Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 01, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-40506 | ||
Entity Registrant Name | Convey Health Solutions Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-2099378 | ||
Entity Address, Address Line One | 100 SE 3rd Avenue, 26th Floor | ||
Entity Address, City or Town | Fort Lauderdale | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33394 | ||
City Area Code | 800 | ||
Local Phone Number | 559-9358 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | CNVY | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 151.7 | ||
Entity Common Stock, Shares Outstanding | 73,194,171 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement for its 2022 Annual Meeting of Stockholders, which is to be filed with the Securities and Exchange Commission within 120 days of the registrant’ fiscal year ended December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. | ||
Entity Central Index Key | 0001787640 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Hallandale Beach, Florida |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 38,811 | $ 45,366 |
Accounts receivable, net of allowance for doubtful accounts of $69 and $610 as of December 31, 2021, and December 31, 2020, respectively | 62,813 | 50,589 |
Inventories, net | 14,060 | 11,094 |
Prepaid expenses and other current assets | 16,569 | 15,220 |
Restricted cash | 0 | 3,560 |
Total current assets | 132,253 | 125,829 |
Property and equipment, net | 20,400 | 20,667 |
Intangible assets, net | 220,014 | 238,842 |
Goodwill | 455,206 | 455,206 |
Restricted cash | 0 | 160 |
Other assets | 2,030 | 2,364 |
Total assets | 829,903 | 843,068 |
Current liabilities | ||
Accounts payable | 13,868 | 21,308 |
Accrued expenses | 48,558 | 67,159 |
Capital lease obligations, current portion | 498 | 361 |
Deferred revenue, current portion | 7,472 | 6,466 |
Term loans, current portion | 0 | 2,500 |
Total current liabilities | 70,396 | 97,794 |
Capital leases obligations, net of current portion | 528 | 1,129 |
Deferred taxes, net | 25,992 | 26,561 |
Term loans, net of current portion | 189,643 | 239,290 |
Other long-term liabilities | 5,595 | 8,144 |
Total liabilities | 292,154 | 372,918 |
Commitments and contingencies (Note 15) | ||
Shareholders’ equity | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized and no shares issued or outstanding as of December 31, 2021 and no shares authorized, issued or outstanding as of December 31, 2020 | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 and 126,000,000 shares authorized as of December 31, 2021, and December 31, 2020, respectively; 73,194,171 and 61,321,424 shares issued and outstanding as of December 31, 2021, and December 31, 2020, respectively | 732 | 613 |
Additional paid-in capital | 570,252 | 492,747 |
Accumulated other comprehensive income | 31 | 78 |
Accumulated deficit | (33,266) | (23,288) |
Total shareholders’ equity | 537,749 | 470,150 |
Total liabilities and shareholders’ equity | $ 829,903 | $ 843,068 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 69 | $ 610 |
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 25,000,000 | 0 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized | 500,000,000 | 126,000,000 |
Common stock shares issued | 73,194,171 | 61,321,424 |
Common stock shares outstanding | 73,194,171 | 61,321,424 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Net revenues: | |||||
Net revenues | $ 80,415 | $ 140,738 | $ 337,596 | $ 282,914 | |
Operating expenses: | |||||
Selling, general and administrative | 21,753 | 40,521 | 94,093 | 79,955 | |
Depreciation and amortization | 9,188 | 13,359 | 30,480 | 28,032 | |
Transaction related costs | 14,784 | 2,511 | 5,894 | 3,949 | |
Change in fair value of contingent consideration | 0 | 19,671 | 96 | (10,770) | |
Total operating expenses | 92,410 | 153,468 | 325,884 | 272,463 | |
Operating income (loss) | (11,995) | (12,730) | 11,712 | 10,451 | |
Other income (expense): | |||||
Interest income | 0 | 0 | 18 | 7 | |
Loss on extinguishment of debt | 0 | 0 | (5,015) | 0 | |
Interest expense | (5,762) | (6,213) | (17,312) | (18,860) | |
Total other expense, net | (5,762) | (6,213) | (22,309) | (18,853) | |
Income (loss) from continuing operations before income taxes | (17,757) | (18,943) | (10,597) | (8,402) | |
Income tax (expense) benefit | 858 | 23,288 | 619 | 1,904 | |
Net income (loss) from continuing operations | (16,899) | 4,345 | (9,978) | (6,498) | |
Income (loss) from discontinued operations, net of tax | 73 | (696) | 0 | 36 | |
Net income (loss) | $ (16,826) | $ 3,649 | $ (9,978) | $ (6,462) | |
Income (loss) per common share – Basic | |||||
Income (loss) per common share – basic; continuing operations (in usd per share) | $ (0.47) | $ 3.04 | $ (0.15) | $ (0.11) | |
Income (loss) per common share – basic; discontinued operations (in usd per share) | 0 | (0.49) | 0 | 0 | |
Net income (loss) per common share - basic (in usd per share) | (0.47) | 2.55 | (0.15) | (0.11) | |
Income (loss) per common share – Diluted | |||||
Income (loss) per common share – diluted; continuing operations (in usd per share) | (0.47) | 2.81 | (0.15) | (0.11) | |
Income (loss) per common share – diluted; discontinued operations (in usd per share) | 0 | (0.49) | 0 | 0 | |
Net income (loss) per common share - diluted (in usd per share) | $ (0.47) | $ 2.32 | $ (0.15) | $ (0.11) | |
Foreign currency translation adjustments | $ 21 | $ (15) | $ (47) | $ 57 | |
Comprehensive income (loss) | (16,805) | 3,634 | (10,025) | (6,405) | |
Services | |||||
Net revenues: | |||||
Net revenues | 51,153 | 92,445 | 177,575 | 147,191 | |
Operating expenses: | |||||
Cost of services and products, excluding depreciation, depletion, and amortization | [1] | 28,844 | 48,196 | 92,241 | 84,144 |
Products | |||||
Net revenues: | |||||
Net revenues | 29,262 | 48,293 | 160,021 | 135,723 | |
Operating expenses: | |||||
Cost of services and products, excluding depreciation, depletion, and amortization | [1] | $ 17,841 | $ 29,210 | $ 103,080 | $ 87,153 |
[1] | Excludes amortization of intangible assets and depreciation, which are separately stated below. |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Common stockIPO | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,431,305 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 171,020 | $ 175 | $ 14 | $ 157,365 | $ (62) | $ 13,703 | $ 175 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share based compensation | 300 | 300 | ||||||
Foreign currency translation adjustments | (15) | (15) | ||||||
Net loss | 3,649 | 3,649 | ||||||
Ending Balance (in shares) at Sep. 03, 2019 | 1,431,305 | |||||||
Ending Balance at Sep. 03, 2019 | $ 175,129 | $ 14 | 157,665 | (77) | 17,527 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting standards update | Accounting Standards Update 2014-09 [Member] | |||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 1,431,305 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 171,020 | $ 175 | $ 14 | 157,365 | (62) | 13,703 | $ 175 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Exercise of vested stock options (in shares) | 0 | |||||||
Ending Balance (in shares) at Dec. 31, 2019 | 61,321,424 | |||||||
Ending Balance at Dec. 31, 2019 | $ 469,873 | $ 613 | 486,065 | 21 | (16,826) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share based compensation | 6,682 | 6,682 | ||||||
Foreign currency translation adjustments | 57 | 57 | ||||||
Net loss | (6,462) | (6,462) | ||||||
Ending Balance (in shares) at Dec. 31, 2020 | 61,321,424 | |||||||
Ending Balance at Dec. 31, 2020 | 470,150 | $ 613 | 492,747 | 78 | (23,288) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share based compensation | 4,380 | 4,380 | ||||||
Foreign currency translation adjustments | (47) | (47) | ||||||
Issuance of common stock to board of director member (in shares) | 25,200 | |||||||
Issuance of common stock to a board of directors member | 250 | 250 | ||||||
Issuance of common stock (in shares) | 8,152 | 11,666,667 | ||||||
Issuance of common stock | $ 146,136 | $ 117 | 146,019 | |||||
Exercise of vested stock options (in shares) | 172,728 | 172,728 | ||||||
Exercise of vested stock options | $ 1,358 | $ 2 | 1,356 | |||||
Dividend | (74,500) | (74,500) | ||||||
Net loss | (9,978) | (9,978) | ||||||
Ending Balance (in shares) at Dec. 31, 2021 | 73,194,171 | |||||||
Ending Balance at Dec. 31, 2021 | $ 537,749 | $ 732 | $ 570,252 | $ 31 | $ (33,266) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 17.2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||||
Net loss | $ (16,826) | $ 3,649 | $ (9,978) | $ (6,462) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
Depreciation expense | 1,365 | 2,057 | 5,603 | 4,192 |
Amortization expense | 7,823 | 11,302 | 24,877 | 23,840 |
Loss on extinguishment of debt | 0 | 0 | 5,015 | 0 |
Provision for bad debt | 132 | (171) | (202) | 542 |
Provision for inventory reserve | 0 | 0 | 639 | 0 |
Gain from disposal of assets | 0 | 159 | 28 | 397 |
Deferred income taxes | (917) | (23,615) | (569) | (2,317) |
Write-off of capitalized software costs | 0 | 0 | 0 | 69 |
Amortization of debt issuance costs | 309 | 399 | 1,082 | 1,056 |
Change in fair value of contingent consideration | 0 | 19,671 | 96 | (10,770) |
Share-based compensation | 0 | 300 | 4,380 | 6,682 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (11,575) | (1,899) | (12,021) | (2,031) |
Inventory | (1,665) | 2,191 | (3,605) | (7,796) |
Prepaid expenses and other assets | (2,639) | 33 | (1,195) | (4,653) |
Accounts payable and other accrued liabilities | 6,016 | 12,566 | (7,686) | 29,659 |
Deferred revenue | 3,586 | (1,395) | 1,550 | (845) |
Payment on contingent consideration | 0 | 0 | (10,329) | 0 |
Net cash (used in) provided by operating activities | (14,391) | 25,247 | (2,315) | 31,563 |
Cash flows from investing activities | ||||
Acquisition, net of cash received | (626,292) | 0 | 0 | (3,758) |
Purchases of property and equipment, net | (1,429) | (9,799) | (6,435) | (5,159) |
Capitalized software development costs | (2,129) | (2,488) | (5,894) | (4,355) |
Net cash used in investing activities | (629,850) | (12,287) | (12,329) | (13,272) |
Cash flows from financing activities | ||||
Proceeds from issuance of debt | 225,000 | 0 | 78,000 | 25,000 |
Payment of debt issuance cost | (6,105) | 0 | (2,133) | (1,148) |
Principal payment on term loan | (563) | (613) | (132,368) | (2,438) |
Payment on capital leases | (117) | (716) | (464) | (118) |
Proceeds from issuance of common stock to Board of Director | 0 | 0 | 250 | 0 |
Proceeds from issuance of common stock in initial public offering, net of issuance costs | 0 | 0 | 146,136 | 0 |
Prepayment premium on early repayment of term loan | 0 | 0 | (1,563) | 0 |
Proceeds from capitalization | 447,351 | 0 | 0 | 0 |
Proceeds from capitalization | 0 | 0 | (10,303) | (11,867) |
Payment on contingent consideration | 0 | 0 | 1,358 | 0 |
Exercise of vested stock options | 0 | 0 | (74,500) | 0 |
Dividend | 665,566 | (1,329) | 4,413 | 9,429 |
Net cash provided by (used in) financing activities | 21 | (14) | (44) | 20 |
Effect of exchange rate changes on cash | 21,346 | 11,617 | (10,275) | 27,740 |
Cash, cash equivalents and restricted cash at beginning of period | 18,264 | 49,086 | 21,346 | |
Cash, cash equivalents and restricted cash at end of period | 21,346 | 29,881 | 38,811 | 49,086 |
Cash, cash equivalents and restricted cash at beginning of period | ||||
Cash and cash equivalents | 15,971 | 21,458 | 38,811 | 45,366 |
Restricted cash | 1,615 | 3,068 | 0 | 3,560 |
Restricted cash, non-current | 3,760 | 5,355 | 0 | 160 |
Cash, cash equivalents and restricted cash | 21,346 | 29,881 | 38,811 | 49,086 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for taxes | 13 | 66 | 1,412 | 50 |
Cash paid for interest | 4,277 | 5,858 | 18,517 | 15,288 |
Non-cash investing and financial activities: | ||||
Contingent consideration payable to former owners and working capital payable | 6,562 | 0 | 0 | 0 |
Common stock issued in exchange to Parent for acquisition | 39,327 | 0 | 0 | 0 |
Capitalized software and property and equipment, net included in accounts payable | $ 468 | $ 1,269 | $ 1,918,000 | $ 3,672 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | BUSINESS AND BASIS OF PRESENTATION Business Convey Health Solutions Holdings, Inc. (collectively with its subsidiaries, which includes our main operating subsidiary, Convey Health Solutions, Inc., “we”, “us”, “our”, “Convey” or the “Company”) provides technology enabled solutions to payors within the large and growing government sponsored health plan market. Our platform combines proprietary modular technology and end-to-end solutions to serve as an extension of our clients’ operations and core systems. Our clients are primarily Medicare Advantage, Medicare Part D and Employer Group Waiver Plans, as well as Pharmacy Benefit Managers. Convey is a United States (“U.S.”) based holding company incorporated in Delaware. Our principal executive offices are located in Fort Lauderdale, Florida. On April 21, 2021, we completed a corporate name change from Cannes Holding Parent, Inc. to Convey Holding Parent, Inc. On November 4, 2021, we completed another corporate name change from Convey Holding Parent, Inc. to Convey Health Solutions Holdings, Inc. Basis of Presentation and Consolidation Convey was formed on June 13, 2019, for the purpose of acquiring Convey Health Solutions, Inc. (“CHS”). On September 4, 2019, Cannes Parent, Inc. (“Cannes”), a direct subsidiary of Convey, entered into an agreement to acquire all of the outstanding stock of CHS through the merger of Cannes Merger Sub, Inc. and Convey Health Parent, Inc. (“Parent”) (the “Merger”) with Parent surviving as a direct subsidiary of Cannes. The Merger principally occurred through an investment from TPG Cannes Aggregation, L.P., which is primarily funded by partners of TPG Partners VIII, L.P. and TPG Healthcare Partners, L.P. or any parallel fund or their alternative investment vehicles (collectively, “TPG”). See Note 4. Acquisitions. The Merger was accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), and Cannes was determined to be the accounting acquirer. The accompanying consolidated financial statements and related notes are presented on a Successor and Predecessor basis. Predecessor The period from January 1, 2019 to September 3, 2019 reflects the historical financial information for Parent and its subsidiaries prior to the closing of the Merger (“Predecessor”). Successor The period from Inception to December 31, 2019 and the years ended December 31, 2020 and 2021, reflect the historical financial information for Convey and its subsidiaries (“Successor”). The Successor and Predecessor consolidated financial information presented herein is not comparable due to the impacts of the Merger including the application of acquisition accounting in the Successor financial statements as of September 4, 2019, see Note 4. Acquisitions . Where applicable, a black line separates the Successor and Predecessor periods to highlight the lack of comparability. The accompanying consolidated financial statements include the accounts of Convey and our wholly-owned subsidiaries. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. Stock Split Prior to the IPO (as defined below), in June 2021, Convey’s Board of Directors (the “Board”) and stockholders approved a forward split of shares of Convey’s common stock, par value $0.01 per share, on a 126-for-1 basis (the “Stock Split”), which became effective as of June 4, 2021. Prior to the Stock Split, we were authorized to issue 1,000,000 shares of common stock of which (i) 915,000 shares were designated as voting common stock and (ii) 85,000 shares were designated as non-voting common stock. In connection with the Stock Split, the total number of authorized shares of common stock was proportionately increased and the par value of the common stock was not adjusted as a result of the Stock Split. In addition, all authorized shares of common stock were designated voting common stock. All references to common stock, options to purchase common stock, per share data and related information contained in the consolidated financial statements have been retrospectively adjusted to reflect the effect of the Stock Split. Initial Public Offering On June 18, 2021, we closed our initial public offering (“IPO”) of our common stock through an underwritten sale of 13,333,334 shares of our common stock at a price of $14.00 per share. In the offering, we sold 11,666,667 shares and a selling stockholder sold 1,666,667 shares. The aggregate net proceeds to us from the offering after deducting underwriting discounts and commissions and other offering expenses payable by us, were approximately $146.1 million. We used approximately $131.5 million of the net proceeds from the IPO to repay outstanding indebtedness under our credit agreement. We did not receive any of the proceeds from the sale by the selling stockholder. Prior to the closing of the IPO, on June 17, 2021, our Second Amended and Restated Certificate of Incorporation (the “Charter”) and our Second Amended and Restated Bylaws, became effective. The Charter, among other things, provides that our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share and 25,000,000 shares of preferred stock, par value $0.01 per share. COVID-19 Pandemic During the first quarter ended March 31, 2020, concerns related to the spread of novel coronavirus (“COVID-19”) began to create global business disruptions as well as disruptions in our operations. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Governments at the national, state and local level in the U.S., and globally, have implemented varying measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings of people, work from home and supply chain logistical changes. While some of these actions have eased, escalating transmission rates (including of the Delta and Omicron variants of COVID-19), uneven vaccination and vaccination booster rates and further governmental guidance and orders may result in having to reimplement certain of these measures or implementing new and additional ones. The spread of COVID-19 has also caused significant volatility in the U.S. and international markets and has had and continues to have widespread, rapidly evolving and unpredictable impacts on global society, economics, financial markets and business practices. The impact of COVID-19 on our business has resulted in elongated sales cycles, postponement of customer contract renewals, and slower implementation of software solutions for our clients, as well as a reduction in billable hours in one of our reportable segments, the Advisory Services segment. The full extent to which the COVID-19 pandemic and the various responses to the COVID-19 pandemic continues to impact our business, operations or financial condition will depend on numerous evolving factors that we may not be able to accurately predict, including, but not limited to, the duration, severity and scope of the COVID-19 pandemic (including due to new variants, such as Delta and Omicron); actions by governmental entities, businesses and individuals that have been and continue to be taken in response to the pandemic; the effect on our clients and demand by clients, clients and our clients’ members for and ability to pay for our solutions and services; and disruptions or restrictions on our employees’ ability to work and travel. The impact of these factors and others on our suppliers and clients could persist for some time after governments ease their restrictions and after the overall number of COVID-19 cases in the United States decreases. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. While our current assessment of our estimates did not have a material impact on our consolidated financial statements as of and for the year ended December 31, 2021, as additional information becomes available to us, our future assessment of our estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information currently available to us and based on various other assumptions that we conclude to be reasonable under the circumstances. While management concludes that such estimates are reasonable when considered in conjunction with our consolidated balance sheets and statements of operations and comprehensive income (loss) taken as a whole, actual results could differ materially from those estimates. Segments We operate in two segments in accordance with ASC Topic 280, Segment Reporting (“ASC 280”). Operating segments are components of public entities that engage in business activities from which they may earn revenues and incur expenses, and separate financial information is available and evaluated regularly by our Chief Operating Decision Maker (“CODM”) group in deciding how to assess performance and allocate resources. The two reportable segments are Technology Enabled Solutions and Advisory Services. See Note 18. Segment Information . Foreign Operations The consolidated financial statements are presented in U.S. dollars, which is our reporting currency. We translate the results of operations of our subsidiaries with functional currencies other than the U.S. dollar using average exchange rates during each period and translate balance sheet accounts using exchange rates at the end of each period. We record currency translation adjustments as a component of equity within Accumulated other comprehensive income and transaction gains and losses in other expense, net in our consolidated statements of operations and comprehensive (loss) income. Foreign currency translation balances reported within Accumulated other comprehensive income are recognized in the consolidated statements of operations and comprehensive (loss) income when the operation is disposed of or substantially liquidated. Revenue Recognition We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). For further discussion of our accounting policies related to revenue see Note 3. Revenue from Contracts with Customers. Share-based Compensation Our accounting policy for share-based compensation is disclosed in Note 11. Share-based Compensation . Cash and Cash Equivalents We consider cash in banks and holdings of highly liquid investments with original maturities of three months or less, when purchased, to be cash and cash equivalents. At various times throughout 2021 and 2020 and as of December 31, 2021 and 2020, some accounts held at financial institutions were in excess of the federally insured limit of $250 thousand. We reduce our exposure to credit risk by maintaining our cash deposits with major financial institutions. We have not experienced any losses on these accounts and conclude the credit risk to be minimal. We also have an immaterial amount of cash held in the Philippines and the Netherlands to fund local operations. Restricted Cash As part of the acquisition of HealthScape Advisors, LLC (“HealthScape Advisors”) and Pareto Intelligence LLC (“Pareto Intelligence”) in 2018, the previous shareholders agreed to set aside funds for an incentive compensation plan for employees who remained post acquisition. The payments were paid yearly and the last payment was made in December 2021. The cash for this incentive compensation plan was held as restricted cash. Any such payments have appropriately been accounted for as post business combination expense to the employees within the plan. Additionally, as a condition of certain facility lease agreements, a certificate of deposit is required to collateralize our lease payments throughout the lease term. These balances have been excluded from our cash and cash equivalent balance and are classified as a restricted cash balance in our consolidated balance sheets. Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amounts and do not bear interest. An allowance for doubtful accounts is recorded to provide for estimated losses resulting from uncollectible accounts and is based principally on specifically identified amounts where collection is determined to be doubtful. Management analyzes the collectability of trade accounts and other receivables and the adequacy of the allowance for doubtful accounts on a regular basis taking into consideration the aging of the account balances, historical bad debt experience, customer concentration, customer credit-worthiness, customer financial condition and credit report and the current economic environment. In addition, an allowance is established when it is probable that a specific receivable is not collectible, and the loss can be reasonably estimated. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is remote. If the financial condition of our clients were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance and related bad debt expense may be required. Inventories Inventory consists of finished goods and is stated at lower of cost or net realizable value. The cost of inventory is computed using the first in first out method. Inventory is monitored to ensure appropriate valuation. Adjustments of inventories to the lower of cost or net realizable value, if necessary, are based on turnover and assumptions about future demand and market conditions. If assumptions about future demand change and/or actual market conditions are less favorable than those projected by management, additional adjustments to inventory valuations may be required. As of December 31, 2021 and 2020, we had a reserve for obsolescence of $0.7 million and $0.1 million, respectively. The reserve is calculated based on several factors, including projections of products not expected to be sold prior to their expiration dates. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated over the estimated useful lives of the assets using the straight-line method, which best reflects the pattern of use. Maintenance and repair costs are expensed as incurred. We test for impairment whenever events or changes in circumstances that could impact recoverability occur. Intangible Assets Purchased intangible assets with finite lives are primarily amortized using the straight-line method over the estimated economic lives of the assets, which best reflects the pattern of use. Our finite-lived intangible assets are amortized over periods between five and twenty years. Trade names are amortized over estimated useful lives between five and twenty years; Customer relationships are amortized over an estimated useful life of eleven years; and Technology is amortized over an estimated useful life of ten years. We test for impairment whenever events or changes in circumstances that could impact recoverability occur. Software Development Costs Development costs associated with certain solutions offered exclusively through software as a service model are accounted for in accordance with ASC Topic 350-40, Internal-Use Software (“ASC 350-40”). Under ASC 350-40 qualifying software costs developed for internal use are capitalized when application development begins, it is probable that the project will be completed, and the software will be used as intended. We capitalize direct costs related to application development activities that are probable to result in additional functionality. Capitalized costs are amortized on a straight-line basis over 3 to 10 years, which best represents the pattern of the software’s use. We test for impairment whenever events or changes in circumstances that could impact recoverability occur. Cloud Computing Arrangements We capitalize implementation costs related to cloud computing (i.e. hosting) arrangements that are accounted for as a service contract. Such implementation costs incurred to develop or utilize internal-use software hosted by a third-party vendor are recorded as part of Prepaid expenses and other current assets on the consolidated balance sheets. Once the installed software is ready for its intended use, such costs are amortized on a straight-line basis, to Selling, general and administrative expenses on our consolidated statements of operations and comprehensive (loss) income over the minimum term of the contract plus contractually-provided renewal periods that are reasonably expected to be exercised. Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Acquisitions We allocate the purchase consideration to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to the consolidated statements of operations and comprehensive (loss) income. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies which techniques include the royalty method, the multi-period excess earnings method, the cost approach, the market approach, and the probability weighted assessment method as considered necessary. Significant assumptions used in those methodologies include, but are not limited to, growth rates, discount rates, customer attrition rates, expected levels of revenues, earnings, cash flows and tax rates. The use of different valuation methodologies and assumptions is highly subjective and inherently uncertain and, as a result, actual results may differ materially from estimates. Goodwill Goodwill represents the fair value of acquired businesses in excess of the fair value of the individually identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Impairment exists when the carrying amount, including goodwill, of the reporting unit exceeds its fair value, resulting in an impairment charge for this excess (not to exceed the carrying amount of the goodwill). Our annual impairment testing date is October 1. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. For purposes of the goodwill impairment test, we have determined our business operates in four reporting units: Advanced Plan Administration, Supplemental Benefit Administration, Value Based Payment Assurance, and Advisory Services. Advanced Plan Administration, Supplemental Benefit Administration, and Value Based Payment Assurance reporting units form part of the Technology Enabled Solutions reporting segment. A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and company specific factors such as trends in revenue generating activities, and merger or acquisition activity. If we elect to bypass qualitatively assessing goodwill, or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, management estimates the fair values of each of our reporting units mentioned above and compares it to their carrying values. The estimated fair values of the reporting units are established using an income approach based on a discounted cash flow model that includes significant assumptions about the future operating results and cash flows of each reporting unit, and a market approach which compares each reporting unit to comparable companies in their respective industries. The impairment is recorded within Operating expenses in the statements of operations and comprehensive loss in the period the determination is made. There were no impairments recorded during the periods presented. Debt Issuance Cost Deferred financing costs relate to our debt instruments, the short-term and long-term portions are reflected as a deduction from the carrying amount of the related debt. The deferred financing costs are amortized using the straight-line method over the term of the related debt instrument which approximates the effective interest method. Deferred financing costs incurred with line-of-credit arrangements are recorded as assets on our consolidated balance sheets and amortized over the term of the arrangement. Debt may be considered extinguished when it has been modified and the terms of the new debt instruments and old debt instruments are “substantially different” (as defined in the debt modification guidance in ASC Topic 470‑50, Debt — Modifications and Extinguishments (“ASC 470-50”)). Deferred Initial Public Offering Costs We incurred certain costs in connection with our IPO. Deferred IPO costs of $5.8 million were charged to shareholders’ equity upon the completion of the IPO (see Note 1. Business and Basis of Presentation ). As of December 31, 2020, deferred IPO costs were $0.4 million and were included within Prepaid expenses and other current assets on the consolidated balance sheets. Customer Concentrations Revenue and Accounts receivable from our major customers are as follows: Revenues For the Years Ended Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) 2021 2020 (Successor) (Predecessor) Customer A $ 93,730 $ 80,901 $ 20,972 $ 27,814 % of total revenue 27.8 % 28.6 % 26.1 % 19.8 % Customer B $ 63,838 $ 50,485 $ 17,106 $ 30,650 % of total revenue 18.9 % 17.8 % 21.3 % 21.8 % Accounts Receivable (in thousands) December 31, 2021 December 31, 2020 Customer A $ 13,161 $ 7,582 % of total accounts receivable 21.0 % 15.0 % Customer B $ 15,174 $ 3,447 % of total accounts receivable 24.2 % 6.8 % Our customer base is highly concentrated. Revenue may significantly decline if we were to lose one or more of our major customers. However, our risk is reduced due to our significant customers having multiple product delivery solutions under separate contracts. Fair Value of Financial Instruments Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. There is a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: • Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, such as quoted market prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs which are supported by little or no market activity. Financial instruments (principally cash and cash equivalents, accounts receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. Our long-term credit facility is carried at cost, which approximates fair value due to the variable interest rate associated with the revolving credit facility. Contingencies A liability is contingent if the amount is not presently known but may become known in the future as a result of the occurrence of some uncertain future event. We accrue a liability for an estimated loss if we determine that the potential loss is probable of occurring and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable, and accruals are based only on the information available to our management at the time the judgment is made. We expense legal costs, including those legal costs incurred in connection with a loss contingency, as incurred. Selling, General and Administrative (“SG&A”) SG&A expenses includes the total cost of payroll, related benefits and other personnel expense for employees who do not have a direct role with revenue generation activities, including those involved with developing new service offerings. SG&A expenses include all general operating costs including, but not limited to, rent and occupancy costs, telecommunications costs, information technology infrastructure costs, technology development costs, software licensing costs, advertising and marketing expenses and expenses related to the use of certain subcontractors and professional services firms. SG&A expenses do not include depreciation and amortization, which is stated separately in the consolidated statements of operations and comprehensive (loss) income. Leases We lease various property and equipment. Amortization of assets accounted for as capital leases is computed utilizing the straight-line method over the shorter of the remaining lease term or the estimated useful life. All other leases, primarily facility leases, are accounted for as operating leases. Rent expense for operating leases, which may have rent escalation provisions or rent holidays, is recorded on a straight-line basis over the non-cancelable lease period. The difference between rent expensed and rent paid is recorded as deferred rent. Lease incentives received from landlords are recorded as a deferred rent credit and amortized to rent expense over the term of the lease. Deferred rent is included in other long-term liabilities and accrued expenses on the consolidated balance sheets. Discontinued Operations We report financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs only when the disposal of a component or a group of components represents a strategic shift that will have a major effect on our operations and financial results. In our consolidated statements of cash flows, the cash flow from discontinued operations are not separately classified. Unless indicated otherwise, the information in the Notes to the consolidated financial statements relates to continuing operations. See Note 17. Discontinued Operations . Income Taxes Income tax expense includes federal, state, and foreign taxes and is based on reported income before income taxes. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or realized. We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. We recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from uncertain tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. Interest related to uncertain tax positions is recognized as part of the provision for income taxes and is accrued beginning in the period that such interest would be applicable under relevant tax law until such time that the related tax benefits are recognized. Contingent Consideration We recognized an earn-out liability in connection with the November 2018 acquisition of HealthScape Advisors and Pareto Intelligence, which represented contingent consideration. The initial fair value of the earn-out liability was determined by employing a Monte-Carlo simulation model. The underlying simulated variable was adjusted revenue discounted by the market price of risk embedded in the revenue metrics. The revenue volatility estimate was based on a study of historical asset volatility and implied volatility for a set of comparable public companies, adjusted by our operating leverage. The earn-out payments were calculated based on simulated revenue metrics and payment thresholds as set forth in the HealthScape Advisors and Pareto Intelligence purchase agreement. The calculated payments were further discounted back to present value using cost of debt reflecting our credit risk. The fair value of the earn-out liability at each reporting date subsequent to the acquisition was measured using a probability weighted approach. Any change in fair value was recognized in the consolidated statements of operations and comprehensive (loss) income. In connection with the Merger, we recognized a holdback liability, which represented contingent consideration. See Note 4. Acquisitions for additional information. The initial fair value of the holdback liabilities and at each subsequent reporting date was measured using a probability weighted approach. Any change in fair value was recognized in the consolidated statements of operations and comprehensive (loss) income. During the year ended December 31, 2021, we made a final payment of $13.1 million related to the holdback liability and a $7.5 million final payment related to the earn-out liability due to HealthScape Advisors. The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the year ended December 31, 2021: (in thousands) Balance at December 31, 2020 $ 20,538 Payments against the earn-out liabilities (7,500) Payments against the holdback liabilities (13,134) Change in fair value of earn-out liabilities 96 Balance at December 31, 2021 $ — The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the year ended December 31, 2020: (in thousands) Balance at December 31, 2019 $ 43,175 Payments against the earn-out liabilities (11,867) Change in fair value of the holdback liabilities 10,329 Change in fair value of the earn-out liabilities (21,099) Balance at December 31, 2020 $ 20,538 Net Income (Loss) Per Common Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common shareholders (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted net income (loss) per common share attributable to common shareholders is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period adjusted for the dilutive effects of common stock equivalents. In periods when losses from continuing operations are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. For the Years Ended Period from Period from (in thousands, except share and per share data) 2021 2020 (Successor) (Predecessor) Net income (loss) attributable to common shareholders Net income (loss) from continuing operations $ (9,978) $ (6,498) $ (16,899) $ 4,345 Net income (loss) from discontinued operations — 36 73 (696) Net income (loss) attributable to common shareholders $ (9,978) $ (6,462) $ (16,826) $ 3,649 Weighted-average common shares outstanding: Basic 67,695,030 61,321,424 35,821,422 1,431,305 Diluted — — — 112,469 Dilutive impact of stock awards outstanding 67,695,030 67,695,030 61,321,424 35,821,422 1,543,774 Income (Loss) per share: Basic Continuing operations $ (0.15) $ (0.11) $ (0.47) $ 3.04 Discontinued operations — — — (0.49) Net income (loss) per common share $ (0.15) $ (0.11) $ (0.47) $ 2.55 Diluted Continuing operations $ (0.15) $ (0.11) $ (0.47) $ 2.81 Discontinued operations — — — (0.49) Net income (loss) per common share $ (0.15) $ (0.11) $ (0.47) $ 2.32 For the year ended December 31, 2021 and 2020, 5,790,440 and 5,621,364 of potentially dilutive share-based awards outstanding, respectively, were excluded from the computation of diluted net income (loss) related to common holders as their effect was anti-dilutive. There were no potentially dilutive share-based awards outstanding from the period from Inception to December 31, 2019 (Successor). See Note 11. Share-Based Compensation . Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which amended the accounting for income taxes. ASU 2019-12 eliminates certain exceptions to the guidance for income taxes related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences as well as simplifying aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. We early adopted ASU 2019-12 on January 1, 2021, and the adoption did not have a material impact on our consolidated financial statements. Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The guidance specifies that lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases except those which meet the definition of a short-term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or financing. Classification will be based on criteria that are similar to those applied in current lease accounting, but without explicit bright lines. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As of December 31, 2021, we have identified our arrangements that are within the scope of the new guidance and have evaluated our portfolio of leases, which is primarily comprised of operating real estate leases for our respective offices. We will elect the package of practical expedients under which we will not reassess prior conclusions about lease identification, lease classification, and initial direct costs of existing leases as of the date of the adoption and, upon adoption, will recognize the right-of-use lease assets and related lease liabilities as of the adoption date using the modified retrospective approach. Prior period information will not be restated. Upon transition to the guidance as of the date of adoption, we expect to recognize approximately $21.0 million of operating lease liabilities on the consolidated balance sheet, with a corresponding amount of right-of-use assets, net of amounts reclassified from other assets liabilities In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), subsequently clarified in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The main provisions of this update provide optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. We are currently evaluating the new guidance to determine the impact ASU 2020-04 and ASU 2021-01 will have on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) (“ASU 2021-08”). The new guidance creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. Under this exception, an acquirer applies Topic 606 to recognize and measure contract assets and contract liabilities on the acquisition date. Topic 805 generally requires the acquirer in a business combination to recognize and measure the assets it acquires and liabilities it assumes at fair value on the acquisition date. This generally will result in companies recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. This new guidance is effective for emerging growth companies following private business adoption dates, for the fiscal years beginning after December 15, 2023, with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS We provide technology enabled solutions and advisory services to assist our clients with workflows across product developments, sales, member experience, clinical management, core operations and business intelligence and analytics. We generate our revenues through our two reporting segments: (i) Technology Enabled Solutions and (ii) Advisory Services. Technology Enabled Solutions We help health plans grow membership and revenue as well as operate more effectively and efficiently. We also assist our clients in managing the compliance and administrative requirements imposed under government sponsored health plans. Our technology solutions are primarily delivered through a web-based customizable application. This application is used to identify, track, and administer contractual services, or benefits provided under a client’s plan to its Medicare and Medicaid beneficiaries. We also provide analytics over healthcare data to capture and assess gaps in risk documentation, quality, clinical care, and compliance. With our technology enabled solutions, we offer the following services: • Health Plan Management provides technology-enabled plan administration services for government-sponsored health plans. Our service encompasses eligibility and enrollment processing, member services, premium billing, payment processing, reconciliation and other related services. In addition, we provide technology enabled services to manage supplemental benefits provided to members through their Medicare Advantage plans. Our services include benefit design and administration, member eligibility and engagement, analytics and reporting. • Software Services provide additional services to our clients for ad hoc enhancements on their existing software solutions. • Data Analytics provide payment tools and data analytics to improve revenue accuracy and identify gaps in quality, clinical care and compliance. Increasingly we are combining these analytics capabilities with our Health Plan Management offerings. • Supplemental Benefit Services include product fulfillment, as well as catalog development and product distribution. Advisory Services We provide Advisory Services that complement our technology enabled solutions, including sales and marketing strategies, provider network strategies, compliance, Star ratings, quality, clinical, pharmacy, analytics and risk adjustment. Five-step approach Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for contracts that are within the scope of the standard, we perform the following five steps: 1) Identify the contract(s) with a customer A contract with a customer exists when (i) we enter into an enforceable contract with the customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay. Our customary business practice is to enter into legally enforceable written contracts with our customers. The majority of our contracts are governed by a master agreement between us and the customer, which sets forth the general terms and conditions of any individual contract between the parties, which is then supplemented by any of the following: software as a service agreement, statement of work, project task orders, or purchase orders. The supplement specifies the different goods and services, the associated prices, and any additional terms for an individual contract. Multiple contracts with a single counterparty entered into at the same time are evaluated to determine if the contracts should be combined and accounted for as a single contract. Typical payment terms are net 30 days. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or services either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we must apply judgment to determine whether promised goods or services are capable of being distinct and are distinct in the context of the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation. No customer can take possession of our software in the ordinary course of business, nor is it feasible for a customer to contract with a third party to host the software or for a customer to host the software. Therefore, our license arrangements are accounted for as service obligations, rather than the transfer of intellectual property. The Company is generally acting as a principal in each arrangement and, thus, recognizes revenue on a gross basis. 3) Determine the transaction price The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. We assess the timing of transfer of goods and services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less, which is the case in most of our customer contracts. The primary purpose of our invoicing terms is not to receive or provide financing from or to customers. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration when it is required. Typically, outside of our supplemental benefit products, we do not provide our customers with any right of return. We do not constrain the contract price as it is probable that there will not be a significant revenue reversal due to a return. 4) Allocate the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct goods or services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, we must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. We allocate the variable amount to one or more distinct performance obligations or to one or more distinct services that forms a part of a single performance obligation, when the payment terms of the variable amount relate solely to our efforts to satisfy that distinct performance obligation and it results in an allocation that is consistent with the overall allocation objective of ASC 606. Where variable revenue exists in connection with providing a series of substantially similar services to our customers, we do not estimate variable revenue at the inception of a contract but recognize revenue as services are provided which typically aligns with billing. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. We determine SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, we estimate the SSP using an expected cost-plus-a-margin approach. 5) Recognize revenue when (or as) the entity satisfies a performance obligation We satisfy performance obligations either over time or at a point in time depending on the nature of the underlying promise. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. The following table summarizes the nature and pattern of revenue recognition for our most significant performance obligations: Performance Performance Obligation Description Measure of Progress Health Plan Management Health Plan Support Services We provide administration support services to government sponsored plans using our proprietary technology. Those administrative services include eligibility and enrollment processing, member services, premium billing, payment processing, reconciliation and other related services. The services are provided throughout the duration of the contract which can be annual or multi-year. The performance obligation falls under the series guidance. Variable Fees recognized in the period to which it relates following the series allocation exception (i.e., the period we have the contractual right to the fee). Over time Supplement Benefit Administration We provide customized solutions using our proprietary technology to manage benefits provided to members through their Medicare Advantage plans, including benefit design and administration, member eligibility and engagement, end to end analytics and reporting. The service is provided throughout the agreed upon period. The performance obligation falls under the series guidance. Variable Fees recognized in the period to which it relates following the series allocation exception (i.e., the period we have the contractual right to the fee). Over Time Performance Performance Obligation Description Measure of Progress Software Services Software Solution We provide our clients access to in house software solutions, which are generally marketed under annual and multi-year arrangements. The solution integrates with the client’s existing technology and the client has access to the software throughout the duration of the contract. The performance obligation falls under the series guidance. Input method – fixed fees revenue is recognized ratably over the contract term based on time elapsed. Over Time Development Services We offer additional services to our clients for ad hoc enhancements on their existing software solutions. The service is typically agreed upon on a standalone basis and provided over a set period of time that is usually less than a year. Input method – revenue is recognized proportionally over the service based on service hours or number of hours worked. Over Time Data Analytics Shared Savings Analytics We provide shared savings solutions that is derived from an evaluation of healthcare data, delivering insights to optimize outcomes, improve financial performance, and ensure compliance. These contracts are multiyear arrangements. Shared savings recognized on delivery of the report of potential cost savings. Point in Time Data Validation We offer an add-on administrational service where clients can opt to have their data inputted to government websites to recover identified savings. The length of the service provided is based on the number of members to be processed. Output method – revenue is recognized proportionally over the service based on number of members’ data processed for potential cost savings. Over Time Subscription Software Access We provide a stand ready solution that gives our clients access to an analytical tool that harmonizes third party, health plan, and clinical datasets, and applies analytic models to inform strategic product, pricing, and market decisions. These multi-year contracts allow the client to access the technology at any time to view the reports. The performance obligation falls under the series guidance. Input method – revenue is recognized as the number of runs are completed. Over Time Access to a pre-determined number of data analytic assessments per year We offer an alternative subscription service to have a predetermined number of data analytic assessment runs per year over a long-term contract. The contract specifies how many data analytic runs the client can access. The performance obligation falls under the series guidance. Input method – revenue is recognized as the number of runs are completed. Over Time Performance Performance Obligation Description Measure of Progress Supplemental Benefit Services Supplemental Benefit Product Sales This solution is provided on an annual contract and ships supplemental benefit products to client members. This is an end to end service starting with the order processing to shipment of the product. Recognized upon shipment to members. Point in Time Catalog Sales We offer production and delivery of product formulary to client members. Recognized upon shipment to members. Point in Time Advisory Services Consulting Services We provide advisory services to the healthcare industry in various strategic and operational areas. Each individual engagement is a distinct service with a short duration and can be offered on a fixed fee or a time and materials basis. Input method – revenue is recognized proportionally over the service based on hours. Input method – for fixed fee arrangements a percentage of completion measure is used. Over Time Accounting Policy Elections and Practical Expedients We have elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value-added) assessed by government authorities and collected from a customer. Therefore, revenue is recognized net of such taxes. We contract with customers to deliver and ship tangible products within the normal course of business, such as supplemental benefit products. The control of the products transfers to the customer, in most cases, free on board (FOB) shipping point. We have elected to use the practical expedient allowed under ASC 606 to account for shipping and handling activities that occur after the customer has obtained control of a promised good as fulfillment costs rather than as an additional promised service and, therefore, we do not allocate a portion of the transaction price to a shipping service obligation. We record as revenue any amounts billed to customers for shipping and handling costs and record as cost of revenue the actual shipping costs incurred. In accordance with ASC 606, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice (“right-to-invoice” practical expedient). We have elected to utilize this expedient on supplemental benefit products shipped and advisory services that are not based on a fixed fee. Our standard contract terms allow for the reimbursement by a customer for certain travel expenses necessary to provide on-site services to the customer. Such reimbursed travel expenses are reported on a gross basis. Since such reimbursed travel expenses do not represent a distinct good or service nor incremental value provided to a customer, a performance obligation is deemed not to exist. Where the “right-to-invoice” practical expedient is being applied to variable consideration any client pass-thru charges related to the consulting services performance obligations are also treated under the “right-to-invoice” practical expedient. Disaggregation of revenue The following tables present disaggregated revenue by reporting segment: (in thousands) For the Year Ended December 31, 2021 Technology Advisory Total Supplemental Benefit Services $ 160,021 $ — $ 160,021 Health Plan Management 93,150 — 93,150 Consulting Services 6,023 52,849 58,872 Software Services 13,766 128 13,894 Data Analytics 11,659 — 11,659 Total $ 284,619 $ 52,977 $ 337,596 (in thousands) For the Year Ended December 31, 2020 Technology Advisory Total Supplemental Benefit Services $ 135,723 $ — $ 135,723 Health Plan Management 76,814 — 76,814 Consulting Services 4,754 41,578 46,332 Software Services 13,365 — 13,365 Data Analytics 10,680 — 10,680 Total $ 241,336 $ 41,578 $ 282,914 Period from Inception to December 31, 2019 (Successor) (in thousands) Technology Enabled Solutions Advisory Services Total Supplemental Benefit Services $ 29,262 $ — $ 29,262 Health Plan Management 25,571 — 25,571 Consulting Services 1,701 13,885 15,586 Software Services 5,384 — 5,384 Data Analytics 4,612 — 4,612 Total $ 66,530 $ 13,885 $ 80,415 Period from January 1, 2019 to September 3, 2019 (Predecessor) (in thousands) Technology Enabled Solutions Advisory Services Total Supplemental Benefit Services $ 48,293 $ — $ 48,293 Health Plan Management 45,245 — 45,245 Consulting Services 1,553 30,806 32,359 Software Services 6,366 — 6,366 Data Analytics 8,475 — 8,475 Total $ 109,932 $ 30,806 $ 140,738 The revenue recognition pattern, point in time or over time, is consistent within all revenue categories with the exception of Data Analytics which includes revenue recognized on both a point in time and over time basis. The amount of point in time revenue within Data Analytics was $4.9 million, $3.8 million, $2.5 million and $4.6 million during the year ended December 31, 2021, the year ended December 31, 2020, period from Inception to December 31, 2019 (Successor) and period from January 1, 2019 to September 3, 2019 (Predecessor), respectively. Contract Balances The timing of our revenue recognition, invoicing, and cash collections results in billed accounts receivable, unbilled receivables, and deferred revenue. Accounts receivable includes unbilled receivable balances of $7.0 million and $16.0 million as of December 31, 2021, and December 31, 2020, respectively. Deferred revenue represents payments received from our customers in advance of recognition of revenue. Deferred revenue that will be recognized during the succeeding 12 months is recognized as current deferred revenue and the remaining portion is recognized as non-current deferred revenue within Other long-term liabilities. Revenue recognized during the years ended December 31, 2021 and 2020 that was included in the deferred revenue balance at the beginning of the period was $6.4 million and $7.4 million, respectively. Assets Recognized from Costs to Obtain a Contract Sales commission expenses that would not have occurred absent the customer contracts are considered incremental costs to obtain a contract. We have elected to take the practical expedient available to expense the incremental costs to obtain a contract as incurred when the expected benefit and amortization period is one year or less. Sales commission expenses are not material or have a period of benefit of one year or less and are therefore expensed as incurred in line with the practical expedient elected. All other costs to obtain a contract are not considered incremental and therefore are expensed as incurred. Remaining Performance Obligations Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes contract liabilities and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. The timing and amount of revenue recognition for our remaining performance obligations are influenced by several factors and therefore the amount of remaining obligations may not be a meaningful indicator of future results. Total RPO equaled $9.8 million as of December 31, 2021, of which we expect to recognize approximately $4.2 million over the next 12 months. The remaining $5.6 million is expected to be recognized in fiscal years 2023, 2024, 2025, 2026, and 2027 by $5.2 million, $0.4 million, and $2.0 thousand, for each of the remaining periods, respectively. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS As discussed in Note 1. Business and Basis of Presentation, the Merger was consummated on September 4, 2019. The Merger was accounted for using the acquisition method of accounting in accordance with ASC 805. We concluded that Cannes is the acquirer of Parent based on Cannes taking control of greater than 50% of the voting shares of Parent. Further, the business combination was effected primarily by transferring cash and Cannes was the entity that transferred cash to the selling shareholders. The acquisition allowed TPG to expand its investments in the healthcare industry, which is a core focus industry for TPG. Consideration of approximately $702.1 million was exchanged for all of Parent’s outstanding stock and options. Under ASC 805, transaction costs of the acquirer are not included as a component of consideration transferred but are accounted as an expense in the period in which such costs are incurred, or, if related to the issuance of debt, capitalized as debt issuance costs. Acquisition related transaction costs incurred as part of a business combination can include estimated fees related to the issuance of long-term debt, underwriting fees, as well as advisory, legal and accounting fees. Acquisition related fees of $14.1 million were paid by TPG on behalf of Convey. As a result, these fees have been pushed down and reflected as an expense in the period from Inception to December 31, 2019 (Successor). Debt issuance costs of $6.1 million, in connection with the arrangement of debt financing to consummate the Merger, have been reported in the balance sheet as a direct deduction of the associated debt. CHS incurred $23.0 million in transaction costs related to Parent’s advisors and transaction-based bonuses to Parent’s employees, which was included as part of the purchase consideration. Seller transaction expenses of $21.5 million were contingent on the consummation of the Merger and were recognized “on the line”, and, therefore are not reflected in the Predecessor or Successor statement of operations and comprehensive loss. Unrecognized compensation expenses of $4.1 million associated with stock options that vested upon consummation of the Merger and deferred financing costs of $3.1 million associated with the extinguishment of the Predecessor term loan and the revolving credit facility were also recognized “on the line.” The following table summarizes the purchase consideration transferred in connection with the Merger and consists of the following: (in thousands) Cash consideration $ 656,174 Contingent consideration payable to former owners and working capital payable 6,562 Equity rollover 39,327 Total consideration $ 702,063 The fair value of the equity rollover consideration was calculated by valuing each share based on the per share common stock merger consideration. Contingent consideration of $2.8 million was estimated to be paid to the sellers at the time of the acquisition. The initial fair value of the holdback liability was measured using a probability weighted approach. The valuation of the assets acquired and liabilities assumed was based on fair values as of September 4, 2019, the closing date of the Merger. The allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed reflect various fair value estimates and analyses, including work performed by third-party valuation specialists. The following table summarizes the acquisition date fair value of the allocation of the purchase consideration assigned to each major class of assets acquired and liabilities assumed as of September 4, 2019, the closing date of the Merger: Preliminary allocation Measurement period adjustments Final allocation (in thousands) ASSETS ACQUIRED Cash $ 21,459 $ — $ 21,459 Accounts receivable 37,657 — 37,657 Inventories, net 1,633 — 1,633 Prepaid expenses and other current assets 8,100 — 8,100 Restricted cash 8,423 — 8,423 Property and equipment, net 17,588 — 17,588 Other assets, net 1,149 — 1,149 Total identifiable assets acquired 96,009 — 96,009 Fair value of intangible assets Tradenames 27,300 — 27,300 Customer relationships 189,000 — 189,000 Technology 47,800 — 47,800 Total fair value of intangible assets acquired 264,100 — 264,100 Goodwill 455,006 200 455,206 Total Assets Acquired $ 815,115 $ 200 $ 815,315 LIABILITIES ASSUMED Accounts payable $ 6,123 $ — $ 6,123 Deferred revenue 3,879 — 3,879 Accrued expenses 25,203 25,203 Capital lease obligations 595 — 595 Deferred taxes, net 29,595 200 29,795 Contingent consideration from prior acquisitions 40,371 — 40,371 Other long-term liabilities 7,286 — 7,286 Total Liabilities Assumed $ 113,052 $ 200 $ 113,252 Total consideration transferred $ 702,063 $ — $ 702,063 Due to a change in our tax estimate we made a measurement period adjustment of $0.2 million for the year ended December 31, 2020. The preliminary value of net assets acquired and liabilities assumed of $247.1 million were recorded at their fair values. Measurement period adjustments were made which changed the net assets acquired and liabilities assumed to $246.9 million. Finite-lived intangible assets acquired of $264.1 million related to tradenames, customer relationships, and technology are being amortized on a straight-line basis, which best reflects the pattern of usage. We estimated the fair value of the identifiable intangible assets based upon a third-party valuation. The weighted average useful life of tradenames, customer relationships and technology at the time of acquisition was 19.7 years, 11 years and 10 years, respectively. The tradenames and technology were valued using the relief from royalty method. Under this method a royalty rate is applied to the revenues associated with the respective trade name and technology to capture value associated with use of the intangible assets as if licensed. The resulting royalty savings are then discounted to present value at rates reflective of the risk and return expectations of the cash flows to derive their respective fair values as of the closing date of the Merger. The customer relationships were valued utilizing the multi-period excess earnings method. Under this method, revenues, operating expenses and other costs were estimated in order to derive cash flows attributable to the customer relationships. The resulting cash flows were then discounted to present value at rates reflective of the risk and return expectations to arrive at the fair value of the customer relationship as of the closing date of the Merger. The fair value of property and equipment acquired was determined using the cost approach. The market approach was also utilized for assets with active secondary markets. The fair value of the deferred revenue was estimated based on the costs to satisfy our remaining obligations, plus a reasonable profit considering the mark-up that a third-party market participant would charge to service the deferred revenue. Contingent consideration from prior acquisitions was fair valued based on a probability weighted assessment. Goodwill of $455.2 million as of December 31, 2020, represents the excess of cost over the fair value of net tangible assets and finite-lived intangible assets acquired and it is not deductible for income tax purposes. The goodwill is attributable to the general reputation of the business and the collective experience of management and employees. Goodwill of $88.9 million, $190.2 million, $138.2 million and $37.9 million was assigned to the Advanced Plan Administration, Supplemental Benefits Administration, Value Based Payment Assurance and Advisory Services reporting units, respectively, based on expected benefits from the combination as of the Merger date. See Note 7. Intangibles Assets and Goodwill . Unaudited Supplemental Pro Forma Information The pro forma results presented below include the effects of the Merger as if it had occurred on January 1, 2019. The pro forma results for the year ended December 31, 2019 includes (i) the additional depreciation and amortization resulting from the adjustments to the value of property and equipment and intangible assets resulting from purchase accounting, (ii) the additional amortization of the estimated adjustment to decrease the assumed deferred revenue obligations to fair value that would have been charged assuming the acquisition occurred on January 1, 2019, together with the consequential tax effects. The pro forma results also include interest expense associated with debt used to fund the acquisitions and adjustments to exclude interest expense from debt extinguished in the Merger. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisitions. The pro forma information does not purport to be indicative of what our results of operations would have been if the Merger had in fact occurred at the beginning of the period presented and is not intended to be a projection of our future results of operations. Transaction expenses are included within the pro forma results. The unaudited pro forma combined results, which assumes the Merger was completed on January 1, 2019 are as follows for the year ended December 31, 2019: (in thousands) Revenue Net Loss 2019 supplemental pro forma from January 1, 2019 through December 31, 2019 $ 220,993 $ (20,815) |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: (in thousands) December 31, 2021 December 31, 2020 Prepaid expenses and other advances $ 6,904 $ 4,272 Software licenses 2,547 1,492 Insurance 1,271 852 Inventory purchase advances 23 2,206 Cloud computing subscription & implementation costs 4,841 1,986 Tenant facility lease allowances — 789 Deferred IPO costs — 446 Other current assets 983 3,177 Total prepaid expenses and other current assets $ 16,569 $ 15,220 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following: (in thousands) Estimated Life December 31, 2021 December 31, 2020 Office and computer equipment 3 – 8 years $ 14,442 $ 10,383 Leasehold improvements Up to 10 years 10,503 10,572 Furniture and fixtures 2 – 8 years 4,054 3,794 Software 3 years 2,277 1,486 31,276 26,235 Less: accumulated depreciation (10,876) (5,568) Property and equipment, net $ 20,400 $ 20,667 Depreciation expense for the year ended December 31, 2021, the year ended December 31, 2020, period from Inception to December 31,2019 (Successor) and period from January 1, 2019 to September 3, 2019 (Predecessor), totaled $5.6 million, $4.2 million, $1.4 million and $2.1 million, respectively. We lease various equipment and software under capital leases. The depreciation expense associated with the assets under capital leases for the year ended December 31, 2021, the year ended December 31, 2020, period from Inception to December 31,2019 (Successor) and period from January 1, 2019 to September 3, 2019 (Predecessor), totaled $0.4 million, $0.1 million, $0.03 million and $0.02 million, respectively. Assets held under capital leases are included in property and equipment as follows: (in thousands) December 31, 2021 December 31, 2020 Office and computer equipment $ 1,682 $ 1,682 Less: accumulated depreciation (656) (192) Total financing leases included in property and equipment $ 1,026 $ 1,490 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The activity for goodwill as of December 31, 2021 is as follows: (in thousands) Balance at December 31, 2020 455,206 Measurement period adjustments — Acquisitions — Impairment — Balance at December 31, 2021 $ 455,206 The carrying amount of goodwill by reporting unit as of December 31, 2021, and December 31, 2020 was $88.9 million for Advanced Plan Administration, $190.1 million for Supplemental Benefits Administration, $138.2 million for Value Based Payment Assurance and $38.0 million for Advisory Services, for each period. The goodwill allocated to the Technology Enabled Solutions and Advisory Services reportable segments is $417.3 million and $37.9 million, respectively as of December 31, 2021. Goodwill is assessed for impairment on an annual basis and on an interim basis when indicators of impairment exist. On October 1, 2021, we completed our annual goodwill impairment test, based on a quantitative assessment, and determined there was no impairment. There were no indicators of impairment as of December 31, 2021. The carrying value of identifiable intangible assets consisted of the following as of December 31, 2021: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (3,395) $ 23,905 Customer relationships 189,000 (40,091) 148,909 Technology 47,800 (11,153) 36,647 Capitalized software development costs 12,454 (1,901) 10,553 Total intangible assets $ 276,554 $ (56,540) $ 220,014 The carrying value of identifiable intangible assets consisted of the following as of December 31, 2020: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (1,940) $ 25,360 Customer relationships 189,000 (22,909) 166,091 Technology 47,800 (6,373) 41,427 Capitalized software development costs 6,405 (441) 5,964 Total intangible assets $ 270,505 $ (31,663) $ 238,842 Amortization expense for Trade names, Customer relationships and Technology for the years ended December 31, 2021, and 2020, totaled $23.4 million for each period. For the period from Inception to December 31, 2019 (Successor) and period from January 1, 2019 to September 3, 2019 (Predecessor), amortization expense for Trade names, Customer relationships and Technology was $7.8 million and $10.6 million, respectively. Amortization expense for Capitalized software development costs for the years ended December 31, 2021, and 2020, totaled $1.5 million and $0.4 million, respectively. For the period from January 1, 2019 to September 3, 2019 (Predecessor), the amortization expense for Capitalized software development costs was $0.7 million. For the period from Inception to December 31,2019 (Successor), amortization expense was immaterial. We expect to recognize amortization of all intangible assets over a weighted average period of 9.13 years with no expected residual values. These charges are classified as operating expenses in the consolidated statements of operations and comprehensive (loss) income. Expected future amortization expense consists of the following for each of the following years ended December 31: (in thousands) 2022 $ 25,117 2023 24,784 2024 24,101 2025 23,462 2026 23,344 Thereafter 99,206 Total $ 220,014 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses and other current liabilities consist of the following: (in thousands) December 31, 2021 December 31, 2020 Contingent consideration $ — $ 20,538 Incentive bonus 15,214 12,198 Employee related 11,154 11,065 Sales and use tax 6,865 7,469 Rebates 4,276 3,822 Accrued interest 637 2,794 Accrued professional fees 7,046 6,389 Other 3,366 2,884 Total accrued expenses $ 48,558 $ 67,159 |
CREDIT FACILITY
CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY On September 4, 2019, we entered into the First Lien Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for senior secured credit facilities consisting of (i) a $225.0 million closing date term loan (the “Term Facility”) and loans thereunder (the “Term Loans”) and (ii) a $40.0 million revolving credit facility (the “Revolving Facility”) (collectively, the “Credit Facility”). The Term Facility has a seven-year term which expires on September 4, 2026 and the Revolving Facility has a five-year term which expires on September 4, 2024. We paid debt issuance costs of approximately $6.1 million on the closing date of the Credit Facility, $5.2 million is being amortized over the life of the Term Facility (84 months) and $0.9 million is being amortized over the term of the Revolving Facility (60 months) on a straight-line method. The Revolving Facility includes a letter of credit sub-facility (subject to a sublimit not to exceed $10.0 million) and a swing line loan sub-facility (subject to a sublimit not to exceed $10.0 million). On April 8, 2020, we amended the Credit Agreement to establish an incremental loan facility in an aggregate principal amount equal to $25.0 million for an incremental term loan request (the “2020 Incremental Term Loan”) bearing interest at the Eurodollar Rate (as defined in the Credit Agreement) expiring September 4, 2026. We capitalized debt issuance costs of approximately $1.1 million on the closing date of the 2020 Incremental Term Loan, which was being amortized over the life of the 2020 Incremental Term Loan (77 months) on a straight-line basis. On February 12, 2021, we further amended the Credit Agreement to establish an incremental term loan in an aggregate principal amount equal to $78.0 million (the “2021 Incremental Term Loan”) bearing interest at the Eurodollar Rate (as defined in the Credit Agreement) expiring September 4, 2026. We capitalized debt issuance costs of approximately $2.4 million on the closing date of the 2021 Incremental Term Loan, which was being amortized over the life of the 2021 Incremental Term Loan (67 months) on a straight-line basis. The Credit Agreement includes an uncommitted incremental facility, which provides that we have the right at any time to request term loan increases, additional term loan facilities, revolving commitment increases and/or additional revolving credit facilities, in an aggregate principal amount, together with the aggregate principal amount of permitted incremental equivalent debt under the Credit Agreement, not to exceed (a) the sum of the greater of (i) $46.9 million and (ii) 100.0% of Consolidated EBITDA (as defined in the Credit Agreement) of CHS and its restricted subsidiaries for the most recently ended period of four consecutive fiscal quarters of CHS (calculated on a pro forma basis), plus (b) certain additional amounts, including an unlimited amount subject to pro forma compliance with a leverage ratio test. Interest Rate and Fees Borrowings under the Credit Agreement (other than borrowings of swing line loans) bear interest at a rate per annum equal to, at our election, either (i) the LIBOR for the relevant interest period (subject to a floor of 1.00% per annum) plus an applicable margin, as defined in the Credit Agreement, or (ii) a base rate plus an applicable margin, as defined in the Credit Agreement. We elected to use the LIBOR rate for the Term Loans and the Revolving Facility. The Credit Agreement provides for the replacement of LIBOR with a successor or alternative index rate in the event LIBOR is phased-out. In addition to paying interest on the outstanding principal of the Credit Facility, we are required to pay a commitment fee in respect of any unused commitments under the Revolving Facility at a rate that is subject to adjustment based upon the First Lien Net Leverage Ratio, as defined in the Credit Agreement (maximum debt to Earnings Before Interest, Income Tax, Depreciation and Amortization (“EBITDA”), as defined in the Credit Agreement) at such time and ranges from 0.375% to 0.500% per annum. We are also required to pay customary letter of credit fees and certain other agency fees. On July 12, 2021, CHS entered into Amendment No. 4 to the Credit Agreement (“Amendment No. 4”). Amendment No. 4 amends the Credit Agreement to provide for, among other things, (i) the reduction of the Applicable Rate (as defined in the Credit Agreement) for Eurodollar Rate Loans (as defined in the Credit Agreement) from 5.25% to 4.75% and, for Base Rate Loans (as defined in the Credit Agreement), from 4.25% to 3.75%, and (ii) the reduction of the floor for the Eurodollar Rate (as defined in the Credit Agreement) from 1.00% to 0.75% for the Closing Date Term Loans (as defined in the Credit Agreement). Amendment No. 4 was accounted for as a debt modification. See Note 19. Subsequent Events , for additional information Covenants The Credit Agreement includes negative covenants that, subject to certain exceptions and limitations, restrict the ability of CHS and its restricted subsidiaries to, among other things: incur liens; incur debt; make investments or loans; engage in mergers, acquisitions and asset sales; declare dividends or other distributions, redeem or repurchase equity interests or make other restricted payments; alter the businesses CHS and its restricted subsidiaries conduct; enter into agreements restricting distributions by CHS’s restricted subsidiaries; modify certain terms of certain junior indebtedness; and engage in certain transactions with affiliates. In addition, the Credit Facility contains a financial covenant that requires us to maintain as of the last day of each period of four consecutive quarters of the Company, a First Lien Net Leverage Ratio not to exceed 7.4 to 1.0 if, as of the last day of any fiscal quarter of the Company, there are outstanding revolving loans and letters of credit (excluding (i) undrawn letters of credit in an aggregate face amount up to $10.0 million and (ii) letters of credit (whether drawn or undrawn) to the extent reimbursed, cash collateralized or backstopped on terms reasonably acceptable to the applicable issuing bank on or prior to the date that is three business days following the end of the applicable period of four consecutive fiscal quarters of CHS in an aggregate principal amount exceeding 35% of the aggregate principal amount of the Revolving Facility at such time. The financial covenant is subject to equity cure rights and may be amended or waived with the consent of the lenders holding a majority of the commitments under the Revolving Facility. We were in compliance with our debt covenants at December 31, 2021. Prepayments and Mandatory Prepayment Under the terms of the Credit Agreement, we are permitted to voluntarily prepay outstanding loans or commitments in whole or part without premium or penalty other than certain exceptions described in the Credit Agreement; however, the Credit Agreement requires us to prepay outstanding term loans, subject to certain exceptions and limitations with (i) 50% of our annual excess cash flow, subject to certain step-downs based upon the First Lien Net Leverage Ratio; (ii) 100% of the net cash proceeds of certain asset sales or casualty events; and (iii) 100% of the net cash proceeds of certain incurrences or issuances of indebtedness. Scheduled Repayments We are required to make scheduled quarterly payments on the Term Loans. Prior to the 2021 Incremental Term Loan, we were required to make quarterly payments (i) commencing with the quarter ended December 31, 2019, in an amount equal to 0.25% of the aggregate principal amount of the Term Loans outstanding on September 4, 2019 with the balance due upon maturity date and (ii) in respect of the 2020 Incremental Term Loans, beginning with the quarter ended June 30, 2020, in an amount equal to 0.25% of the aggregate principal amount of the 2020 Incremental Term Loan outstanding on April 8, 2020, with the balance due on maturity. Subsequent to the 2021 Incremental Term Loan, we are required to make quarterly payments (i) commencing with the quarter ended March 31, 2021, in an aggregate principal amount equal to $0.8 million for the Term Facility and the 2021 Incremental Term Loan, with the balance due upon maturity date and (ii) in respect of the 2020 Incremental Term Loans, in an amount equal to 0.25% of the aggregate principal amount of the 2020 Incremental Term Loan outstanding on April 8, 2020, with the balance due on maturity. We are required to repay the aggregate principal amount outstanding under the Revolving Facility, and the aggregate principal amount of each swing line loan under the Revolving Facility, at maturity of the Revolving Facility on September 4, 2024. In connection with the prepayment noted under the “Extinguishment of Debt” below, no additional scheduled installments of principal are required. Guarantees and Collateral All obligations under the Credit Agreement are unconditionally guaranteed by Parent and certain subsidiaries. All obligations under the Credit Agreement are secured, subject to permitted liens and other exceptions and limitations, by first priority security interests in substantially all the assets of the Company and each guarantor (including all the equity interests of CHS). Extinguishment of Debt On June 18, 2021, $131.5 million from the IPO proceeds (see Note 1. Business and Basis of Presentation ) were used to repay the principal balance, accrued but unpaid interest, and prepayment premium under the Credit Agreement. The 2020 Incremental Term Loan and the 2021 Incremental Term Loan were repaid in full and the remainder of the proceeds were used to repay a portion of the Term Facility. The prepayment for the Term Facility was applied to the remaining scheduled installments of principal and as a result of the prepayment, no additional scheduled installments of principal are required. The Company recorded a loss on extinguishment of debt of $5.0 million. The loss consisted of $3.4 million for unamortized deferred financing costs and $1.6 million for prepayment premiums. Other Information As of December 31, 2021, and December 31, 2020, unamortized deferred financing costs for the Term Loans totaled $3.0 million and $5.2 million, respectively. Amortization of deferred financing costs for the years ended December 31, 2021, and 2020, totaled $0.9 million for each period. From Inception to December 31, 2019 (Successor) and from January 1 to September 4, 2019 (Predecessor) amortization of deferred financing costs totaled $0.2 million and $0.3 million, respectively. As of December 31, 2021 and December 31, 2020, unamortized deferred financing costs associated with the Revolving Facility totaled $0.5 million and $0.7 million, respectively, and were included in Other assets in the consolidated balance sheets. Amortization of deferred financing costs was approximately $0.2 million for each of the years ended December 31, 2021, and 2020. From Inception to December 31, 2019 (Successor) and from January 1 to September 4, 2019 (Predecessor) amortization of deferred financing costs totaled $0.1 million for each period. Amortization of deferred financing costs is included within Interest expense in the consolidated statement of operations and comprehensive income (loss). For the years ended December 31, 2021, and 2020, the average interest rate for the Term Facility was 6.1% and 6.5%, respectively. As of December 31, 2021, and December 31, 2020, the aggregate principal balance was $192.6 million and $222.2 million, respectively. For the year ended December 31, 2021, the average interest rate for the 2020 Incremental Term Loan was 10.0%. As of December 31, 2020, the aggregated principal balance was $24.8 million. For the year ended December 31, 2021, the average interest rate for the 2021 Incremental Term Loan was 7.0%. For the years ended December 31, 2021, and 2020, the average interest rate for the Revolving Facility was 2.75% for each period. As of December 31, 2021, and December 31, 2020, the available balance was $39.4 million and $39.5 million, respectively. On January 23, 2020, we established an irrevocable transferable letter of credit (“LOC”) in the favor of a lessor totaling $0.5 million. The LOC expired on January 31, 2021, however, per the terms of the agreement, the LOC automatically extends for a one year period upon the expiration date and each anniversary thereafter, unless at least 60 days prior to such expiration date or anniversary written notice is provided that we elect not to extend the LOC. The LOC was automatically extended for a one year period on January 31, 2021. Debt consists of the following as of December 31, 2021, and December 31, 2020: (in thousands) December 31, 2021 December 31, 2020 Term loans $ 192,631 $ 246,999 Less: deferred financing costs (2,988) (5,209) Term loans, net of deferred financing costs 189,643 241,790 Less: current portion — (2,500) $ 189,643 $ 239,290 Debt Maturities Schedule The required principal payments for Term Loans for each of the five years and thereafter following the balance sheet date are as follows: (in thousands) 2022 $ — 2023 — 2024 — 2025 — 2026 192,631 Total $ 192,631 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | SHAREHOLDERS’ EQUITY As of December 31, 2021, we are authorized to issue 500,000,000 shares of common stock, par value $0.01 per share and 25,000,000 shares of preferred stock, par value $0.01 per share. See Note 1. Business and Basis of Presentation for additional information related to the Stock Split and IPO. In February 2021, our Board, through a unanimous written consent, adopted a written resolution declaring a special dividend of $1.18 per share of common stock totaling $74.5 million in cash (“Special Dividend”) ultimately to be distributed to the shareholders of Convey. Of the Special Dividend, $72.2 million was paid to existing shareholders and $2.3 million was paid to outstanding and vested stock option holders. The Special Dividend was paid out during the year ended December 31, 2021. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION On September 4, 2019, our Board adopted the Cannes Holding Parent, Inc. 2019 Equity Incentive Plan (the “2019 Equity Plan”). The 2019 Equity Plan was terminated and replaced and superseded by the 2021 Plan (as defined below) on the effective date of the 2021 Plan and no further grant of awards under the 2019 Equity Plan have been made since such effective date. Outstanding awards granted under the 2019 Equity Plan remain in effect pursuant to their terms. On June 4, 2021, in connection with the IPO, the Company adopted the Convey Holding Parent, Inc. 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”). The 2021 Plan has a term of ten years. In March 2020, pursuant to the 2019 Equity Plan, Convey issued option awards to acquire 5,723,676 shares, respectively, of Convey’s common stock having an exercise price of $7.94 per share and a term of ten The time-vesting options will vest 20% on the first anniversary of the commencement date, defined in each option agreement, and the remainder will vest in 16 equal 3-month installments over the following four years. Upon a change in control, the time-vested options will vest fully. The performance-vesting options are eligible to vest 20% each year subject to the Company meeting certain annual Adjusted Earnings Before Interest, Income Tax, Depreciation and Amortization (“Adjusted EBITDA”) targets. Each year has been accounted for as a separate tranche. To the extent that any performance-based options have not vested pursuant to achievement of the annual Adjusted EBITDA targets (performance condition), catch-up vesting may occur if at any time prior to or upon the option expiration date of the award, TPG achieves a certain multiple-of-money return (market condition). Upon the consummation of a change in control, all performance-based options that have not become vested pursuant to the achievement of the Adjusted EBITDA targets or do not satisfy the catch-up vesting criteria will be immediately forfeited without any payment or consideration due from us. In March 2021, pursuant to the 2019 Equity Plan, Convey issued option awards to acquire 69,300 shares of Convey’s common stock with an exercise price of $9.92 per share and a term of ten In June 2021, in connection with the IPO and pursuant to the 2021 Plan, Convey issued option awards to acquire 497,321 shares of Convey’s common stock with an exercise price of $14.00 per share and a term of ten In August 2021, pursuant to the 2021 Plan, Convey issued option awards to acquire 20,380 shares of Convey’s common stock with an exercise price of $9.20 per share and a term of five (5) years. In addition, Convey issued 8,152 RSUs with a grant date fair value of $9.20 per unit. The option awards and RSUs were fully vested as of the date of the grant. The following table summarizes the total share-based compensation expense included in the consolidated statements of operations and comprehensive income (loss): For the Years Ended Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) 2021 2020 (Successor) (Predecessor) Selling, general and administrative $ 4,380 $ 6,682 $— $300 Total stock-based compensation expense $ 4,380 $ 6,682 $— $300 The estimated income tax benefit of stock-based compensation expense included in the provision for income taxes is approximately $2.1 million, $1.9 million, and $0.08 million for the year ended December 31, 2021, the year ended December 31, 2020, and period from Inception to December 31, 2019 (Successor), respectively. There was no income tax benefit for the period from January 1, 2019 to September 3, 2019 (Predecessor). During the years ended December 31, 2021, and 2020, cash received upon exercise under all share-based compensation arrangements totaled $1.4 million and $0, respectively. Stock Option Modification On February 15, 2021, our Board approved a stock option award modification (the “Modification”) whereby the exercise price of certain previously granted and still outstanding unvested stock option awards held by current employees and certain executives were reduced by $1.18 per award, which represented the cash payment made for the vested awards as part of the Special Dividend. No other terms of the repriced stock options were modified, and the modified stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates. As a result of the Modification, 3,653,837 unvested stock options outstanding with an original exercise price of $7.94 were modified. There was no incremental stock-based compensation expense as there was no incremental fair value generated as a result of the Modification. Stock Option Grants Stock option activity and information about stock options outstanding are summarized in the following table: Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2019 (Successor) — $ — — Granted 5,723,676 7.94 Exercised — — Forfeited (102,312) 7.94 Outstanding at December 31, 2020 5,621,364 $ 7.94 9.20 Granted 587,001 13.35 Exercised (172,728) 7.86 Forfeited (399,483) 8.78 Outstanding at December 31, 2021 5,636,154 $ 7.68 8.29 Vested or expect to vest as of December 31, 2021 5,636,154 $ 7.68 8.29 Vested and Exercisable as of December 31, 2021 2,729,741 $ 7.56 8.17 The stock options are equity-based awards and their aggregate intrinsic value outstanding and exercisable at December 31, 2021, was $2.2 million. The weighted average fair value of options granted in 2021 was $4.60. As of December 31, 2021, there was approximately $10.4 million total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 2.38 years. We estimate the fair value of the time-vesting stock option awards on the date of grant using the Black-Scholes Merton model. The time-vesting options have a service condition. Option valuation models, including the Black-Scholes Merton model, require the input of certain assumptions that involve judgment. Changes in the input assumptions can materially affect the fair value estimates and, ultimately, how much we recognize as stock-based compensation expense. The fair value of the options granted during the year were estimated on the date of the grant using the Black-Scholes Merton model based on the following assumptions: 2021 Grants 2020 Grants Expected term (years) 5.00 to 6.24 5.85 to 6.10 Expected volatility 45% to 60% 50% to 55% Risk free interest rate 0.66% to 1.11% 0.36% to 0.95% Expected dividend yield — % — % Prior to the IPO, there was no active external or internal market for our common shares. Thus, it was not possible to estimate the expected volatility of our share price in estimating fair value of options granted. Accordingly, as a substitute for such volatility, the Company used the historical volatility of the common stock of other companies in the same industry over an approximate period of time commensurate with the expected term of the options awarded. The expected term for options granted is based on the “simplified” method described in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment , and SAB No. 110, Share-Based Payment , since the simplified method provides a reasonable estimate in comparison to actual experience. Management had estimated the risk-free interest rate based on U.S. Treasury note rates for the expected term. Restricted Stock Units Activity and information about non-vested RSUs outstanding are summarized in the following table: Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2020 — $ — Granted 207,081 2,661 Vested (8,152) (75) Forfeited (44,643) (580) Outstanding at December 31, 2021 154,286 $ 2,006 One RSU gives the right to one share of the Company’s common stock. RSUs that vest based on service are measured based on the fair value of the underlying stock on the date of grant. Compensation with respect to RSU awards is expensed on a straight-line basis over the vesting period. As of December 31, 2021, there was approximately $1.8 million total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 3.46 years. Long-Term Incentive Awards In March 2020, Convey issued fifty-six (56) Long-Term Incentive (LTI) awards with a total grant-date fair value of $1.1 million to employees. These awards vest upon satisfaction of the performance condition as determined by our Board at its sole discretion, subject to the participants continued employment or service. The performance condition is satisfied by TPG meeting a certain multiple-of-money return, on a scale, prior to or upon (i) TPG in the aggregate beneficially owning less than 20% of the voting equity securities of the Company or (ii) the date on which a change in control occurs. The awards contain a market condition with an implicit performance condition. No awards have vested as of December 31, 2021, as such events did not occur during the year ended December 31, 2021. No awards have been granted or cancelled during the year ended December 31, 2021. The awards do not expire. On the date the performance condition is met, any unvested awards will be forfeited. LTI Awards Outstanding at December 31, 2019 (Successor) — Granted 56 Forfeited (2) Outstanding as of December 31, 2020 54 Forfeited (11) Outstanding as of December 31, 2021 43 Settlement of the award can be made, as determined by the Board of Directors at its sole discretion, (i) in cash, (ii) common stock, or (iii) in other property acceptable to the Board of Directors. The LTIs are treated as liability-based awards under ASC Topic 718, Compensation — Stock Compensation , (“ASC 718”) and the Company shall recognize compensation expense for the LTIs upon the liquidity event occurring. The fair value of the LTI awards granted during 2020 were estimated on the date of the grant using the Monte-Carlo Simulation analysis based on the following assumptions: Expected term (years) 2.25 to 4.25 Expected volatility 60% Risk free interest rate 0.15% to 0.23% Expected dividend yield — Prior to our IPO, there was no active external or internal market for our common shares. Thus, it was not possible to estimate the expected volatility of our share price in estimating the fair value of the LTI awards granted in 2020. Accordingly, as a substitute for such volatility, we used the historical volatility of the common stock of other companies in the same industry over a period of time commensurate with the expected term of the LTI awards. The expected term for LTI awards granted is |
EMPLOYEE SAVINGS PLAN
EMPLOYEE SAVINGS PLAN | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE SAVINGS PLAN | EMPLOYEE SAVINGS PLANWe offer our employees a savings plan pursuant to Section 401(k) of the Internal Revenue Code (the “Code”), whereby employees may contribute a percentage of their compensation, not to exceed the maximum amount allowable under the Code. At the discretion of the Board of Directors, we may elect to make matching or other contributions into the savings plan. We made matching contributions of $2.0 million and $1.9 million, for the years ended December 31, 2021, and 2020, respectively, and $0.4 million and $0.9 million for the period from Inception through December 31, 2019 (Successor) and the period from January 1, 2019 through September 3, 2019 (Predecessor), respectively, to our employee savings plan, which is included within Selling, general and administrative expenses, Cost of services and Cost of products in the consolidated statement of operations and comprehensive income (loss). |
TAXES
TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
TAXES | TAXES Income tax expense (benefit) from continuing operations is summarized as follows: Years Ended December 31, Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 2021 2020 (Successor) (Predecessor) (in thousands) Pre-tax (loss) income Domestic $ (10,856) $ (8,524) $ (17,968) $ (19,033) Foreign 259 122 211 90 Total pre-tax loss (10,597) (8,402) (17,757) (18,943) Current tax benefit (expense): Federal (36) — — — State 222 (689) (78) (3) Foreign (136) (303) (9) (17) Total Current tax benefit (expense) 50 (992) (87) (20) Deferred tax benefit: Federal 631 2,342 765 16,119 State (62) 554 180 7,189 Foreign — — — — Total deferred tax benefit 569 2,896 945 23,308 Total tax benefit (expense): Federal 595 2,342 765 16,119 State 160 (135) 102 7,186 Foreign (136) (303) (9) (17) Total benefit for taxes on income $ 619 $ 1,904 $ 858 $ 23,288 We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are no longer subject to U.S. federal income tax examinations for the years prior to 2018. With few exceptions, we are no longer subject to state income tax examinations for the years prior to 2018. At December 31, 2021, there are no income tax examinations currently in process in the U.S. jurisdictions. Our subsidiary, Convey Health Solutions Philippines, Inc. (“CHSP”), is subject to income taxes in the Philippines at a favorable rate due to certain tax incentives afforded to our subsidiary by the Philippine Economic Zone Authority. At December 31, 2021, our subsidiary is under examination by the Bureau of Internal Revenue for the year 2014. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred taxes were as follows: December 31, 2021 December 31, 2020 (in thousands) Deferred Tax Assets: Net operating loss carry forward $12,247 $13,997 General business credits 4,173 4,078 Accrued compensation 1,545 5,921 Stock-based compensation 2,132 1,870 Foreign tax credit — 268 Deferred revenue 66 260 Allowance for refunds, claim denials and returns 20 171 Accrued liabilities 2,153 1,707 Intangible assets 603 648 Deferred rent 239 367 Accrued Taxes 2,654 3,264 Interest expense 4,186 — Tenant Improvement Allowance 1,225 1,431 Uniform Capitalization 110 532 Director and officer prior act liability insurance policy 1,790 — Other 266 121 Total deferred tax assets, net $33,409 $34,635 Deferred tax liabilities: Identifiable Intangible assets $(47,660) $(50,827) Property and equipment (5,382) (5,687) Software development costs (2,984) (1,669) Change in Fair Value on Contingent liability (3,018) (3,013) Prepaids (357) — Total deferred tax liabilities $(59,401) $(61,196) Net deferred tax liability $(25,992) $(26,561) The total of all deferred tax assets is $33.4 million and $34.6 million as of December 31, 2021 and 2020, respectively. The total of all deferred tax liabilities is $59.4 million and $61.2 million as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, we had no unrecognized tax benefits. As a result of the Merger, an analysis was completed in accordance with Internal Revenue Code Section 382 (“Section 382”) to determine the limitations associated with our use of preexisting Net Operating Loss (“NOL”) carryforwards in future periods. The annual limitation is based on a number of factors including the value of our stock (as defined for tax purposes) on the date of the ownership change, our net unrealized built in gain position on that date and the effect of any subsequent ownership changes, if any. We retained a third party to complete the required Section 382 analysis who determined that at September 4, 2019 approximately $66.9 million of the NOL carryforwards will be available to future tax periods in varying increments annually. As of December 31, 2021, we had $43.3 million of federal NOL carryforwards of which $0.7 million begin to expire between 2023 and 2026 and the remaining $42.6 million has an indefinite carryforward period. The remaining NOLs will be limited to 80% of taxable income in accordance with the Tax Cut and Jobs Act. As of December 31, 2021, we had $41.4 million of combined NOL carryforwards in various states which will begin to expire in 2023. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. Consequently, we have filed NOL carryback claims for the years 2016 and 2017. Furthermore, the CARES Act contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Internal Revenue Code Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. This modification significantly increases the allowable interest expense deduction and results in significantly less taxable income for the year-ended 2020, resulting in less utilization of net operating losses in that year. As a result of the CARES Act, it is anticipated that we will fully utilize all interest expense that was deferred with no additional disallowed interest expense in 2020. Finally, the CARES Act included a retroactive technical correction as if it were included in the Tax Cuts and Jobs Act originally. The CARES Act permits Qualified Improvement Property to qualify for 15-year depreciation and therefore also be eligible for 100 percent first-year bonus depreciation. A reconciliation of the provision for income taxes at the federal statutory rate compared to the effective tax rate is as follows: Years Ended December 31, Period from Period from 2021 2020 (Successor) (Predecessor) (in thousands) Income tax expense at the statutory rate $ 2,225 $ 1,764 $ 3,729 $ 3,978 Increase in income taxes resulting from: Foreign Jurisdiction rate different than the statutory (82) (277) 35 2 State taxes, net of federal 30 (159) 242 5,837 Loss on Extinguishment of Debt — — — 654 Transaction bonuses deduction for tax not for book — — — 2,713 Tax credits 187 272 (71) 72 Option Holder Compensation 486 — — 9,300 Non-Deductible Compensation for Covered Employees (880) — — — Write off of Excess DTA related to Stock Option Exercise (120) — — — Buyer Transaction Costs not Deductible for Tax — — (2,953) — 70% Success based deductible transaction Costs — — — 1,185 Prior Year Adjustments — — — (170) Carryback Due To CARES Act — 154 — — Fair value contingency 608 375 — — Disallowed Fringe Benefits (149) (140) (43) (59) FTC - Expiration (268) — — — NOL Carryforward Adjustment - Amended 2019 Tax Return (1,369) — — — Other (49) (85) (81) (224) Income tax benefit $ 619 $ 1,904 $ 858 $ 23,288 |
TRANSACTION RELATED COSTS
TRANSACTION RELATED COSTS | 12 Months Ended |
Dec. 31, 2021 | |
Acquisition Related and Deferred Offering Costs [Abstract] | |
TRANSACTION RELATED COSTS | TRANSACTION RELATED COSTSThe following table represents the components of Transaction related costs as reported in the consolidated statements of operations and comprehensive income (loss): For the Years Ended Period from Period from (in thousands) 2021 2020 (Successor) (Predecessor) Mergers and acquisitions related costs $ 3,093 $ 1,526 14,784 2,511 Public company readiness costs 2,801 2,423 — — Total $ 5,894 $ 3,949 14,784 2,511 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases We lease office space, warehouse and distribution space, and equipment under non-cancelable operating and capital leases expiring at various dates through 2029. Lease terms generally range from two Rent expense under all operating leases was approximately $8.4 million, $8.0 million, $2.5 million and $5.3 million for the year ended December 31, 2021, the year ended December 31, 2020, period from Inception through December 31, 2019 (Successor) and period from January 1, 2019 through September 3, 2019 (Predecessor), respectively. The remaining aggregate commitment for lease payments under the operating lease for the facilities as of December 31, 2021 are as follows: (in thousands) Capital Leases Operating Leases 2022 $ 529 $ 8,762 2023 351 7,993 2024 122 7,136 2025 82 4,852 2026 — 2,951 Thereafter — 6,220 Total $ 1,084 $ 37,914 Less: amounts representing interest $ 58 Net present value of capital lease obligations $ 1,026 Employment Agreements We have employment agreements with various executives. The agreements have open-ended terms providing that employment shall continue until terminated by either party in accordance with the agreement. In addition to salary, bonuses, and benefits, the agreements also provide for termination benefits if the agreements are terminated by us for reasons other than cause or by the executives for good reason. Inventory Purchases As of December 31, 2021 and December 31, 2020, we have contractual commitments to purchase inventory from certain manufacturers totaling $5.2 million and $6.5 million, respectively. Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. Because of the uncertainties associated with claims resolution and litigation, future losses to resolve these matters could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential losses. If new information were to become available that allowed us to reasonably estimate a range of potential losses in an amount higher or lower than what we have accrued, we would adjust our accrued liabilities accordingly. Based upon current information, we concluded that the impact of the resolution of these matters would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows. Additional lawsuits, claims, inquiries, and other regulatory and compliance matters could arise in the future. The range of losses for resolving any future matters would be assessed as they arise. On July 11, 2017, Ronnie Kahululani Solis (“Solis”) filed suit in the Los Angeles Superior Court against one of our former subsidiaries, Gorman Health Group, LLC (“Gorman”), which merged into Convey Health Solutions, Inc. effective September 1, 2020, for damages for negligence and negligence per se arising out of an incident that occurred on March 3, 2017. Solis alleged damages in excess of $6.0 million stemming from an accident involving a vehicle and a motorcycle. The vehicle was being operated by a Gorman employee in the scope of his employment. In July 2021, the parties reached an agreement to settle the claim for $1.2 million and in August 2021, the settlement was paid by the insurance company. Sales Tax Accrual On June 21, 2018, the U.S. Supreme Court issued an opinion in South Dakota v. Wayfair. The State of South Dakota alleged that U.S. constitutional law should be revised to permit South Dakota to require remote sellers to collect and remit sales tax in South Dakota in accordance with South Dakota’s sales tax statute. Under the U.S. Supreme Court’s ruling, the longstanding Quill Corp v. North Dakota sales tax case was overruled, and states may now require remote sellers to collect sales tax under certain circumstances. Consequently, we began collecting sales tax in 21 states that we deemed in accordance with the new statute. Pursuant to South Dakota’s statute, we are not required to pay sales tax retroactively. ASC Topic 450, Contingencies , (“ASC 450”) requires an estimated loss to be accrued by a charge to income if it is probable that a liability has been incurred at the date of the financial statements and the amount of the liability can be reasonably estimated. We recognized liabilities for contingencies related to state sales and use tax deemed probable and estimable totaling $6.9 million and $7.5 million at December 31, 2021, and December 31, 2020, respectively. These are included in accrued liabilities in our consolidated balance sheets. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS TPG Management Service Agreement On September 4, 2019, in connection with the Merger, we entered into a management services agreement (“MSA”) with TPG. Under the MSA, TPG agreed to provide certain financial, strategic advisory services, and consulting services in exchange for (i) reimbursement of certain expenses incurred by TPG and (ii) an aggregate annual retainer fee of 1% based on our previous year’s consolidated EBITDA determined by Convey’s Board of Directors. Additional services may be provided in exchange for the fees structured within the MSA. During the year ended December 31, 2021, the year ended December 31, 2020, the period from Inception through December 31, 2019 (Successor) and period from January 1, 2019 through September 3, 2019 (Predecessor), we paid management and consulting fees of $0.2 million, $0.6 million, $0.2 million, and $0, respectively. Also, during the years ended December 31, 2021, and 2020, we paid TPG a fee of $1.2 million, and $0.3 million for services provided in connection with establishing: (i) the 2021 Incremental Term Loan and the July 2021 amendment to the Credit Agreement and (ii) the 2020 Incremental Term Loan, respectively. No payment was made during the period from Inception through December 31, 2019 (Successor) and the period from January 1, 2019 through September 3, 2019 (Predecessor). In the event the MSA is terminated by an IPO or business combination and TPG continues to hold at least 10% of equity of the Company upon closing of such transaction, we are required to pay TPG the net present value of the remaining portion of management and consulting fees that would have been incurred until three years after the date of such termination, as well as certain other expenses of TPG. In connection with the IPO completed in June 2021, we paid TPG a $2.3 million termination fee. The termination fee is included within Selling, general and administrative expenses in the consolidated statement of operations and comprehensive income (loss). There was no amount payable to TPG as of December 31, 2021, or December 31, 2020. EIR Partners Consulting Agreement We have a Consulting Agreement with EIR Partners, LLC (“EIR”), a former member of the Company’s Board of Directors, and a current shareholder. Under the terms of the Consulting Agreement, EIR provides consulting services for the purpose of analyzing and reviewing potential sellers in the marketplace for the benefit of the Company as agreed to from time-to-time. As compensation for service, the Company remits to EIR $10 thousand monthly, plus reasonable out-of-pocket expenses incurred in the performance of the duties under the Consulting Agreement. The Consulting Agreement may be terminated by either party upon providing 10 days advance written notice and unless terminated, automatically renews for additional terms of one year. For the year ended December 31, 2021, the year ended December 31, 2020, and the period from January 1, 2019 through September 3, 2019 (Predecessor), $0.1 million were paid for each period. For the period from Inception through December 31, 2019 (Successor), payment was immaterial. The Consulting Agreement is still active with the Company. New Mountain Capital Advisory Agreement On October 5, 2016, the Predecessor entered into an arrangement with New Mountain Capital, L.L.C. (“NMC”) to which NMC agreed to provide certain advisory services. Under the arrangement, we incurred management and consulting fees of $0.1 million from January 1, 2019 to September 3, 2019 (Predecessor). The arrangement terminated September 4, 2019, upon the Merger. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On February 9, 2018, in order to focus on our Technology Enabled Solutions and Advisory Services, we announced a plan to abandon our Business Processing Outsourcing (“BPO”) unit which provided labor resources to fulfill a wide range of plan administration functions based on client requirements. All run-off operations of our BPO unit ceased in the first quarter of 2020. We abandoned the BPO unit as we were unable to sell the line due to competitive pricing and the ease of transition to competitors. The operating results of our discontinued operations through the date of abandonment are as follows: Year Ended December 31, 2020 Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) (Successor) (Predecessor) Major line items constituting income from discontinued operations Service revenue $ 50 $ 98 $ 3,301 Cost of services — 5 2,550 Selling, general and administrative — (8) 1,718 Income (loss) from discontinued operations before provision for income taxes 50 101 (967) Provision expense (benefit) for income taxes 14 28 (271) Income (loss) from discontinued operations, net of tax $ 36 $ 73 $ (696) There were no assets or liabilities related to discontinued operations as of December 31, 2021, or December 31, 2020. Supplemental cash flow information and adjustments to reconcile net (loss) income to net cash flow from operating activities for discontinued operations on the BPO unit are below: Year Ended December 31, 2020 Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) (Successor) (Predecessor) Operating activities: Net income (loss) from discontinued operations $36 $73 $(696) Decrease in accounts receivable $43 $— $2,808 Decrease in deferred revenue $— $— $(64) There were no other significant operating or investing non-cash items for the year ended December 31, 2020, period from Inception through December 31, 2019 (Successor) and period from January 1, 2019 through September 3, 2019 (Predecessor). |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION ASC 280 establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, we have determined that we have two reportable segments: Technology Enabled Solutions and Advisory Services. These reportable segments reflect the manner in which the Chief Operating Decision Maker (“CODM”) group assesses information for decision-making purposes. The CODM group consists of our Chief Executive Officer and Chief Financial Officer. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products and services. This reflects how the CODM group monitors performance, allocates resources, and makes strategic and operational decisions. In addition to the reportable segments, we have the “Unallocated” classification which includes those profit and loss items not allocated to either reportable segment. Unallocated includes corporate costs, primarily relating to group wide functions, including but not limited to, finance, tax and legal. There are no inter-segment sales that require elimination. Information by Segment We present reportable segment revenue and Segment Adjusted EBITDA. Segment Adjusted EBITDA is the financial measure by which management and the CODM group allocate resources and analyze the performance of the reportable segments. Segment Adjusted EBITDA represents each segment’s earnings before interest, tax, depreciation and amortization and is further adjusted to exclude certain items of a significant or unusual nature, including but not limited to, change in fair value of contingent consideration, COVID-19 cost impacts, consultant lower utilization due to COVID-19, sales and use tax, non-cash stock compensation, transaction related costs, acquisition bonus expense, loss on extinguishment of debt, director and officer prior act liability insurance policy and other costs. Other includes costs such as contract termination fees, management and board of directors fees, and arrangement fees paid to TPG in connection with obtaining the incremental term loans. We do not report assets by reportable segment, as this metric is not used by the CODM group to allocate resources to the segments. Presented in the tables below is revenue and Segment Adjusted EBITDA by reportable segment: For the Year Ended December 31, 2021 (in thousands) Technology Enabled Advisory Revenue $ 284,619 $ 52,977 Segment Adjusted EBITDA $ 69,214 $ 16,232 For the Year Ended December 31, 2020 (in thousands) Technology Enabled Advisory Revenue $ 241,336 $ 41,578 Segment Adjusted EBITDA $ 66,043 $ 8,204 Period from Inception to December 31, 2019 (Successor) (in thousands) Technology Enabled Solutions Advisory Services Revenue $ 66,530 $ 13,885 Segment Adjusted EBITDA $ 14,881 $ 1,445 Period from January 1, 2019 to September 3, 2019 (Predecessor) (in thousands) Technology Enabled Solutions Advisory Services Revenue $ 109,932 $ 30,806 Segment Adjusted EBITDA $ 29,205 $ 6,073 The following table presents a reconciliation of Segment Adjusted EBITDA to the consolidated U.S. GAAP net income (loss) from continuing operations: (in thousands) For the Years Ended December 31, Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 2021 2020 (Successor) (Predecessor) Technology Enabled Solutions Segment Adjusted EBITDA $ 69,214 $ 66,043 $ 14,881 $ 29,205 Advisory Services Segment Adjusted EBITDA 16,232 8,204 1,445 6,073 Total $ 85,446 $ 74,247 $ 16,326 $ 35,278 Unallocated (1) $ (11,819) $ (9,024) $ (66) $ (3,595) Adjustments to reconcile to U.S. GAAP net income (loss) from continuing operations Depreciation and amortization (30,480) (28,032) (9,188) (13,359) Interest, net (17,294) (18,853) (5,762) (6,213) Income tax provision 619 1,904 858 23,288 Change in fair value of contingent consideration 96 10,770 — (19,671) Cost of COVID-19 (2) (3,827) (10,174) — — Consultant lower utilization due to COVID-19 (3) — (2,062) — — Sales and use tax (2,569) (8,194) (1,906) (3,133) Non-cash stock compensation expense (4,380) (6,682) — (300) Transaction related costs (5,894) (3,949) (14,784) (2,511) Acquisition bonus expense – HealthScape and Pareto acquisition (667) (1,989) (1,663) (3,685) Loss on extinguishment of debt (5,015) — — — Director and officer prior act liability insurance policy (4) (7,861) — — — Other (5) (6,333) (4,460) (714) (1,754) Net income (loss) from continuing operations $ (9,978) $ (6,498) $ (16,899) $ 4,345 _______________________ (1) Represents certain corporate costs associated with the executive compensation, legal, accounting, finance and other costs not specifically attributable to the segments. (2) Expenses incurred due to the COVID-19 pandemic include the following: $0 and $3.2 million for early hire of employees due to social distancing and work at home protocols for the years ended December 31, 2021, and 2020, respectively; $2.3 million and $2.9 million for higher pricing from vendors due to supply chain disruptions, product shortages and increases in shipping costs for the years ended December 31, 2021, and 2020, respectively; $0.8 million and $2.8 million for higher employee costs due to hazard pay for our employees, enhanced sick pay due to illness and quarantine protocols for the years ended December 31, 2021, and 2020, respectively; $0.5 million and $0.7 million for COVID-19 training, overtime, temporary resources, and IT costs due to the change in the work environment for the years ended December 31, 2021 and 2020, respectively; and $0.2 million and $0.5 million for janitorial costs due to enhanced COVID-19 protocols for the years ended December 31, 2021 and 2020, respectively. (3) Consultant lower utilization due to COVID-19 reflects the decreased productivity of the Advisory segment in connection with the COVID-19 pandemic. The average utilization for consultants in the Company’s Advisory Services segment declined during the COVID-19 pandemic as compared to pre-pandemic comparable periods. The utilization variance was multiplied by the average consultant cost to derive the cost absorbed by the Company. This change in utilization represents consultants’ idle time that otherwise would have been billed to clients if the consulting arrangements would have materialized. In addition, we chose not to reduce our headcount as we expected the lower utilization to be temporary in nature. (4) In connection with the IPO, we made a $7.9 million one-time payment on a 3-year director and officer prior act liability insurance policy. We deemed this policy to be a retroactive insurance policy and in accordance with ASC 720-20-25, “Retrospective Contracts”, we expensed the premium of $7.9 million in June 2021. (5) These adjustments include individual adjustments related to legal fees associated with obtaining the incremental loans, contract termination costs assessed upon the early termination of a facility lease, severance costs incurred as a result of eliminating certain positions, management fees, management service agreement termination fee, certain revenue adjustments, professional fees incurred in the implementation of ASC 606, board of directors related fees, and consulting costs for the selection of our Enterprise Resource Planning solution. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTS Acquisition On January 9, 2022, Convey’s indirect wholly-owned subsidiary, D-M-S Holdings Parent, LLC (f/k/a Dragon Holdings Parent, LLC), a Delaware limited liability company (“Buyer”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Briggs Medical Service Company, a Delaware corporation (“Seller”), and D-M-S Holdings, Inc., a Delaware corporation (“Target”), pursuant to which, on the terms and subject to the conditions set forth in the Purchase Agreement, Buyer has agreed to acquire from Seller all of the issued and outstanding capital stock of Target (the acquisition of such capital stock, the “Acquisition”). Target provides a diverse portfolio of health, wellness and diagnostic products centered on home based care outcomes, and the Company intends to leverage the Target’s supply chain and logistics expertise to get high quality products to members faster and at a lower cost. Pursuant to the terms set forth in the Purchase Agreement, Buyer will pay to Seller cash (i) upon consummation of the Acquisition, in an aggregate amount equal to $77,500,000, subject to certain adjustments for, among other things, Target’s cash, indebtedness and net working capital (the “Closing Purchase Price”) and (ii) if the Target achieves certain amounts of net revenue in calendar year 2022, up to an additional $15,000,000. A portion of the Closing Purchase Price will be deposited into an escrow account to be held by an escrow agent and released to Buyer or Seller, as applicable, following the final determination of any purchase price adjustment. In connection with the Purchase Agreement, Buyer, as a wholly-owned subsidiary of CHS obtained debt financing commitments from Ares Capital Management LLC, PSP Investments Credit USA LLC and New Mountain Finance Advisers BDC, L.L.C. (in each case, acting through itself and/or its affiliates, the “Commitment Parties”) for the purpose of financing the Acquisition and paying fees and expenses related thereto. The Commitment Parties agreed to provide CHS with a first lien incremental term loan facility under CHS’s existing First Lien Credit Agreement in an aggregate principal amount of up to $78,000,000, on the terms and subject to the conditions set forth in a debt commitment letter. On February 1, 2022, Buyer completed its acquisition of all of the issued and outstanding capital stock of the Target. The Acquisition was consummated pursuant to the Purchase Agreement. The Company is currently working on the initial accounting of the Acquisition; as such, the purchase price allocation and valuation have not yet been completed and revenue and costs impacts have not yet been determined. On February 1, 2022, CHS entered into Amendment No. 5 (“Amendment No. 5”), by and among CHS, as borrower, Ares Capital Corporation, as administrative agent and collateral agent, and the term lenders party thereto, to the First Lien Credit Agreement, dated as of September 4, 2019, as amended to the date hereof (the “Credit Agreement”). Amendment No. 5 amends the Credit Agreement to provide for, among other things, a first lien incremental term loan facility (the “2022 Incremental Term Loan Facility”) in an aggregate principal amount of $78,000,000. The proceeds of the term loans borrowed under the 2022 Incremental Term Loan Facility (the “2022 Incremental Term Loans”) were used to finance the Acquisition (as defined above) and pay fees and expenses related thereto. The 2022 Incremental Term Loans will mature on September 4, 2026, will bear interest at an annual rate equal to, at the option of the Borrower, (i) the LIBOR (as defined in the Credit Agreement) for the relevant interest period (subject to a floor of 0.75% per annum) plus 4.75% for Eurodollar Rate Loans (as defined in the Credit Agreement) and (ii) a base rate plus 3.75% for Base Rate Loans (as defined in the Credit Agreement), and will amortize at a rate of 1.00% per annum. Current Market Volatility Since December 31, 2021, the price of the Company’s common stock has declined. A sustained decrease in the price of the Company’s common stock is one of the qualitative factors to be considered as part of an impairment test when evaluating |
SCHEDULE I - CONDENSED FINANCIA
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | CONVEY HEALTH SOLUTIONS HOLDINGS, INC. PARENT COMPANY ONLY CONDENSED BALANCE SHEETS (in thousands, except per share data) December 31, 2021 December 31, 2020 ASSETS Investment in subsidiaries $ 546,372 $ 470,285 Total assets $ 546,372 $ 470,285 LIABILITIES AND SHAREHOLDER’S EQUITY Intercompany payables to subsidiaries $ 8,623 $ 135 Common stock, $0.01 par value, 500,000,000 and 126,000,000 shares authorized and 73,194,171 and 61,321,424 shares issued and outstanding at December 31, 2021 and 2020, respectively 732 613 Additional paid-in capital 570,252 492,747 Accumulated other comprehensive income 31 78 Accumulated deficit (33,266) (23,288) Total shareholder’s equity 537,749 470,150 Total liabilities and shareholder’s equity $ 546,372 $ 470,285 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONVEY HEALTH SOLUTIONS HOLDINGS, INC. (SUCCESSOR) CONVEY HEALTH PARENT, INC. (PREDECESSOR) PARENT COMPANY ONLY CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) Years Ended December 31, Period from Inception to December 31,2019 Period from January 1, 2019 to September 3, 2019 2021 2020 (Successor) (Predecessor) Equity in income (loss) of subsidiaries $ 2,890 $ 314 $ (2,721) $ 3,949 Operating expenses (12,868) (6,776) (14,105) (300) Net (loss) income (9,978) (6,462) (16,826) 3,649 Equity in other comprehensive income (loss) of subsidiaries (47) 57 21 (15) Comprehensive (loss) income $ (10,025) $ (6,405) $ (16,805) $ 3,634 CONVEY HEALTH SOLUTIONS HOLDINGS, INC. (SUCCESSOR) CONVEY HEALTH PARENT, INC. (PREDECESSOR) PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, Period from Inception to December 31,2019 Period from January 1, 2019 to September 3, 2019 2021 2020 (Successor) (Predecessor) Net cash used in operating activities $ — $ — $ (14,064) $ — Cash flows from investing activities Investment in subsidiaries — — (433,287) — Nest cash used in investing activities — — (433,287) — Cash flows from financing activities Proceeds from capitalization — — 447,351 — Net cash provided by financing activities — — 447,351 — Net increase in cash and cash equivalents and restricted cash — — — — Cash, cash equivalents and restricted cash at beginning of period — — — — Cash, cash equivalents and restricted cash at end of period $ — $ — $ — $ — Non-cash investing and financial activities Common stock issued in exchange to Parent for the acquisitions $ — $ — $ 39,327 $ — SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT Note to Registrant’s Condensed Financial Statements (Parent Company Only ) Basis of Presentation These condensed parent company financial statements of Convey Health Solutions Holdings, Inc. (Successor) and Convey Health Parent, Inc. (Predecessor) have been prepared in accordance with Rule 12-04 of Regulation S-X, as the restricted net assets of the subsidiaries of Convey Health Solutions Holdings, Inc. (Successor) and Convey Health Parent, Inc. (Predecessor) exceed 25% of the consolidated net assets of Convey Health Solutions Holdings, Inc. (Successor) and Convey Health Parent, Inc. (Predecessor) as stipulated by Rule 5-04, Section 1 from Regulation S-X. The ability to pay dividends by subsidiaries of Convey Health Solutions Holdings, Inc. (Successor) and Convey Health Parent, Inc. (Predecessor) may be restricted due to the terms of the Credit Agreement, as described in Note 9. Credit Facility , in the consolidated financial statements. These condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that Convey Health Solutions Holdings, Inc. (Successor) and Convey Health Parent, Inc. (Predecessor) account for investments in their subsidiaries using the equity method. These condensed parent company financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this report. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation Convey was formed on June 13, 2019, for the purpose of acquiring Convey Health Solutions, Inc. (“CHS”). On September 4, 2019, Cannes Parent, Inc. (“Cannes”), a direct subsidiary of Convey, entered into an agreement to acquire all of the outstanding stock of CHS through the merger of Cannes Merger Sub, Inc. and Convey Health Parent, Inc. (“Parent”) (the “Merger”) with Parent surviving as a direct subsidiary of Cannes. The Merger principally occurred through an investment from TPG Cannes Aggregation, L.P., which is primarily funded by partners of TPG Partners VIII, L.P. and TPG Healthcare Partners, L.P. or any parallel fund or their alternative investment vehicles (collectively, “TPG”). See Note 4. Acquisitions. The Merger was accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), and Cannes was determined to be the accounting acquirer. The accompanying consolidated financial statements and related notes are presented on a Successor and Predecessor basis. Predecessor The period from January 1, 2019 to September 3, 2019 reflects the historical financial information for Parent and its subsidiaries prior to the closing of the Merger (“Predecessor”). Successor The period from Inception to December 31, 2019 and the years ended December 31, 2020 and 2021, reflect the historical financial information for Convey and its subsidiaries (“Successor”). The Successor and Predecessor consolidated financial information presented herein is not comparable due to the impacts of the Merger including the application of acquisition accounting in the Successor financial statements as of September 4, 2019, see Note 4. Acquisitions . Where applicable, a black line separates the Successor and Predecessor periods to highlight the lack of comparability. The accompanying consolidated financial statements include the accounts of Convey and our wholly-owned subsidiaries. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. Stock Split Prior to the IPO (as defined below), in June 2021, Convey’s Board of Directors (the “Board”) and stockholders approved a forward split of shares of Convey’s common stock, par value $0.01 per share, on a 126-for-1 basis (the “Stock Split”), which became effective as of June 4, 2021. Prior to the Stock Split, we were authorized to issue 1,000,000 shares of common stock of which (i) 915,000 shares were designated as voting common stock and (ii) 85,000 shares were designated as non-voting |
Consolidation | Basis of Presentation and Consolidation Convey was formed on June 13, 2019, for the purpose of acquiring Convey Health Solutions, Inc. (“CHS”). On September 4, 2019, Cannes Parent, Inc. (“Cannes”), a direct subsidiary of Convey, entered into an agreement to acquire all of the outstanding stock of CHS through the merger of Cannes Merger Sub, Inc. and Convey Health Parent, Inc. (“Parent”) (the “Merger”) with Parent surviving as a direct subsidiary of Cannes. The Merger principally occurred through an investment from TPG Cannes Aggregation, L.P., which is primarily funded by partners of TPG Partners VIII, L.P. and TPG Healthcare Partners, L.P. or any parallel fund or their alternative investment vehicles (collectively, “TPG”). See Note 4. Acquisitions. The Merger was accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), and Cannes was determined to be the accounting acquirer. The accompanying consolidated financial statements and related notes are presented on a Successor and Predecessor basis. Predecessor The period from January 1, 2019 to September 3, 2019 reflects the historical financial information for Parent and its subsidiaries prior to the closing of the Merger (“Predecessor”). Successor The period from Inception to December 31, 2019 and the years ended December 31, 2020 and 2021, reflect the historical financial information for Convey and its subsidiaries (“Successor”). The Successor and Predecessor consolidated financial information presented herein is not comparable due to the impacts of the Merger including the application of acquisition accounting in the Successor financial statements as of September 4, 2019, see Note 4. Acquisitions . Where applicable, a black line separates the Successor and Predecessor periods to highlight the lack of comparability. The accompanying consolidated financial statements include the accounts of Convey and our wholly-owned subsidiaries. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. Stock Split Prior to the IPO (as defined below), in June 2021, Convey’s Board of Directors (the “Board”) and stockholders approved a forward split of shares of Convey’s common stock, par value $0.01 per share, on a 126-for-1 basis (the “Stock Split”), which became effective as of June 4, 2021. Prior to the Stock Split, we were authorized to issue 1,000,000 shares of common stock of which (i) 915,000 shares were designated as voting common stock and (ii) 85,000 shares were designated as non-voting |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information currently available to us |
Segments | Segments We operate in two segments in accordance with ASC Topic 280, Segment Reporting (“ASC 280”). Operating segments are components of public entities that engage in business activities from which they may earn revenues and incur expenses, and separate financial information is available and evaluated regularly by our Chief Operating Decision Maker (“CODM”) group in deciding how to assess performance and allocate resources. The two reportable segments are Technology Enabled Solutions and Advisory Services. See Note 18. Segment Information |
Foreign Operations | Foreign Operations |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). For further discussion of our accounting policies related to revenue see Note 3. Revenue from Contracts with Customers. |
Share-based Compensation | Share-based Compensation Our accounting policy for share-based compensation is disclosed in Note 11. Share-based Compensation |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents We consider cash in banks and holdings of highly liquid investments with original maturities of three months or less, when purchased, to be cash and cash equivalents. At various times throughout 2021 and 2020 and as of December 31, 2021 and 2020, some accounts held at financial institutions were in excess of the federally insured limit of $250 thousand. We reduce our exposure to credit risk by maintaining our cash deposits with major financial institutions. We have not experienced any losses on these accounts and conclude the credit risk to be minimal. We also have an immaterial amount of cash held in the Philippines and the Netherlands to fund local operations. Restricted Cash As part of the acquisition of HealthScape Advisors, LLC (“HealthScape Advisors”) and Pareto Intelligence LLC (“Pareto Intelligence”) in 2018, the previous shareholders agreed to set aside funds for an incentive compensation plan for employees who remained post acquisition. The payments were paid yearly and the last payment was made in December 2021. The cash for this incentive compensation plan was held as restricted cash. Any such payments have appropriately been accounted for as post business combination expense to the employees within the plan. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amounts and do not bear interest. An allowance for doubtful accounts is recorded to provide for estimated losses resulting from uncollectible accounts and is based principally on specifically identified amounts where collection is determined to be doubtful. Management analyzes the collectability of trade accounts and other receivables and the adequacy of the allowance for doubtful accounts on a regular basis taking into consideration the aging of the |
Inventories | Inventories |
Property and Equipment | Property and Equipment |
Intangible Assets | Intangible Assets |
Software Development Costs | Software Development Costs Development costs associated with certain solutions offered exclusively through software as a service model are accounted for in accordance with ASC Topic 350-40, Internal-Use Software |
Cloud Computing Arrangements | Cloud Computing Arrangements |
Long-Lived Assets | Long-Lived Assets |
Acquisitions | Acquisitions We allocate the purchase consideration to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the fair value of the purchase consideration over the fair value of the identifiable assets and liabilities, if any, is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to the consolidated statements of operations and comprehensive (loss) income. |
Goodwill | Goodwill Goodwill represents the fair value of acquired businesses in excess of the fair value of the individually identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Impairment exists when the carrying amount, including goodwill, of the reporting unit exceeds its fair value, resulting in an impairment charge for this excess (not to exceed the carrying amount of the goodwill). Our annual impairment testing date is October 1. We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit exceeds its carrying value. For purposes of the goodwill impairment test, we have determined our business operates in four reporting units: Advanced Plan Administration, Supplemental Benefit Administration, Value Based Payment Assurance, and Advisory Services. Advanced Plan Administration, Supplemental Benefit Administration, and Value Based Payment Assurance reporting units form part of the Technology Enabled Solutions reporting segment. A qualitative assessment considers macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, and company specific factors such as trends in revenue generating activities, and merger or acquisition activity. If we elect to bypass qualitatively assessing goodwill, or it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, management estimates the fair values of each of our reporting units mentioned above and compares it to their carrying values. The estimated fair values of the reporting units are established using an income approach based on a discounted cash flow model that includes significant assumptions about the future operating results and cash flows of each reporting unit, and a market approach which compares each reporting unit to comparable companies in their respective industries. |
Debt Issuance Cost | Debt Issuance Cost Deferred financing costs relate to our debt instruments, the short-term and long-term portions are reflected as a deduction from the carrying amount of the related debt. The deferred financing costs are amortized using the straight-line method over the term of the related debt instrument which approximates the effective interest method. Deferred financing costs incurred with line-of-credit arrangements are recorded as assets on our consolidated balance sheets and amortized over the term of the arrangement. Debt may be considered extinguished when it has been modified and the terms of the new debt instruments and old debt instruments are “substantially different” (as defined in the debt modification guidance in ASC Topic 470‑50, Debt — Modifications and Extinguishments (“ASC 470-50”)). |
Deferred Initial Public Offering Costs | Deferred Initial Public Offering Costs We incurred certain costs in connection with our IPO. Deferred IPO costs of $5.8 million were charged to shareholders’ equity upon the completion of the IPO (see Note 1. Business and Basis of Presentation ). As of December 31, 2020, deferred IPO costs were $0.4 million and were included within Prepaid expenses and other current assets on the consolidated balance sheets. |
Customer Concentrations | Customer Concentrations Revenue and Accounts receivable from our major customers are as follows: Revenues For the Years Ended Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) 2021 2020 (Successor) (Predecessor) Customer A $ 93,730 $ 80,901 $ 20,972 $ 27,814 % of total revenue 27.8 % 28.6 % 26.1 % 19.8 % Customer B $ 63,838 $ 50,485 $ 17,106 $ 30,650 % of total revenue 18.9 % 17.8 % 21.3 % 21.8 % Accounts Receivable (in thousands) December 31, 2021 December 31, 2020 Customer A $ 13,161 $ 7,582 % of total accounts receivable 21.0 % 15.0 % Customer B $ 15,174 $ 3,447 % of total accounts receivable 24.2 % 6.8 % Our customer base is highly concentrated. Revenue may significantly decline if we were to lose one or more of our major customers. However, our risk is reduced due to our significant customers having multiple product delivery solutions under separate contracts. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. There is a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: • Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, such as quoted market prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3 - Unobservable inputs which are supported by little or no market activity. Financial instruments (principally cash and cash equivalents, accounts receivable, accounts payable and accrued expenses) are carried at cost, which approximates fair value due to the short-term maturity of these instruments. Our long-term credit facility is carried at cost, which approximates fair value due to the variable interest rate associated with the revolving credit facility. |
Contingencies and Contingent Consideration | Contingencies A liability is contingent if the amount is not presently known but may become known in the future as a result of the occurrence of some uncertain future event. We accrue a liability for an estimated loss if we determine that the potential loss is probable of occurring and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable, and accruals are based only on the information available to our management at the time the judgment is made. We expense legal costs, including those legal costs incurred in connection with a loss contingency, as incurred. Contingent Consideration We recognized an earn-out liability in connection with the November 2018 acquisition of HealthScape Advisors and Pareto Intelligence, which represented contingent consideration. The initial fair value of the earn-out liability was determined by employing a Monte-Carlo simulation model. The underlying simulated variable was adjusted revenue discounted by the market price of risk embedded in the revenue metrics. The revenue volatility estimate was based on a study of historical asset volatility and implied volatility for a set of comparable public companies, adjusted by our operating leverage. The earn-out payments were calculated based on simulated revenue metrics and payment thresholds as set forth in the HealthScape Advisors and Pareto Intelligence purchase agreement. The calculated payments were further discounted back to present value using cost of debt reflecting our credit risk. The fair value of the earn-out liability at each reporting date subsequent to the acquisition was measured using a probability weighted approach. Any change in fair value was recognized in the consolidated statements of operations and comprehensive (loss) income. In connection with the Merger, we recognized a holdback liability, which represented contingent consideration. See Note 4. Acquisitions for additional information. The initial fair value of the holdback liabilities and at each subsequent reporting date was measured using a probability weighted approach. Any change in fair value was recognized in the consolidated statements of operations and comprehensive (loss) income. |
Selling, General and Administrative (“SG&A”) | Selling, General and Administrative (“SG&A”) |
Leases | Leases |
Discontinued Operations | Discontinued Operations We report financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs only when the disposal of a component or a group of components represents a strategic shift that will have a major effect on our operations and financial results. In our consolidated statements of cash flows, the cash flow from discontinued operations are not separately classified. Unless indicated otherwise, the information in the Notes to the consolidated financial statements relates to continuing operations. See Note 17. Discontinued Operations |
Income Taxes | Income Taxes Income tax expense includes federal, state, and foreign taxes and is based on reported income before income taxes. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or realized. We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. We recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from uncertain tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. No tax benefits are recognized for positions that do not meet this threshold. Interest related to uncertain tax positions is recognized as part of the provision for income taxes and is accrued beginning in the period that such interest would be applicable under relevant tax law until such time that the related tax benefits are recognized. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common shareholders (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted net income (loss) per common share attributable to common shareholders is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period adjusted for the dilutive effects of common stock equivalents. In periods when losses from continuing operations are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which amended the accounting for income taxes. ASU 2019-12 eliminates certain exceptions to the guidance for income taxes related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences as well as simplifying aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. We early adopted ASU 2019-12 on January 1, 2021, and the adoption did not have a material impact on our consolidated financial statements. Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The guidance specifies that lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases except those which meet the definition of a short-term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or financing. Classification will be based on criteria that are similar to those applied in current lease accounting, but without explicit bright lines. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As of December 31, 2021, we have identified our arrangements that are within the scope of the new guidance and have evaluated our portfolio of leases, which is primarily comprised of operating real estate leases for our respective offices. We will elect the package of practical expedients under which we will not reassess prior conclusions about lease identification, lease classification, and initial direct costs of existing leases as of the date of the adoption and, upon adoption, will recognize the right-of-use lease assets and related lease liabilities as of the adoption date using the modified retrospective approach. Prior period information will not be restated. Upon transition to the guidance as of the date of adoption, we expect to recognize approximately $21.0 million of operating lease liabilities on the consolidated balance sheet, with a corresponding amount of right-of-use assets, net of amounts reclassified from other assets liabilities In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), subsequently clarified in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The main provisions of this update provide optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied prospectively to contract modifications and hedging relationships through December 31, 2022. We are currently evaluating the new guidance to determine the impact ASU 2020-04 and ASU 2021-01 will have on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) (“ASU 2021-08”). The new guidance creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. Under this exception, an acquirer applies Topic 606 to recognize and measure contract assets and contract liabilities on the acquisition date. Topic 805 generally requires the acquirer in a business combination to recognize and measure the assets it acquires and liabilities it assumes at fair value on the acquisition date. This generally will result in companies recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. This new guidance is effective for emerging growth companies following private business adoption dates, for the fiscal years beginning after December 15, 2023, with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Revenue and Accounts receivable from our major customers are as follows: Revenues For the Years Ended Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) 2021 2020 (Successor) (Predecessor) Customer A $ 93,730 $ 80,901 $ 20,972 $ 27,814 % of total revenue 27.8 % 28.6 % 26.1 % 19.8 % Customer B $ 63,838 $ 50,485 $ 17,106 $ 30,650 % of total revenue 18.9 % 17.8 % 21.3 % 21.8 % Accounts Receivable (in thousands) December 31, 2021 December 31, 2020 Customer A $ 13,161 $ 7,582 % of total accounts receivable 21.0 % 15.0 % Customer B $ 15,174 $ 3,447 % of total accounts receivable 24.2 % 6.8 % |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the year ended December 31, 2021: (in thousands) Balance at December 31, 2020 $ 20,538 Payments against the earn-out liabilities (7,500) Payments against the holdback liabilities (13,134) Change in fair value of earn-out liabilities 96 Balance at December 31, 2021 $ — The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the year ended December 31, 2020: (in thousands) Balance at December 31, 2019 $ 43,175 Payments against the earn-out liabilities (11,867) Change in fair value of the holdback liabilities 10,329 Change in fair value of the earn-out liabilities (21,099) Balance at December 31, 2020 $ 20,538 |
Schedule of Earnings per Share, Basic and Diluted | For the Years Ended Period from Period from (in thousands, except share and per share data) 2021 2020 (Successor) (Predecessor) Net income (loss) attributable to common shareholders Net income (loss) from continuing operations $ (9,978) $ (6,498) $ (16,899) $ 4,345 Net income (loss) from discontinued operations — 36 73 (696) Net income (loss) attributable to common shareholders $ (9,978) $ (6,462) $ (16,826) $ 3,649 Weighted-average common shares outstanding: Basic 67,695,030 61,321,424 35,821,422 1,431,305 Diluted — — — 112,469 Dilutive impact of stock awards outstanding 67,695,030 67,695,030 61,321,424 35,821,422 1,543,774 Income (Loss) per share: Basic Continuing operations $ (0.15) $ (0.11) $ (0.47) $ 3.04 Discontinued operations — — — (0.49) Net income (loss) per common share $ (0.15) $ (0.11) $ (0.47) $ 2.55 Diluted Continuing operations $ (0.15) $ (0.11) $ (0.47) $ 2.81 Discontinued operations — — — (0.49) Net income (loss) per common share $ (0.15) $ (0.11) $ (0.47) $ 2.32 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract With Customer, Revenue Recognition | The following table summarizes the nature and pattern of revenue recognition for our most significant performance obligations: Performance Performance Obligation Description Measure of Progress Health Plan Management Health Plan Support Services We provide administration support services to government sponsored plans using our proprietary technology. Those administrative services include eligibility and enrollment processing, member services, premium billing, payment processing, reconciliation and other related services. The services are provided throughout the duration of the contract which can be annual or multi-year. The performance obligation falls under the series guidance. Variable Fees recognized in the period to which it relates following the series allocation exception (i.e., the period we have the contractual right to the fee). Over time Supplement Benefit Administration We provide customized solutions using our proprietary technology to manage benefits provided to members through their Medicare Advantage plans, including benefit design and administration, member eligibility and engagement, end to end analytics and reporting. The service is provided throughout the agreed upon period. The performance obligation falls under the series guidance. Variable Fees recognized in the period to which it relates following the series allocation exception (i.e., the period we have the contractual right to the fee). Over Time Performance Performance Obligation Description Measure of Progress Software Services Software Solution We provide our clients access to in house software solutions, which are generally marketed under annual and multi-year arrangements. The solution integrates with the client’s existing technology and the client has access to the software throughout the duration of the contract. The performance obligation falls under the series guidance. Input method – fixed fees revenue is recognized ratably over the contract term based on time elapsed. Over Time Development Services We offer additional services to our clients for ad hoc enhancements on their existing software solutions. The service is typically agreed upon on a standalone basis and provided over a set period of time that is usually less than a year. Input method – revenue is recognized proportionally over the service based on service hours or number of hours worked. Over Time Data Analytics Shared Savings Analytics We provide shared savings solutions that is derived from an evaluation of healthcare data, delivering insights to optimize outcomes, improve financial performance, and ensure compliance. These contracts are multiyear arrangements. Shared savings recognized on delivery of the report of potential cost savings. Point in Time Data Validation We offer an add-on administrational service where clients can opt to have their data inputted to government websites to recover identified savings. The length of the service provided is based on the number of members to be processed. Output method – revenue is recognized proportionally over the service based on number of members’ data processed for potential cost savings. Over Time Subscription Software Access We provide a stand ready solution that gives our clients access to an analytical tool that harmonizes third party, health plan, and clinical datasets, and applies analytic models to inform strategic product, pricing, and market decisions. These multi-year contracts allow the client to access the technology at any time to view the reports. The performance obligation falls under the series guidance. Input method – revenue is recognized as the number of runs are completed. Over Time Access to a pre-determined number of data analytic assessments per year We offer an alternative subscription service to have a predetermined number of data analytic assessment runs per year over a long-term contract. The contract specifies how many data analytic runs the client can access. The performance obligation falls under the series guidance. Input method – revenue is recognized as the number of runs are completed. Over Time Performance Performance Obligation Description Measure of Progress Supplemental Benefit Services Supplemental Benefit Product Sales This solution is provided on an annual contract and ships supplemental benefit products to client members. This is an end to end service starting with the order processing to shipment of the product. Recognized upon shipment to members. Point in Time Catalog Sales We offer production and delivery of product formulary to client members. Recognized upon shipment to members. Point in Time Advisory Services Consulting Services We provide advisory services to the healthcare industry in various strategic and operational areas. Each individual engagement is a distinct service with a short duration and can be offered on a fixed fee or a time and materials basis. Input method – revenue is recognized proportionally over the service based on hours. Input method – for fixed fee arrangements a percentage of completion measure is used. Over Time |
Disaggregation of Revenue | The following tables present disaggregated revenue by reporting segment: (in thousands) For the Year Ended December 31, 2021 Technology Advisory Total Supplemental Benefit Services $ 160,021 $ — $ 160,021 Health Plan Management 93,150 — 93,150 Consulting Services 6,023 52,849 58,872 Software Services 13,766 128 13,894 Data Analytics 11,659 — 11,659 Total $ 284,619 $ 52,977 $ 337,596 (in thousands) For the Year Ended December 31, 2020 Technology Advisory Total Supplemental Benefit Services $ 135,723 $ — $ 135,723 Health Plan Management 76,814 — 76,814 Consulting Services 4,754 41,578 46,332 Software Services 13,365 — 13,365 Data Analytics 10,680 — 10,680 Total $ 241,336 $ 41,578 $ 282,914 Period from Inception to December 31, 2019 (Successor) (in thousands) Technology Enabled Solutions Advisory Services Total Supplemental Benefit Services $ 29,262 $ — $ 29,262 Health Plan Management 25,571 — 25,571 Consulting Services 1,701 13,885 15,586 Software Services 5,384 — 5,384 Data Analytics 4,612 — 4,612 Total $ 66,530 $ 13,885 $ 80,415 Period from January 1, 2019 to September 3, 2019 (Predecessor) (in thousands) Technology Enabled Solutions Advisory Services Total Supplemental Benefit Services $ 48,293 $ — $ 48,293 Health Plan Management 45,245 — 45,245 Consulting Services 1,553 30,806 32,359 Software Services 6,366 — 6,366 Data Analytics 8,475 — 8,475 Total $ 109,932 $ 30,806 $ 140,738 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the purchase consideration transferred in connection with the Merger and consists of the following: (in thousands) Cash consideration $ 656,174 Contingent consideration payable to former owners and working capital payable 6,562 Equity rollover 39,327 Total consideration $ 702,063 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the acquisition date fair value of the allocation of the purchase consideration assigned to each major class of assets acquired and liabilities assumed as of September 4, 2019, the closing date of the Merger: Preliminary allocation Measurement period adjustments Final allocation (in thousands) ASSETS ACQUIRED Cash $ 21,459 $ — $ 21,459 Accounts receivable 37,657 — 37,657 Inventories, net 1,633 — 1,633 Prepaid expenses and other current assets 8,100 — 8,100 Restricted cash 8,423 — 8,423 Property and equipment, net 17,588 — 17,588 Other assets, net 1,149 — 1,149 Total identifiable assets acquired 96,009 — 96,009 Fair value of intangible assets Tradenames 27,300 — 27,300 Customer relationships 189,000 — 189,000 Technology 47,800 — 47,800 Total fair value of intangible assets acquired 264,100 — 264,100 Goodwill 455,006 200 455,206 Total Assets Acquired $ 815,115 $ 200 $ 815,315 LIABILITIES ASSUMED Accounts payable $ 6,123 $ — $ 6,123 Deferred revenue 3,879 — 3,879 Accrued expenses 25,203 25,203 Capital lease obligations 595 — 595 Deferred taxes, net 29,595 200 29,795 Contingent consideration from prior acquisitions 40,371 — 40,371 Other long-term liabilities 7,286 — 7,286 Total Liabilities Assumed $ 113,052 $ 200 $ 113,252 Total consideration transferred $ 702,063 $ — $ 702,063 |
Business Acquisition, Pro Forma Information | The unaudited pro forma combined results, which assumes the Merger was completed on January 1, 2019 are as follows for the year ended December 31, 2019: (in thousands) Revenue Net Loss 2019 supplemental pro forma from January 1, 2019 through December 31, 2019 $ 220,993 $ (20,815) |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: (in thousands) December 31, 2021 December 31, 2020 Prepaid expenses and other advances $ 6,904 $ 4,272 Software licenses 2,547 1,492 Insurance 1,271 852 Inventory purchase advances 23 2,206 Cloud computing subscription & implementation costs 4,841 1,986 Tenant facility lease allowances — 789 Deferred IPO costs — 446 Other current assets 983 3,177 Total prepaid expenses and other current assets $ 16,569 $ 15,220 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: (in thousands) Estimated Life December 31, 2021 December 31, 2020 Office and computer equipment 3 – 8 years $ 14,442 $ 10,383 Leasehold improvements Up to 10 years 10,503 10,572 Furniture and fixtures 2 – 8 years 4,054 3,794 Software 3 years 2,277 1,486 31,276 26,235 Less: accumulated depreciation (10,876) (5,568) Property and equipment, net $ 20,400 $ 20,667 |
Schedule of Capital Leased Assets | Assets held under capital leases are included in property and equipment as follows: (in thousands) December 31, 2021 December 31, 2020 Office and computer equipment $ 1,682 $ 1,682 Less: accumulated depreciation (656) (192) Total financing leases included in property and equipment $ 1,026 $ 1,490 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The activity for goodwill as of December 31, 2021 is as follows: (in thousands) Balance at December 31, 2020 455,206 Measurement period adjustments — Acquisitions — Impairment — Balance at December 31, 2021 $ 455,206 |
Schedule of Finite-Lived Intangible Assets | The carrying value of identifiable intangible assets consisted of the following as of December 31, 2021: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (3,395) $ 23,905 Customer relationships 189,000 (40,091) 148,909 Technology 47,800 (11,153) 36,647 Capitalized software development costs 12,454 (1,901) 10,553 Total intangible assets $ 276,554 $ (56,540) $ 220,014 The carrying value of identifiable intangible assets consisted of the following as of December 31, 2020: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (1,940) $ 25,360 Customer relationships 189,000 (22,909) 166,091 Technology 47,800 (6,373) 41,427 Capitalized software development costs 6,405 (441) 5,964 Total intangible assets $ 270,505 $ (31,663) $ 238,842 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | These charges are classified as operating expenses in the consolidated statements of operations and comprehensive (loss) income. Expected future amortization expense consists of the following for each of the following years ended December 31: (in thousands) 2022 $ 25,117 2023 24,784 2024 24,101 2025 23,462 2026 23,344 Thereafter 99,206 Total $ 220,014 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses and other current liabilities consist of the following: (in thousands) December 31, 2021 December 31, 2020 Contingent consideration $ — $ 20,538 Incentive bonus 15,214 12,198 Employee related 11,154 11,065 Sales and use tax 6,865 7,469 Rebates 4,276 3,822 Accrued interest 637 2,794 Accrued professional fees 7,046 6,389 Other 3,366 2,884 Total accrued expenses $ 48,558 $ 67,159 |
CREDIT FACILITY (Tables)
CREDIT FACILITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | Debt consists of the following as of December 31, 2021, and December 31, 2020: (in thousands) December 31, 2021 December 31, 2020 Term loans $ 192,631 $ 246,999 Less: deferred financing costs (2,988) (5,209) Term loans, net of deferred financing costs 189,643 241,790 Less: current portion — (2,500) $ 189,643 $ 239,290 |
Contractual Obligation, Fiscal Year Maturity | The required principal payments for Term Loans for each of the five years and thereafter following the balance sheet date are as follows: (in thousands) 2022 $ — 2023 — 2024 — 2025 — 2026 192,631 Total $ 192,631 The remaining aggregate commitment for lease payments under the operating lease for the facilities as of December 31, 2021 are as follows: (in thousands) Capital Leases Operating Leases 2022 $ 529 $ 8,762 2023 351 7,993 2024 122 7,136 2025 82 4,852 2026 — 2,951 Thereafter — 6,220 Total $ 1,084 $ 37,914 Less: amounts representing interest $ 58 Net present value of capital lease obligations $ 1,026 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | The following table summarizes the total share-based compensation expense included in the consolidated statements of operations and comprehensive income (loss): For the Years Ended Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) 2021 2020 (Successor) (Predecessor) Selling, general and administrative $ 4,380 $ 6,682 $— $300 Total stock-based compensation expense $ 4,380 $ 6,682 $— $300 |
Share-based Payment Arrangement, Option, Activity | Stock option activity and information about stock options outstanding are summarized in the following table: Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2019 (Successor) — $ — — Granted 5,723,676 7.94 Exercised — — Forfeited (102,312) 7.94 Outstanding at December 31, 2020 5,621,364 $ 7.94 9.20 Granted 587,001 13.35 Exercised (172,728) 7.86 Forfeited (399,483) 8.78 Outstanding at December 31, 2021 5,636,154 $ 7.68 8.29 Vested or expect to vest as of December 31, 2021 5,636,154 $ 7.68 8.29 Vested and Exercisable as of December 31, 2021 2,729,741 $ 7.56 8.17 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the options granted during the year were estimated on the date of the grant using the Black-Scholes Merton model based on the following assumptions: 2021 Grants 2020 Grants Expected term (years) 5.00 to 6.24 5.85 to 6.10 Expected volatility 45% to 60% 50% to 55% Risk free interest rate 0.66% to 1.11% 0.36% to 0.95% Expected dividend yield — % — % The fair value of the LTI awards granted during 2020 were estimated on the date of the grant using the Monte-Carlo Simulation analysis based on the following assumptions: Expected term (years) 2.25 to 4.25 Expected volatility 60% Risk free interest rate 0.15% to 0.23% Expected dividend yield — |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | Activity and information about non-vested RSUs outstanding are summarized in the following table: Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2020 — $ — Granted 207,081 2,661 Vested (8,152) (75) Forfeited (44,643) (580) Outstanding at December 31, 2021 154,286 $ 2,006 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | LTI Awards Outstanding at December 31, 2019 (Successor) — Granted 56 Forfeited (2) Outstanding as of December 31, 2020 54 Forfeited (11) Outstanding as of December 31, 2021 43 |
TAXES (Tables)
TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income tax expense (benefit) from continuing operations is summarized as follows: Years Ended December 31, Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 2021 2020 (Successor) (Predecessor) (in thousands) Pre-tax (loss) income Domestic $ (10,856) $ (8,524) $ (17,968) $ (19,033) Foreign 259 122 211 90 Total pre-tax loss (10,597) (8,402) (17,757) (18,943) Current tax benefit (expense): Federal (36) — — — State 222 (689) (78) (3) Foreign (136) (303) (9) (17) Total Current tax benefit (expense) 50 (992) (87) (20) Deferred tax benefit: Federal 631 2,342 765 16,119 State (62) 554 180 7,189 Foreign — — — — Total deferred tax benefit 569 2,896 945 23,308 Total tax benefit (expense): Federal 595 2,342 765 16,119 State 160 (135) 102 7,186 Foreign (136) (303) (9) (17) Total benefit for taxes on income $ 619 $ 1,904 $ 858 $ 23,288 |
Schedule of Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred taxes were as follows: December 31, 2021 December 31, 2020 (in thousands) Deferred Tax Assets: Net operating loss carry forward $12,247 $13,997 General business credits 4,173 4,078 Accrued compensation 1,545 5,921 Stock-based compensation 2,132 1,870 Foreign tax credit — 268 Deferred revenue 66 260 Allowance for refunds, claim denials and returns 20 171 Accrued liabilities 2,153 1,707 Intangible assets 603 648 Deferred rent 239 367 Accrued Taxes 2,654 3,264 Interest expense 4,186 — Tenant Improvement Allowance 1,225 1,431 Uniform Capitalization 110 532 Director and officer prior act liability insurance policy 1,790 — Other 266 121 Total deferred tax assets, net $33,409 $34,635 Deferred tax liabilities: Identifiable Intangible assets $(47,660) $(50,827) Property and equipment (5,382) (5,687) Software development costs (2,984) (1,669) Change in Fair Value on Contingent liability (3,018) (3,013) Prepaids (357) — Total deferred tax liabilities $(59,401) $(61,196) Net deferred tax liability $(25,992) $(26,561) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes at the federal statutory rate compared to the effective tax rate is as follows: Years Ended December 31, Period from Period from 2021 2020 (Successor) (Predecessor) (in thousands) Income tax expense at the statutory rate $ 2,225 $ 1,764 $ 3,729 $ 3,978 Increase in income taxes resulting from: Foreign Jurisdiction rate different than the statutory (82) (277) 35 2 State taxes, net of federal 30 (159) 242 5,837 Loss on Extinguishment of Debt — — — 654 Transaction bonuses deduction for tax not for book — — — 2,713 Tax credits 187 272 (71) 72 Option Holder Compensation 486 — — 9,300 Non-Deductible Compensation for Covered Employees (880) — — — Write off of Excess DTA related to Stock Option Exercise (120) — — — Buyer Transaction Costs not Deductible for Tax — — (2,953) — 70% Success based deductible transaction Costs — — — 1,185 Prior Year Adjustments — — — (170) Carryback Due To CARES Act — 154 — — Fair value contingency 608 375 — — Disallowed Fringe Benefits (149) (140) (43) (59) FTC - Expiration (268) — — — NOL Carryforward Adjustment - Amended 2019 Tax Return (1,369) — — — Other (49) (85) (81) (224) Income tax benefit $ 619 $ 1,904 $ 858 $ 23,288 |
TRANSACTION RELATED COSTS (Tabl
TRANSACTION RELATED COSTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Acquisition Related and Deferred Offering Costs [Abstract] | |
Schedule of Acquisition Related and Deferred Offering Costs | The following table represents the components of Transaction related costs as reported in the consolidated statements of operations and comprehensive income (loss): For the Years Ended Period from Period from (in thousands) 2021 2020 (Successor) (Predecessor) Mergers and acquisitions related costs $ 3,093 $ 1,526 14,784 2,511 Public company readiness costs 2,801 2,423 — — Total $ 5,894 $ 3,949 14,784 2,511 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity | The remaining aggregate commitment for lease payments under the operating lease for the facilities as of December 31, 2021 are as follows: (in thousands) Capital Leases Operating Leases 2022 $ 529 $ 8,762 2023 351 7,993 2024 122 7,136 2025 82 4,852 2026 — 2,951 Thereafter — 6,220 Total $ 1,084 $ 37,914 Less: amounts representing interest $ 58 Net present value of capital lease obligations $ 1,026 |
Contractual Obligation, Fiscal Year Maturity | The required principal payments for Term Loans for each of the five years and thereafter following the balance sheet date are as follows: (in thousands) 2022 $ — 2023 — 2024 — 2025 — 2026 192,631 Total $ 192,631 The remaining aggregate commitment for lease payments under the operating lease for the facilities as of December 31, 2021 are as follows: (in thousands) Capital Leases Operating Leases 2022 $ 529 $ 8,762 2023 351 7,993 2024 122 7,136 2025 82 4,852 2026 — 2,951 Thereafter — 6,220 Total $ 1,084 $ 37,914 Less: amounts representing interest $ 58 Net present value of capital lease obligations $ 1,026 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The operating results of our discontinued operations through the date of abandonment are as follows: Year Ended December 31, 2020 Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) (Successor) (Predecessor) Major line items constituting income from discontinued operations Service revenue $ 50 $ 98 $ 3,301 Cost of services — 5 2,550 Selling, general and administrative — (8) 1,718 Income (loss) from discontinued operations before provision for income taxes 50 101 (967) Provision expense (benefit) for income taxes 14 28 (271) Income (loss) from discontinued operations, net of tax $ 36 $ 73 $ (696) Year Ended December 31, 2020 Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 (in thousands) (Successor) (Predecessor) Operating activities: Net income (loss) from discontinued operations $36 $73 $(696) Decrease in accounts receivable $43 $— $2,808 Decrease in deferred revenue $— $— $(64) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Presented in the tables below is revenue and Segment Adjusted EBITDA by reportable segment: For the Year Ended December 31, 2021 (in thousands) Technology Enabled Advisory Revenue $ 284,619 $ 52,977 Segment Adjusted EBITDA $ 69,214 $ 16,232 For the Year Ended December 31, 2020 (in thousands) Technology Enabled Advisory Revenue $ 241,336 $ 41,578 Segment Adjusted EBITDA $ 66,043 $ 8,204 Period from Inception to December 31, 2019 (Successor) (in thousands) Technology Enabled Solutions Advisory Services Revenue $ 66,530 $ 13,885 Segment Adjusted EBITDA $ 14,881 $ 1,445 Period from January 1, 2019 to September 3, 2019 (Predecessor) (in thousands) Technology Enabled Solutions Advisory Services Revenue $ 109,932 $ 30,806 Segment Adjusted EBITDA $ 29,205 $ 6,073 The following table presents a reconciliation of Segment Adjusted EBITDA to the consolidated U.S. GAAP net income (loss) from continuing operations: (in thousands) For the Years Ended December 31, Period from Inception to December 31, 2019 Period from January 1, 2019 to September 3, 2019 2021 2020 (Successor) (Predecessor) Technology Enabled Solutions Segment Adjusted EBITDA $ 69,214 $ 66,043 $ 14,881 $ 29,205 Advisory Services Segment Adjusted EBITDA 16,232 8,204 1,445 6,073 Total $ 85,446 $ 74,247 $ 16,326 $ 35,278 Unallocated (1) $ (11,819) $ (9,024) $ (66) $ (3,595) Adjustments to reconcile to U.S. GAAP net income (loss) from continuing operations Depreciation and amortization (30,480) (28,032) (9,188) (13,359) Interest, net (17,294) (18,853) (5,762) (6,213) Income tax provision 619 1,904 858 23,288 Change in fair value of contingent consideration 96 10,770 — (19,671) Cost of COVID-19 (2) (3,827) (10,174) — — Consultant lower utilization due to COVID-19 (3) — (2,062) — — Sales and use tax (2,569) (8,194) (1,906) (3,133) Non-cash stock compensation expense (4,380) (6,682) — (300) Transaction related costs (5,894) (3,949) (14,784) (2,511) Acquisition bonus expense – HealthScape and Pareto acquisition (667) (1,989) (1,663) (3,685) Loss on extinguishment of debt (5,015) — — — Director and officer prior act liability insurance policy (4) (7,861) — — — Other (5) (6,333) (4,460) (714) (1,754) Net income (loss) from continuing operations $ (9,978) $ (6,498) $ (16,899) $ 4,345 _______________________ (1) Represents certain corporate costs associated with the executive compensation, legal, accounting, finance and other costs not specifically attributable to the segments. (2) Expenses incurred due to the COVID-19 pandemic include the following: $0 and $3.2 million for early hire of employees due to social distancing and work at home protocols for the years ended December 31, 2021, and 2020, respectively; $2.3 million and $2.9 million for higher pricing from vendors due to supply chain disruptions, product shortages and increases in shipping costs for the years ended December 31, 2021, and 2020, respectively; $0.8 million and $2.8 million for higher employee costs due to hazard pay for our employees, enhanced sick pay due to illness and quarantine protocols for the years ended December 31, 2021, and 2020, respectively; $0.5 million and $0.7 million for COVID-19 training, overtime, temporary resources, and IT costs due to the change in the work environment for the years ended December 31, 2021 and 2020, respectively; and $0.2 million and $0.5 million for janitorial costs due to enhanced COVID-19 protocols for the years ended December 31, 2021 and 2020, respectively. (3) Consultant lower utilization due to COVID-19 reflects the decreased productivity of the Advisory segment in connection with the COVID-19 pandemic. The average utilization for consultants in the Company’s Advisory Services segment declined during the COVID-19 pandemic as compared to pre-pandemic comparable periods. The utilization variance was multiplied by the average consultant cost to derive the cost absorbed by the Company. This change in utilization represents consultants’ idle time that otherwise would have been billed to clients if the consulting arrangements would have materialized. In addition, we chose not to reduce our headcount as we expected the lower utilization to be temporary in nature. (4) In connection with the IPO, we made a $7.9 million one-time payment on a 3-year director and officer prior act liability insurance policy. We deemed this policy to be a retroactive insurance policy and in accordance with ASC 720-20-25, “Retrospective Contracts”, we expensed the premium of $7.9 million in June 2021. (5) These adjustments include individual adjustments related to legal fees associated with obtaining the incremental loans, contract termination costs assessed upon the early termination of a facility lease, severance costs incurred as a result of eliminating certain positions, management fees, management service agreement termination fee, certain revenue adjustments, professional fees incurred in the implementation of ASC 606, board of directors related fees, and consulting costs for the selection of our Enterprise Resource Planning solution. |
BUSINESS AND BASIS OF PRESENT_2
BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Millions | Jun. 18, 2021USD ($)shares | Jun. 03, 2021$ / sharesshares | Dec. 31, 2021$ / sharesshares | Jun. 17, 2021$ / sharesshares | Jun. 16, 2021USD ($)$ / shares | Dec. 31, 2020$ / sharesshares |
Class of Stock [Line Items] | ||||||
Common stock par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Stock split, conversion ratio | 126 | |||||
Common stock shares authorized | 1,000,000 | 500,000,000 | 500,000,000 | 126,000,000 | ||
Sale of stock, net proceeds | $ | $ 131.5 | |||||
Preferred stock shares authorized | 25,000,000 | 25,000,000 | 0 | |||
Preferred stock par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 13,333,334 | |||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 14 | |||||
Sale of stock, consideration received on transaction | $ | $ 146.1 | |||||
IPO - Company Shares | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 11,666,667 | |||||
IPO - Shares From Existing Shareholders | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 1,666,667 | |||||
Voting Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares authorized | 915,000 | |||||
Nonvoting Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares authorized | 85,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 18, 2021 | |
Accounting Policies [Abstract] | |||
Inventory valuation reserves | $ 0.7 | $ 0.1 | |
Deferred offering costs | $ 0.4 | $ 5.8 | |
Antidilutive securities excluded from computation of earnings per share, amount | 5,790,440 | 5,621,364 | |
Operating lease, liability | $ 21 | ||
Operating lease, right-of-use asset | $ 21 | ||
Operating lease, liability, statement of financial position | Liabilities | ||
Operating lease, right-of-use asset, statement of financial position | Other assets |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||||
Net revenues | $ 80,415 | $ 140,738 | $ 337,596 | $ 282,914 | |
Accounts Receivable, after Allowance for Credit Loss, Current | 62,813 | 50,589 | |||
Revenue Benchmark | Customer Concentration Risk | Customer A | |||||
Concentration Risk [Line Items] | |||||
Net revenues | $ 20,972 | $ 27,814 | $ 93,730 | $ 80,901 | |
Concentration risk, percentage | 26.10% | 19.80% | 27.80% | 28.60% | |
Revenue Benchmark | Customer Concentration Risk | Customer B | |||||
Concentration Risk [Line Items] | |||||
Net revenues | $ 17,106 | $ 30,650 | $ 63,838 | $ 50,485 | |
Concentration risk, percentage | 21.30% | 21.80% | 18.90% | 17.80% | |
Accounts Receivable | Customer Concentration Risk | Customer A | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 15.00% | 21.00% | |||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 13,161 | $ 7,582 | |||
Accounts Receivable | Customer Concentration Risk | Customer B | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 6.80% | 24.20% | |||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 15,174 | $ 3,447 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earn-Out and Holdback Liabilities Reconciliation (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
44196 | $ 20,538 | $ 43,175 |
44561 | 0 | 20,538 |
Earn-Out Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments against the earn-out liabilities | (7,500) | (11,867) |
Change in fair value of contingent consideration | 96 | (21,099) |
Holdback Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments against the earn-out liabilities | $ (13,134) | |
Change in fair value of contingent consideration | $ 10,329 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss (income) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net income (loss) attributable to common shareholders | ||||
Net income (loss) from continuing operations | $ (16,899) | $ 4,345 | $ (9,978) | $ (6,498) |
Net income (loss) from discontinued operations | 73 | (696) | 0 | 36 |
Net income (loss) | $ (16,826) | $ 3,649 | $ (9,978) | $ (6,462) |
Weighted-average common shares outstanding: | ||||
Weighted-average common shares outstanding: basic | 35,821,422 | 1,431,305 | 67,695,030 | 61,321,424 |
Weighted average number diluted shares outstanding adjustment | 0 | 112,469 | 0 | 0 |
Weighted-average common shares outstanding: diluted | 35,821,422 | 1,543,774 | 67,695,030 | 61,321,424 |
Income (loss) per common share – Basic | ||||
Income (loss) from continuing operations, per basic share (in usd per share) | $ (0.47) | $ 3.04 | $ (0.15) | $ (0.11) |
Income (loss) from continuing operations, per basic (in usd per share) | 0 | (0.49) | 0 | 0 |
Earnings per share, basic (in usd per share) | (0.47) | 2.55 | (0.15) | (0.11) |
Income (loss) per common share – Diluted | ||||
Income (loss) from continuing operations, per diluted share (in usd per share) | (0.47) | 2.81 | (0.15) | (0.11) |
Income (loss) from continuing operations, per diluted (in usd per share) | 0 | (0.49) | 0 | 0 |
Earnings per share, diluted (in usd per share) | $ (0.47) | $ 2.32 | $ (0.15) | $ (0.11) |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019USD ($) | Sep. 03, 2019USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Net revenues | $ 80,415,000 | $ 140,738,000 | $ 337,596,000 | $ 282,914,000 |
Unbilled receivables, current | 7,000,000 | 16,000,000 | ||
Contract with customer, liability, revenue recognized | 6,400,000 | 7,400,000 | ||
Revenue, remaining performance obligation, amount | $ 9,800,000 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 4,200,000 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 5,600,000 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 5,200,000 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 400,000 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 2,000 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |||
Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 4,612,000 | 8,475,000 | $ 11,659,000 | 10,680,000 |
Data Analytics | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 2,500,000 | $ 4,600,000 | $ 4,900,000 | $ 3,800,000 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 80,415 | $ 140,738 | $ 337,596 | $ 282,914 |
Supplemental Benefit Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 29,262 | 48,293 | 160,021 | 135,723 |
Health Plan Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 25,571 | 45,245 | 93,150 | 76,814 |
Consulting Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 15,586 | 32,359 | 58,872 | 46,332 |
Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 5,384 | 6,366 | 13,894 | 13,365 |
Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 4,612 | 8,475 | 11,659 | 10,680 |
Technology Enabled Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 66,530 | 109,932 | 284,619 | 241,336 |
Technology Enabled Solutions | Supplemental Benefit Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 29,262 | 48,293 | 160,021 | 135,723 |
Technology Enabled Solutions | Health Plan Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 25,571 | 45,245 | 93,150 | 76,814 |
Technology Enabled Solutions | Consulting Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 1,701 | 1,553 | 6,023 | 4,754 |
Technology Enabled Solutions | Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 5,384 | 6,366 | 13,766 | 13,365 |
Technology Enabled Solutions | Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 4,612 | 8,475 | 11,659 | 10,680 |
Advisory Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 13,885 | 30,806 | 52,977 | 41,578 |
Advisory Services | Supplemental Benefit Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Advisory Services | Health Plan Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Advisory Services | Consulting Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 13,885 | 30,806 | 52,849 | 41,578 |
Advisory Services | Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 0 | 0 | 128 | 0 |
Advisory Services | Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 0 | $ 0 | $ 0 | $ 0 |
ACQUISITIONS - Purchase Conside
ACQUISITIONS - Purchase Consideration (Details) - USD ($) $ in Thousands | Sep. 04, 2019 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Common stock issued in exchange to Parent for acquisition | $ 39,327 | $ 0 | $ 0 | $ 0 | |
Cannes | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ 656,174 | ||||
Contingent consideration payable to former owners and working capital payable | 6,562 | ||||
Common stock issued in exchange to Parent for acquisition | 39,327 | ||||
Total consideration | $ 702,063 |
ACQUISITIONS - Assets and Liabi
ACQUISITIONS - Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Sep. 04, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS ACQUIRED | |||
Goodwill | $ 455,206 | $ 455,206 | |
Cannes | |||
ASSETS ACQUIRED | |||
Cash | $ 21,459 | ||
Accounts receivable | 37,657 | ||
Inventories, net | 1,633 | ||
Prepaid expenses and other current assets | 8,100 | ||
Restricted cash | 8,423 | ||
Property and equipment, net | 17,588 | ||
Other assets, net | 1,149 | ||
Total identifiable assets acquired | 96,009 | ||
Total fair value of intangible assets acquired | 264,100 | ||
Goodwill | 455,206 | ||
Total Assets Acquired | 815,315 | ||
LIABILITIES ASSUMED | |||
Accounts payable | 6,123 | ||
Deferred revenue | 3,879 | ||
Accrued expenses | 25,203 | ||
Capital lease obligations | 595 | ||
Deferred taxes, net | 29,795 | ||
Contingent consideration from prior acquisitions | 40,371 | ||
Other long-term liabilities | 7,286 | ||
Total Liabilities Assumed | 113,252 | ||
Total consideration | 702,063 | ||
Cannes | Previously Reported | |||
ASSETS ACQUIRED | |||
Cash | 21,459 | ||
Accounts receivable | 37,657 | ||
Inventories, net | 1,633 | ||
Prepaid expenses and other current assets | 8,100 | ||
Restricted cash | 8,423 | ||
Property and equipment, net | 17,588 | ||
Other assets, net | 1,149 | ||
Total identifiable assets acquired | 96,009 | ||
Total fair value of intangible assets acquired | 264,100 | ||
Goodwill | 455,006 | $ 455,200 | |
Total Assets Acquired | 815,115 | ||
LIABILITIES ASSUMED | |||
Accounts payable | 6,123 | ||
Deferred revenue | 3,879 | ||
Accrued expenses | 25,203 | ||
Capital lease obligations | 595 | ||
Deferred taxes, net | 29,595 | ||
Contingent consideration from prior acquisitions | 40,371 | ||
Other long-term liabilities | 7,286 | ||
Total Liabilities Assumed | 113,052 | ||
Total consideration | 702,063 | ||
Cannes | Revision of Prior Period, Adjustment | |||
ASSETS ACQUIRED | |||
Cash | 0 | ||
Accounts receivable | 0 | ||
Inventories, net | 0 | ||
Prepaid expenses and other current assets | 0 | ||
Restricted cash | 0 | ||
Property and equipment, net | 0 | ||
Other assets, net | 0 | ||
Total identifiable assets acquired | 0 | ||
Total fair value of intangible assets acquired | 0 | ||
Goodwill | 200 | ||
Total Assets Acquired | 200 | ||
LIABILITIES ASSUMED | |||
Accounts payable | 0 | ||
Deferred revenue | 0 | ||
Accrued expenses | |||
Capital lease obligations | 0 | ||
Deferred taxes, net | 200 | ||
Contingent consideration from prior acquisitions | 0 | ||
Other long-term liabilities | 0 | ||
Total Liabilities Assumed | 200 | ||
Total consideration | 0 | ||
Cannes | Trade names | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 27,300 | ||
Cannes | Trade names | Previously Reported | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 27,300 | ||
Cannes | Trade names | Revision of Prior Period, Adjustment | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 0 | ||
Cannes | Customer relationships | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 189,000 | ||
Cannes | Customer relationships | Previously Reported | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 189,000 | ||
Cannes | Customer relationships | Revision of Prior Period, Adjustment | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 0 | ||
Cannes | Technology | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 47,800 | ||
Cannes | Technology | Previously Reported | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | 47,800 | ||
Cannes | Technology | Revision of Prior Period, Adjustment | |||
ASSETS ACQUIRED | |||
Total fair value of intangible assets acquired | $ 0 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | Sep. 04, 2019 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||
Mergers and acquisitions related costs | $ 14,784 | $ 2,511 | $ 3,093 | $ 1,526 | |
Debt issuance costs, gross | $ 6,100 | ||||
Business acquisition, transaction costs | 23,000 | ||||
Business combination, separately recognized transactions, additional disclosures, acquisition cost expensed | 21,500 | ||||
Business combination, contingent consideration, liability | 2,800 | ||||
Goodwill | 455,206 | 455,206 | |||
Advanced Plan Administration | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 88,900 | ||||
Supplemental Benefits Administration | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 190,200 | 190,100 | |||
Value Based Payment Assurance | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 138,200 | ||||
Advisory Services | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 37,900 | 38,000 | |||
Trade names | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 19 years 8 months 12 days | ||||
Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 11 years | ||||
Technology | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life | 10 years | ||||
Cannes | |||||
Business Acquisition [Line Items] | |||||
Total consideration | 702,063 | ||||
Mergers and acquisitions related costs | 14,100 | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, amount | 4,100 | ||||
Write off of deferred debt issuance cost | 3,100 | ||||
Goodwill | 455,206 | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, net | 246,900 | ||||
Cannes | Revision of Prior Period, Adjustment | |||||
Business Acquisition [Line Items] | |||||
Total consideration | 0 | ||||
Goodwill | 200 | ||||
Cannes | Previously Reported | |||||
Business Acquisition [Line Items] | |||||
Total consideration | 702,063 | ||||
Goodwill | 455,006 | $ 455,200 | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, net | 247,100 | ||||
Cannes | Tradenames, Customer Relationships and Technology | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 264,100 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Revenue | $ 220,993 |
Net Loss | $ (20,815) |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses and other advances | $ 6,904 | $ 4,272 |
Software licenses | 2,547 | 1,492 |
Insurance | 1,271 | 852 |
Inventory purchase advances | 23 | 2,206 |
Cloud computing subscription & implementation costs | 4,841 | 1,986 |
Tenant facility lease allowances | 0 | 789 |
Deferred IPO costs | 0 | 446 |
Other current assets | 983 | 3,177 |
Total prepaid expenses and other current assets | $ 16,569 | $ 15,220 |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 31,276 | $ 26,235 |
Less: accumulated depreciation | (10,876) | (5,568) |
Property and equipment, net | 20,400 | 20,667 |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 14,442 | 10,383 |
Office and computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 3 | |
Office and computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 8 | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 10,503 | 10,572 |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 10 | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 4,054 | 3,794 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 2 | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 8 | |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 3 years | |
Property, plant and equipment, gross | $ 2,277 | $ 1,486 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,365 | $ 2,057 | $ 5,603 | $ 4,192 |
Capital lease, depreciation expense | $ 30 | $ 20 | $ 400 | $ 100 |
PROPERTY AND EQUIPMENT - Assets
PROPERTY AND EQUIPMENT - Assets Held Under Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (656) | $ (192) |
Total financing leases included in property and equipment | 1,026 | 1,490 |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Office and computer equipment | $ 1,682 | $ 1,682 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Goodwill Activity (Details) - USD ($) | Oct. 01, 2021 | Dec. 31, 2021 |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 455,206,000 | |
Measurement period adjustments | 0 | |
Acquisitions | 0 | |
Impairment | $ 0 | 0 |
Goodwill, ending balance | $ 455,206,000 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) | Oct. 01, 2021 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 455,206,000 | $ 455,206,000 | |||
Impairment | $ 0 | $ 0 | |||
Finite-lived intangible asset, useful life | 9 years 1 month 17 days | ||||
Tradenames, Customer Relationships and Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 7,800,000 | $ 10,600,000 | $ 23,400,000 | 23,400,000 | |
Capitalized software development costs | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 700,000 | 1,500,000 | 400,000 | ||
Advisory Services | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 37,900,000 | 37,900,000 | |||
Technology Enabled Solutions | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 417,300,000 | 417,300,000 | |||
Advanced Plan Administration | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 88,900,000 | ||||
Supplemental Benefits Administration | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 190,200,000 | 190,100,000 | |||
Value Based Analytics | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 138,200,000 | ||||
Advisory Services | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 37,900,000 | $ 38,000,000 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 276,554 | $ 270,505 |
Accumulated Amortization | (56,540) | (31,663) |
Total | 220,014 | 238,842 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 27,300 | 27,300 |
Accumulated Amortization | (3,395) | (1,940) |
Total | 23,905 | 25,360 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 189,000 | 189,000 |
Accumulated Amortization | (40,091) | (22,909) |
Total | 148,909 | 166,091 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 47,800 | 47,800 |
Accumulated Amortization | (11,153) | (6,373) |
Total | 36,647 | 41,427 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,454 | 6,405 |
Accumulated Amortization | (1,901) | (441) |
Total | $ 10,553 | $ 5,964 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Future Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 25,117 | |
2023 | 24,784 | |
2024 | 24,101 | |
2025 | 23,462 | |
2026 | 23,344 | |
Thereafter | 99,206 | |
Total | $ 220,014 | $ 238,842 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Contingent consideration | $ 0 | $ 20,538 |
Incentive bonus | 15,214 | 12,198 |
Employee related | 11,154 | 11,065 |
Sales and use tax | 6,865 | 7,469 |
Rebates | 4,276 | 3,822 |
Accrued interest | 637 | 2,794 |
Accrued professional fees | 7,046 | 6,389 |
Other | 3,366 | 2,884 |
Total accrued expenses | $ 48,558 | $ 67,159 |
CREDIT FACILITY - Narrative (De
CREDIT FACILITY - Narrative (Details) $ in Thousands | Jun. 18, 2021USD ($) | Feb. 12, 2021USD ($) | Apr. 08, 2020USD ($) | Sep. 04, 2019USD ($) | Mar. 31, 2021USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2019USD ($) | Sep. 03, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Jan. 23, 2020USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Payment of debt issuance cost | $ 6,100 | $ 6,105 | $ 0 | $ 2,133 | $ 1,148 | |||||||
Amortization of debt issuance costs | 309 | 399 | 1,082 | 1,056 | ||||||||
Debt issuance costs, gross | 6,100 | |||||||||||
Consolidated EBITDA, maximum amount | $ 46,900 | |||||||||||
Consolidated EBITDA, percentage | 1 | |||||||||||
Debt instrument, leverage ratio | 7.4 | |||||||||||
Annual excess cash flow, percentage | 0.50 | |||||||||||
Net cash proceeds of certain asset sales or casualty events, percentage | 1 | |||||||||||
Net cash proceeds of debt, percentage | 1 | |||||||||||
Prepayment premium on early repayment of term loan | 0 | 0 | $ 1,563 | 0 | ||||||||
Loss on extinguishment of debt | $ 5,000 | 0 | 0 | 5,015 | 0 | |||||||
Long-term debt, gross | $ 192,631 | 246,999 | ||||||||||
Long-term debt, irrevocable letter of credit threshold | $ 500 | |||||||||||
Long-term debt, irrevocable letter of credit, extension period | 1 year | |||||||||||
Unamortized Deferred Financing Costs | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loss on extinguishment of debt | 3,400 | |||||||||||
Prepayment Premiums | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loss on extinguishment of debt | 1,600 | |||||||||||
IPO | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Prepayment premium on early repayment of term loan | $ 131,500 | |||||||||||
Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.375% | |||||||||||
Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||||
Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Amortization of debt issuance costs | 100 | 100 | $ 200 | 200 | ||||||||
Unamortized debt issuance expense | $ (500) | $ (700) | ||||||||||
Long-term debt, weighted average interest rate, over time | 2.75% | 2.75% | ||||||||||
Long-term debt, gross | $ 39,400 | $ 39,500 | ||||||||||
Undrawn Letter Of Credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 10,000 | |||||||||||
Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Amortization of debt issuance costs | $ 5,200 | |||||||||||
Debt issuance costs, amortization period | 84 months | |||||||||||
Long-term debt, weighted average interest rate, over time | 6.10% | 6.50% | ||||||||||
Long-term debt, gross | $ 192,600 | $ 222,200 | ||||||||||
Line of Credit | Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 40,000 | |||||||||||
Debt instrument, term | 5 years | |||||||||||
Amortization of debt issuance costs | $ 900 | |||||||||||
Debt issuance costs, amortization period | 60 months | |||||||||||
Line of Credit | Bridge Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | |||||||||||
2020 Incremental Term Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, gross | 24,800 | |||||||||||
Term Loans | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Amortization of debt issuance costs | $ 200 | $ 300 | 900 | 900 | ||||||||
Debt instrument, aggregate principal amount, payment, percentage | 0.0025 | |||||||||||
Unamortized debt issuance expense | $ (3,000) | $ (5,200) | ||||||||||
Term Loans | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 225,000 | |||||||||||
Debt instrument, term | 7 years | |||||||||||
2020 Incremental Term Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, weighted average interest rate, over time | 10.00% | |||||||||||
2020 Incremental Term Loan | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 25,000 | |||||||||||
Debt issuance costs, amortization period | 77 months | |||||||||||
Debt issuance costs, gross | $ 1,100 | |||||||||||
Debt instrument, aggregate principal amount, payment, percentage | 0.0025 | 0.0025 | ||||||||||
2021 Incremental Term Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, weighted average interest rate, over time | 7.00% | |||||||||||
2021 Incremental Term Loan | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 78,000 | |||||||||||
Debt issuance costs, amortization period | 67 months | |||||||||||
Debt issuance costs, gross | $ 2,400 | |||||||||||
Debt instrument, quarterly payment amount | $ 800 | |||||||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 5.25% | |||||||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 4.75% | |||||||||||
Credit Agreement | Base Rate | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 4.25% | |||||||||||
Credit Agreement | Base Rate | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||
Credit Agreement | Eurodollar | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||||
Credit Agreement | Eurodollar | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.75% |
CREDIT FACILITY - Schedule of D
CREDIT FACILITY - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Long-term debt, gross | $ 192,631 | $ 246,999 |
Debt Issuance Costs, Line of Credit Arrangements, Net | (2,988) | (5,209) |
Long-term Debt | 189,643 | 241,790 |
Term loans, current portion | 0 | (2,500) |
Term loans, net of current portion | $ 189,643 | $ 239,290 |
CREDIT FACILITY - Debt Maturiti
CREDIT FACILITY - Debt Maturities Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument, Redemption [Line Items] | ||
Long-term Debt | $ 189,643 | $ 241,790 |
Term Loans | ||
Debt Instrument, Redemption [Line Items] | ||
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 192,631 | |
Long-term Debt | $ 192,631 |
SHAREHOLDERS_ EQUITY (Details)
SHAREHOLDERS’ EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 7 Months Ended | 8 Months Ended | 12 Months Ended | |||
Feb. 28, 2021 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 17, 2021 | Jun. 03, 2021 | |
Dividends Payable [Line Items] | |||||||
Common stock shares authorized | 500,000,000 | 126,000,000 | 500,000,000 | 1,000,000 | |||
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||
Preferred stock shares authorized | 25,000,000 | 0 | 25,000,000 | ||||
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Dividends payable, amount per share (in usd per share) | $ 1.18 | ||||||
Dividends payable, current | $ 74,500 | ||||||
Payments of Dividends | $ 0 | $ 0 | $ 74,500 | $ 0 | |||
Dividends Paid, Outstanding and Vested Option Holders | |||||||
Dividends Payable [Line Items] | |||||||
Payments of Dividends | 72,200 | ||||||
Dividends Paid, Existing Shareholders | |||||||
Dividends Payable [Line Items] | |||||||
Payments of Dividends | $ 2,300 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) | Jun. 03, 2021 | Aug. 31, 2021$ / sharesshares | Jun. 30, 2021$ / sharesshares | Mar. 31, 2021$ / sharesshares | Mar. 31, 2020USD ($)award$ / sharesshares | Jun. 30, 2021$ / shares | Dec. 31, 2019USD ($)$ / shares | Sep. 03, 2019USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019$ / shares | Feb. 15, 2021$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options outstanding, weighted average exercise price (in usd per share) | $ / shares | $ 0 | $ 7.68 | $ 7.94 | $ 0 | ||||||||
Award vesting rights, percentage | 20.00% | |||||||||||
Granted (in shares) | shares | 8,152 | 198,929 | ||||||||||
Income tax (expense) benefit | $ | $ (858,000) | $ (23,288,000) | $ (619,000) | $ (1,904,000) | ||||||||
Share-based compensation arrangement by share-based payment award, cash received upon exercise | $ | 1,400,000 | 0 | ||||||||||
Options, nonvested, weighted average grant date fair value, reduction (in usd per share) | $ / shares | $ 1.18 | |||||||||||
Options nonvested, number of shares | shares | 3,653,837 | |||||||||||
Option, nonvested, weighted average exercise price (in usd per share) | $ / shares | $ 7.94 | |||||||||||
Options, outstanding, intrinsic value | $ | 2,200,000 | |||||||||||
Options, exercisable, intrinsic value | $ | $ 2,200,000 | 2,200,000 | ||||||||||
Granted (in usd per share) | $ / shares | $ 13.35 | $ 7.94 | ||||||||||
Number of long term incentive awards | award | 56 | |||||||||||
2021 Omnibus Incentive Compensation Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based payment award expiration period | 10 years | |||||||||||
Share-based Payment Arrangement, Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting rights, percentage | 25.00% | 25.00% | ||||||||||
Award vesting period | 4 years | |||||||||||
Income tax (expense) benefit | $ | $ 0 | $ 2,100,000 | ||||||||||
Effective income tax rate reconciliation, tax expense, share-based payment arrangement, amount | $ | $ 1,900,000 | $ 80,000 | ||||||||||
Granted (in usd per share) | $ / shares | $ 4.60 | |||||||||||
Share-based payment arrangement, nonvested award, option, cost not yet recognized, amount | $ | $ 10,400,000 | |||||||||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 2 years 4 months 17 days | |||||||||||
Share-based Payment Arrangement, Option | 2021 Omnibus Incentive Compensation Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based payment award expiration period | 5 years | |||||||||||
Share-based payment award, shares issued in period | shares | 20,380 | 497,321 | ||||||||||
Options outstanding, weighted average exercise price (in usd per share) | $ / shares | $ 9.20 | $ 14 | $ 14 | |||||||||
Share-based Payment Arrangement, Option | 2019 Equity Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based payment award expiration period | 10 years | 10 years | 10 years | |||||||||
Share-based payment award, shares issued in period | shares | 69,300 | 5,723,676 | ||||||||||
Options outstanding, weighted average exercise price (in usd per share) | $ / shares | $ 9.92 | $ 7.94 | ||||||||||
Restricted Stock Units | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 3 years | |||||||||||
Granted (in shares) | shares | 207,081 | |||||||||||
Outstanding at beginning of period (in shares) | $ / shares | $ 9.20 | $ 13 | $ 13 | |||||||||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ | $ 1,800,000 | |||||||||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 3 years 5 months 15 days | |||||||||||
Exercised (in shares) | shares | 8,152 | |||||||||||
LTI Awards | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Granted (in shares) | shares | 0 | 56 | ||||||||||
Equity instruments other than options, aggregate intrinsic value, nonvested | $ | $ 1,100,000 | |||||||||||
Exercised (in shares) | shares | 0 | |||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, cancelled in period | shares | 0 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 300 | $ 4,380 | $ 6,682 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 300 | $ 4,380 | $ 6,682 |
SHARE-BASED COMPENSATION - St_2
SHARE-BASED COMPENSATION - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option Awards | |||
Beginning balance (in shares) | 5,621,364 | 0 | |
Granted (in shares) | 587,001 | 5,723,676 | |
Exercised (in shares) | (172,728) | 0 | |
Forfeited (in shares) | (399,483) | (102,312) | |
Ending balance (in shares) | 5,636,154 | 5,621,364 | 0 |
Vested or expect to vest (in shares) | 5,636,154 | ||
Vested or expect to vest (in shares) | 2,729,741 | ||
Weighted Average Exercise Price | |||
Beginning balance (in usd per share) | $ 7.94 | $ 0 | |
Granted (in usd per share) | 13.35 | $ 7.94 | |
Exercised (in usd per share) | 7.86 | 0 | |
Forfeited (in usd per share) | 8.78 | 7.94 | |
Ending balance (in usd per share) | 7.68 | $ 7.94 | $ 0 |
Vested or expect to vest at end of period (in usd per share) | 7.68 | ||
Vested or expect to vest at end of period (in usd per share) | $ 7.56 | ||
Weighted Average Remaining Contractual Life (Years) | |||
Weighted Average Remaining Contractual Life (Years) | 8 years 3 months 14 days | 9 years 2 months 12 days | |
Weighted average remaining contractual life vested or expect to vest | 8 years 3 months 14 days | ||
Weighted average remaining contractual life vested or expect to vest | 8 years 2 months 1 day |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Fair Value Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Grant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Grant | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 5 years | 5 years 10 months 6 days |
Expected volatility | 45.00% | 50.00% |
Risk free interest rate | 0.66% | 0.36% |
Grant | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 6 years 2 months 26 days | 6 years 1 month 6 days |
Expected volatility | 60.00% | 55.00% |
Risk free interest rate | 1.11% | 0.95% |
LTI Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 60.00% | |
Expected dividend yield | 0.00% | |
LTI Awards | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 2 years 3 months | |
Risk free interest rate | 0.15% | |
LTI Awards | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 4 years 3 months | |
Risk free interest rate | 0.23% |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | |
Restricted Stock Units | |||
Granted (in shares) | 8,152 | 198,929 | |
Restricted Stock Units | |||
Restricted Stock Units | |||
Outstanding at beginning of period (in shares) | 0 | ||
Granted (in shares) | 207,081 | ||
Exercised (in shares) | (8,152) | ||
Forfeited (in shares) | (44,643) | ||
Outstanding at end of period (in shares) | 154,286 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding at beginning of period (in usd per share) | $ 0 | ||
Granted (in usd per share) | 2,661 | ||
Exercised (in usd per share) | (75) | ||
Forfeited (in usd per share) | (580) | ||
Outstanding at end of period (in usd per share) | $ 2,006 |
SHARE-BASED COMPENSATION - Long
SHARE-BASED COMPENSATION - Long Term Incentive Activity (Details) - shares | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 8,152 | 198,929 | |||
LTI Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding at beginning of period (in shares) | 54 | 0 | |||
Granted (in shares) | 0 | 56 | |||
Forfeited (in shares) | (11) | (2) | |||
Outstanding at end of period (in shares) | 43 | 54 | 0 |
EMPLOYEE SAVINGS PLAN (Details)
EMPLOYEE SAVINGS PLAN (Details) - USD ($) $ in Millions | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||||
Defined contribution plan, cost | $ 0.4 | $ 0.9 | $ 2 | $ 1.9 |
TAXES - Income Tax Expense (Ben
TAXES - Income Tax Expense (Benefit) from Continuing Operations (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pre-tax (loss) income | ||||
Domestic | $ (17,968) | $ (19,033) | $ (10,856) | $ (8,524) |
Foreign | 211 | 90 | 259 | 122 |
Income (loss) from continuing operations before income taxes | (17,757) | (18,943) | (10,597) | (8,402) |
Current tax benefit (expense): | ||||
Federal | 0 | 0 | (36) | 0 |
State | (78) | (3) | 222 | (689) |
Foreign | (9) | (17) | (136) | (303) |
Total Current tax benefit (expense) | (87) | (20) | 50 | (992) |
Total Current tax benefit (expense) | ||||
Federal | 765 | 16,119 | 631 | 2,342 |
State | 180 | 7,189 | (62) | 554 |
Foreign | 0 | 0 | 0 | 0 |
Total deferred tax benefit | 945 | 23,308 | 569 | 2,896 |
Total tax benefit (expense): | ||||
Federal | 765 | 16,119 | 595 | 2,342 |
State | 102 | 7,186 | 160 | (135) |
Foreign | (9) | (17) | (136) | (303) |
Income tax benefit | $ 858 | $ 23,288 | $ 619 | $ 1,904 |
TAXES - Deferred Tax Assets and
TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Net operating loss carry forward | $ 12,247 | $ 13,997 |
General business credits | 4,173 | 4,078 |
Accrued compensation | 1,545 | 5,921 |
Stock-based compensation | 2,132 | 1,870 |
Foreign tax credit | 0 | 268 |
Deferred revenue | 66 | 260 |
Allowance for refunds, claim denials and returns | 20 | 171 |
Accrued liabilities | 2,153 | 1,707 |
Intangible assets | 603 | 648 |
Deferred rent | 239 | 367 |
Accrued Taxes | 2,654 | 3,264 |
Interest expense | 4,186 | 0 |
Tenant Improvement Allowance | 1,225 | 1,431 |
Uniform Capitalization | 110 | 532 |
Director and officer prior act liability insurance policy | 1,790 | 0 |
Other | 266 | 121 |
Total deferred tax assets, net | 33,409 | 34,635 |
Deferred tax liabilities: | ||
Identifiable Intangible assets | (47,660) | (50,827) |
Property and equipment | (5,382) | (5,687) |
Software development costs | (2,984) | (1,669) |
Change in Fair Value on Contingent liability | (3,018) | (3,013) |
Prepaids | (357) | 0 |
Total deferred tax liabilities | (59,401) | (61,196) |
Net deferred tax liability | $ (25,992) | $ (26,561) |
TAXES - Narrative (Details)
TAXES - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 04, 2019 |
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets, net | $ 33,400,000 | $ 34,600,000 | |
Deferred tax liabilities, gross | (59,401,000) | (61,196,000) | |
Unrecognized tax benefits | 0 | $ 0 | |
Operating loss carryforwards | $ 66,900,000 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 41,400,000 | ||
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 43,300,000 | ||
Domestic Tax Authority | Tax Year 2021 | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 700,000 | ||
Domestic Tax Authority | Latest Tax Year | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 42,600,000 |
TAXES - Effective Tax Rate Reco
TAXES - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense at the statutory rate | $ 3,729 | $ 3,978 | $ 2,225 | $ 1,764 |
Increase in income taxes resulting from: | ||||
Foreign Jurisdiction rate different than the statutory | 35 | 2 | (82) | (277) |
State taxes, net of federal | 242 | 5,837 | 30 | (159) |
Loss on Extinguishment of Debt | 0 | 654 | 0 | 0 |
Transaction bonuses deduction for tax not for book | 0 | 2,713 | 0 | 0 |
Tax credits | 71 | 72 | 187 | 272 |
Option Holder Compensation | 0 | 9,300 | 486 | 0 |
Non-Deductible Compensation for Covered Employees | 0 | 0 | (880) | 0 |
Write off of Excess DTA related to Stock Option Exercise | 0 | 0 | (120) | 0 |
Buyer Transaction Costs not Deductible for Tax | (2,953) | 0 | 0 | 0 |
70% Success based deductible transaction Costs | 0 | 1,185 | 0 | 0 |
Prior Year Adjustments | 0 | (170) | 0 | 0 |
Carryback Due To CARES Act | 0 | 0 | 0 | 154 |
Fair value contingency | 0 | 0 | 608 | 375 |
Disallowed Fringe Benefits | (43) | (59) | (149) | (140) |
FTC - Expiration | 0 | 0 | (268) | 0 |
NOL Carryforward Adjustment - Amended 2019 Tax Return | 0 | 0 | (1,369) | 0 |
Other | (81) | (224) | (49) | (85) |
Income tax benefit | $ 858 | $ 23,288 | $ 619 | $ 1,904 |
TRANSACTION RELATED COSTS (Deta
TRANSACTION RELATED COSTS (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquisition Related and Deferred Offering Costs [Abstract] | ||||
Mergers and acquisitions related costs | $ 14,784 | $ 2,511 | $ 3,093 | $ 1,526 |
Public company readiness costs | 0 | 0 | 2,801 | 2,423 |
Total | $ 14,784 | $ 2,511 | $ 5,894 | $ 3,949 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | Jul. 11, 2017 | Jul. 31, 2021 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Other Commitments [Line Items] | ||||||
Operating leases, rent expense | $ 2.5 | $ 5.3 | $ 8.4 | $ 8 | ||
Contractual obligation | 5.2 | 6.5 | ||||
Loss contingency accrual | $ 6.9 | $ 7.5 | ||||
Insurance Claims | ||||||
Other Commitments [Line Items] | ||||||
Loss contingency, damages sought, value | $ 6 | |||||
Litigation settlement, amount awarded to other party | $ 1.2 | |||||
Minimum | ||||||
Other Commitments [Line Items] | ||||||
Lease terms | 2 years | |||||
Maximum | ||||||
Other Commitments [Line Items] | ||||||
Lease terms | 7 years |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Capital and Operating Lease Payments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Capital Leases | |
2022 | $ 529 |
2023 | 351 |
2024 | 122 |
2025 | 82 |
2026 | 0 |
Thereafter | 0 |
Total | 1,084 |
Less: amounts representing interest | 58 |
Net present value of capital lease obligations | 1,026 |
Operating Leases | |
2022 | 8,762 |
2023 | 7,993 |
2024 | 7,136 |
2025 | 4,852 |
2026 | 2,951 |
Thereafter | 6,220 |
Total | $ 37,914 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 7 Months Ended | 8 Months Ended | 12 Months Ended | ||
Jun. 30, 2021USD ($) | Dec. 31, 2019USD ($) | Sep. 03, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 04, 2019 | |
Related Party Transaction [Line Items] | ||||||
Related party, equity held, percent | 0.10 | |||||
Related party, payment, term | 3 years | |||||
Related party costs | $ 100,000 | |||||
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Annual retainer fee | 0.01 | |||||
Affiliated Entity | TPG Management and Consulting Fees | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amounts of transaction | $ 200,000 | 0 | $ 200,000 | $ 600,000 | ||
Affiliated Entity | TPG Management Service Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amounts of transaction | $ 0 | $ 0 | 1,200,000 | 300,000 | ||
Loss on contract termination | $ 2,300,000 | |||||
Due from related parties, current | $ 0 | |||||
Affiliated Entity | EIR Partners Monthly Consulting Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amounts of transaction | 10,000 | |||||
Affiliated Entity | EIR Partners Consulting Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amounts of transaction | $ 100,000 | |||||
Related party transaction, renewal term | 1 year |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - Business Processing Outsourcing - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Service revenue | $ 98 | $ 3,301 | $ 50 |
Cost of services | 5 | 2,550 | 0 |
Selling, general and administrative | (8) | 1,718 | 0 |
Income (loss) from discontinued operations before provision for income taxes | 101 | (967) | 50 |
Provision expense (benefit) for income taxes | 28 | (271) | 14 |
Income (loss) from discontinued operations, net of tax | $ 73 | $ (696) | $ 36 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Disposal group, including discontinued operation, assets | $ 0 | $ 0 |
Disposal group, including discontinued operation, liabilities | $ 0 | $ 0 |
DISCONTINUED OPERATIONS - Other
DISCONTINUED OPERATIONS - Other (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Decrease in accounts receivable | $ 11,575 | $ 1,899 | $ 12,021 | $ 2,031 |
Deferred revenue | 3,586 | (1,395) | $ 1,550 | (845) |
Business Processing Outsourcing | Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net income (loss) from discontinued operations | 73 | (696) | 36 | |
Decrease in accounts receivable | 0 | 2,808 | 43 | |
Deferred revenue | $ 0 | $ (64) | $ 0 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Thousands | Jun. 18, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2019USD ($) | Sep. 03, 2019USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) |
Segment Reporting [Abstract] | ||||||
Number of reportable segments | segment | 2 | |||||
Director and Officer Prior Act Liability Insurance Policy, Premium Expense | $ | $ 7,900 | $ 7,900 | $ 0 | $ 0 | $ 7,861 | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | Jun. 18, 2021 | Jun. 30, 2021 | Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||||||
Net revenues | $ 80,415 | $ 140,738 | $ 337,596 | $ 282,914 | ||
Segment Adjusted EBITDA | 16,326 | 35,278 | 85,446 | 74,247 | ||
Unallocated | (66) | (3,595) | (11,819) | (9,024) | ||
Adjustments to reconcile to U.S. GAAP net income (loss) from continuing operations | ||||||
Depreciation and amortization | (9,188) | (13,359) | (30,480) | (28,032) | ||
Interest expense | (5,762) | (6,213) | (17,294) | (18,853) | ||
Income tax provision | 858 | 23,288 | 619 | 1,904 | ||
Change in fair value of contingent consideration | 0 | 19,671 | 96 | (10,770) | ||
Cost of COVID-19 | 0 | 0 | (3,827) | (10,174) | ||
Consultant lower utilization due to COVID-19 | 0 | 0 | 0 | (2,062) | ||
Sales and use tax | (1,906) | (3,133) | (2,569) | (8,194) | ||
Non-cash stock compensation expense | 0 | (300) | (4,380) | (6,682) | ||
Transaction related costs | (14,784) | (2,511) | (5,894) | (3,949) | ||
Acquisition bonus expense – HealthScape and Pareto acquisition | (1,663) | (3,685) | (667) | (1,989) | ||
Loss on extinguishment of debt | $ (5,000) | 0 | 0 | (5,015) | 0 | |
Director and officer prior act liability insurance policy | $ (7,900) | $ (7,900) | 0 | 0 | (7,861) | 0 |
Other | (714) | (1,754) | (6,333) | (4,460) | ||
Net income (loss) from continuing operations | (16,899) | 4,345 | (9,978) | (6,498) | ||
Covid related expense, labor and related expenses | 0 | 3,200 | ||||
Covid related expense, vendor expense | 2,300 | 2,900 | ||||
Covid related expense, employee costs | 800 | 2,800 | ||||
Covid related expense, related training and implementation | 500 | 700 | ||||
Covid related expense, janitorial expense | 200 | 500 | ||||
Technology Enabled Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenues | 66,530 | 109,932 | 284,619 | 241,336 | ||
Segment Adjusted EBITDA | 14,881 | 29,205 | 69,214 | 66,043 | ||
Advisory Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenues | 13,885 | 30,806 | 52,977 | 41,578 | ||
Segment Adjusted EBITDA | $ 1,445 | $ 6,073 | $ 16,232 | $ 8,204 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) | Feb. 01, 2022 | Dec. 31, 2021 | Jan. 09, 2022 |
Purchase Agreement | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, repurchase amount | $ 77,500,000 | ||
Purchase agreement, revenue threshold | $ 15,000,000 | ||
2022 Incremental Term Loans | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, face amount | $ 78,000,000 | ||
Amortization rate | 1.00% | ||
Base Rate | 2022 Incremental Term Loans | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, basis spread on variable rate | 4.75% | ||
Eurodollar | 2022 Incremental Term Loans | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, basis spread on variable rate | 3.75% | ||
Minimum | |||
Subsequent Event [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.375% | ||
Minimum | 2022 Incremental Term Loans | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.75% | ||
Maximum | |||
Subsequent Event [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.50% |
SCHEDULE I - CONDENSED FINANC_2
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2021 | Jun. 17, 2021 | Jun. 03, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 03, 2019 | Jun. 13, 2019 | Dec. 31, 2018 |
ASSETS | ||||||||
Total assets | $ 829,903 | $ 843,068 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Common stock, $0.01 par value; 500,000,000 and 126,000,000 shares authorized as of December 31, 2021, and December 31, 2020, respectively; 73,194,171 and 61,321,424 shares issued and outstanding as of December 31, 2021, and December 31, 2020, respectively | 732 | 613 | ||||||
Accumulated other comprehensive income | 31 | 78 | ||||||
Accumulated deficit | (33,266) | (23,288) | ||||||
Total shareholders’ equity | 537,749 | 470,150 | $ 469,873 | $ 175,129 | $ 0 | $ 171,020 | ||
Total liabilities and shareholders’ equity | $ 829,903 | $ 843,068 | ||||||
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Common stock shares authorized | 500,000,000 | 500,000,000 | 1,000,000 | 126,000,000 | ||||
Common stock shares issued | 73,194,171 | 61,321,424 | ||||||
Common stock shares outstanding | 73,194,171 | 61,321,424 | ||||||
Parent | ||||||||
ASSETS | ||||||||
Investment in subsidiaries | $ 546,372 | $ 470,285 | ||||||
Total assets | 546,372 | 470,285 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Due to Affiliate | 8,623 | 135 | ||||||
Common stock, $0.01 par value; 500,000,000 and 126,000,000 shares authorized as of December 31, 2021, and December 31, 2020, respectively; 73,194,171 and 61,321,424 shares issued and outstanding as of December 31, 2021, and December 31, 2020, respectively | 732 | 613 | ||||||
Additional paid-in capital | 570,252 | 492,747 | ||||||
Accumulated other comprehensive income | 31 | 78 | ||||||
Accumulated deficit | (33,266) | (23,288) | ||||||
Total shareholders’ equity | 537,749 | 470,150 | ||||||
Total liabilities and shareholders’ equity | $ 546,372 | $ 470,285 |
SCHEDULE I - CONDENSED FINANC_3
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Statements of Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Statement of Income Captions [Line Items] | ||||
Total operating expenses | $ (92,410) | $ (153,468) | $ (325,884) | $ (272,463) |
Net income (loss) | (16,826) | 3,649 | (9,978) | (6,462) |
Comprehensive income (loss) | (16,805) | 3,634 | (10,025) | (6,405) |
Parent | ||||
Condensed Statement of Income Captions [Line Items] | ||||
Equity in income (loss) of subsidiaries | (2,721) | 3,949 | 2,890 | 314 |
Total operating expenses | (14,105) | (300) | (12,868) | (6,776) |
Net income (loss) | (16,826) | 3,649 | (9,978) | (6,462) |
Equity in other comprehensive income (loss) of subsidiaries | 21 | (15) | (47) | 57 |
Comprehensive income (loss) | $ (16,805) | $ 3,634 | $ (10,025) | $ (6,405) |
SCHEDULE I - CONDENSED FINANC_4
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 7 Months Ended | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash (used in) provided by operating activities | $ (14,391) | $ 25,247 | $ (2,315) | $ 31,563 |
Cash flows from investing activities | ||||
Net cash used in investing activities | (629,850) | (12,287) | (12,329) | (13,272) |
Cash flows from financing activities | ||||
Dividend | 665,566 | (1,329) | 4,413 | 9,429 |
Effect of exchange rate changes on cash | 21,346 | 11,617 | (10,275) | 27,740 |
Cash, cash equivalents and restricted cash at beginning of period | 18,264 | 49,086 | 21,346 | |
Cash, cash equivalents and restricted cash at end of period | 21,346 | 29,881 | 38,811 | 49,086 |
Parent | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash (used in) provided by operating activities | (14,064) | 0 | 0 | 0 |
Cash flows from investing activities | ||||
Investment in subsidiaries | (433,287) | 0 | 0 | 0 |
Net cash used in investing activities | (433,287) | 0 | 0 | 0 |
Cash flows from financing activities | ||||
Proceeds from Contributed Capital | 447,351 | 0 | 0 | 0 |
Dividend | 447,351 | 0 | 0 | 0 |
Effect of exchange rate changes on cash | 0 | 0 | 0 | 0 |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 | 0 | |
Cash, cash equivalents and restricted cash at end of period | 0 | 0 | 0 | 0 |
Non-cash investing and financial activities | ||||
Common stock issued in exchange to Parent for the acquisitions | $ 39,327 | $ 0 | $ 0 | $ 0 |
Uncategorized Items - cnvy-2021
Label | Element | Value |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 486,678,000 |
Common Stock [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 0 |
Stock Issued During Period, Shares, Acquisitions | us-gaap_StockIssuedDuringPeriodSharesAcquisitions | 61,321,424 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 613,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 0 |
Retained Earnings [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ 0 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | (16,826,000) |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 0 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | 486,065,000 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | us-gaap_OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationAdjustmentNetOfTaxPortionAttributableToParent | $ 21,000 |