
Accounts receivable, net | 4,964 | 4,644 |
Prepaid expenses and other assets | 796 | 554 |
Property and equipment, net | 1,349 | |
Operating lease right-of-use assets | 3,732 | |
Software development costs, net | 6,910 | |
Goodwill | 1,927 | |
Intangible assets, net | 22,635 | |
Impairment of carrying value | (15,521) | |
Total current assets of discontinued operations | 26,861 | 5,471 |
Noncurrent assets of discontinued operations | ||
Property and equipment, net | 1,485 | |
Operating lease right-of-use assets | 3,296 | |
Software development costs, net | 4,466 | |
Goodwill | 8,053 | |
Intangible assets, net | 24,675 | |
Other assets | 123 | |
Total noncurrent assets of discontinued operations | 42,098 | |
Current liabilities of discontinued operations | ||
Operating lease liabilities | 3,458 | 793 |
Accounts payable | 3,077 | 3,395 |
Accrued expenses and other liabilities | 4,597 | 3,130 |
Total current liabilities of discontinued operations | $ 11,132 | 7,318 |
Noncurrent liabilities of discontinued operations | ||
Noncurrent operating lease liabilities | 2,608 | |
Total noncurrent liabilities of discontinued operations | $ 2,608 |
Discontinued Operations - Hel_4
Discontinued Operations - Held for Sale, Operating non-cash items and investing activities (Details) - DoseMe and SinfonaRx businesses - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating non-cash items and investing activities of discontinued operations: | |||
Depreciation and amortization | $ 2,780 | $ 8,175 | |
Impairment charges | $ 5,845 | 21,648 | |
Stock-based compensation | 2,667 | 2,510 | |
Purchases of property and equipment | (50) | (1,323) | |
Software development costs | $ (2,998) | $ (6,155) |
Revenue - General (Details)
Revenue - General (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Minimum | |
Contract with customer | |
Client contract term | 1 year |
Termination notice period | 0 days |
Maximum | |
Contract with customer | |
Client contract term | 5 years |
Termination notice period | 180 days |
Revenue - Disaggregation (Detai
Revenue - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of revenue | ||||
Total revenue | $ 77,101 | $ 67,910 | $ 216,808 | $ 190,985 |
Product | ||||
Disaggregation of revenue | ||||
Total revenue | 59,780 | 50,321 | 166,645 | 139,021 |
Service | ||||
Disaggregation of revenue | ||||
Total revenue | 17,321 | 17,589 | 50,163 | 51,964 |
Service - PACE solutions | ||||
Disaggregation of revenue | ||||
Total revenue | 16,416 | 14,707 | 47,604 | 42,973 |
Service - Medication safety services | ||||
Disaggregation of revenue | ||||
Total revenue | 843 | 2,820 | 2,336 | 8,817 |
Service - Software subscription and services | ||||
Disaggregation of revenue | ||||
Total revenue | 62 | 62 | 223 | 174 |
CareVention HealthCare | ||||
Disaggregation of revenue | ||||
Total revenue | 76,196 | 65,028 | 214,249 | 181,994 |
CareVention HealthCare | Product | ||||
Disaggregation of revenue | ||||
Total revenue | 59,780 | 50,321 | 166,645 | 139,021 |
CareVention HealthCare | PACE product revenue | ||||
Disaggregation of revenue | ||||
Total revenue | 59,780 | 50,321 | 166,645 | 139,021 |
CareVention HealthCare | Service | ||||
Disaggregation of revenue | ||||
Total revenue | 16,416 | 14,707 | 47,604 | 42,973 |
CareVention HealthCare | Service - PACE solutions | ||||
Disaggregation of revenue | ||||
Total revenue | 16,416 | 14,707 | 47,604 | 42,973 |
MedWise HealthCare | ||||
Disaggregation of revenue | ||||
Total revenue | 905 | 2,882 | 2,559 | 8,991 |
MedWise HealthCare | Service - Medication safety services | ||||
Disaggregation of revenue | ||||
Total revenue | 843 | 2,820 | 2,336 | 8,817 |
MedWise HealthCare | Service - Software subscription and services | ||||
Disaggregation of revenue | ||||
Total revenue | $ 62 | $ 62 | $ 223 | $ 174 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Contract Balances | |||
Contract assets | $ 15,072 | $ 12,695 | |
Contract liabilities | $ 4,110 | $ 2,191 | $ 1,982 |
Revenue - Change in contract ba
Revenue - Change in contract balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Contract assets: | ||
Contract assets, beginning of period | $ 12,695 | |
Decreases due to cash received | (12,466) | |
Changes to the contract assets at the beginning of the period as a result of changes in estimates | 451 | |
Changes during the year, net of reclassifications to receivables | 14,392 | |
Contract assets, end of period | 15,072 | |
Contract liabilities: | ||
Contract liabilities, beginning of period | 2,191 | $ 1,982 |
Revenue recognized that was included in the contract liabilities balance at the beginning of the period | (1,903) | $ (1,404) |
Increases due to cash received, excluding amounts recognized as revenue during the period | 3,822 | |
Contract liabilities, end of period | $ 4,110 |
Net Loss per Share - EPS (Detai
Net Loss per Share - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator (basic and diluted): | ||||
Net loss from continuing operations, basic | $ (25,880) | $ (11,756) | $ (58,963) | $ (39,200) |
Net loss from discontinued operations, basic | (14,185) | (5,355) | (58,905) | (18,484) |
Net loss, basic | (40,065) | (17,111) | (117,868) | (57,684) |
Net loss from continuing operations, diluted | (25,880) | (11,756) | (58,963) | (39,200) |
Net loss from discontinued operations, diluted | (14,185) | (5,355) | (58,905) | (18,484) |
Net loss, diluted | $ (40,065) | $ (17,111) | $ (117,868) | $ (57,684) |
Denominator (basic and diluted): | ||||
Weighted average common shares outstanding, basic (in shares) | 24,350,182 | 23,407,391 | 24,075,666 | 23,230,138 |
Weighted average common shares outstanding, diluted (in shares) | 24,350,182 | 23,407,391 | 24,075,666 | 23,230,138 |
Net loss per share from continuing operations, basic (in dollars per share) | $ (1.07) | $ (0.50) | $ (2.45) | $ (1.68) |
Net loss per share from discontinued operations, basic (in dollars per share) | (0.58) | (0.23) | (2.45) | (0.80) |
Total net loss per share, basic (in dollars per share) | (1.65) | (0.73) | (4.90) | (2.48) |
Net loss per share from continuing operations, diluted (in dollars per share) | (1.07) | (0.50) | (2.45) | (1.68) |
Net loss per share from discontinued operations, diluted (in dollars per share) | (0.58) | (0.23) | (2.45) | (0.80) |
Total net loss per share, diluted (in dollars per share) | $ (1.65) | $ (0.73) | $ (4.90) | $ (2.48) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilutive Securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 12,912,750 | 12,588,989 |
Stock options | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 1,402,931 | 1,671,680 |
Restricted stock and restricted stock units | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 2,217,033 | 1,624,523 |
Common stock warrants/Convertible note warrants | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 4,646,393 | 4,646,393 |
Convertible Debt | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 4,646,393 | 4,646,393 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Other Current Assets | ||
Contract assets | $ 15,072 | $ 12,695 |
Non-trade receivables | 1,235 | 3,289 |
Divestiture related consideration receivables | 1,477 | |
Other | 2,655 | 2,049 |
Total other current assets | $ 20,439 | $ 18,033 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property and Equipment | |||||
Property and equipment, net | $ 10,038 | $ 10,038 | $ 11,778 | ||
Depreciation and amortization | 5,723 | $ 5,328 | 16,954 | $ 15,109 | |
Property and equipment | |||||
Property and Equipment | |||||
Accumulated depreciation | 18,890 | 18,890 | $ 17,427 | ||
Depreciation and amortization | $ 801 | $ 825 | $ 2,862 | $ 2,672 |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Software Development Costs | |||||
Software development costs | $ 51,305 | $ 51,305 | $ 49,481 | ||
Less: accumulated amortization | (18,699) | (18,699) | (20,227) | ||
Software development costs, net | 32,606 | 32,606 | 29,254 | ||
Capitalized software development costs included above not yet subject to amortization | 4,505 | 4,505 | $ 5,328 | ||
Amortization expense | $ 3,224 | $ 2,579 | 9,005 | $ 6,682 | |
Long-lived asset impairment charge | $ 4,062 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and related changes | ||
Goodwill | $ 115,323 | $ 115,323 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Intangible Assets | |||||
Gross Value | $ 69,023 | $ 69,023 | $ 69,023 | ||
Accumulated Amortization | (28,748) | (28,748) | (23,665) | ||
Intangible Assets, net | 40,275 | 40,275 | $ 45,358 | ||
Amortization expense | 1,694 | $ 1,907 | $ 5,083 | $ 5,738 | |
Trade name | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 2 years 7 months 6 days | 2 years 10 months 24 days | |||
Gross Value | 1,340 | $ 1,340 | $ 1,340 | ||
Accumulated Amortization | (982) | (982) | (853) | ||
Intangible Assets, net | 358 | $ 358 | $ 487 | ||
Client relationships | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 11 years 8 months 12 days | 11 years 8 months 12 days | |||
Gross Value | 51,264 | $ 51,264 | $ 51,264 | ||
Accumulated Amortization | (14,438) | (14,438) | (11,042) | ||
Intangible Assets, net | 36,826 | $ 36,826 | $ 40,222 | ||
Non-competition agreements | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 5 years | 5 years | |||
Gross Value | 1,640 | $ 1,640 | $ 1,640 | ||
Accumulated Amortization | (1,221) | (1,221) | (975) | ||
Intangible Assets, net | 419 | $ 419 | $ 665 | ||
Developed technology | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 6 years 2 months 12 days | 6 years 2 months 12 days | |||
Gross Value | 14,720 | $ 14,720 | $ 14,720 | ||
Accumulated Amortization | (12,076) | (12,076) | (10,768) | ||
Intangible Assets, net | 2,644 | $ 2,644 | $ 3,952 | ||
Domain name | |||||
Intangible Assets | |||||
Weighted Average Amortization Period | 10 years | 10 years | |||
Gross Value | 59 | $ 59 | $ 59 | ||
Accumulated Amortization | (31) | (31) | (27) | ||
Intangible Assets, net | $ 28 | $ 28 | $ 32 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Estimated amortization expense | ||
2022 (October 1 - December 31) | $ 1,669 | |
2023 | 6,162 | |
2024 | 4,684 | |
2025 | 4,466 | |
2026 | 4,338 | |
2027 | 4,271 | |
Thereafter | 14,685 | |
Total estimated amortization expense | $ 40,275 | $ 45,358 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Liabilities | ||
Employee related expenses | $ 8,961 | $ 8,595 |
Contract liability | 3,864 | 2,015 |
Customer deposits | 903 | 904 |
Client funds obligations | 7,389 | 6,038 |
Contract labor | 2,852 | 838 |
Divestiture closing fees | 3,000 | |
Interest | 711 | 2,281 |
Vendor financing arrangements | 176 | |
Professional fees | 2,161 | 1,327 |
Consideration payable to customer | 24,500 | 15,971 |
Income and non-income taxes payable | 95 | 15 |
Other expenses | 4,895 | 3,013 |
Total accrued expenses and other liabilities | $ 59,507 | $ 40,997 |
Line of Credit and Long-Term _3
Line of Credit and Long-Term Debt - Line of Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 01, 2022 | Dec. 18, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lines of Credit | ||||||
Repayment of line of credit | $ 57,200 | |||||
2020 Credit Facility | ||||||
Lines of Credit | ||||||
Maximum borrowing capacity | $ 120,000 | |||||
Sublimit of loan | $ 1,000 | |||||
Commitment fee at closing (as a percent) | 0.50% | |||||
Commitment fee payable on each anniversary (as a percent) | 0.25% | |||||
Repayment of principal and interest | $ 57,406 | |||||
Interest expense | $ 266 | $ 314 | 1,363 | $ 842 | ||
Deferred financing costs, gross | 1,534 | 1,534 | ||||
Amortization of deferred financing costs to interest expense | $ 698 | $ 136 | $ 973 | $ 404 | ||
2020 Credit Facility | LIBOR | ||||||
Lines of Credit | ||||||
Spread on variable rate (as a percent) | 3.25% |
Line of Credit and Long-Term _4
Line of Credit and Long-Term Debt - Convertible Senior Subordinated Notes (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Feb. 12, 2019 USD ($) D $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lines of Credit and Long-Term Debt | ||||||
Accrued interest payable | $ 711 | $ 711 | $ 2,281 | |||
Cash paid for interest | 7,204 | $ 8,169 | ||||
Long term debt, net | 320,297 | 320,297 | $ 319,299 | |||
2026 Notes, Convertible Senior Subordinated Notes | ||||||
Lines of Credit and Long-Term Debt | ||||||
Aggregate borrowings | $ 325,000 | $ 325,000 | $ 325,000 | |||
Interest rate (as a percent) | 1.75% | 1.75% | 1.75% | |||
Initial conversion rate | 0.0142966 | |||||
Initial conversion price (in dollars per share) | $ / shares | $ 69.95 | |||||
Principal amount | $ 1 | |||||
Debt issuance costs | $ 9,372 | |||||
Effective interest rate | 2.20% | 2.20% | ||||
Interest expense | $ 1,757 | $ 1,750 | $ 5,265 | 5,243 | ||
Paid or accrued interest | 1,422 | 1,423 | 4,266 | 4,266 | ||
Non-cash accretion of discounts | 335 | 327 | 999 | 977 | ||
Amount of additional interest payable | $ 212 | $ 212 | ||||
Accrued interest payable | 711 | 711 | ||||
Long term debt, net | $ 320,297 | $ 320,297 | ||||
2026 Notes, Convertible Senior Subordinated Notes | Debt Conversion Scenario One | ||||||
Lines of Credit and Long-Term Debt | ||||||
Trading days | D | 20 | |||||
Consecutive trading days | D | 30 | |||||
Stock price trigger percentage (as a percent) | 130% | |||||
2026 Notes, Convertible Senior Subordinated Notes | Debt Conversion Scenario Two | ||||||
Lines of Credit and Long-Term Debt | ||||||
Trading days | D | 5 | |||||
Consecutive trading days | D | 5 | |||||
Principal amount | $ 1 | |||||
Stock price trigger percentage (as a percent) | 98% |
Line of Credit and Long-Term _5
Line of Credit and Long-Term Debt - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Feb. 12, 2019 | Sep. 30, 2022 | |
Warrants and options indexed to Company's stock | ||
Warrants exercised | 0 | |
Convertible senior subordinated notes, Option to purchase shares | ||
Warrants and options indexed to Company's stock | ||
Options indexed to Company's stock (in shares) | 4,646,393 | |
Price of options indexed to Company's stock (in dollars per share) | $ 105.58 | |
Proceeds from sale of warrants | $ 65,910 | |
Common stock warrants/Convertible note warrants | ||
Warrants and options indexed to Company's stock | ||
Option to purchase | 4,646,393 | |
Exercise price (in dollars per share) | $ 69.95 | |
Premiums paid for the note hedges | $ 101,660 |
Line of Credit and Long-Term _6
Line of Credit and Long-Term Debt - Long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-Term Debt | ||
Unamortized discount, including debt issuance costs, on convertible senior subordinated notes | $ (4,703) | $ (5,701) |
Total long-term debt, net | 320,297 | 319,299 |
2026 Notes, Convertible Senior Subordinated Notes | ||
Long-Term Debt | ||
Total long-term debt, net | 320,297 | |
Convertible senior subordinated notes - excluding related party | ||
Long-Term Debt | ||
Convertible senior subordinated notes | 235,272 | $ 325,000 |
Convertible senior subordinated notes - related party | ||
Long-Term Debt | ||
Convertible senior subordinated notes | $ 89,728 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 12, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes | |||||
Income tax (benefit) expense | $ (7) | $ 82 | $ 368 | $ 284 | |
Effective tax rate (as a percent) | 0% | (0.70%) | (0.60%) | (0.70%) | |
Increase in deferred tax asset | $ 26,313 | ||||
Increase (decrease) valuation allowance | $ 26,313 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plans (Details) - 2016 Plan - shares | 1 Months Ended | ||
Feb. 25, 2022 | Sep. 30, 2016 | Sep. 30, 2022 | |
Stock-Based Compensation | |||
Automatic increase on share reserve (as a percent) | 5% | ||
Additional shares authorized | 1,283,321 | ||
Available for future grant (in shares) | 1,123,371 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Common Stock and Restricted Stock Units (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) employee $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) employee $ / shares shares | Sep. 30, 2021 USD ($) | |
Weighted average grant date fair value | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ | $ 17,236 | $ 8,011 | $ 32,537 | $ 28,962 |
Restricted stock and restricted stock units | ||||
Weighted average grant date fair value | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ | 13,061 | $ 6,447 | 26,129 | $ 22,846 |
Unrecognized compensation expense (in dollars) | $ | $ 30,976 | $ 30,976 | ||
Weighted average period expected to be recognized | 2 years 4 months 24 days | |||
Restricted stock and restricted stock units | Minimum | ||||
Stock-Based Compensation | ||||
Vesting period | 1 year | |||
Restricted stock and restricted stock units | Maximum | ||||
Stock-Based Compensation | ||||
Vesting period | 4 years | |||
Restricted stock, performance based restricted stock and restricted stock units | ||||
Number of shares | ||||
Outstanding at beginning of period (in shares) | 2,196,566 | |||
Granted (in shares) | 1,935,883 | |||
Vested (in shares) | (1,224,471) | |||
Forfeited (in shares) | (676,723) | |||
Outstanding at end of period (in shares) | 2,231,255 | 2,231,255 | ||
Weighted average grant date fair value | ||||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 40.19 | |||
Granted (in dollars per share) | $ / shares | 4.44 | |||
Vested (in dollars per share) | $ / shares | 34.32 | |||
Forfeited (in dollars per share) | $ / shares | 16.40 | |||
Outstanding at end of period (in dollars per share) | $ / shares | $ 19.61 | $ 19.61 | ||
Restricted stock | Named executive officers | ||||
Weighted average grant date fair value | ||||
Accelerated vesting expense | $ | $ 8,143 | $ 8,143 | ||
Number of retired employees with accelerated vesting related to separation agreements | employee | 2 | 2 | ||
Restricted stock units | ||||
Weighted average grant date fair value | ||||
Awards vested but not yet issued | 14,222 | 14,222 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Based Equity Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Aug. 22, 2022 | Dec. 31, 2021 | Apr. 30, 2021 | Apr. 27, 2021 | Oct. 29, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation | |||||||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 17,236 | $ 8,011 | $ 32,537 | $ 28,962 | |||||
Award Date, August 22, 2022 | |||||||||
Stock-Based Compensation | |||||||||
Number of target shares | 350,000 | 350,000 | |||||||
Performance stock units | Award Date, October 29, 2020 | |||||||||
Stock-Based Compensation | |||||||||
Granted (in shares) | 26,400 | ||||||||
Weighted average grant-date fair value (in dollars per share) | $ 35.95 | ||||||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 194 | $ 556 | |||||||
Expired (in shares) | 12,500 | 1,400 | |||||||
Vested (in shares) | 12,500 | ||||||||
Performance stock units | Award Date, April 27, 2021 | |||||||||
Stock-Based Compensation | |||||||||
Number of target shares | 45,550 | 45,550 | |||||||
Vesting period | 3 years | ||||||||
Weighted average grant-date fair value (in dollars per share) | $ 44.13 | ||||||||
Expired (in shares) | 47,175 | ||||||||
Maximum number of achievable performance stock units | 91,100 | 91,100 | |||||||
Performance stock units | Award Date, April 27, 2021 | Minimum | |||||||||
Stock-Based Compensation | |||||||||
Vesting (as a percent) | 0% | ||||||||
Performance stock units | Award Date, April 27, 2021 | Maximum | |||||||||
Stock-Based Compensation | |||||||||
Vesting (as a percent) | 200% | ||||||||
Unrecognized compensation expense (in dollars) | $ 4,020 | $ 4,020 | |||||||
Performance stock units | Award Date, August 22, 2022 | |||||||||
Stock-Based Compensation | |||||||||
Vesting period | 3 years | ||||||||
Weighted average grant-date fair value (in dollars per share) | $ 4.38 | ||||||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 69 | $ 69 | |||||||
Maximum number of achievable performance stock units | 700,000 | 700,000 | |||||||
Unrecognized compensation expense (in dollars) | $ 1,463 | $ 1,463 | |||||||
Performance stock units | Award Date, August 22, 2022 | Minimum | |||||||||
Stock-Based Compensation | |||||||||
Vesting (as a percent) | 0% | ||||||||
Performance stock units | Award Date, August 22, 2022 | Maximum | |||||||||
Stock-Based Compensation | |||||||||
Vesting (as a percent) | 200% |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation | |||||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 17,236 | $ 8,011 | $ 32,537 | $ 28,962 | |||
Other stock awards | Award Date, First Quarter, 2021 | |||||||
Stock-Based Compensation | |||||||
Issuance of common stock awards (in shares) | 1,416 | ||||||
Weighted average grant-date fair value (in dollars per share) | $ 40.85 | ||||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 58 | ||||||
Other stock awards | Award Date, First Quarter, 2022 | |||||||
Stock-Based Compensation | |||||||
Issuance of common stock awards (in shares) | 16,471 | ||||||
Weighted average grant-date fair value (in dollars per share) | $ 5.57 | ||||||
Stock-based compensation expense, including discontinued operations (in dollars) | 92 | ||||||
Other stock awards | Award Date, Second Quarter, 2022 | |||||||
Stock-Based Compensation | |||||||
Issuance of common stock awards (in shares) | 12,262 | ||||||
Weighted average grant-date fair value (in dollars per share) | $ 3.64 | ||||||
Stock-based compensation expense, including discontinued operations (in dollars) | 45 | ||||||
Other stock awards | Award Date, Third Quarter, 2022 | |||||||
Stock-Based Compensation | |||||||
Issuance of common stock awards (in shares) | 615,066 | ||||||
Weighted average grant-date fair value (in dollars per share) | $ 5.01 | ||||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 3,081 | $ 3,081 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Valuation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 17,236 | $ 8,011 | $ 32,537 | $ 28,962 |
Options granted (in shares) | 0 | |||
Stock options | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 1,025 | $ 1,586 | $ 3,121 | $ 5,502 |
Valuation assumptions: | ||||
Expected volatility (as a percent) | 58.57% | |||
Expected term (years) | 5 years 5 months 23 days | |||
Risk-free interest rate (as a percent) | 0.50% | |||
Weighted average grant-date fair value (in dollars per share) | $ 28.26 |
Stock-Based Compensation - Op_2
Stock-Based Compensation - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Number of shares | |||
Outstanding at beginning of period (in shares) | 1,604,226 | ||
Exercised (in shares) | (12,830) | ||
Forfeited (in shares) | (188,465) | ||
Outstanding at end of the period (in shares) | 1,402,931 | 1,402,931 | |
Options vested and expected to vest at end of the period (in shares) | 1,402,931 | 1,402,931 | |
Exercisable at end of period (in shares) | 1,370,302 | 1,370,302 | |
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 29.90 | ||
Exercised (in dollars per share) | 4.96 | ||
Forfeited (in dollars per share) | 44.18 | ||
Outstanding at end of period (in dollars per share) | $ 28.21 | 28.21 | |
Options vested and expected to vest at end of period (in dollars per share) | 28.21 | 28.21 | |
Exercisable at end of period (in dollars per share) | $ 27.57 | $ 27.57 | |
Weighted average remaining contractual term | |||
Outstanding | 3 years 9 months 18 days | ||
Options vested and expected to vest at of the period | 3 years 9 months 18 days | ||
Exercisable | 3 years 9 months 18 days | ||
Aggregate intrinsic value | |||
Outstanding (in dollars) | $ 260 | $ 260 | |
Options vested and expected to vest at end of period (in dollars) | 260 | 260 | |
Exercisable (in dollars) | 260 | 260 | |
Additional disclosures | |||
Intrinsic value of options exercised (in dollars) | 109 | $ 11,113 | |
Proceeds from stock options exercised (in dollars) | 64 | $ 3,683 | |
Shares paid for tax withholding, fair value | 2,140 | ||
Stock options | |||
Additional disclosures | |||
Unrecognized compensation cost (in dollars) | $ 867 | $ 867 | |
Weighted average period expected to be recognized | 4 months 24 days |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 17,236 | $ 8,011 | $ 32,537 | $ 28,962 |
Cost of revenue - product | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | 331 | 256 | 778 | 852 |
Cost of revenue - service | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | 793 | 883 | 2,264 | 2,631 |
Research and development | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | 1,741 | 1,261 | 4,021 | 4,533 |
Sales and marketing | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | 285 | 209 | 593 | 1,251 |
General and administrative | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | 12,228 | 4,292 | 20,517 | 14,833 |
Discontinued operations | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense, including discontinued operations (in dollars) | $ 1,858 | $ 1,110 | $ 4,364 | $ 4,862 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan | Sep. 30, 2022 shares |
Stock-Based Compensation | |
Discount (as a percent) | 15% |
Number of shares reserved for issuance | 480,097 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Aug. 01, 2022 | Feb. 12, 2019 |
Fair Value Measurements | |||
Contingent consideration receivable | $ 7,000 | $ 7,000 | |
Level 3 | |||
Fair Value Measurements | |||
Contingent consideration receivable | $ 7,000 | ||
2026 Notes, Convertible Senior Subordinated Notes | |||
Fair Value Measurements | |||
Interest rate (as a percent) | 1.75% | 1.75% | |
Face value | $ 325,000 | $ 325,000 | |
2026 Notes, Convertible Senior Subordinated Notes | Carrying Value | |||
Fair Value Measurements | |||
Debt instrument | 320,297 | ||
2026 Notes, Convertible Senior Subordinated Notes | Fair Value | |||
Fair Value Measurements | |||
Debt instrument | $ 258,131 |
Commitments and Contingencies -
Commitments and Contingencies - Vendor Purchase Agreements (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 29, 2019 | Sep. 30, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Nov. 01, 2021 | Oct. 31, 2021 | Jun. 30, 2021 |
Thrifty Drug Stores, Inc. | ||||||||
Purchase Agreements | ||||||||
Purchase obligation (as a percent) | 98% | |||||||
Amount due as a result of prescription drug purchases | $ 1,993 | $ 1,854 | ||||||
Data aggregation partner | ||||||||
Purchase Agreements | ||||||||
Purchase obligation period | 3 years | |||||||
Monthly minimum purchase obligation | $ 30 | |||||||
Cloud hosting and support services provider under October 2021 agreement | ||||||||
Purchase Agreements | ||||||||
Minimum purchase obligation | $ 7,050 | |||||||
Remaining commitment | 4,700 | |||||||
Cloud hosting and support services provider under June 2021 agreement | ||||||||
Purchase Agreements | ||||||||
Minimum purchase obligation | $ 1,272 | |||||||
Remaining commitment | 691 | |||||||
Enterprise support and information technology services provider | ||||||||
Purchase Agreements | ||||||||
Minimum purchase obligation | $ 8,960 | |||||||
Remaining commitment | 6,222 | |||||||
Cloud hosting services provider | ||||||||
Purchase Agreements | ||||||||
Minimum purchase obligation | $ 1,598 | |||||||
Remaining commitment | $ 243 |
Segment Reporting - Revenue (De
Segment Reporting - Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting | ||||
Number of operating segment | segment | 2 | |||
Total revenue | $ 77,101 | $ 67,910 | $ 216,808 | $ 190,985 |
Product | ||||
Segment Reporting | ||||
Total revenue | 59,780 | 50,321 | 166,645 | 139,021 |
Service | ||||
Segment Reporting | ||||
Total revenue | 17,321 | 17,589 | 50,163 | 51,964 |
Service - PACE solutions | ||||
Segment Reporting | ||||
Total revenue | 16,416 | 14,707 | 47,604 | 42,973 |
Service - Medication safety services | ||||
Segment Reporting | ||||
Total revenue | 843 | 2,820 | 2,336 | 8,817 |
Service - Software subscription and services | ||||
Segment Reporting | ||||
Total revenue | 62 | 62 | 223 | 174 |
CareVention HealthCare | ||||
Segment Reporting | ||||
Total revenue | 76,196 | 65,028 | 214,249 | 181,994 |
CareVention HealthCare | Product | ||||
Segment Reporting | ||||
Total revenue | 59,780 | 50,321 | 166,645 | 139,021 |
CareVention HealthCare | Service | ||||
Segment Reporting | ||||
Total revenue | 16,416 | 14,707 | 47,604 | 42,973 |
CareVention HealthCare | Service - PACE solutions | ||||
Segment Reporting | ||||
Total revenue | 16,416 | 14,707 | 47,604 | 42,973 |
Shared Services and Other | ||||
Segment Reporting | ||||
Total revenue | 905 | 2,882 | 2,559 | 8,991 |
Shared Services and Other | Service | ||||
Segment Reporting | ||||
Total revenue | 905 | 2,882 | 2,559 | 8,991 |
Shared Services and Other | Service - Medication safety services | ||||
Segment Reporting | ||||
Total revenue | 843 | 2,820 | 2,336 | 8,817 |
Shared Services and Other | Service - Software subscription and services | ||||
Segment Reporting | ||||
Total revenue | $ 62 | $ 62 | $ 223 | $ 174 |
Segment Reporting - EBITDA (Det
Segment Reporting - EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting | ||||
Adjusted EBITDA (loss) from continuing operations | $ 2,053 | $ 3,139 | $ 5,192 | $ 7,985 |
Shared Services and Others | ||||
Segment Reporting | ||||
Adjusted EBITDA (loss) from continuing operations | (11,998) | (10,875) | (34,339) | (32,998) |
CareVention HealthCare | Operating Segments | ||||
Segment Reporting | ||||
Adjusted EBITDA (loss) from continuing operations | $ 14,051 | $ 14,014 | $ 39,531 | $ 40,983 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Net Loss to Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of Net Loss to Adjusted EBITDA from Continuing Operations | ||||||||
Net loss | $ (40,065) | $ (49,610) | $ (28,193) | $ (17,111) | $ (21,081) | $ (19,492) | $ (117,868) | $ (57,684) |
Interest expense, net | 2,717 | 2,230 | 7,430 | 6,959 | ||||
Income tax (benefit) expense | (7) | 82 | 368 | 284 | ||||
Depreciation and amortization | 5,723 | 5,328 | 16,954 | 15,109 | ||||
Impairment charges | 4,062 | |||||||
Business optimization expenses | 787 | |||||||
Severance costs | 122 | 354 | 697 | 516 | ||||
Executive transition | 1,821 | 1,971 | ||||||
Cooperation agreement costs | 1,122 | 1,122 | ||||||
Divestiture-related expense | 1,057 | 2,591 | ||||||
Acquisition-related expense | 217 | |||||||
Stock- based compensation expense | 15,378 | 6,901 | 28,173 | 24,100 | ||||
Loss from discontinued operations | 14,185 | 5,355 | 58,905 | 18,484 | ||||
Adjusted EBITDA from continuing operations | 2,053 | 3,139 | 5,192 | 7,985 | ||||
Adjusted EBITDA (loss) from discontinued operations | (3,593) | 2,578 | (1,036) | 7,294 | ||||
Total Adjusted EBITDA (loss) | $ (1,540) | $ 5,717 | $ 4,156 | $ 15,279 |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Net Loss to Adjusted EBITDA (Loss), Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of Net Loss from Discontinued Operations, net of tax to Adjusted EBITDA from Discontinued Operations | ||||
Net loss from discontinued operations, net of tax | $ (14,185) | $ (5,355) | $ (58,905) | $ (18,484) |
Loss on divestiture of business | 2,879 | |||
Adjusted EBITDA (loss) from discontinued operations | (3,593) | 2,578 | (1,036) | 7,294 |
DoseMe, SinfonaRx and PrescribeWellness businesses | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||
Reconciliation of Net Loss from Discontinued Operations, net of tax to Adjusted EBITDA from Discontinued Operations | ||||
Net loss from discontinued operations, net of tax | (14,185) | (58,905) | ||
Income tax (benefit) expense | (94) | (662) | ||
Depreciation and amortization | 7,331 | |||
Impairment charges | 5,845 | 42,293 | ||
Loss on divestiture of business | 2,879 | 2,879 | ||
Settlement | 1,448 | |||
Divestiture-related expense | 104 | 216 | ||
Stock-based compensation expense | 1,858 | 4,364 | ||
Adjusted EBITDA (loss) from discontinued operations | $ (3,593) | $ (1,036) | ||
DoseMe, SinfonaRx and PrescribeWellness businesses | Discontinued Operations, Held-for-sale | ||||
Reconciliation of Net Loss from Discontinued Operations, net of tax to Adjusted EBITDA from Discontinued Operations | ||||
Net loss from discontinued operations, net of tax | (5,355) | (18,484) | ||
Income tax (benefit) expense | 52 | 182 | ||
Depreciation and amortization | 6,771 | 20,234 | ||
Settlement | 500 | |||
Stock-based compensation expense | 1,110 | 4,862 | ||
Adjusted EBITDA (loss) from discontinued operations | $ 2,578 | $ 7,294 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 13, 2022 item | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Related Party Transactions | ||||||
Convertible senior subordinated notes held by a significant stockholder | $ 88,429 | $ 88,429 | ||||
Pharmacy services and PACE solutions services | ||||||
Related Party Transactions | ||||||
Revenue from related party | 1,894 | $ 1,679 | 5,541 | $ 4,834 | ||
Pharmacy services and PACE solutions services | Accounts receivable, net | ||||||
Related Party Transactions | ||||||
Accounts receivable from related parties | 225 | 225 | $ 67 | |||
Cooperation Agreement | ||||||
Related Party Transactions | ||||||
Amount due to related party | 464 | 464 | ||||
Separation Agreements | ||||||
Related Party Transactions | ||||||
Amount due to related party | 1,616 | 1,616 | ||||
Number of former executive officers under the agreement | item | 2 | |||||
General and administrative expenses | 9,927 | |||||
Consultant Services Agreements | ||||||
Related Party Transactions | ||||||
Number of former executive officers under the agreement | item | 2 | |||||
General and administrative expenses | $ 0 | $ 0 |
Rights Plan (Details)
Rights Plan (Details) | Jul. 25, 2022 $ / shares shares | Sep. 30, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Right | |||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Series A Junior Participating Preferred Stock | |||
Right | |||
Preferred stock, par value (in dollars per share) | $ 0.0001 | ||
Preferred Share Purchase Right | |||
Right | |||
Dividend declared in preferred share purchase rights per common share outstanding | 1 | ||
Exercise price (in dollars per share) | $ 26 | ||
Preferred Share Purchase Right | Series A Junior Participating Preferred Stock | |||
Right | |||
Number of shares of stock per each right | shares | 0.001 |