Part I

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Item 1.Business

Overview

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Tabula Rasa HealthCare, Inc. is a healthcare technology company advancing the safe use of medications by creating solutions designed to empower pharmacists, providers, and patients to optimize medication regimens. Our advanced proprietary technology, MedWise®, identifies the causecauses of and risks for medication-related problems, including adverse drug events (“ADEs”), so that healthcare professionals can minimize harm and reduce medication-related risks. Our software and services help improvedrive valued-based care by improving patient outcomes and lowerlowering healthcare costs through reduced hospitalizations, emergency department visits, and healthcare utilization. We also believe we have the most extensive clinical tele-pharmacy network in the United States (“U.S.”), with seven call centers across the country, a number of which are tethered to academic institutions. Health plans and pharmacies nationwide use our solutions to assist them in meeting a range of value-based payment requirements and quality improvement benchmarks. Our vision and mission are supported by our industry-recognizedexperienced leadership team, our significant investments in our technology, services, and collaborationspeople, and partnerships with our healthcare clients including health plans and provider organizations to advance precision pharmacotherapy researchmanage the most complex and its application in clinical practice, and our culture.vulnerable individuals.

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We operate our business through two segments, CareVention HealthCare and MedWise HealthCare.

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Our CareVention HealthCare segment provides our clients, primarily organizations with Programs of All-Inclusive Care for the Elderly (“PACE”),PACE, with medication fulfillment services, cloud-based software, pharmacy benefit management (“PBM”) solutions, and clinical pharmacist services at the point-of-care. Our MedWise HealthCare segment provides our clients, primarily health plans and retail pharmacies, with cloud-based software and full-service clinical pharmacy programs.

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CareVention HealthCare

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CareVention HealthCare primarily services PACE which is a Centers for Medicare & Medicaid Services (“CMS”) sponsored program providing comprehensive medical and social services to adults ageaged 55 and older who need a nursing facility level of care but can live safely in community settings. Our clients include ArchCare Senior Life, Trinity Health, Palm Beach PACE, St. Paul’s PACE, and Welbe Health. We access the market through a number of different service lines and brands, including CareKinesis®, Capstone Risk Adjustment Services, CareVention Consulting™, PACElogic™, TruChart®, PeakTPA, PersonifilRx®, and Pharmastar®.

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Our largest CareVention HealthCare revenue offering is our medication fulfillment services, which are built around our novel andadvanced proprietary MedWise technology, designed to enable clinicians to increase patient safety, create individualized medication regimens, promote adherence, and eliminate unnecessary prescriptions. Our medication fulfillment and adherence packaging services utilize MedWise technology to reduce medication-related risk for the high-cost, high-risk PACE population. The CareVention HealthCare suite of offerings also includes risk adjustment services, PBM solutions, cloud-based electronic health records solutions, and third-party administration services, which are all specifically tailored to the PACE market. Our CareVention HealthCare segment serves more than 150 healthcare organizations.

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The CareVention HealthCare segment revenue model is primarily based on payments for charges and dispensing fees for medication fulfillment, payments on a per-member, per-month (“PMPM”) basis, payments on a subscription basis, and payments on a transaction basis, and payments for charges and dispensing fees for medication fulfillment.

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MedWise HealthCareper claim basis.

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Our MedWise HealthCare segment promotesprovides technology-enabled solutions to promote medication safety and adherence to improve patient outcomes and reduce healthcare costs, and strengthen patient engagement through our cloud-based software and clinical pharmacist services.

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MedWise HealthCare is primarily comprised of service offerings from our acquisitions of the SinfoníaRx business (“SinfoníaRx”) in September 2017 and Prescribe Wellness, LLC (“PrescribeWellness”) in March 2019. As a result of these acquisitions, we believe that we are one of the leading providers of medication therapy management (“MTM”) software and services for Medicare, Medicaid, and commercial health plans, and that we are a leading provider of cloud-based patient engagement software and services for retail pharmacies.

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Approximately 18,000 retail pharmacies and more than 350 health plans, including several Blue Cross Blue Shield organizations, Express Scripts, Humana, UnitedHealth Group, and WellCare, utilize our MedWise HealthCare solutions to execute a range of clinical programs. These programs support MTM, Medicare quality improvement programs, Healthcare Effectiveness Data and Information Set (“HEDIS”) quality measures, and post-hospital discharge care transitions through a combination of our nearly 30,000 PrescribeWellness network pharmacists and/or our clinical tele-pharmacy call centers across the country.

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costs. The MedWise HealthCare segmenttechnology-enabled solutions revenue model is primarily based on payments on a PMPM basis, payments on a subscription basis, and payments on a fee-for-service basis for each medication safety review and clinical intervention, which representsassessment completed.

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As described further below under “Divestiture of Non-Core Businesses,” we completed the sale of our PrescribeWellness business in 2022 and completed the sales of our DoseMe and SinfoníaRx businesses in January and March 2023, respectively. These non-core businesses collectively comprised the majority of our MedWise HealthCare segment’s largest sourcesegment during 2022, with PrescribeWellness representing the most significant portion of revenue.this segment, and these

To supplement our organic growth, we made a total of seven acquisitions from the beginning of 2018 through 2020, the most recent of which was Personica, LLC, (“Personica”) in October 2020. Our PACE clients had a combined patient census of 49,769 at the end of 2021, as compared to 44,947 and 31,820 patients at the end of 2020 and 2019, respectively.

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Further Penetrate the Programs of All-Inclusive Care for the Older Adult Market

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We believe that we are the market leader in providing medication risk management services to PACE, a CMS-sponsored program through which participating healthcare organizations provide fully integrated healthcare services on an at-risk basis for older adults, most of whom are dually eligible for Medicare and Medicaid. Our medication management, plustogether with pharmacy fulfillment PACE clients, cover approximately 35%32% of the total PACE enrollees nationwide reported by the National PACE Association at the end of 20212022, as compared to 31%30% at the end of 2020.2021.

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We have organized our PACE offerings under our CareVention HealthCare segment whichthat offers a comprehensive setsset of solutions, including medication management services and fulfillment, PBM solutions, risk adjustment services, third-party administrator services, and electronic health records software. By organizing our sales and marketing resources, under our CareVention HealthCare segment, we have streamlined efforts to facilitate cross-selling and increase the adoption of our services.

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We believe that we have a significant opportunity to continue to grow within the PACE market, and we expect our PACE clients to continue to grow organically to cover more eligible lives through expansion of existing sites and new PACE center locations. Based on recent industry data, there are 2.2 million PACE-eligible individuals in the U.S., which is less thanequates to a current penetration rate of approximately 3% penetrated.. In 2017,2023, the National PACE Association launchedwill launch its PACE 2.0, an initiative designed to facilitate200K project with the accelerationgoal of growth in the number of PACE enrollees, or participants. The goal is 100,000200,000 participants by 2024 and 200,000 by 2028.

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Continue Expansion into the Payer and At-Risk Provider Markets

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We believe that the growth of government healthcare programs and the shift to value-based care models are creating opportunities to capture growing portions of the expanding healthcare market. Accordingly, we are actively targeting at-risk, value-based markets, including managed care organizations, physician provider groups, and self-insured employer groups. We have recently started leveraging our CareVention HealthCare portfolio of services to secure contracts with a number of start-up Medicare Advantage plans and at-risk provider groups, and we expect to continue to further penetrate the broader Medicare and Medicaid market with our solutions.

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The Enhanced MTM, or EMTM, program was a CMMI Part D pilot that began on January 1, 2017 and ended on December 31, 2021. In September 2021, we announced a peer-reviewed three-part series published in the American Journal of Managed Care validating that medication interventions informed by MedWise clinical decision support tools as part of the EMTM program improve health outcomes and lower healthcare costs. Specifically, the third study as part of this series highlights total healthcare cost savings of $958 per member per year.solutions

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Continue to Innovate and Expand Platform Offerings to Meet Evolving Market Needs

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We believe our strategic investments in human capital, technology, and services position us to continue to pursue rapid innovation and expand our medication risk management solutions and other platform offerings to the broader healthcare marketplace. For example, we developed the MedWise Risk Score™, or MRS, (the “MRS”) and launched associated high-throughput medication risk stratification technology for identification of patients in need of clinical intervention.

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Divestiture of Non-Core AssetsBusinesses

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We are evaluating certainIn February 2022, we announced plans to evaluate non-core assets to better alignrefocus our corporate strategy and ultimately increase shareholder value. In February 2022,stockholder value, and we commenced an initial plan to sell the DoseMe business, which we had acquired in January 2019. We recently began a search for the appropriate strategic acquirer, andIn March 2022, we are continuing to evaluatecompleted our evaluation of additional divestiture optionsopportunities and commenced plans to sharpensell the SinfoníaRx and PrescribeWellness businesses, acquired in September 2017 and March 2019, respectively. As described further below, we completed our focussales of the PrescribeWellness, DoseMe, and drive increasedSinfoníaRx business in August 2022, January 2023, and March 2023, respectively. We determined that these businesses met the requirements to be classified as held for sale and discontinued operations as of March 31, 2022, and the DoseMe and SinfoníaRx businesses continued to meet such requirements as of December 31, 2022. Accordingly, the accompanying consolidated financial statements in this Annual Report on Form 10-K have been recast for all periods presented to reflect the assets, liabilities, revenue, growth and profitability.

​expenses related to these businesses as discontinued operations.

MedWise MTM Software

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MedWise MTM software is a scalable cloud-based platform designed to aid in the identification and resolution of medication and health-related problems. Through a patient-centric approach, our MedWise MTM software utilizes demographic data, pharmacy claims, medical claims, and other health information to identify at-risk patients. The potential and existing health problems are triaged based on urgency and complexity and resolved through telephonic consultations or video-based consultations with MTM providers using MedWise MTM software.

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TruChart

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TruChart offers electronic health records (“EHR”), care coordination, and financial management in one program, allowing PACE programs to track measurable outcomes in defined timeframes for the populations they serve. Developed specifically for PACE, TruChart is a comprehensive, scalable, and secure technology solution that delivers PACE functionality. TruChart covers end-to-end functionality to manage care coordination, enrollments, authorizations, utilization management, scheduling, claims payment, interfaces, and reporting.

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PACElogic

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PACElogic delivers neatly organized, real-time shareable workflows covering all aspects of operations for PACE organizations and other small health plans. Capable of integrating with any EHR, PACElogic also delivers value as a robust, stand-alone solution. PACElogic offers an array of best-of-breed features, including EHR, customer relationship management, claims adjudication, electronic data interchange, care management, coordination and planning, integration with community-based providers, and all federal and state required reporting. ClinicalPACElogic brings clinical and non-clinical data are brought together into a unified health plan management system.

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DoseMeRx

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DoseMeRx is a unique decision support software that leverages clinically validated pharmacokinetic drug models, patient characteristics, drug concentrations, and genotypes to guide dose optimization, with a focus on community hospitals across the U.S. It is the world’s first precision dosing tool designed for clinical practice that uses Bayesian dosing methods. DoseMeRx digitally constructs a virtual model of a patient’s individual pharmacokinetics, then, calculates an accurate individualized dose to reach the therapeutic target. This model can also be used to simulate potential outcomes of different dosing regimens to ensure the best possible recommendation for every patient.

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PrescribeWellness

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PrescribeWellness has been empowering community pharmacies to expand their services, reach more patients, and improve Star Ratings since 2010. Compatible with 99% of pharmacy management systems, the PrescribeWellness core Patient Engagement Center platform provides a real-time dashboard of pharmacy transactions and key metrics including the ability to identify and communicate with patients for adherence and support services via text message, email, or a call recorded in their local pharmacist’s voice. The software’s task-based workflow helps staff fill orders, anticipate demand, and highlight any additional care a patient might need, such as medication synchronization, MTM, or a MedWise® Safety Review. Additional solutions assist with finding health insurance coverage, administering and managing vaccines, and accurately documenting and billing for clinical services.

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Our Services

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Our clinical pharmacist collaboration service, prescription fulfillment, and adherence packaging service, health plan management services, including risk adjustment and third partythird-party administrator services, and pharmacy benefit management services are designed to improve patient experiences and outcomes and contain costs. The revenue models under these service contracts typically include a fee assessed for each medication review, payments on a PMPM basis, payments on a subscription basis, and charges and dispensing fees for medication fulfillment.

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Clinical Pharmacist Collaboration

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We have teams of clinical pharmacists dedicated to performing both medication safety reviews or MSRs, and comprehensive medication reviews, or CMRs.(the “MSRs”). These interventions include one-on-one consultations with patients, as well as communications with prescribers. Clinical pharmacist recommendations can include guidance based on the clinical application of pharmacogenomic test results, assessment of the MedWise findings and of patient medical history, and optimization of medication regimens. Our clinical pharmacists provide these personalized medication recommendations through real-time digital and verbal communications. We provide clinical decision support, medication safety recommendations, and adherence support for patients nationwide.

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Prescription Fulfillment and Adherence Packaging

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We operate four prescription fulfillment pharmacies strategically located to efficiently distribute medications nationwide. Informed by each patient’s personalized MedWise Matrix, we package medications, synchronize fills, and aggregate doses by day and time-of-day. These measures increase the ease of adherence by patients to their optimized

PACE Organizations

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PACE, a federal and state collaboration, is one of only three established models serving the more than 12 million dual-eligible patient population in the U.S. and focuses on preventing institutional-based placement. PACE embodies many of the characteristics and trends affecting the healthcare industry as a whole,whole: specifically, value-based payment models and the desire for seniors to age in place. Our proof of concept was to provideWe believe we are the market-leader in providing medication risk management technology and services to PACE organizations, which are responsible for individuals who typically have complex medication regimens. Since our inception, we believe we have become the market-leader in providing PACE with medication services. Our PACE clients utilizing our medication risk management and pharmacy fulfillment services covered approximately 35%32% of the total PACE enrollees nationwide at the end of 2021.2022. In addition, we also provide complimentarya suite of complementary solutions to assist PACE organizations with clinical, financial, and administrative operations.

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Managed Care Organizations

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According to CMS, at the end of 2021, 51.42022, 53.0 million Americans were enrolled in Medicare Part C (i.e., Medicare Advantage) and Part D (Prescription Drug Plan or PDP), a 3.0% increase as compared to the end of 2020,2021, driven by growth in Medicare Advantage. In the past decade, the number of beneficiaries enrolled in Medicare Advantage (“MA”) plans has more than doubled to 27.329.6 million in 2021.2022. MA enrollment increased 10.1%8.4% in 20212022 and total enrollment is expected to grow to more than 40 million by 2030. The Congressional Budget Office projects that MA towill increase to nearly 51% of total Medicare enrollment or more than 80 million Americans by 2030. According to

We rely on patent, copyright, trademark, and trade secret laws, as well as confidentiality agreements, licenses, and other agreements with employees, consultants, vendors, and clients.clients to protect our intellectual property. We also seek to control access to and distribution of our proprietary software, confidential information and know-how, technology, and other intellectual property. We have sixseven issued patents: (i) U.S. Pat. No. 8,392,220, entitled “Medication Management System and Method” and issued on March 5, 2013,2013; (ii) U.S. Pat. No. 10,720,241, entitled “Medication Risk Mitigation System and Method” and issued on July 21, 2020,2020; (iii) U.S. Pat. No. 10,890,577, entitled “Treatment Methods Having Reduced Drug-Related Toxicity and Methods of Identifying the Likelihood of Patient Harm from Prescribed Medications” and issued on January 12, 2021,2021; (iv) EP DES 005666138-0001,Japanese Pat. 7042256, entitled “Graphical User Interfaces”“Methods of Treatment Having Reduced Drug-Related Toxicity and Methods of Identifying the Likelihood of Patient Harm Arising from Prescribed Medications” and issued on September 28, 2018,March 16, 2022, (v) GB RRD 90056661380001,Mexico Pat. 389003, entitled “Graphical User Interfaces”“Methods of Treatment Having Reduced Drug-Related Toxicity and Methods of Identifying the Likelihood of Patient Harm Arising from Prescribed Medications” and issued on September 28, 2018,January 3, 2022 and (vi) U.S. D893524,Chinese Pat. 110022908, entitled “Display Screen with Graphical User Interface”“Methods of Treatment Having Reduced Drug-Related Toxicity and Methods of Identifying the Likelihood of Patient Harm Arising from Prescribed Medications” and issued on August 18, 2020.April 5, 2022 and (vii) U.S. Pat. 11,361,856, entitled “Population-based Medication Risk Stratification and Personalized Medication Risk Score” and issued on June 14, 2022 . We also have six non-provisional patent applications pending in the United States. The first and second applications,States, comprising: (i) Application No. 15/008,555, and Application No. 16/928,557, filed on January 28, 2016 and relating to a medication risk mitigation matrix system, (ii) Application No. 16/928,557, filed onJuly 14, 2020, respectively, each relateand relating to medication risk mitigation matrix systems and methods. The third application,methods, (iii) Application No. 17/143,936, filed on January 7, 2021, relates to treatment methods having reduced drug-related toxicity and methods for identifying patient harm. This application also has related foreign counterpart pending applications in Canada China, Japan,, Hong Kong, Mexico, and Europe. The fourth application, Application No. 16/760,631, filed on April 30, 2020, relates to population-based medication risk stratification. This application also has related foreign counterpart applications in Canada, Europe, Hong Kong, and Singapore. The fifth application, Application No. 16/870,517, filed on May 8, 2020, is related to population-based medication risk stratification. We have pending application No. 17/837,841, filed on June 10, 2022 and entitled “Population-based Medication Risk Stratification and Personalized Medication Risk Score”. We have a pending PCT application no. PCT/US2021/057063, entitled “System and Method of Processing Pharmaceutical Substance Data” and filed October 28, 2021. We also have a pending design patent application, Application No. 29/746,708,746,708835,609, filed on August 17, 2020April 20, 2022 related to a display screen withnovel graphical user interface. We own copyright registrations in connection with the following software: EireneRx, PACElogic, CaseLogic, Mobile Workforce Manager, and Enterprise Services.

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regimens every 30 days, which is retrospective in nature and generally less effective in improving patient outcomes. Furthermore, typical prescription fulfillment models are reimbursed on a fee-for-service basis and are incentivized based on prescription dispensing volumes. Our clients partner with us to mitigate and prevent medication problems, lower healthcare costs, and improve overall health outcomes, which often involvesinvolve utilizing our software to optimize prescription regimens.

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While we believe that no competitor provides a similar breadth and deptdepth of solutions, we nevertheless compete with other companies’ specific products or solutions and markets or care settings. For example, traditional, single drug-to-drug interaction databases are provided by Wolters Kluwer, Elsevier, and Hearst Health. Additional competitors across both of our major market segments include our health plan clients that opt to in-source clinical programs (such as MTM), as well as external vendors such as Cardinal Health, Adhere Health, RxAnte, Cureatr, Aspen RxHealth, CSSClarest Health, Pack4U, and MedWatchers. Across the retail pharmacy landscape, we compete with a wide range of public and private companies including Omnicell, RedSail Technologies, and OmniSYS. We expect that competition will continue to increase as a result of consolidation in both the information technology and healthcare industries. The continued growth in healthcare spending, the ongoing shift to value-based payment models, such as PACE and Medicare Advantage, and changes in government regulation may draw increasing attention and generate new competitors, such as management consultants, traditional technology companies, and start-ups that may enter the market.

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Healthcare Regulatory Environment

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We operate in a highly regulated industry and our business operations must comply with a number of complex and evolving federal and state agency requirements. While we believe we comply in all material respects with applicable healthcare laws and regulations, these laws can vary significantly from jurisdiction to jurisdiction, and the state and federal interpretation of existing laws and regulations, and their enforcement, may change from time to time. Additionally, a state or federal government enforcement body may disagree that we are in material compliance with applicable healthcare laws and regulations. Federal and state legislatures also may enact various legislative proposals that could materially impact certain aspects of our business.

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On October 24, 2018, President Trump signed legislation into law aimed at curbing the opioid crisis in the U.S. The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (Pub. L. 115-271), or SUPPORT Act, includes provisions that address law enforcement, public health, and coverage under the Medicare and Medicaid programs. Broad in scope, the legislation increases federal oversight of the production and distribution of opioids, bolsters fraud prevention safeguards, enhances oversight of prescription opioids, expands coverage of opioid addiction treatment services, and authorizes consumer education and provider training programs aimed at preventing and treating opioid use disorders.

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GivenThere has been a trend in federal and state legislation aimed at lowering costs for drug products, including by requiring pharmaceutical companies to disclose information about their pricing and production and marketing costs, and heightened governmental scrutiny over the focus on addressing the opioid epidemicmanner in which pharmaceutical manufacturers set prices for their marketed products. There have been several presidential executive orders and theU.S. Congressional inquiries and proposed and enacted federal government’s focus on increasingand state legislation designed to, among other things, bring more transparency into drug pricing, and oversight,reduce the legislative environment surroundingcost of prescription drugs is in flux. While not all legislative reforms affect our business directly, many continue to affectunder Medicare, review the coveragerelationship between pricing and plan designs that are or will be provided by many of our clients.

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Onmanufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, on October 10, 2018 two pieces of legislation were enacted to enhance drug price transparency. The Know the Lowest Price Act (Pub. L. 115-262) and the Patient Right to Know Drug Prices Act (Pub. L. 115-263) each prevent various parties(for private plans) and the Know the Lowest Price Act (for Medicare Parts C and D) were signed into law, which prohibited health plans from instituting “gag” orders or clauses against pharmacistsrestricting pharmacies from informing individuals regarding prices for certain drugs.

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On August 15, 2022, the Inflation Reduction Act of 2022 was signed into law by President Biden. This legislation is intended to lower prescription drug costs for people with Medicare and pharmacies, which heretoforereduce drug spending by the federal government. The prescription drug provisions included in the Inflation Reduction Act will require the federal government to negotiate prices for some drugs covered under Medicare Part B and Part D with the highest total spending, beginning in 2026, and require drug companies to pay rebates to Medicare if prices rise faster than inflation for drugs used by Medicare beneficiaries, beginning in 2023. We are unable at this time to assess any impact this legislation may have prevented a pharmacist from disclosing the lowest available price of a drug to a consumer. These laws may have a financial impact on various stakeholders due to pressures to develop more competitive pricing. It is not clear how these changes might affect our business.

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PACE Organizations

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Our partnership with PACE organizations is a significant source of our current revenue stream. The PACE program is a unique, comprehensive managed care benefit for older adults, most of whom are dually eligible for Medicare and Medicaid benefits, provided by a not-for-profit or public entity. The PACE program features a comprehensive medical and social service delivery system using an interdisciplinary team approach in an adult day health center that is supplemented by in-home and referral services in accordance with participants’ needs. Financing for the program is capped, which allows providers to deliver all needed services rather than only those reimbursable under Medicare and Medicaid fee-for-service plans. PACE is a program under Medicare, and states can elect to provide PACE services to Medicaid program beneficiaries as an optional Medicaid benefit. The PACE program becomes the sole

State and Federal Data Privacy and Security Laws

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We process, collect, use, and disclose individual patient data directly or for our clients and, therefore, we are subject to various laws protecting privacy and security of that patient information. Certain segmentsbusinesses of our company qualify as a “Covered Entity” under HIPAA, and others qualify as a “Business Associate” to our partners who are Covered Entities. We are required to comply with HIPAA and the Health Information Technology for Economic and Clinical Health (“HITECH”) Act as implemented through regulations promulgated thereunder by HHS, which include the HIPAA Omnibus Final Rule, the HIPAA Privacy Rule and the HIPAA Security Rule. HIPAA generally requires Covered Entities and their Business Associates (each as defined therein) to adopt certain safeguards to ensure the privacy and security of protected health information, or PHI, and to limit uses and disclosures of such PHI to those permissible under the law. When Covered Entities utilize Business Associates to provide services, pursuant to which the Business Associate may access the Covered Entity’s PHI, the parties must enter into a Business Associate Agreement through which the Business Associate must contractually agree to safeguard PHI in certain ways and to notify the Covered Entity of improper uses or disclosures of PHI.

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Covered Entities and Business Associates are required to have written policies and procedures addressing HIPAA compliance and must designate a Security Officer to oversee the development and implementation of the policies and procedures related to the safeguards to protect privacy of electronic PHI. Covered Entities must also designate a Privacy Officer (as defined in HIPAA), although the Privacy Officer and the Security Officer may be the same person. As part of their security policies and procedures, Covered Entities and Business Associates are required to conduct periodic risk assessments to identify vulnerabilities to electronic PHI. Additionally, Covered Entities and Business Associates are required to train all employees on their HIPAA policies and procedures. Further, in the event of a breach of PHI as defined by HIPAA, Covered Entities must notify affected individuals, HHS, and sometimes the media, and must take steps to mitigate damage, and they may be subject to fines and penalties. HIPAA violations can result in significant civil monetary penalties and/or imprisonment for up to ten years depending on the facts surrounding the violation.

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The FDA also regulates COVID-19–related drugs and medical devices, including COVID-19 tests, and generally requires emergency use authorization (“EUA”) or other premarket approval for such products. We market and sell certain COVID-19 tests authorized by the FDA. Our marketing, sale, and distribution of COVID-19 tests is subject to the requirements and restrictions imposed by the FDA in the EUA approval letters for such tests, as well as the state laws and regulations governing prescription devices and clinical tests.

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Clinical laboratories that perform human genomic testing are subject to oversight by CMS and state regulators. The laboratories that we contract with for genomic testing must comply with federal and state laws and regulations applicable to clinical laboratories and genomic testing, including the Clinical Laboratory Improvement Amendments and the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”). To date, there have been no regulations implementing EKRA proposed by the Department of Justice.

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The Drug Enforcement Administration (“DEA”), the FDA, and state regulators, such as state boards of pharmacy, regulate drug and controlled substance packaging, repackaging, purchasing, handling, storage, distribution, security, and dispensing activities. Our prescription fulfillment pharmacies must comply with the applicable FDA, DEA, and state statutes, regulations, and policies. In addition, our prescription fulfillment pharmacies may be subject to periodic audits by state regulators,the FDA, the DEA, and/or the FDAand state regulators to assess our compliance with these requirements.

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Non-complianceNoncompliance with applicable federal or state requirements, as described above, can result in an enforcement action that could substantially harm our business.

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Anti-Kickback Laws

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The federal Anti-Kickback Statute, or AKS makes it unlawful for individuals or entities, among other things, to knowingly and willfully solicit, offer, receive, or pay any kickback, bribe, or other remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce or reward the referral of an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a federal healthcare program, or the purchase, lease, or order, or arranging for or recommending purchasing, leasing, or ordering, of any good, facility, service, or item for which payment may be made in whole or in part under a federal healthcare program. Penalties for violations include criminal penalties and civil sanctions such as fines, imprisonment, and possible exclusion from federal healthcare programs. The Bipartisan Budget Act of 2018 (H.R. 1892) enhanced the penalties associated with AKS violations. The HHS Office of Inspector General, which promulgates rules under the AKS, recently finalized a set of rules as part of the “Regulatory Sprint to Coordinated Care” In 2020. These rules enhance protections for entities that participate in value-based arrangements. It is not yet clear what impact these new rules will have on our business.

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Federal and State Self-Referral Laws

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The federal physician self-referral law, often referred to as the Stark Law prohibits a physician who has a financial relationship, or who has an immediate family member who has a financial relationship, with limited exceptions, prohibits physiciansentities providing designated health services, or DHS, from referring Medicare Program orand Medicaid patients to an entitysuch entities for the provisionfurnishing of certain designated health services, among them outpatient prescription medications, if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (includingDHS, unless an ownership or investment interest or a compensation arrangement) with the entity.exception applies. The Stark Law also prohibits the entity from billing Medicare or Medicaid for any such designated health services. A referral that does not fall within a statutory exception is strictly prohibited byreferral. Unlike the Stark Law. A violation ofAKS, the Stark Law is punishableviolated if the financial arrangement does not meet an applicable exception, regardless of any intent by civil sanctions, including overpayment liability, significant finesthe parties to induce or reward referrals or the reasons for the financial relationship and exclusion from participation in Medicare and Medicaid programs. CMS, which promulgates rules under and enforces the Stark Law, recently finalized a set of rules as part of the “Regulatory Sprint to Coordinated Care.” These rules enhance protections for entities that participate in value-based arrangements. It is not yet clear what impact these new rules will have on our business.referral.

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We evaluate when these physician (or immediate family member) financial arrangements are created to ensure we do not enter into a prohibited financial relationship and design structures that satisfy exceptions under the Stark Law.

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Our business may implicate federal and state physician self-referral laws to the extent our pharmacy, a designated health services entity, has financial arrangements in the form of ownership, investment, or compensation with referring physicians or a referring physician’s immediate family member. Our pharmacy may have compensation arrangements with physicians who serve on its Clinical Advisory Panel and who order designated health services for patients enrolled in a PACE program. If any such compensation arrangements exist, we believe such compensation arrangements fall within an exception to the physician self-referral prohibition.

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A number of states have statutes and regulations that prohibit the same general types of conduct as those prohibited by the Stark Law, but some have even broader applications, extending beyond Medicare and Medicaid programs and including commercial and self-payers.

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Federal and State False Claims Acts

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The federal false claims and civil monetary penalties laws, including the civil False Claims Act, impose criminal and civil liability on individuals and entities that, among other things, knowingly submit, or cause to be submitted, false or fraudulent claims for payment to the federal government or knowingly make, or cause to be made, a false statement in order to have a false claim paid. The civil False Claims Act provides for treble damages and mandatory and significant minimum penalties per false claim or statement ($11,80313,507 to $23,607$27,018 per false claim). The qui tam or whistleblower provisions of the civil False Claims Act permit a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery. Our future activities relating to the manner in which we sell and market our services may be subject to scrutiny under these laws. False Claims Act qui tam lawsuits in healthcare are common, although the government often declines to pursue such actions following investigation. Analogous state false claims laws also may apply to our sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers.

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Other State Laws

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The vast majority of, if not all, states have laws regulating licensure, registration and certification of pharmacies, pharmacists, pharmacy technicians, other pharmacy personnel, and health insurance administrators. We are licensed in all states that require such licensure in which we do business and believe that we substantially comply with all state licensing laws applicable to our business. Where required by law, we also have pharmacists licensed in all states in which we dispense. If we violate state pharmacy licensure laws or engage in conduct prohibited under our license, we could be subject to enforcement action, including but not limited to, suspension or loss of such pharmacy license.

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Human Capital

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Our success is built upon our dedicated and passionate employees who strive to transform the communities we serve by delivering excellent service, utilizing advanced technology, and delivering results. We believe that our success is largely dependent upon our ability to attract and retain qualified employees. We are focused on recruiting a diverse talent pool, promoting leadership development and performance management, and maintaining positive relations with our employees. As of December 31, 2021,2022, we had 1,6021,027 employees. None of our employees are represented by labor unions or subject to collective bargaining agreements and substantially all of our employees currently work in the United States. We believe that we have been successful to date in attracting skilled and experienced professionals.

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Diversity & Inclusion

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We continue to focus on building a high performing organization with an engaging work culture and have established initiatives to support this strategic priority. We embrace difference,differences, diversity, and varying perspectives amongstamong our employee base, and we are an equal opportunity employer. We do not discriminate basedhave a zero-tolerance policy regarding any type of harassment and discrimination. We believe in respecting every employee and expect our staff to show respect for everyone.

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We believe that our company culture relies on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, military or veteran status, sexual orientation or any other protected characteristic established by federal, state, or local laws.collaboration and input from multiple perspectives. We also believe that building upon our diversity, equity, and inclusion (“DEI”) initiatives is key to engaging in responsible business practices. Our DEI committee provides training for all of our employees, and we offer employee resource groups. As of December 31, 2022, 68% of our employees and 56% of our managers self-identified as female. Moreover, as of December 31, 2022, 55% of our Board self-identified as diverse.

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Employee Engagement

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We strongly believe that our success depends, in part, on open and regular communication with employees to help foster a high performinghigh-performing and engaged workforce. We use a variety of channels to facilitate open and direct communication to help ensure that employees fully understand the Company’s long-term strategy, annual goals, and how their work contributes to the Company’s success.

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Corporate Information

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We were incorporated in Delaware in May 2014. Our principal executive offices are located at 228 Strawbridge Drive, Suite 100, Moorestown, NJ 08057, and our telephone number is (866) 648-2767.

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Information about Segment and Geographic Revenue

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We manage our operations and allocate resources through two reportable segments: CareVention HealthCare and MedWise HealthCare. Substantially all of our revenue is recognized in the U.S. and substantially all of our assets are located in the U.S.

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Available Information

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We file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports with the SEC. You may obtain copies of these documents by accessing the SEC’s website at www.sec.gov. In addition, as soon as reasonably practicable after such materials are furnished to the SEC, we make copies of these documents available to the public, free of charge, through our website. Our website address is www.trhc.com.

Financial Information

 For required financial information related to our operations, please refer to our consolidated financial statements, including the notes thereto, included with this Annual Report on Form 10-K.

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Risks Related to Our Intellectual Property

Risks Related to Industry Regulation and Other Legal Compliance Matters

Risks Related to Our Common Stock

Risks Related to Our Convertible Senior Subordinated Notes

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Risks Relating to Our Business and Industry

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The ongoing COVID-19 pandemic has had and could continue to have a material adverse effect on our business operations, results of operations, cash flows, and financial position.

The COVID-19 pandemic has created significant volatility, uncertainty, and economic disruption, which will continue to adversely affect our business operations and may materially and adversely affect our results of operations, cash flows, and financial position. We continue to closely monitor the impact of the COVID-19 pandemic on our employees and operations.

We continue to experience challenges with revenue growth as a result of the COVID-19 pandemic. During 2020, in our CareVention HealthCare segment, overall census growth for PACE dipped below historical levels. During the second quarter of 2021, we experienced a recovery in our net PACE census growth to pre-pandemic levels, which continued through the remainder of 2021 and positively impacted revenue.

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Our MedWise HealthCare segment also continues to be impacted by the COVID-19 pandemic. Changes made by CMS to their Medicare Part D Star Ratings improvement programs for health plans in response to the COVID-19 pandemic have negatively impacted our medication safety services revenues. In addition, the COVID-19 pandemic has elevated the role of retail pharmacies and created strong demand for pharmacists and pharmacy technicians. As a result, we have faced challenges in hiring clinical staff.

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We have incurred, and expect to continue to incur, additional costs resulting from our efforts to protect the health and well-being of our employees. Our prescription fulfillment pharmacies provide essential services that require employees to continue to work on-site during the COVID-19 pandemic. We implemented physical distancing for all employees at our prescription fulfillment pharmacies, provided pharmacy-appropriate protective equipment, instituted additional cleaning protocols, provided additional cleaning materials and encouraged the practice of frequent handwashing. If the procedures we implemented are ineffective or are not followed by our employees, or if we fail to implement additional procedures, as appropriate, our employees and others may experience and transmit illness which has the potential to increase employee turnover, expose us to litigation, and raise our operating costs. We expect to continue to incur additional costs, which may be significant, as we continue to implement operational changes in response to this pandemic.

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In addition, we have instituted work-from-home guidelines for all employees who can work remotely. An extended period of remote work arrangements could strain our business plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. Further, our management is focused on mitigating the spread of COVID-19, which has required and will continue to require a substantial investment of time and resources across our business and could delay other company initiatives.

The COVID-19 pandemic may also adversely impact our ability to purchase or obtain pharmaceutical products which may result in higher supply chain costs and otherwise disrupt our operations. If we do not respond appropriately to the pandemic, or if customers perceive our response to be inadequate, we could suffer damage to our reputation and our brand, which could adversely affect our business.

The extent to which the COVID-19 pandemic impacts us will depend on numerous evolving factors and future

developments that we are not able to predict, including: the severity of the virus; the duration of the pandemic; governmental, business, and other actions (which could include limitations on our operations or mandates to provide products or services); the impacts on our supply chain; the impact of the pandemic on economic activity; the health of and the effect on our workforce and our ability to meet staffing needs in our prescription fulfillment pharmacies and other critical functions, particularly if members of our work force are quarantined as a result of exposure; any impairment in value of our tangible or intangible assets which could be recorded as a result of weaker economic conditions; and the potential effects on our internal controls including those over financial reporting as a result of changes in working environments such as shelter-in-place and similar orders that are applicable to our team members and business partners, among others. In addition, if the pandemic continues to create disruptions or turmoil in the credit or financial markets, or impacts our credit ratings, it could adversely affect our ability to access capital on favorable terms and to continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted.

How quickly, and to what extent, normal economic and operating conditions can resume is difficult to predict, and the resumption of normal business operations may be delayed or constrained by lingering effects of the COVID-19 pandemic and will depend on future developments, including the widespread availability, use and effectiveness of vaccines, which are highly uncertain and cannot be predicted.

In addition, we cannot predict the impact that the COVID-19 pandemic will have on our clients and their patients, suppliers, and other business partners, and each of their financial conditions; however, any material effect on these parties could adversely impact us. The impact of the COVID-19 pandemic may also exacerbate other risks discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K, any of which could have a material effect on us. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently.

The healthcare industry in the U.S. is rapidly evolving, which makes it difficult to forecast demand for our technology-enabled products and services. If we are not successful in promoting the benefits of our products and services, our growth may be limited.

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The healthcare industry in the U.S. is rapidly evolving. We believe demand for our products and services has been driven in large part by price pressure in traditional fee-for-service healthcare, a regulatory environment that is incentivizing value-based care models, the movement toward patient-centricity and personalized healthcare and advances in technology. Widespread acceptance of the value-based care model is critical to our future growth and success. A reduction in the growth of value-based care or patient-centric models could reduce the demand for our products and services and result in a lower revenue growth rate or decreased revenue.

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It is uncertain whether the market for technology-enabled healthcare products and services will achieve and sustain high levels of demand and market adoption. Our future financial performance will depend in part on growth in this market and on our ability to adapt to the emerging demands of our clients. It is difficult to predict the future growth rate and size of our target markets. If the estimates and assumptions we use to determine the size of our target markets are inaccurate, our future growth rate may be impacted.

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Our success depends to a substantial extent on the willingness of healthcare organizations to increase their use of our technology and our ability to demonstrate the value of our technology to our existing clients and potential clients. If healthcare organizations do not recognize or acknowledge the benefits of our products and services or if we are unable to continue to reduce healthcare costs and drive positive health outcomes, then the market for our products and services might not develop at all, or it might develop more slowly than we expect.

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If we are unable to offer innovative products and services or our products and services fail to keep pace with our clients’ needs, our clients may terminate or fail to renew their agreements with us, and our revenue and results of operations may suffer.

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Our success depends on providing innovative, high-quality products and services that healthcare providers and payers use to improve clinical, financial, and operational performance. If we cannot adapt to rapidly evolving industry standards, technology, and increasingly sophisticated and varied client needs, our existing technology could become undesirable, obsolete, or harm our reputation. In order to remain competitive, we must continue to invest significant resources in our personnel and technology in a timely and cost-effective manner in order to enhance our existing products and services and introduce new high-quality products and services that existing clients and potential new clients will want. We are continuallycontinuously involved in a number of projects to develop new products and services, including the further expansion and refinement of our proprietary MedWise offerings. If our innovations are not responsive to the

needs of our existing clients or potential new clients, are not appropriately timed with market opportunity, are not effectively brought to market, or significantlyare a significant increase to our operating costs, we may lose existing clients or be unable to obtain new clients and our results of operations may suffer. In addition, the introduction of new solutions by competitors, the emergence of new industry standards, or the development of entirely new technologies to replace existing offerings could render our existing or future solutions obsolete.

We have incurred significant net losses and we may not be able to generate net income in the future.future, and may have difficulty obtaining financing on favorable terms, or at all.

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We have incurred net losses since our inception. As of December 31, 2021,2022, we had an accumulated deficit of $260.3$407.9 million. Substantially all of our operating losses resulted from costs incurred$159.3 million of stock-based compensation expense, $119.2 million amortization of acquired intangibles, $61.9 million of impairment charges primarily related to

value-based model for providing healthcare to the elderly and are funded by both Medicare and Medicaid. Our ability to generate revenue and grow our business may be compromised if the laws and regulations that currently promote PACE organizations were to change in a way that makes operating a PACE organization less attractive, if other Medicare or Medicaid reimbursement models are developed that are more attractive to the healthcare providers that operate PACE organizations, or if the prevalence of PACE organizations were to decline for any other reason.

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Consolidation in the healthcare industry could lead to the elimination of some of our clients and make others larger, which could decrease demand for our solutions or create pricing pressure.

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Many healthcare industry participants are consolidating to create larger and more integrated healthcare delivery systems. If regulatory and economic conditions continue to facilitate additional consolidation in the healthcare industry, some of our current clients, and possibly our future clients, may be eliminated. Such market fluctuations may result in decreased need for some or all of our products and services as some of our clients disappear, and others acquire larger market power, which may be used to develop various solutions in-house, rather than purchasing them from us, or negotiate fee reductions for our products and services.

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Failure by PACE organization clients to meet applicable penetration benchmarks could result in loss of their service area, which could lead to our loss of that business and a corresponding decline in our revenue.

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PACE organizations in many states are subject to penetration benchmarks regarding the number of eligible lives in their service areas that have been captured by the program. If the number of members covered by any of our PACE organization clients were to be reduced by a material amount, such decrease may lead to a loss of their service area, which could result in our loss of the client and a corresponding decline in our revenue.

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The growth of our business relies, in part, on the growth of members covered by our clients,clients’ programs, which is difficult to predict and is affected by factors outside of our control.

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We enter into agreements with our clients under which a portion of our fees are dependent upon the number of members that are covered by our clients’ programs each month. The number of members covered by a client’s program is often affected by factors outside of our control, such as the client’s pricing, overall quality of service, and member retention initiatives. If the number of members covered by one or more of our client’s programs were to be reduced, such decrease would lead to a decrease in our revenue. In addition, the growth forecasts of our clients are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. Even if the markets in which our clients compete meet the size estimates and growth forecasted, their program membership could fail to grow at similar rates, if at all.

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A few clients account for a significant portion of our revenue and, as a result, the loss of one or more of these clients could hurt our revenue.

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Our ten largest clients accounted for 41%52%, 43%50%, and 53%55% of our total revenue from continuing operations during the years ended December 31, 2022, 2021, 2020, and 2019,2020, respectively. Our engagement with our ten largest clients is generally covered through contracts that are multi-year in their duration.contracts. One or more of these clients may decline to renew their existing contracts with us upon expiration and any such failure to renew could have a negative impact on our revenue and compromise our growth strategy. Further, if one or more of these clients significantly decreases its use of our solutions, we would lose revenue and our growth would be compromised. We believe our clients view us as a trusted partner that shares their commitment to improving medication-related health outcomes and reducing overall healthcare costs.

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reflected in our results of operations until future periods. In addition, we may be unable to adjust our cost structure rapidly, or at all, to take account of reduced revenue.

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If we do not continue to attract new clients, we may not be able to grow our business.

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In order to grow our business, we must continually attract new clients. Our ability to do so depends in large part on the success of our sales and marketing efforts. Potential clients may seek out other options. Therefore, we must demonstrate that our products and services provide a viable solution for potential clients. If we fail to provide high-quality solutions and convince individual clients of our value proposition, we may not be able to attract new clients. Our financial results could be harmed if the market for our products and services declines or grows more slowly than we expect, or if the number of individual clients that use our solutions declines or fails to increase as we expect.

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If we are not able to maintain and enhance our reputation and brand recognition, our business will be harmed.

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Maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing clients and to our ability to attract new clients. The promotion of our brand may require us to make substantial investments. As our market becomes increasingly competitive, we anticipate that these marketing initiatives may become more difficult and expensive. Our marketing activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur. In addition, any factor that diminishes our reputation or that of our management, including failing to meet the expectations of our clients, could make it substantially more difficult for us to attract new clients. If we do not successfully maintain and enhance our reputation and brand recognition, our business may not grow and we could lose our relationships with clients.

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Positive outcomes and cost reductions for our clients are not necessarily predictive of future outcomes or costs.

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Although several of our clients have reported improved outcomes for their patients and cost reductions as a result of our services, these results are not necessarily predictive of future outcomes. Other factors, including changes in healthcare regulations or other business practices or our clients’ implementation of other cost saving measures may have contributed to positive outcomes or reduced costs. Moreover, outcome and cost reduction data are often susceptible to varying interpretations and analyses, and many companies that believed their technologies and services were effective initially were unable to maintain positive results over time.analyses. If we fail to produce positive outcomes and reduce costs for our clients, they may not continue to use our services and we may be unable to attract new clients. Each of these factors could harm our business.

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Our marketing efforts depend significantly on our ability to receive positive references from our existing clients.

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Our marketing efforts depend significantly on our ability to call on our current clients to provide positive references to new, potential clients. The loss or dissatisfaction of any client could substantially harm our brand and reputation, inhibit the market adoption of our products and services, impair our ability to attract new clients and maintain existing clients and, ultimately, harm our financial results.

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AnyThe failure to offer high-quality client support services may adversely affect our relationships with our clients and harm our financial results.

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Our clients depend on our technical support to resolve any issues relating to our offering and technology solutions and to provide initial and ongoing training and education when necessary. In addition, our sales process is highly dependent on the quality of our offering, our business reputation, and strong recommendations from our existing clients. Any failure to maintain high-quality and highly responsive technical support, or a market perception that we do not maintain high-quality and highly-responsivehighly responsive support, could harm our reputation and compromise our ability to sell our solutions to existing and prospective clients.

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We offer client support services with our offerings and may be unable to respond quickly enough to accommodate short-term increases in client demand for support services, particularly as we increase the size of our client base. We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors. It is difficult to predict client demand for our support services. If client demand increases significantly, we may be unable to provide satisfactory support services to our clients. Additionally, increased client demand for these services, without corresponding revenue, could increase costs and hurt our ability to achieve profitability.

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Our proprietary products and services may not operate properly, which could damage our reputation, give rise to a variety of claims against us, or divert our resources from other purposes, any of which could harm our business and operating results.

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Technology-enabled product and service development is time-consuming, expensive, and complex and may involve unforeseen difficulties. We may encounter technical obstacles, and we may discover additional problems that prevent our proprietary products and services from operating properly. If our products and services do not function reliably or fail to achieve client expectations in terms of performance, clients could assert liability claims against us and attempt to cancel their contracts with us. Moreover, material performance problems, defects, or errors in our existing or new products and services may arise in the future and may result from, among other things, the lack of interoperability of our software with systems and data that we did not develop, and the function of which is outside of our control or undetected in our testing. Defects or errors in our products or services might discourage existing or potential clients from purchasing services from us. Correction of defects or errors could prove to be time consuming,time-consuming, costly, impossible, or impracticable. The existence of errors or defects in our products and services and the correction of such errors could divert our resources from other matters relating to our business, damage our reputation, and increase our costs.

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Adverse drug events resulting from optimizing a patient’s medication regimen through recommendations made by our services or our pharmacists could give rise to claims against us and could damage our reputation.

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We provide medication risk management services that includesinclude answering prescriber questions and making recommendations to prescribers and providing formal consultations with physicians and patients. In the event that optimizing a patient’s medication regimen through recommendations made by our services or our pharmacists contributes to an ADE,adverse drug event, clients and patients could assert liability claims against us, which may not be subject to a contractually agreed upon liability cap, and clients could attempt to cancel their contracts with us. Such

products and services outside of the U.S. or in effectively selling our products and services in the international markets we enter. In addition, we will face risks in doing business internationally that could hurt our business, including:

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The occurrence of any one of these risks could negatively affect our international business and, consequently, our results of operations. In the event that we are unable to manage the complications associated with international operations, our business prospects could be materially and adversely affected. Any further expansion in our international operations will require significant management attention and financial resources. We cannot be certain that the investment and additional resources required for establishing and expanding our international operations will produce desired levels of revenue or profitability. If we invest substantial time and resources to establish and expand our international operations and are unable to do so successfully and in a timely manner, our business and operating results may suffer.

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If we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or that are more significant than those in our domestic operations. Our exposure to these risks is expected to increase.

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If we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic, and other risks that we do not face or that are more significant than those in our domestic operations. These risks vary widely by country and include varying regional and geopolitical business conditions and demands, government intervention and censorship, discriminatory regulation, nationalization or expropriation of assets, and pricing constraints. Our international products need to meet country-specific client preferences as well as country-specific legal requirements, including those related to licensing, privacy, data storage, location, protection, and security.

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Our international operations increase our exposure to and require us to devote significant management resources to implement controls and systems to comply with the privacy and data protection laws of non-U.S. jurisdictions; to comply with the anti-bribery, anti-corruption and anti-money laundering laws of the U.S. (including the U.S. Foreign Corrupt Practices Act of 1977); and to comply with similar laws in other jurisdictions. Implementing our compliance policies, internal controls, and other systems upon our expansion into new countries and geographies may require the investment of considerable time and management, as well as financial, and other resources over a number of

years before any significant revenues or profits are generated. Violations of these laws and regulations could result in fines; criminal sanctions against us, our officers or employees; restrictions or outright prohibitions on the conduct of our business; and significant brand and reputational harm. We must regularly reassess the size, capability and location of our global infrastructure and make appropriate changes, and we must have effective change management processes and internal controls in place to address changes in our business and operations. Our success depends, in part, on our ability to anticipate these risks and manage these difficulties, and the failure to do so could have a material adverse effect on our business, operating results, financial position, brand, reputation, and/or long-term growth.

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Our international operations require us to overcome logistical and other challenges based on differing languages, cultures, legal and regulatory schemes, and time zones. Our international operations encounter labor laws, customs and employee relationships that can be difficult, less flexible than in our domestic operations and expensive to modify or terminate. In some countries we may be required to, or choose to, operate with local business partners, which would require us to manage our partner relationships and may reduce our operational flexibility and ability to quickly respond to business challenges.

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We purchase a significant portion of our pharmaceutical products from a group purchasing organization which receives discounts from a primary supplier.supplier with a term lasting through March 31, 2024, subject to renewal provisions. 

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On June 30, 2020, we entered into an Affiliated Pharmacy Agreement and Pharmaceutical Program Supply Agreement, including an associated High Volume Retailer Addendum or the Pharmaceutical(the “Pharmaceutical Supply Agreements,Agreements”) with Thrifty Drug Stores, Inc, or Inc. (“Thrifty Drug.Drug”). Pursuant to the terms of the Pharmaceutical Supply Agreements, which have a term lasting through September 30, 2023,March 31, 2024, subject to renewal under certain circumstances, we agree to purchase not less than 98% of our total prescription product requirements from Thrifty Drug. The Pharmaceutical Supply Agreements can be terminated solely by Thrifty Drug for, among other things, a payment default that continues for ten days after notice thereof and our failure to maintain credit worthiness.creditworthiness. If we are no longer able to purchase our pharmaceutical products from a group purchasing organization, there can be no assurance that our operations would not be disrupted or that we could obtain the necessary pharmaceutical products at similar cost or at all. In this event, failure to satisfy our clients’ requirements would result in defaults under client contracts, subjecting us to damages and the potential termination of those contracts.

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As of January 1, 2022, we ceased recognizing revenue related to the EMTM Pilot Program, which expired on December 31, 2021.

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On January 1, 2017, we launched the Enhanced Medication Therapy Management (“EMTM”) program, with a large, regional Medicare Part D Prescription Drug Plan participating in the CMMI Medicaid Part D pilot. On September 16, 2021, we issued a press release highlighting a peer-reviewed three-part series published in the September issue of The American Journal of Managed Care outlining the results of the EMTM Pilot Program. In particular, the third study revealed annual overall cost savings of 7.5% per beneficiary from 2018 to 2019 for beneficiaries who received an MSR using MedWise compared to those that were identified as high risk but did not receive an MSR. We believe that these peer-reviewed results and the experience we gained over the lifespan of the EMTM Pilot Program will continue to differentiate our MedWise solutions in the market and support future growth with a wide range of health plans and at-risk provider groups.

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However, CMMI did not extend the EMTM Pilot Program, and it expired on December 31, 2021. Accordingly,2021 and, as a result, beginning on January 1, 2022, we ceased recognizing revenue related to the EMTM Pilot Program. For the years ended December 31, 2021 and 2020, the EMTM Pilot Program revenue accounted for 3%4% and 4%5%, respectively, of our total revenue. While historically revenue related to the EMTM Pilot Program has not accounted for a material percentage of our total revenue from continuing operations. Accordingly, the expiration of the EMTM Pilot Program has adversely affected our results of operations in 2022 and could adversely affect our business, financial condition, and results of operations.operations going forward.

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We do not believe that the decision by CMMI to not extend the EMTM Pilot Program is a reflection of the financial savings or improved quality of care we have delivered and recently documented in CMMI’s August 2021 report, but is based on the EMTM Pilot Program as a whole, which covered six distinct regions across the country, 1.9 million Part D beneficiaries during 2019, and multiple vendors testing new types of member targeting, outreach, and clinical interventions.

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Any restrictions on our ability to license or share data and integrate third-party technologies could harm our business.

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We depend upon licenses from third parties for some of the technology and data used in our products and services, and for some of the technology platforms upon which these products and services are built and operate. Most of our third-party licenses are non-exclusive and our competitors may obtain the right to use any of the technology covered by these licenses to compete directly with us. We also license some of our technology and share data we collect with our clients, including under agreements with health systems and providers of electronic health records. We expect that we will need to obtain additional licenses from third parties in the future in connection with the development of our products and services. In addition, we obtain a portion of the data that we use from public records and from our clients for specific client engagements. Our licenses for information may not be sufficient to allow us to use the data that is incorporated into our products and services for all potential or contemplated applications and products.

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In the future, data providers could withdraw their data from us or restrict our usage for any reason, including if there is a competitive reason to do so, if legislation is passed restricting the use of the data, or if judicial interpretations are issued restricting use of the data that we currently use in our products and services. In addition, data providers could fail to adhere to our quality control standards in the future, causing us to incur additional expense to appropriately utilize the data. If a substantial number of data providers were to withdraw or restrict their data, or if they were to fail to adhere to our quality control standards, and if we arewere unable to identify and contract with suitable alternative data suppliers and integrate these data sources into our service offerings, our ability to provide products and services to our clients would be compromised and our future growth and success could be delayed or limited.

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We also integrate into our proprietary applications and use third-party software to maintain and enhance, among other things, content generation and delivery, and to support our technology infrastructure. Some of this software is proprietary and some is open sourceopen-source software. Our use of third-party technologies exposes us to increased risks, including, but not limited to, risks associated with the integration of new technology into our solutions, the diversion of our resources from development of our own proprietary technology, and our inability to generate revenue from licensed

We are subject to cybersecurity risks and other risks associated with data security breaches.cyber incidents. If we are unable to safeguard the security and privacy of confidential data, we may incur increased expenses to mitigate our disclosure or address any such incidents, and our reputation and business will be harmed.

Our products and services involve the collection, storage, and analysis of confidential or proprietary information, and we are subject to numerous laws, rules, and regulations in the U.S. (both federal and state) tothat protect both individualpersonally identifiable information as well asand personal health information. If a cyber-incident,cyber incident such as a phishing or ransomware attack, virus, malware installation, server malfunction, software or hardware failure, impairment of data integrity, loss of data or other computer assets, adware,insider threat, or other similar issue impairs or shuts down one or more of our computing systems or our IT network, or results in the unauthorized access to confidential, proprietary, or personally identifiable information, we may be subject to negative treatment and lawsuits by our clients.clients and business partners, and to regulatory scrutiny. In addition, attention to remediating cyber incidents may distract our technical or management personnel from their normal responsibilities. Public announcements of such cyber incidents could occur and negative perception of such cyber incidents could adversely affect the price of our common stock, and we could lose sales and clients.

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In certain cases, confidential or proprietary information is provided to third parties, such as the service providers that host our technology platform, and we may be unable to control the use of our information or the security protections used by third parties. Cyber incidents and malicious internet-based activity continue to increase generally, and providers of hosting and cloud-based services are often targeted. If the third parties with whom we work violate applicable laws, contracts, or our security policies, these violations could also put our confidential or proprietary information at risk and otherwise hurt our business. Cyber incidents can also occur as a result of non-technical issues, including employee error or malfeasance, poor password management, or other irregularities by us or by our third-party service providers that result in the unauthorized access to personally identifiable, confidential, or proprietary information. In addition, if the security measures of our clients are compromised, even without any actual compromise of our own systems, we may face negative publicity or reputational harm if our clients or anyone else incorrectly attributes the blame for such security breaches to us or our systems.Data and security breaches can also occur as a result of non-technical issues, including breaches by us or by our third-party service providers that result in the unauthorized release of personal or confidential information, employee error or malfeasance, faulty password management, or other irregularities that may result in a defeat of our or our third-party providers’ security measures.

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We may be required to expend significant capital and other resources to protect against security incidents caused by known cyber vulnerabilitiescybersecurity risks or to alleviate problems caused byremediate and recover from security breaches.incidents. We, our customers, and our third-party service providers face an evolving threat landscape in which cybercriminals, among others, employ a complex array of cyber-attack techniques designed to

We have, however, experienced limited interruptions in these systems in the past, including server failures that temporarily slowed down the performance of our services, and we may experience similar or more significant interruptions in the future. We rely on internal systems as well as third-party suppliers, including bandwidth and telecommunications equipment providers, to provide our services. We do not currently maintain redundant systems or facilities for some of these services. Interruptions in these systems or services, whether due to system failures, cyber incidents, physical or electronic break-ins, or other events, could affect the security or availability of our services and prevent or inhibit the ability of our clients and their patients to access our services. In the event of a catastrophic event with respect to one or more of these systems or facilities, we may experience an extended period of system unavailability, which could result in substantial costs to remedy those problems or harm our relationship with our clients and our business.

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Additionally, any disruption in the network access, telecommunications, or co-location services provided by third-party providers or any failure of or by third-party providers’ systems or our own systems to handle current or higher volume of use could significantly harm our business. We exercise limited control over our third-party suppliers, which increases our vulnerability to problems with services they provide. Any errors, failures, interruptions, or delays experienced in connection with these third-party technologies and information services or our own systems could hurt our relationships with clients and expose us to third-party liabilities. Although we maintain insurance for our business, the coverage under our policies may not be adequate to compensate us for all losses that may occur. In addition, we might not continue to be able to obtain adequate insurance coverage at an acceptable cost.

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The reliability and performance of our internet connection may be harmed by increased usage or by denial-of-service attacks or related cyber incidents. The services of other companies delivered through the internet have experienced a variety of outages and other delays as a result of damagesdamage to portions of the internet’s infrastructure, and such outages and delays could affect our systems and services in the future. These outages and delays could reduce the level of internet usage as well as the availability to us of the internet to us for delivery of our internet-based services.

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Knowlton and Mr. Brian Adams,our Chief Financial Officer, which means that any of these employees could leave our employment at any time. The replacement of one or more of our executive officers or other key employees would likely involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.

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In addition, competition for qualified management in our industry is intense. Many of the companies with which we compete for management personnel have greater financial and other resources than we do. As a result, we may experience difficulty hiring and retaining qualified personnel. The departure of key personnel could also hurt our business. In such event, we would be required to hire other personnel to manage and operate our business, and we might not be able to employ a suitable replacement for the departing individual, or a replacement might not be willing to work for us on terms that are favorable to us.

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In addition, in making employment decisions, particularly in the technology industry, job candidates often consider the value of the stock options or other equity instruments they are to receive in connection with their employment. Volatility in the price of our common stock might therefore compromise our ability to attract or retain highly skilled personnel. Furthermore, the requirement to expense stock options and other equity instruments might discourage us from granting the size or type of stock option or equity awards that job candidates require to join our company. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.

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Substantially all of our assets are pledged as collateral under our existing line of credit.

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As of December 31, 2021, our total indebtedness was $348.8 million, which includes amounts outstanding on the convertible senior subordinated notes and credit facility. Our current credit facility provides for borrowings, on a revolving basis, in an aggregate amount up to $120.0 million to be used for general corporate purposes. The credit facility is secured by all of our personal property, whether presently existing or created or acquired in the future, as well as our intellectual property. If we are unable to repay any secured borrowings when due, whether at maturity or if declared due and payable following a default, the lenders would have the right to proceed against the collateral pledged to the indebtedness and may sell the assets pledged as collateral in order to repay those borrowings. As of December 31, 2021, $29.5 million in borrowings were outstanding under our credit facility.

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We may require additional capital to support business growth, and this capital might not be available to us on acceptable terms or at all.

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Our operations have required a significant investment of cash since inception. We intend to continue to make significant investments to support our business growth, respond to business challenges or opportunities, develop new

Our effective tax rate may increase or decrease, and we may be adversely impacted by changes in tax laws.

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We are subject to income taxes in the U.S. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are subject to audit by tax authorities where we do business. Although we believe that our tax estimates and tax positions are reasonable, they could be materially affected by many factors, including the final outcome of tax audits and related litigation, the introduction of new tax accounting standards, legislation, regulations, and related interpretations, our global mix of earnings and the realizability of deferred tax assets. An increase or decrease in our effective tax rate could have a material adverse impact on our financial condition and results of operations.

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In addition, at any time, U.S. federal tax laws or the administrative interpretations of those laws may be changed. In December 2017, the legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act, which made widespread changes to the Internal Revenue Code, was signed into law; while we believe that this law generally will have a favorable effect on corporations and their stockholders, uncertainty remains regarding the full effect that this law will have on us and our customers, stockholders and other stakeholders. We also cannot predict whether, when, or to what extent other new U.S. federal tax laws, regulations, interpretations, or rulings will be issued. As a result, changes in U.S. federal tax laws could adversely affect our business, financial condition, and results of operations, and adversely impact our stockholders.

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Occasionally, changes in state and local tax laws or regulations are enacted that may result in an increase in our tax liability. Shortfalls in tax revenues for states and municipalities in recent years may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income.

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Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local income taxes, which could adversely affect our results of operations.

We are currently licensed to operate in all fifty50 states and file state income tax returns in 41 states. There is a risk that certain state tax authorities where we do not currently file a state income tax return could assert that we are liable for state and local income taxes based upon income or gross receipts allocable to such states. States are becoming increasingly aggressive in asserting a nexus for state income tax purposes. We could be subject to state and local taxation, including penalties and interest attributable to prior periods, if a state tax authority successfully asserts that our

Risks Related to Our Intellectual Property

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If we are unable to obtain, maintain, and enforce intellectual property protection for our technology and products or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop and commercialize technology and products substantially similar to ours, and our ability to successfully commercialize our technology and products may be compromised.

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Our business depends on proprietary technology and content, including software, databases, confidential information, and know-how, the protection of which is crucial to the success of our business. We rely on a combination of patent, trademark, trade-secret, and copyright laws, confidentiality procedures, cyber security practices, and contractual provisions to protect the intellectual property rights of our proprietary technology and content. We may over time increase our investment in protecting our intellectual property through additional trademark, patent, and other intellectual property filings, which could be expensive and time-consuming. We may not be able to obtain protection for our technology and, even if we are successful in attaining effective patent, trademark, trade-secret, and copyright protection, it is expensive to maintain these rights and the costs of defending our rights could be substantial. Furthermore, recent changes to U.S. intellectual property laws may jeopardize the enforceability and validity of our intellectual property portfolio and harm our ability to obtain patent protection offor some of our unique business methods.

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If our trademarks and trade names are not adequately protected and if we cannot protect our domain names, we may not be able to build name recognition in our markets of interest and our competitive position may be harmed.

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The registered or unregistered trademarks or trade names that we own may be challenged, infringed, circumvented, declared generic, lapsed, or determined to be infringing on or dilutive of other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential clients. In addition, third parties may in the future file for registration of trademarks similar or identical to our trademarks. If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such third-party rights, we may not be able to use these trademarks to develop brand recognition of our technologies, products, or services. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively.

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We also currently own the web domain names www.tabularasahealthcare.com, www.trhc.com, www.carekinesis.com,www.careventionhc.com, www.careventions.com, www.careventionhc.com, www.medliance.com, www.capstoneperformancesystems.com, www.eirenerx.com, www.medwisehealthcare.com, www.medwise.com, www.medwiseadvisor.com, www.niarx.com, www.sinfoniarx.com, www.mediture.com, www.cognify.com, and www.doseme-rx.com,www.cognify.com, each of which is critical to the operation of our business. The acquisition and maintenance of domain names is generally regulated by governmental agencies and their designees. The regulation of domain names in the U.S. and in foreign countries is subject to change. Governing bodies may establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names. As a result, we may be unable to acquire or maintain relevant domain names in all countries in which we conduct business. Furthermore, it is unclear whether laws protecting trademarks and similar proprietary rights will be extended to protect domain names. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon, or otherwise decrease the value of our trademarks and other proprietary rights. We may not be able to successfully implement our business

and services. We may also have to redesign our products or services so they do not infringe third-party intellectual property rights, which may not be possible or may require substantial monetary expenditures and time, during which our technology and products may not be available for commercialization or use. Even if we have an agreement to indemnify us against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not obtain a third-party license to the infringed technology at all, license the technology on reasonable terms, or obtain similar technology from another source, our ability to operate our business could be compromised.

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Our use of open sourceopen-source software could compromise our ability to offer our services and subject us to possible litigation.

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We use open sourceopen-source software in connection with our products and services. Companies that incorporate open sourceopen-source software into their products have from time to time faced claims challenging the use of open sourceopen-source software and compliance with open sourceopen-source license terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open sourceopen-source software or claiming noncompliance with open sourceopen-source licensing terms. Some open sourceopen-source software licenses require users who distribute software containing open sourceopen-source software to publicly disclose all or part of the source code to the licensee'slicensee’s software that incorporates, links, or uses such open sourceopen-source software, and make available to third parties forat no cost, any derivative works of the open sourceopen-source code created by the licensee, which could include the licensee'slicensee’s own valuable proprietary code. While we monitor our use of open sourceopen-source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open sourceopen-source agreement, such use could inadvertently occur, or could be claimed to have occurred, in part because open sourceopen-source license terms are often ambiguous. Any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and could help our competitors develop products and services that are similar to or better than ours.

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Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.

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Even if resolved in our favor, litigation or other legal proceedings against us relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.

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If we are unable to protect the confidentiality of our trade secrets, know-how, and other proprietary information, the value of our technology, products, and services could be hurt.

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We may not be able to adequately protect our trade secrets, know-how, and other proprietary information adequately.information. Although we use reasonable efforts to protect this proprietary information and technology, our employees, consultants, and other parties may unintentionally or willfully disclose our information or technology to competitors. In addition, our trade secrets, know-how, and other proprietary information may be accessed or disclosed during a cyber incident, which could have a significant negative impact on us. Further, such cyber incidents, if disclosed publicly, could adversely affect the price of our common stock.

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OnThere has been a trend in federal and state legislation aimed at lowering costs for drug products, including by requiring pharmaceutical companies to disclose information about their pricing and production and marketing costs, and heightened governmental scrutiny over the manner in which pharmaceutical manufacturers set prices for their marketed products. There have been several presidential executive orders and U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, on October 10, 2018 two pieces of legislation were enacted to enhance drug price transparency—the Know the Lowest Price Act (S. 2553) and the Patient Right to Know Drug Prices Act (S. 2554). Each prevents various parties(for private plans) and the Know the Lowest Price Act (for Medicare Parts C and D) were signed into law, which prohibited health plans from instituting “gag” orders or clauses against pharmacists andrestricting pharmacies which heretofore may have prevented a pharmacist from disclosing the lowest available price of a drug to a consumer. These laws may have a financial impact on insurers and pharmacy benefit managers, as they may have to develop more competitive pricing ininforming individuals regarding prices for certain situations.drugs.

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Additionally, a significant amount of our business depends on the evolution of the health care environment and concomitant clinical integration and care coordination, including certain demonstration projects operated by the federal government. If these demonstration projects are modified, cancelled, or not ultimately made permanent as part of federal health care programs, this might affect demand for the types of services we provide. In 2020, CMS and OIG finalized rules as part of the federal government’s “Regulatory Sprint to Coordinated Care” initiative. The impact of these rules is still unknown, but they focus on protecting and encouraging certain value-based arrangements.

In addition, we are subject to various other healthcare laws and regulations, including, among others, the Stark Law relating to self-referrals, anti-kickback laws, including the federal AKS, antitrust laws, and the data privacy and security laws and regulations described below. For instance, the CCPA imposes rules governing how businesses handle personal data of California residents. Companies that do business in California will be required to disclose the types of

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We operate in a highly regulated industry and must comply with a significant number of complex and evolving requirements. Achieving and sustaining compliance with state and federal statutes and regulation related to the healthcare industry may prove costly. Changes in these laws could restrict our ability to conduct our business. Further, if we fail to comply with these requirements, we could incur significant penalties and our reputation could suffer.

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In additionOur industry is highly regulated and subject to HIPAA, additional federalchanging political, legislative, regulatory, and state statutes,other influences. Changes in the laws and regulations guidancemay impact the operating environment and contractual provisions regarding healthcare that may apply tomarket and, by extension, our business activities, including:business. Among other impacts, existing and new laws and regulations affecting the healthcare industry could create

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As a result, these executive officers, directors, and current five percent or greater stockholders could pursue transactions that may not be in our best interests and which could harm our business.

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Some provisions of Delaware law, our amended and restated certificate of incorporation, and our amended and restated bylaws may deter third parties from acquiring us.

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Our amended and restated certificate of incorporation and amended and restated bylaws, among other things:

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Because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law or the DGCL,(the “DGCL”), which may discourage, delay, or prevent someone from acquiring us or merging with us, whether or not it is desired by or beneficial to our stockholders. Under the DGCL, a corporation may not in general engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the boardBoard of directorsDirectors has approved the transaction.

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These and other provisionsthe recently adopted Rights Agreement described below could have the effect of discouraging, delaying, or preventing a transaction involving a change in control of our company or could make it more difficult for you and other stockholders to elect directors of your choosing or to cause us to take other corporate actions that you desire.

provision described above and (2) having service of process made upon such claiming party in any such enforcement action by service upon such claiming party'sparty’s counsel in the foreign action as agent for such claiming party. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to these provisions. These provisions may limit a stockholder'sstockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to or unenforceable in respect of one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions. The exclusive forum provision in the Company’s amended and restated certificate of incorporation will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws, including the Exchange Act or the Securities Act or the respective rules and regulations promulgated thereunder.

The price of our common stock historically has been volatile. This volatility may affect the price at which you could sell your common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. This volatility may also impact assessments over the potential impairment of our assets.

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The market price for our common stock has varied between a high of $52.55$6.95 and a low of $4.67$2.30 in the twelve-month12-month period ending on February 24, 2022.28, 2023. This volatility may affect the price at which you could sell the common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in “Risks Relating to Our Business and Industry”; variations in our quarterly operating results from our expectations or those of securities analysts or investors; downward revisions in securities analysts’ estimates; and announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments.

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In addition, the sale of substantial amounts of our common stock could adversely impact its price. As of February 16, 2022,28, 2023, we had outstanding approximately 25,731,80726,870,660 shares of our common stock, of which approximately 1,857,9711,601,118 are restricted, and options to purchase approximately 1,564,4381,068,934 shares of our common stock (of which approximately 1,439,5561,066,569 were exercisable) as of that date. The sale or the availability for sale of a large number of shares of our common stock in the public market could cause the price of our common stock to decline.

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The volatility of our common stock may also impact assumptions utilizedrelied upon in our assessments of the fair value of our assets, including our goodwill and intangible assets, and a decline in our stock price could result in potential impairment charges to these assets. During firstthe second quarter of 20222021 and through the date of this report, we experienced a sustained decline in the price of our common stock. If the stock price continues to decline or remains depressed, we may be required to assess our assets, including goodwill and intangible assets, for impairment, which may result in possible impairment charges for 2022.2023.

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control over financial reporting,then (a) investors may lose confidence in the accuracy and completeness of our financial reports,reports; (b) the market price of our common stock could be negatively affectedaffected; and (c) we could become subject to investigations by the Nasdaq Global Market, on which our securities are listed, the SEC, or other regulatory authorities, which could require us to obtain additional financial and management resources.

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Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

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We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

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Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an "ownership“ownership change,"” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation'scorporation’s ability to use its pre-change federal net operating loss carryforwards, or NOLs and other pre-change federal tax attributes (such as research tax credits) to offset its post-change income may be limited. We may experience ownership changes as a result of shifts in our stock ownership that could limit the use of our NOLs. State NOL carryforwards may be similarly or more stringently limited. As a result, if we earn net taxable income, our ability to use our pre-change NOLs to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, under the Tax Act, the amount of post-2017 NOLs that we are permitted to deduct in any taxable year is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL deduction itself. In addition, the Tax Act generally eliminates the ability to carry back any NOL to prior taxable years, while allowing post-2017 unused NOLs to be carried forward indefinitely. There is a risk that due to changes under the Tax Act, regulatory changes, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. For these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we attain profitability.

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Our stockholder rights plan, or “poison pill,” includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable.

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On July 25, 2022, our Board approved and adopted a Rights Agreement, dated as of July 25, 2022 (the “Rights Agreement”), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent. Pursuant to the Rights Agreement, the Board declared a dividend of one preferred share purchase right (each, a “Right”) for each outstanding share of our common stock (the “Common Shares”). The Rights were distributable to stockholders of record as of the close of business on August 5, 2022 (the “Record Date”). One Right also will be issued together with each Common Share issued by the Company after the Record Date, but before the Distribution Date (as defined in the Rights Agreement) (or the earlier redemption or expiration of the Rights) and, in certain circumstances, after the Distribution Date.

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Generally, the Rights Agreement works by causing substantial dilution to any person or group that acquires

We may not have the ability to raise the funds necessary to settle conversions of the 2026 Convertible Notes in cash or to repurchase the 2026 Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2026 Convertible Notes.

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Holders of the 2026 Convertible Notes have the right to require us to repurchase all or a portion of their 2026 Convertible Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the 2026 Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2026 Convertible Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2026 Convertible Notes surrendered therefor or the 2026 Convertible Notes being converted. In addition, our ability to repurchase the notes or to pay cash upon conversions of the 2026 Convertible Notes may be limited by law, by regulatory authority, or by agreements governing our future indebtedness. Our failure to repurchase 2026 Convertible Notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of the 2026 Convertible Notes as required by the

In connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the option counterparties or their respective affiliates purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock concurrently with, or shortly after, the pricing of the 2026 Convertible Notes. This activity may have increased (or reduced the size of any decrease in) the market price of our common stock at that time.

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In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2026 Convertible Notes (and are likely to do so during any observation period related to a conversion of 2026 Convertible Notes). This activity could also cause or avoid an increase or a decrease in the market price of our common stock.

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In addition, if any such convertible note hedge and warrant transactions fail to become effective, the option counterparties may unwind their hedge positions with respect to our common stock, which could adversely affect the value of our common stock.

Purchases of Equity Securities

During the year ended December 31, 2021,2022, we did not repurchase any shares of common stock.  

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Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. The following discussion focuses on 20212022 and 20202021 financial condition and results of operations and year-to-year comparisons between 20212022 and 2020.2021. Similar discussion of our 20192020 financial condition and results and year-to-year comparisons between 20202021 and 20192020 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.2021. See also “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.

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Overview

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We are innovating and redefiningadvancing the safe use of medication safety market andby creating solutions designed to empower pharmacists, providers, and patients to optimize medication regimens. Our advanced proprietary technology, MedWise®, identifies the causecauses of and risks for medication-related problems, including adverse drug events (“ADEs”),ADEs, so that healthcare professionals can minimize harm and reduce medication-related risks. Our software and services help improvedrive value-based care by improving patient outcomes and lowerlowering healthcare costs through reduced hospitalizations, emergency department visits, and healthcare utilization. We believe we have the most extensive clinical tele-pharmacy network in the United States (“U.S.”), with seven call centers across the country, a number of which are tethered to academic institutions. Health plans and pharmacies nationwide use our solutions to assist them in meeting a range of value-based payment requirements and quality improvement benchmarks. Our vision and mission are supported by our industry-recognizedexperienced leadership team, our significant investments in our technology, services and people, and collaborations to advance precision pharmacotherapy research and its application in clinical practice, and our culture.

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The CareVention HealthCare segment revenue model is primarily based on payments on a per-member per-month (“PMPM”) basis, payments on a subscription basis, payments on a transaction basis, and payments for charges and dispensing fees for medication fulfillment.

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MedWise HealthCare

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Our MedWise HealthCare segment promotes medication safety and adherence to improve patient outcomes, reduce healthcare costs, and strengthen patient engagement. MedWise HealthCare is primarily comprised of service offerings from our acquisitions of the SinfoníaRx business in September 2017 and PrescribeWellness in March 2019. As a result of these acquisitions, we believe that we are one of the leading providers of medication therapy management (“MTM”) software and services for Medicare, Medicaid, and commercial health plans, and that we are a leading provider of cloud-based patient engagement software and services for retail pharmacies.

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Approximately 18,000 retail pharmacies and more than 350 health plans, including several Blue Cross Blue Shield organizations, Express Scripts, Humana, UnitedHealth Group, and WellCare, utilize our MedWise HealthCare solutions to execute a range of clinical programs. These programs support MTM, Medicare quality improvement programs, Healthcare Effectiveness Data and Information Set (“HEDIS”) quality measures, and post-hospital discharge care transitions through a combination of our nearly 30,000 PrescribeWellness network pharmacists and/or our clinical tele-pharmacy call centers across the country. Through our unique, proprietary approaches to healthcare, our MedWise HealthCare segment offers cloud-based software and clinical pharmacist services through various service offerings and brands, such as MedWise® Safety Review, MedWise® MTM, PrescribeWellness, and DoseMeRx®.

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The MedWise HealthCare segment revenue model is primarily based payments on a PMPM basis, payments on a subscription basis, and payments on a fee-for-service basis for each clinical intervention.

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Our total revenues from continuing operations for the years ended December 31, 2022 and 2021 and 2020 were $331.3$299.5 million and $297.2$259.9 million, respectively. We incurred net losses of $79.1 million and $81.0 millionfrom continuing operations for the years ended December 31, 2022 and 2021 of $77.3 million and 2020,$52.2 million, respectively. Our adjusted EBITDA for the year ended December 31, 2021 was $19.6 million compared to $21.8 million for the year ended December 31, 2020. See “Non-GAAP Financial Measures” for our definition of Adjusted EBITDA, why we present Adjusted EBITDA and a reconciliation of net losses to Adjusted EBITDA.

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We face a variety of challengesIn February 2022, we announced plans to evaluate non-core assets to refocus our corporate strategy and risks,increase stockholder value, and we commenced an initial plan to sell the DoseMe business, which we will needacquired in January 2019. In March 2022, we completed our evaluation of additional divestiture opportunities and commenced plans to addresssell the SinfoníaRx and manage as we pursue our growth strategy. In particular, we will need to continue to innovatePrescribeWellness businesses, acquired in the face of a rapidly changing healthcare landscape if we are to remain competitive. We will also need to effectively manage our growth, especially related to our expansion beyond the PACESeptember 2017 and post-acute markets to other at-risk providers and payers. Our senior management continuously focuses on these and other challenges, and we believe that our culture of innovation and our history of growth and expansion will contribute to the success of our business. We cannot, however, assure you that we will be successful in addressing and managing the many challenges and risks that we face.March 2019, respectively.

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On August 1, 2022, we completed the sale of our unincorporated PrescribeWellness business division, and the assets, properties, and rights that were primarily used or held for use in connection with the PrescribeWellness Business, and the KD Assets (as defined below), to TDS. On the PW Sale Date, we also completed the acquisition of certain intellectual property from KD, which had historically been licensed to the Company (the “KD Assets”). The KD Assets acquired were simultaneously transferred to TDS on the PW Sale Date. The purchase consideration included $125 million in cash, subject to certain customary post-closing adjustments, of which $118.6 million was paid directly to us and $5.9 million was paid to KD on the PW Sale Date. In October 2022, TDS also paid us $1.5 million for certain customary post-closing adjustments. We are also entitled to receive up to $15.0 million in contingent consideration based upon the PrescribeWellness Business’s achievement of certain performance-based metrics during the fiscal years ending December 31, 2023 and 2024.

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On January 20, 2023, we entered into a Share and Asset Purchase Agreement, to sell our unincorporated DoseMe Business, and the assets, properties, and rights that are primarily used or held for use in connection with the DoseMe Business. The purchase consideration included $2.0 million in cash, subject to certain customary post-closing adjustments, and a note receivable of $3.0 million with an annual interest rate of 7%, which matures on January 20, 2027.

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On March 2, 2023, we entered into an Asset Purchase Agreement to sell our unincorporated SinfoníaRx business, and the assets, properties, and rights that are primarily used or held for use in connection with the SinfoníaRx Business. The purchase consideration included $1.4 million in cash, subject to certain customary post-closing adjustments and a note receivable of $3.6 million with an annual interest rate of 3%, which matures on December 31, 2023. We may also be entitled to receive up to $1.0 million in contingent consideration based upon potential regulatory changes affecting the business.

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When we commenced plans to sell the PrescribeWellness, DoseMe, and SinfoníaRx businesses, these businesses (principally, PrescribeWellness) collectively comprised the majority of our MedWise HealthCare segment. Our sales of the PrescribeWellness, DoseMe and SinfoníaRx businesses represented a strategic business shift having a significant effect on our Company’s operations and financial results. As a result, we determined that these businesses met the requirements to be classified as held for sale and discontinued operations as of March 31, 2022, and the DoseMe and SinfoníaRx businesses continued to meet such requirements as of December 31, 2022. Accordingly, the accompanying consolidated financial statements in this Annual Report on Form 10-K have been recast for all periods presented to reflect the assets, liabilities, revenue, and expenses related to these businesses as discontinued operations.

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Key Business Metrics

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We regularly review a number ofcontinually monitor certain corporate metrics, including the following key metrics, to evaluate and manage our business. These metricsthat we believe are useful in evaluating and managing our operating performance as compared to that of other companies in our industry.

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Net Revenue Retention

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rate. We believe that our ability to retain revenue associated with new or existing client relationships is an indicator of the stability of our revenue base and the long-term value we provide to our clients. We assess our performance in this area using a metric we refer to as net revenue retention. We calculate our net revenue retention by comparing revenue by client and segment at the end of the most recent calendar year divided by revenue at the end of the prior calendar year from only clients that were contracted with us at the end of the prior calendar year. We believe net revenue retention captures our cross-sell success, client expansion, changes in pricing, and client churn or downgrades.

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During 2022 and 2021, and 2020, our CareVention HealthCare segmentwe generated net revenue retention from continuing operations of 110%115% and 111%117%, respectively, driven by census growth at existing clients and cross-sell revenue. Our MedWise HealthCare segment generated net revenue retention of 85% in 2021 compared to 73% in 2020 due to improved client retention efforts.

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Factors Affecting our Future Performance

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We believe that our future success will be dependentdepends on many factors, including our ability to maintain and grow our relationships with existing clients, expand our client base, continue to enter new markets, and expand our offerings to meet evolving market needs. While these areas present significant opportunities, they also present risks that we must manage to ensure successful results. See the section entitled “Risk Factors” for a discussion of certain risks and uncertainties that may impact our future success.

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COVID-19 Pandemic

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We continue to closely monitorAs described above, we completed the impact of COVID-19 pandemic on both our employees and operations. In response to the pandemic, we have implemented measures to protect the health and safety of our employees, including hybrid and remote work arrangements, reduced density in our buildings, guidelines to ensure safe business travel, and safety protocols for on-site employees, including social distancing, enhanced cleaning, and contact tracing.

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We continue to experience challenges with revenue growth as a resultsales of the COVID-19 pandemic. InPrescribeWellness, DoseMe, and SinfoníaRx businesses in 2022 and early 2023. The continuing operations of the remaining components of our CareVention segment, we had seen overall census growth for PACE dip below historical levels during 2020. During the second quarter of 2021, we experienced a recovery in our net PACE census growth to pre-pandemic levels, which continued through the remainder of 2021 and positively impacted revenue.

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Our MedWise HealthCare segment also continues to be impacted by the COVID-19 pandemic. Changes made by CMS to their Medicare Part D Star Ratings improvement programs for health plans in response to the COVID-19 pandemic have negatively impacted ourpromote medication safety services revenues. In addition, the COVID-19 pandemic has elevated the role of retail pharmacies and created strong demandadherence to improve patient outcomes and reduce healthcare costs. The MedWise HealthCare segment revenue model is primarily based on payments on a PMPM basis, payments on a subscription basis, and payments on a fee-for-service basis for pharmacistseach MSR and pharmacy technicians. As a result, we have faced challenges in hiring clinical staff.

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Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, we are not able to predict the continuing effects that the COVID-19 pandemic may have on our results of operations, financial condition, or liquidity. We continue to actively monitor the COVID-19 pandemic and are prepared to mitigate potential adverse impacts to our business, including our financial position, liquidity, operations, suppliers, industry, and workforce.assessment completed.

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Components of Our Results of Continuing Operations

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Revenue

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Our revenue is derived from our product salesmedication revenue and service activitiestechnology-enabled solutions revenue under our CareVention HealthCare and MedWise HealthCare segments. For the years ended December 31, 2022 and 2021, medication revenue represented 77% and 2020, product sales represented 57% and 54%73%, respectively, of our total revenue respectively.from continuing operations. For the years ended December 31, 2022 and 2021, and 2020, servicetechnology-enabled solutions revenue represented 43%23% and 46%27%, respectively, of our total revenue respectively.from continuing operations.

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To provide improved description over our disaggregation of revenue, we retitled our revenue categories from product revenue and service revenue to medication revenue and technology-enabled solutions revenue, respectively, in the consolidated statements of operations and the notes to the consolidated financial statements. The change had no impact to the amounts previously reported in the consolidated statements of operations and the notes to the consolidated financial statements.

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CareVention HealthCare

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PACE ProductMedication Revenue

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We provide medication fulfillment pharmacy services to PACE organizations.organizations under our CareVention HealthCare segment. While the majority of medications are routinely filled in order to treat chronic conditions, the mix and quantity of medications can vary. Revenue from medication fulfillment services is generally billed monthly or weekly, depending on whether the PACE organization is contracted with a pharmacy benefit manager, and is recognized when medications are delivered and control has passed to the client. At the time of delivery, we have performed substantially all of our performance obligations under our client contracts. We do not experience a significant level of returns or reshipments.

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expenses and allocated indirect overhead costs. We allocate indirect overhead costs among functions based on employee headcount. ForThe purchase price of medications represented 81% of our total cost of medication revenue for the years ended December 31, 20212022 and 2020, medication costs represented 81% and 79% of our total product costs, respectively.2021.

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Service Cost of Technology-Enabled Solutions Revenue

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Cost of servicetechnology-enabled solutions revenue includes all costs directly related to servicing our CareVention HealthCaretechnology service contracts and MedWise HealthCare service contracts. These costs primarily consistconsists of laboremployment costs, including stock-based compensation, outside contractors, expenses related to supporting our software platforms, direct overhead expenses, and allocated indirect overhead costs. We allocate indirect overhead costs among functions based on employee headcount.

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Research and Development Expenses

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Our research and development expenses consist primarily of salaries and relatedemployment costs, including stock-based compensation, for personnel in our research and development functions. This personnel include employees engaged in scientific research, healthcare analytics, the design and development of new scientific algorithms, and the enhancement of our software and technology platforms. Research and development expenses also include fees paid to third-party consultants, costs related to quality assurance and testing, and other

Change in Fair Value of Acquisition-related Contingent Consideration Receivable

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We classified our acquisition-relatedIn connection with the sale of the PrescribeWellness Business on August 1, 2022, we may be entitled to additional consideration based on the achievement of certain customer and revenue metrics. The contingent consideration is classified as a liability. Acquisition-related contingent consideration wasan asset and is subject to remeasurement at each balance sheet date. Any change in the fair value of such acquisition-relatedthe contingent consideration wasreceivable is reflected in our consolidated statements of operations as a change in fair value of the liability.receivable. We adjustedadjust the carrying value of the acquisition-related contingent consideration receivable until the contingency wasis finally determined or final payment was made.

is received.
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IntangibleLong-Lived Asset Impairment Charge

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Definite-livedLong-lived assets consist of property and equipment, operating lease right-of-use assets, software development costs, and definite-lived intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. WhenFactors that we consider in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, we compare forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. If theAn impairment loss may be recognized when estimated undiscounted future cash flows expected to result from the use and disposition of an asset are less than its carrying amount, we would recognize anamount. The impairment loss would