Ontrak (OTRK) 10-Q 7 May 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-31932
Entity Registrant Name	CATASYS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	88-0464853
Entity Address, Address Line One	2120 Colorado Ave.
Entity Address, Address Line Two	Suite 230
Entity Address, City or Town	Santa Monica
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90404
City Area Code	310
Local Phone Number	444-4300
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	CATS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		16,985,292
Entity Central Index Key	0001136174
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Current Fiscal Year End Date	--12-31

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and restricted cash	$ 12,001	$ 13,610
Receivables, net	2,982	3,615
Unbilled receivables	2,719	2,093
Deferred costs	847	341
Prepaid expenses and other current assets	986	733
Total current assets	19,535	20,392
Long-term assets:
Property and equipment, net	142	150
Restricted cash, long-term	408	408
Deferred costs, long-term	156	112
Right-of-use assets	2,646	2,793
Total assets	22,887	23,855
Current liabilities:
Accounts payable	1,734	1,385
Accrued compensation and benefits	2,816	3,640
Deferred revenue	6,710	5,803
Current portion of lease liabilities	533	519
Other accrued liabilities	2,739	2,060
Warrant liabilities	627	691
Total current liabilities	15,159	14,098
Long-term liabilities:
Long-term debt, net	33,250	31,597
Long-term lease liabilities	1,931	2,069
Total liabilities	50,340	47,764
Stockholders' deficit:
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.0001 par value; 500,000,000 shares authorized; 16,876,581 and 16,616,165 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	2	2
Additional paid-in capital	311,454	307,403
Accumulated deficit	(338,909)	(331,314)
Total stockholders' deficit	(27,453)	(23,909)
Total liabilities and stockholders' deficit	$ 22,887	$ 23,855

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	16,876,581	16,616,165
Common stock, shares outstanding (in shares)	16,876,581	16,616,165

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Revenue	$ 12,338	$ 6,811
Cost of revenue	7,233	3,027
Gross profit	5,105	3,784
Operating expenses	11,109	6,299
Operating loss	(6,004)	(2,515)
Other income / (expense)	62	(85)
Interest expense	(1,653)	(321)
Net loss	$ (7,595)	$ (2,921)
Net loss per share, basic and diluted from operations (in dollars per share)	$ (0.45)	$ (0.18)
Weighted-average shares used to compute basic and diluted net loss per share (in shares)	16,693	16,198

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2018		16,185,146
Beginning balance at Dec. 31, 2018	$ (8,965)	$ 2	$ 296,688	$ (305,655)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclassification of warrant liability to equity upon adoption of ASU 2017-11	86		86
Warrant exercised (in shares)		20,000
Warrant exercised	100		100
Stock compensation expense	1,024		1,024
Net loss	(2,921)			(2,921)
Ending balance (in shares) at Mar. 31, 2019		16,205,146
Ending balance at Mar. 31, 2019	$ (10,676)	$ 2	297,898	(308,576)
Beginning balance (in shares) at Dec. 31, 2019	16,616,165	16,616,165
Beginning balance at Dec. 31, 2019	$ (23,909)	$ 2	307,403	(331,314)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclassification of warrant liability to equity upon adoption of ASU 2017-11	0
Warrant exercised (in shares)		11,049
Warrant exercised	20		20
Stock option exercised (in shares)		223,643
Stock option exercised	1,759		1,759
Stock compensation expense (in shares)		25,724
Stock compensation expense	2,272		2,272
Net loss	$ (7,595)			(7,595)
Ending balance (in shares) at Mar. 31, 2020	16,876,581	16,876,581
Ending balance at Mar. 31, 2020	$ (27,453)	$ 2	$ 311,454	$ (338,909)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows used in operating activities
Net loss	$ (7,595)	$ (2,921)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	2,272	1,024
Depreciation	23	38
Amortization	347	100
Change in fair value of warrant liability	(64)	91
Deferred rent	0	(26)
Changes in operating assets and liabilities:
Accounts payable	349	322
Leases liabilities	(88)	0
Other accrued liabilities	(145)	(261)
Prepaid and other current assets	(612)	(6)
Deferred revenue	907	(501)
Receivables	633	(2,219)
Unbilled receivables	(626)	0
Net cash used in operating activities	(4,599)	(4,359)
Cash flows used in investing activities
Purchase of property and equipment	(14)	0
Net cash used in investing activities	(14)	0
Cash flows provided by financing activities
Debt issuance costs	0	(105)
Proceeds from warrant exercise	20	100
Proceeds from options exercise	1,567	0
Capital lease obligations	(36)	(2)
Net cash provided by financing activities	3,004	2,493
Net increase in cash and restricted cash	(1,609)	(1,866)
Cash and restricted cash at beginning of period	14,018	3,570
Cash and restricted cash at end of period	12,409	1,704
Supplemental disclosure of cash flow information:
Interest paid	0	192
Non cash financing and investing activities:
Reclassification of warrant liability to equity upon adoption of ASU 2017-11	0	86
Warrants issued in connection with revolving loan	0	461
Stock options exercise in transit	192
Revolving Loan
Cash flows provided by financing activities
Proceeds from debt	0	2,500
2024 Notes
Cash flows provided by financing activities
Proceeds from debt	$ 1,453	$ 0

Organization

Organization	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Company Overview Catasys, Inc. (“Catasys” or the “Company”) is AI-powered and telehealth-enabled, virtualized outpatient healthcare treatment company whose mission is to help improve the health and save the lives of as many people as possible. The Company’s platform, Catasys PRETM (Predict-Recommend-Engage), organizes and automates healthcare data integration and analytics through the application of machine intelligence to deliver analytic insights. The PRE platform predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages people who are not receiving the care they need. By combining predictive analytics with human engagement, the Company delivers improved member health and validated outcomes and savings to healthcare payers. The Company’s integrated, technology-enabled OnTrak solution, a critical component of the Catasys PRE platform, is designed to identify and treat members with behavioral conditions that cause or exacerbate chronic medical conditions such as diabetes, hypertension, coronary artery disease, chronic obstructive pulmonary disease, and congestive heart failure, which result in high medical costs. The Company has the ability to engage these members, who do not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance. OnTrak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaching and inmarket Community Care Coordinators who address the social and environmental determinants of health, including loneliness. Basis of Presentation The accompanying condensed consolidated financial statements include Catasys, Inc. and its wholly-owned subsidiaries and variable interest entities (VIE's). The accompanying condensed consolidated financial statements for Catasys, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and instructions to Form 10-Q and Article 10 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the condensed financial statements included all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for the entire fiscal year. The accompanying financial information should be read in conjunction with the financial statements and the notes thereto included in the most recent Annual Report on Form 10-K for the year-ended December 31, 2019, from which the balance sheet, as of December 31, 2019, has been derived. The Company operates as one segment. Certain prior period amounts reported in condensed consolidated financial statements and notes have been reclassified to conform to current period presentation. As of March 31, 2020, cash and restricted cash was $12.4 million and working capital was approximately $4.4 million. The Company could continue to incur negative cash flows and operating losses for the next twelve months, with an average monthly cash burn rate is approximately $1.5 million for the three months ended March 31, 2020. The Company expects the current cash resources to cover expenses through at least the next twelve months, however, delays in cash collections, revenue, or unforeseen expenditures could impact this estimate. The Company’s ability to fund ongoing operations is dependent on several factors. The Company aims to increase the number of members that are eligible for its solutions by signing new contracts and identifying more eligible members in existing contracts. Additionally, the Company’s funding is dependent upon the success of management’s plan to increase revenue and control expenses. The Company currently operates its OnTrak solutions i n thirty states, as well as the nation's capital. The Company provide services to commercial (employer funded), managed Medicare Advantage, and managed Medicaid and dual eligible (Medicare and Medicaid) populations. The Company generates fees from its launched programs and expects to increase enrollment and fees in the near future. Management’s Plans Historically, we have seen and continue to see net losses, net loss from operations, negative cash flow from operating activities, and historical working capital deficits as we continue through a period of rapid growth. The accompanying financial statements do not reflect any adjustments that might result if we were unable to continue as a going concern. We have alleviated substantial doubt by both entering into contracts for additional revenue-generating health plan customers and expanding our OnTrak program within existing health plan customers. To support this increased demand for services, we invested and will continue to invest in additional headcount needed to support the anticipated growth. Additional management plans include increasing the outreach pool as well as improving our current enrollment rate. We will continue to explore ways to increase operational efficiencies resulting in increase in margins on both existing and new members. We have a growing customer base and believe we are able to fully scale our operations to service the contracts and future enrollment providing leverage in these investments that will generate positive cash flow in the near future. We believe we will have enough capital to cover expenses through the foreseeable future and we will continue to monitor liquidity. If we add more health plans than budgeted, increase the size of the outreach pool by more than we anticipate, decide to invest in new products or seek out additional growth opportunities, we would consider financing these options with either a debt or equity financing. Recently Adopted Accounting Standards In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. The adoption of of this ASU 2018-13 on January 1, 2020 did not have an impact on its financial statements. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes" which enhances and simplifies various aspects of income tax accounting guidance. The guidance is effective for the Company in the first quarter of 2021, although early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2019-12 on its consolidated financial statements and related footnote disclosures. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”). The ASU requires recognition of an estimate of lifetime expected credit losses as an allowance. For small reporting public companies, the amendments are effective for annual reporting periods beginning after December 15, 2022, including interim periods within those annual periods. The Company is currently evaluating the impact of adoption of ASU 2016-13 on its consolidated financial statements and related footnote disclosures.

Accounts Receivable

Accounts Receivable	3 Months Ended
	Mar. 31, 2020
Receivables [Abstract]
Accounts Receivable	Accounts Receivable The following table is a summary of concentration of credit risk by customer revenues and accounts receivables: Three Months Ended Percentage of Revenue 2020 2019 Largest customer 48.2 % 26.5 % 2nd largest customer 18.2 % 25.8 % 3rd largest customer 14.7 % 16.2 % 4th largest customer 10.0 % 11.5 % Remaining customers 8.9 % 20.0 % 100.0 % 100.0 % Percentage of Accounts Receivable March 31, 2020 December 31, 2019 Largest customer 37.6 % 54.3 % 2nd largest customer 31.9 % 15.7 % 3rd largest customer 22.4 % 15.2 % 4th largest customer 4.7 % 3.6 % Remaining customers 3.4 % 11.2 % 100.0 % 100.0 %

Common Stock

Common Stock	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Common Stock	Common Stock Net loss per share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, preferred stock and outstanding stock options and warrants, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. Basic and diluted net loss per share (in thousands, except per share amounts) are as follows: Three months ended March 31, 2020 March 31, 2019 Net loss $ (7,595) $ (2,921) Weighted-average shares of common stock outstanding 16,693 16,198 Net loss per share - basic and diluted $ (0.45) $ (0.18) The following common equivalent shares as of March 31, 2020 and 2019, issuable upon exercise of stock options and warrants have been excluded from the diluted earnings per share calculation as their effect is anti-dilutive: March 31, 2020 March 31, 2019 Warrants to purchase common stock 1,539,926 1,625,108 Options to purchase common stock 3,961,490 4,341,116 Total 5,501,416 5,966,224

Stock Based Compensation

Stock Based Compensation	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Stock Based Compensation	Stock Based Compensation three Share-based compensation expense was approximately $2.3 million and $1.0 million for the quarters ended March 31, 2020 and 2019, respectively. The company issued $0.4 million of common stock to one of the Company's executives during the quarter ended March 31, 2020. The assumptions used in the Black-Scholes option-pricing model are determined as follows: March 31, 2020 Volatility 78.00 % Risk-free interest rate 1.42%-1.55% Expected life (in years) 2.75-6.08 Dividend yield 0 % The expected volatility assumptions have been based on the historical and expected volatility of our stock and comparable companies, measured over a period generally commensurate with the expected term or acceptable period to determine reasonable volatility. The weighted average expected option term for the quarter ended March 31, 2020, reflects the application of the simplified method prescribed in Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches. Stock Options A summary of stock option activity for employees, directors and consultants is as follows: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2019 4,006,351 $ 10.92 Granted 638,563 14.95 Exercised (223,643) 7.87 Forfeited (459,781) 12.22 Outstanding as of March 31, 2020 3,961,490 $ 11.59 Options vested and exercisable as of March 31, 2020 1,022,419 $ 11.72 As of March 31, 2020, there was $19.1 million of total unrecognized compensation cost related to non-vested stock compensation arrangements granted to employees, directors and consultants under the 2017 Amended Plan, which is expected to be recognized over a weighted-average period of approximately 2.7 years. Warrants The Company did not issue any stock options to consultants during the three month ended March 31, 2020 compared to 50,000 stock options at a weighted average exercise price of $9.93 for the three month ended March 31, 2019. Stock option expense related to consultants was $0.03 million and $0.01 million for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there was $0.2 million of total unrecognized compensation cost related to non-vested stock compensation arrangements granted to non-employees under the 2017 Amended Plan, which is expected to be recognized over a weighted-average period of approximately 1.9 years. A summary of warrants activity for non-employees is as follows: Number of Warrants Weighted Average Outstanding as of December 31, 2019 1,550,975 $ 6.08 Issued — — Expired — — Exercised (11,049) $ 1.80 Outstanding as of March 31, 2020 1,539,926 $ 6.12 Warrants exercisable as of March 31, 2020 1,539,926 $ 6.12 There were no warrants issued in the three months ended March 31, 2020, compared with 40,279 in the three months ended March 31, 2019. Of the total outstanding warrants as of March 31, 2020, 1,249,189 are held by Acuitas Group Holdings LLC, whose sole managing member is the Company's chairman and chief executive officer. Performance-Based and Market-Based Awards The Company’s Compensation Committee designed a compensation structure to align the compensation levels of certain executives to the performance of the Company through the issuance of performance-based and market-based stock options. The performance-based options vest upon the Company meeting certain revenue targets and the total amount of compensation expense recognized is based on the number of shares that the Company determines are probable of vesting. The market-based options vest upon the Company’s stock price reaching a certain price at a specific performance period and the total amount of compensation expense recognized is based on a monte carlo simulation that factors in the probability of the award vesting. The following table summarizes the Company’s outstanding awards under this structure: Grant Date Performance Measures Vesting Term Performance Period # of Shares Exercise Price December 2017 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 642,307 $ 7.50 August 2018 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 397,693 $ 7.50 April 2018 The Options will be divided into five equal tranches and Performance Targets to be established by Board of Directors for each tranche at the beginning of the fiscal year Amended and vested 115,950 options based on severance agreement Amended and vested 115,950 options based on severance agreement 115,950 $ 7.50

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases	LeasesOperating leases In September 2018, the Company signed an operating lease for the new corporate headquarters in Santa Monica, CA (“Santa Monica Headquarters”). The lease agreement includes 7,869 square feet for 60 months commencing in July 2019, which is 30 days following the date the premises were ready for occupancy. The base annual rent is approximately $0.6 million subject to annual adjustments. The Company’s lease liability resulted from the lease of the Santa Monica Headquarters which expires in 2024. This lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The lease includes renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liability and right-of-use asset as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor or have any leases classified as financing leases. As of March 31, 2020, the Company has an operating lease liability of approximately $2.1 million and right-of-use asset of approximately $2.3 million, which are included in the condensed consolidated balance sheets. Quantitative information for the operating lease is as follows: Condensed Consolidated Statement of Operations (In thousands) For the Three Months Ended March 31, 2020 For the Three Months Ended March 31, 2019 Operating lease expense $ 166 $ 74 Short-term lease rent expense 27 3 Total rent expense $ 193 $ 77 Condensed Consolidated Statements of Cash Flows (In thousands) For the Three Months Ended March 31, 2020 For the Three Months Ended March 31, 2019 Cash paid for Operating Lease Liabilities $ 143 $ 99 Other Information March 31, 2020 March 31, 2019 Weighted-average remaining lease term – operating leases (years) 4.3 0.0 Weighted-average discount rate – operating leases 10.15 % 9.25 % Maturities of the operating lease liabilities are as follows: (In thousands) Amount Remaining in 2020 $ 438 2021 603 2022 623 2023 644 2024 328 Total lease payments 2,636 Less: imputed interest (513) Present value of lease liabilities 2,123 Less: current portion (389) Lease liabilities, non-current $ 1,734 The Company incurred rent expense of approximately $0.2 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively. Capital leases The Company engaged in agreements to lease computer equipment during the quarter ended March 31, 2020. The computer equipment under capital leases is included in right of use asset within the condensed consolidated balance sheets and was $0.3 million as of March 31, 2020. Lease amortization at March 31, 2020 was approximately $0.04 million. As of March 31, 2020, the future minimum lease payments under capital leases are as follows (in thousands): For the Three Months Ended March 31, 2020 Total lease payments $ 367 Less: interest (26) Present value of lease liabilities 341 Less: current portion (144) Lease liabilities, non-current $ 197
Leases	LeasesOperating leases In September 2018, the Company signed an operating lease for the new corporate headquarters in Santa Monica, CA (“Santa Monica Headquarters”). The lease agreement includes 7,869 square feet for 60 months commencing in July 2019, which is 30 days following the date the premises were ready for occupancy. The base annual rent is approximately $0.6 million subject to annual adjustments. The Company’s lease liability resulted from the lease of the Santa Monica Headquarters which expires in 2024. This lease does not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. The lease includes renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liability and right-of-use asset as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses. The Company does not act as a lessor or have any leases classified as financing leases. As of March 31, 2020, the Company has an operating lease liability of approximately $2.1 million and right-of-use asset of approximately $2.3 million, which are included in the condensed consolidated balance sheets. Quantitative information for the operating lease is as follows: Condensed Consolidated Statement of Operations (In thousands) For the Three Months Ended March 31, 2020 For the Three Months Ended March 31, 2019 Operating lease expense $ 166 $ 74 Short-term lease rent expense 27 3 Total rent expense $ 193 $ 77 Condensed Consolidated Statements of Cash Flows (In thousands) For the Three Months Ended March 31, 2020 For the Three Months Ended March 31, 2019 Cash paid for Operating Lease Liabilities $ 143 $ 99 Other Information March 31, 2020 March 31, 2019 Weighted-average remaining lease term – operating leases (years) 4.3 0.0 Weighted-average discount rate – operating leases 10.15 % 9.25 % Maturities of the operating lease liabilities are as follows: (In thousands) Amount Remaining in 2020 $ 438 2021 603 2022 623 2023 644 2024 328 Total lease payments 2,636 Less: imputed interest (513) Present value of lease liabilities 2,123 Less: current portion (389) Lease liabilities, non-current $ 1,734 The Company incurred rent expense of approximately $0.2 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively. Capital leases The Company engaged in agreements to lease computer equipment during the quarter ended March 31, 2020. The computer equipment under capital leases is included in right of use asset within the condensed consolidated balance sheets and was $0.3 million as of March 31, 2020. Lease amortization at March 31, 2020 was approximately $0.04 million. As of March 31, 2020, the future minimum lease payments under capital leases are as follows (in thousands): For the Three Months Ended March 31, 2020 Total lease payments $ 367 Less: interest (26) Present value of lease liabilities 341 Less: current portion (144) Lease liabilities, non-current $ 197

Debt

Debt	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Debt	Debt 2024 Notes In September 2019, the Company entered into a Note Agreement dated September 24, 2019 (the “Note Agreement”) with certain subsidiaries of the Company party thereto as guarantors, Goldman Sachs Specialty Lending Holdings, Inc. and any other purchasers party thereto from time to time (collectively, the “Holders”). Under the Note Agreement, the Company initially issued $35.0 million aggregate principal amount of senior secured notes (the "2024 Notes"), which bear interest at either a floating rate plus an applicable margin in the case of 2024 Notes subject to cash interest payments or a floating rate plus a slightly higher applicable margin in the case of 2024 Notes with interest rate of 15.75% for the three months ended March 31, 2020. The applicable margins are subject to stepdowns, in each case, following the achievement of certain financial ratios. The Company has elected for the $35 million in aggregate principal amount o f 2024 Notes issued on the date of the Note Agreement that such interest shall be payable in cash. The Holder is obligated to purchase up to an additional $10.0 million in principal amount of 2024 Notes during the period from the date of the Note Agreement until the second anniversary thereof. The entire principal amount of the 2024 Notes is due and payable on the fifth anniversary of the Note Agreement unless earlier redeemed upon the occurrence of certain mandatory prepayment events, including with the proceeds of equity or debt issuances, 50% of excess cash flow, asset sales and the amount by which total debt exceeds an applicable leverage multiple. The principal amount of the 2024 Notes increased by $1.5 million in the form of payment in kind of the interest component during the three months ended March 31, 2020. The Note Agreement contains customary covenants, including, among others, covenants that restrict the Company’s ability to incur debt, grant liens, make certain investments and acquisitions, pay dividends, repurchase equity interests, repay certain debt, amend certain contracts, enter into affiliate transactions and asset sales or make certain equity issuances, and covenants that require the Company to, among other things, provide annual, quarterly and monthly financial statements, together with related compliance certificates, maintain its property in good repair, maintain insurance and comply with applicable laws. The Note Agreement also includes covenants with respect to the Company’s maintenance of certain financial ratios, including a fixed charge coverage ratio, leverage ratio and consolidated liquidity as well as minimum levels of consolidated adjusted EBITDA and revenue. The Note Agreement also contains customary events of default, including, among others, payment default, bankruptcy events, cross-default, breaches of covenants and representations and warranties, change of control, judgment defaults and an ownership change within the meaning of Section 382 of the Internal Revenue Code. In the case of an event of default, the Holder may, among other remedies, accelerate the payment of all obligations under the 2024 Notes and all assets of the Company serves as collateral. Any prepayment of the 2024 Notes or reduction of the purchase commitments made on or prior to the second anniversary of the Closing Date must be accompanied by a yield maintenance premium and on or prior to the third anniversary of the Closing Date must be accompanied by a prepayment premium. In accounting for the issuance of the 2024 Notes, the Company separated the 2024 Notes into liability and equity components. The fair value of the liability component was estimated using an interest rate for debt with terms similar to the 2024 Notes. The carrying amount of the equity component was calculated by measuring the fair value based on the Black-Scholes model. The gross proceeds from the transaction was allocated between liability and equity based on the proportionate value. The debt discount is accreted to interest expense over the term of the 2024 Notes using the interest method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The assumptions used in the Black-Scholes option-pricing model remain unchanged and are determined as follows: March 31, 2020 Volatility 98.01 % Risk-free interest rate 1.58 % Expected life (in years) 7 Dividend yield 0 % The Company is in compliance with all debt covenants as of March 31, 2020. The net carrying amounts of the liability components consists of the following (in thousands): March 31, 2020 December 31, 2019 Principal $ 37,955 $ 36,502 Less: debt discount (4,705) (4,905) Net carrying amount $ 33,250 $ 31,597 2022 Loan In June 2018, the Company entered into a venture loan and security agreement (the “2022 Loan”) with Horizon Technology Finance Corporation (“Horizon”), which provides for up to $7.5 million in loans to the Company. In addition, in June 2018, the Company entered into a loan and security agreement (the “A/R Facility”) in connection with a $2.5 million receivables financing facility with Corporate Finance, a division of Heritage Bank of Commerce (“Heritage”). The Company borrowed and subsequently repaid $1.9 million on the A/R Facility during the six months ended June 30, 2019. In March 2019, the Company entered into an amended and restated 2022 Loan with Horizon, which provides for up to $15.0 million in loans to the Company, including initial term loans in the amount of $7.5 million previously funded under the original agreement and an additional up to $7.5 million loan in three revolving tranches of $2.5 million in availability, subject to the Company's achievement of trailing three month billings exceeding $5.0 million, $7.0 million and $8.0 million, respectively (collectively, the “Billing Requirements”). An initial advance of $2.5 million was funded upon the execution and delivery of the Amended Loan Agreement, subject to repayment if the foregoing $5.0 million threshold is not reached by July 1, 2019. The Company concurrently entered into an amendment to the previously disclosed $2.5 million A/R Facility with Heritage intended primarily to reflect the amendment and restatement of the Amended Loan Agreement. The Company met all three of the Billing Requirements and as a result have incurred the full $7.5 million under the Amended Loan Agreement. In connection with the Company's entry into the Amended Loan Agreement, the Company issued Horizon 40,279 seven The 2022 Loan bore interest at a floating coupon rate of the amount by which one-month LIBOR exceeds 2.00% plus 9.75%. After September 30, 2020, upon the earlier of (i) payment in full of the principal balance of the 2022 Loan, (ii) an event of default and demand by Lender of payment in full or (iii) on the Loan Maturity Date (September 30, 2022), as applicable, the Company was obligated pay to Lender a payment equal to the greater of $150,000 or 6% of the outstanding principal balance on August 31, 2020. Upon the issuance of the 2024 Notes, the balance of the 2022 Loan was repaid and terminated. As part of the termination, the Company incurred $1.1 million of early termination costs and wrote off deferred debt issuance costs of $1.5 million, which has been recorded in other income/(expense) in the consolidated statement of operations during the year ending December 31, 2019. The following table presents the interest expense recognized related to the 2024 Notes and 2022 Loan (in thousands): Three months ended March 31, 2020 2019 Contractual interest expense $ 1,453 $ 221 Accretion of debt discount 200 100 Total $ 1,653 $ 321

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following tables summarize fair value measurements by level as of March 31, 2020 and December 31, 2019, respectively, for assets and liabilities measured at fair value on a recurring basis: Balance as of March 31, 2020 (in thousands) Level I Level II Level III Total Letter of credit (1) $ 408 $ — $ — $ 408 Total assets $ 408 $ — $ — $ 408 Warrant liabilities $ — $ — $ 627 $ 627 Total liabilities $ — $ — $ 627 $ 627 (1) $408,000 is included in restricted cash, long-term on the condensed consolidated balance sheet as of March 31, 2020. Balance as of December 31, 2019 (in thousands) Level I Level II Level III Total Letter of credit (2) $ 408 $ — $ — $ 408 Total assets $ 408 $ — $ — $ 408 Warrant liabilities $ — $ — $ 691 $ 691 Total liabilities $ — $ — $ 691 $ 691 (2) $408,000 is included in restricted cash, long term on the condensed consolidated balance sheet as of December 31st, 2019. Financial instruments classified as Level III in the fair value hierarchy as of March 31, 2020 represent liabilities measured at market value on a recurring basis which include warrant liabilities. In accordance with current accounting rules, the warrant liabilities are being marked-to-market each quarter-end until they are completely settled or expire. The warrants are valued using the Black-Scholes option-pricing model, using both observable and unobservable inputs and assumptions consistent with those used in the estimate of fair value of employee stock options. See Warrant Liabilities below. The carrying value of the 2024 Notes is estimated to approximate their fair value as the variable interest rate of the Senior Secured Notes approximates the market rate for debt with similar terms and risk characteristics. The fair value measurements using significant Level III inputs, and changes therein, for the quarter ended March 31, 2020 are as follows: (in thousands) Level III Balance as of December 31, 2019 $ 691 Issuance of new warrant liability — Change in fair value of warrant liability (64) Balance as of March 31, 2020 $ 627 Warrant Liabilities The assumptions used in the Black-Scholes option-pricing model are determined as follows: March 31, 2020 December 31, 2019 Volatility 98.04 % 98.04 % Risk-free interest rate 0.55 % 1.81 % Weighted average expected life (in years) 6.1 6.25 Dividend yield — % — %

Variable Interest Entities

Variable Interest Entities	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities	Variable Interest Entities As discussed under the heading Management Services Agreement (“MSA”) below, the Company has an MSA with a Texas nonprofit health organization (“TIH”) and a California Professional Corporation (“CIH”). Under the MSA’s, the equity owners of TIH and CIH have only a nominal equity investment at risk, and the Company absorbs or receives a majority of the entity’s expected losses or benefits. The Company participates significantly in the design of these MSA’s. The Company also agrees to provide working capital loans to allow for TIH and CIH to fund their day to day obligations. Substantially all of the activities of TIH and CIH include its decision making, approval or are conducted for its benefit, as evidenced by the facts that (i) the operations of TIH and CIH are conducted primarily using the Company's licensed network of providers and (ii) under the MSA, the Company agrees to provide and perform all non-medical management and administrative services for the entities. Payment of the Company's management fee is subordinate to payments of the obligations of TIH and CIH, and repayment of the working capital loans is not guaranteed by the equity owner of the affiliated medical group or other third party. Creditors of TIH and CIH do not have recourse to the Company's general credit. Based on the design of the entity and the lack of sufficient equity to finance its activities without additional working capital loans, the Company has determined that TIH and CIH are VIEs. The Company is the primary beneficiary required to consolidate the entities as it has power and potentially significant interests in the entities. Accordingly, the Company is required to consolidate the assets, liabilities, revenues and expenses of the managed treatment centers. Management Services Agreement In April 2018, the Company executed an MSA with TIH and in July 2018, the Company executed an MSA with CIH. Under the MSA’s, the Company licenses to TIH and CIH the right to use its proprietary treatment programs and related trademarks and provide all required day-to-day business management services, including, but not limited to: • general administrative support services; • information systems; • recordkeeping; • billing and collection; • obtaining and maintaining all federal, state and local licenses, certifications and regulatory permits. All clinical matters relating to the operation of TIH and CIH and the performance of clinical services through the network of providers shall be the sole and exclusive responsibility of the TIH and CIH Board free of any control or direction from the Company. TIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the medical group, provided that any capitalized costs will be amortized over a five CIH pays the Company a monthly fee equal to the aggregate amount of (a) its costs of providing management services (including reasonable overhead allocated to the delivery of its services and including salaries, rent, equipment, and tenant improvements incurred for the benefit of the entity, provided that any capitalized costs will be amortized over a five The Company's condensed consolidated balance sheets include the following assets and liabilities from its VIE's (in thousands): (in thousands) March 31, December 31, Cash and cash equivalents $ 634 $ 379 Accounts receivable 694 564 Unbilled receivables 26 — Prepaid and other current assets 17 26 Total assets $ 1,371 $ 969 Accounts payable $ 21 $ 9 Accrued liabilities 168 100 Deferred revenue 65 73 Intercompany payable 938 685 Total liabilities $ 1,192 $ 867

Organization (Policies)

Organization (Policies)	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements include Catasys, Inc. and its wholly-owned subsidiaries and variable interest entities (VIE's). The accompanying condensed consolidated financial statements for Catasys, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and instructions to Form 10-Q and Article 10 of Regulation S-X. All intercompany balances and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the condensed financial statements included all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for the entire fiscal year. The accompanying financial information should be read in conjunction with the financial statements and the notes thereto included in the most recent Annual Report on Form 10-K for the year-ended December 31, 2019, from which the balance sheet, as of December 31, 2019, has been derived. The Company operates as one segment. Certain prior period amounts reported in condensed consolidated financial statements and notes have been reclassified to conform to current period presentation.
Recently Adopted/Issued Accounting Standards and Pronouncements	Recently Adopted Accounting Standards In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. The adoption of of this ASU 2018-13 on January 1, 2020 did not have an impact on its financial statements. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes" which enhances and simplifies various aspects of income tax accounting guidance. The guidance is effective for the Company in the first quarter of 2021, although early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2019-12 on its consolidated financial statements and related footnote disclosures. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”). The ASU requires recognition of an estimate of lifetime expected credit losses as an allowance. For small reporting public companies, the amendments are effective for annual reporting periods beginning after December 15, 2022, including interim periods within those annual periods. The Company is currently evaluating the impact of adoption of ASU 2016-13 on its consolidated financial statements and related footnote disclosures.

Accounts Receivable (Tables)

Accounts Receivable (Tables)	3 Months Ended
	Mar. 31, 2020
Receivables [Abstract]
Schedule of concentration of risk	The following table is a summary of concentration of credit risk by customer revenues and accounts receivables: Three Months Ended Percentage of Revenue 2020 2019 Largest customer 48.2 % 26.5 % 2nd largest customer 18.2 % 25.8 % 3rd largest customer 14.7 % 16.2 % 4th largest customer 10.0 % 11.5 % Remaining customers 8.9 % 20.0 % 100.0 % 100.0 % Percentage of Accounts Receivable March 31, 2020 December 31, 2019 Largest customer 37.6 % 54.3 % 2nd largest customer 31.9 % 15.7 % 3rd largest customer 22.4 % 15.2 % 4th largest customer 4.7 % 3.6 % Remaining customers 3.4 % 11.2 % 100.0 % 100.0 %

Common Stock (Tables)

Common Stock (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Schedule of basic and diluted net loss per share	Basic and diluted net loss per share (in thousands, except per share amounts) are as follows: Three months ended March 31, 2020 March 31, 2019 Net loss $ (7,595) $ (2,921) Weighted-average shares of common stock outstanding 16,693 16,198 Net loss per share - basic and diluted $ (0.45) $ (0.18)
Schedule of shares excluded from net loss per share	The following common equivalent shares as of March 31, 2020 and 2019, issuable upon exercise of stock options and warrants have been excluded from the diluted earnings per share calculation as their effect is anti-dilutive: March 31, 2020 March 31, 2019 Warrants to purchase common stock 1,539,926 1,625,108 Options to purchase common stock 3,961,490 4,341,116 Total 5,501,416 5,966,224

Stock Based Compensation (Table

Stock Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Schedule of assumptions used in the Black-Scholes option-pricing model	The assumptions used in the Black-Scholes option-pricing model are determined as follows: March 31, 2020 Volatility 78.00 % Risk-free interest rate 1.42%-1.55% Expected life (in years) 2.75-6.08 Dividend yield 0 %
Summary of stock option activity for employees and directors	A summary of stock option activity for employees, directors and consultants is as follows: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2019 4,006,351 $ 10.92 Granted 638,563 14.95 Exercised (223,643) 7.87 Forfeited (459,781) 12.22 Outstanding as of March 31, 2020 3,961,490 $ 11.59 Options vested and exercisable as of March 31, 2020 1,022,419 $ 11.72
Summary of warrants activity for non-employees	A summary of warrants activity for non-employees is as follows: Number of Warrants Weighted Average Outstanding as of December 31, 2019 1,550,975 $ 6.08 Issued — — Expired — — Exercised (11,049) $ 1.80 Outstanding as of March 31, 2020 1,539,926 $ 6.12 Warrants exercisable as of March 31, 2020 1,539,926 $ 6.12
Schedule of performance based and market based issuances	The following table summarizes the Company’s outstanding awards under this structure: Grant Date Performance Measures Vesting Term Performance Period # of Shares Exercise Price December 2017 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 642,307 $ 7.50 August 2018 Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023. Fully vest on January 1, 2023 January 1, 2023 397,693 $ 7.50 April 2018 The Options will be divided into five equal tranches and Performance Targets to be established by Board of Directors for each tranche at the beginning of the fiscal year Amended and vested 115,950 options based on severance agreement Amended and vested 115,950 options based on severance agreement 115,950 $ 7.50

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Schedule of quantitative information for operating leases	Quantitative information for the operating lease is as follows: Condensed Consolidated Statement of Operations (In thousands) For the Three Months Ended March 31, 2020 For the Three Months Ended March 31, 2019 Operating lease expense $ 166 $ 74 Short-term lease rent expense 27 3 Total rent expense $ 193 $ 77 Condensed Consolidated Statements of Cash Flows (In thousands) For the Three Months Ended March 31, 2020 For the Three Months Ended March 31, 2019 Cash paid for Operating Lease Liabilities $ 143 $ 99 Other Information March 31, 2020 March 31, 2019 Weighted-average remaining lease term – operating leases (years) 4.3 0.0 Weighted-average discount rate – operating leases 10.15 % 9.25 %
Schedule of maturities of the operating lease liabilities	Maturities of the operating lease liabilities are as follows: (In thousands) Amount Remaining in 2020 $ 438 2021 603 2022 623 2023 644 2024 328 Total lease payments 2,636 Less: imputed interest (513) Present value of lease liabilities 2,123 Less: current portion (389) Lease liabilities, non-current $ 1,734
Schedule of future minimum lease payments under capital leases	As of March 31, 2020, the future minimum lease payments under capital leases are as follows (in thousands): For the Three Months Ended March 31, 2020 Total lease payments $ 367 Less: interest (26) Present value of lease liabilities 341 Less: current portion (144) Lease liabilities, non-current $ 197

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Schedule of debt valuation assumptions	The assumptions used in the Black-Scholes option-pricing model remain unchanged and are determined as follows: March 31, 2020 Volatility 98.01 % Risk-free interest rate 1.58 % Expected life (in years) 7 Dividend yield 0 % The assumptions used in the Black-Scholes option-pricing model are determined as follows: March 31, 2020 December 31, 2019 Volatility 98.04 % 98.04 % Risk-free interest rate 0.55 % 1.81 % Weighted average expected life (in years) 6.1 6.25 Dividend yield — % — %
Schedule of carrying amounts of debt	The net carrying amounts of the liability components consists of the following (in thousands): March 31, 2020 December 31, 2019 Principal $ 37,955 $ 36,502 Less: debt discount (4,705) (4,905) Net carrying amount $ 33,250 $ 31,597
Schedule of interest expense recognized	The following table presents the interest expense recognized related to the 2024 Notes and 2022 Loan (in thousands): Three months ended March 31, 2020 2019 Contractual interest expense $ 1,453 $ 221 Accretion of debt discount 200 100 Total $ 1,653 $ 321

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2020
Fair Value Disclosures [Abstract]
Schedule of fair value measurements by level	The following tables summarize fair value measurements by level as of March 31, 2020 and December 31, 2019, respectively, for assets and liabilities measured at fair value on a recurring basis: Balance as of March 31, 2020 (in thousands) Level I Level II Level III Total Letter of credit (1) $ 408 $ — $ — $ 408 Total assets $ 408 $ — $ — $ 408 Warrant liabilities $ — $ — $ 627 $ 627 Total liabilities $ — $ — $ 627 $ 627 (1) $408,000 is included in restricted cash, long-term on the condensed consolidated balance sheet as of March 31, 2020. Balance as of December 31, 2019 (in thousands) Level I Level II Level III Total Letter of credit (2) $ 408 $ — $ — $ 408 Total assets $ 408 $ — $ — $ 408 Warrant liabilities $ — $ — $ 691 $ 691 Total liabilities $ — $ — $ 691 $ 691
Schedule of fair value measurements using significant Level III inputs	The fair value measurements using significant Level III inputs, and changes therein, for the quarter ended March 31, 2020 are as follows: (in thousands) Level III Balance as of December 31, 2019 $ 691 Issuance of new warrant liability — Change in fair value of warrant liability (64) Balance as of March 31, 2020 $ 627
Schedule of warranty liability assumptions	The assumptions used in the Black-Scholes option-pricing model remain unchanged and are determined as follows: March 31, 2020 Volatility 98.01 % Risk-free interest rate 1.58 % Expected life (in years) 7 Dividend yield 0 % The assumptions used in the Black-Scholes option-pricing model are determined as follows: March 31, 2020 December 31, 2019 Volatility 98.04 % 98.04 % Risk-free interest rate 0.55 % 1.81 % Weighted average expected life (in years) 6.1 6.25 Dividend yield — % — %

Variable Interest Entities (Tab

Variable Interest Entities (Tables)	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Variable Interest Entities	The Company's condensed consolidated balance sheets include the following assets and liabilities from its VIE's (in thousands): (in thousands) March 31, December 31, Cash and cash equivalents $ 634 $ 379 Accounts receivable 694 564 Unbilled receivables 26 — Prepaid and other current assets 17 26 Total assets $ 1,371 $ 969 Accounts payable $ 21 $ 9 Accrued liabilities 168 100 Deferred revenue 65 73 Intercompany payable 938 685 Total liabilities $ 1,192 $ 867

Organization (Details)

Organization (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)segmentstate	Dec. 31, 2019USD ($)	Mar. 31, 2019USD ($)	Dec. 31, 2018USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of segments | segment	1
Cash and restricted cash	$ 12,409	$ 14,018	$ 1,704	$ 3,570
Working capital	4,400
Monthly cash burn rate	$ 1,500
Number of states in which entity operates | state	30

Accounts Receivable - Narrative

Accounts Receivable - Narrative (Details) - USD ($)	Mar. 31, 2020	Mar. 31, 2019
Receivables [Abstract]
Allowance for doubtful accounts	$ 0	$ 0

Accounts Receivable - Concentra

Accounts Receivable - Concentration of Credit Risk (Details) - Customer Concentration Risk	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue from Contract with Customer Benchmark
Concentration Risk [Line Items]
Concentration risk	100.00%	100.00%
Revenue from Contract with Customer Benchmark | Largest customer
Concentration Risk [Line Items]
Concentration risk	48.20%	26.50%
Revenue from Contract with Customer Benchmark | 2nd largest customer
Concentration Risk [Line Items]
Concentration risk	18.20%	25.80%
Revenue from Contract with Customer Benchmark | 3rd largest customer
Concentration Risk [Line Items]
Concentration risk	14.70%	16.20%
Revenue from Contract with Customer Benchmark | 4th largest customer
Concentration Risk [Line Items]
Concentration risk	10.00%	11.50%
Revenue from Contract with Customer Benchmark | Remaining customers
Concentration Risk [Line Items]
Concentration risk	8.90%	20.00%
Accounts Receivable
Concentration Risk [Line Items]
Concentration risk	100.00%		100.00%
Accounts Receivable | Largest customer
Concentration Risk [Line Items]
Concentration risk	37.60%		54.30%
Accounts Receivable | 2nd largest customer
Concentration Risk [Line Items]
Concentration risk	31.90%		15.70%
Accounts Receivable | 3rd largest customer
Concentration Risk [Line Items]
Concentration risk	22.40%		15.20%
Accounts Receivable | 4th largest customer
Concentration Risk [Line Items]
Concentration risk	4.70%		3.60%
Accounts Receivable | Remaining customers
Concentration Risk [Line Items]
Concentration risk	3.40%		11.20%

Common Stock - Earnings per sha

Common Stock - Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Net loss	$ (7,595)	$ (2,921)
Weighted-average shares of common stock outstanding (in shares)	16,693	16,198
Net loss per share - basic and diluted (in dollars per share)	$ (0.45)	$ (0.18)

Common Stock - Antidilutive sha

Common Stock - Antidilutive shares (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	5,501,416	5,966,224
Warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	1,539,926	1,625,108
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	3,961,490	4,341,116

Stock Based Compensation - Narr

Stock Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 2,300	$ 1,000
Warrants issued (in shares)	0	40,279
Warrants outstanding (in shares)	1,539,926		1,550,975
Acuitas Group Holdings LLC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants outstanding (in shares)	1,249,189
Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 600
Common stock issued	400
Employees, Directors and Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 19,100
Unrecognized compensation costs, recognition period	2 years 8 months 12 days
Stock options issued (in shares)	638,563
Weighted average exercise price (in dollars per share)	$ 11.59		$ 10.92
Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs	$ 200
Unrecognized compensation costs, recognition period	1 year 10 months 24 days
Consultants | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 30	$ 10
Stock options issued (in shares)		50,000
Weighted average exercise price (in dollars per share)		$ 9.93
2017 and 2010 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)	4,806,513
Expiration period	10 years
Vested and unvested stock options outstanding (in shares)	3,961,490
Shares reserved for future award (in shares)	397,098
2017 and 2010 Stock Incentive Plan | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
2017 and 2010 Stock Incentive Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years

Stock Based Compensation - Assu

Stock Based Compensation - Assumptions used in the Black-Scholes option-pricing model (Details)	3 Months Ended
	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	78.00%
Risk-free interest rate, minimum	1.42%
Risk-free interest rate, maximum	1.55%
Dividend yield	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	2 years 9 months
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	6 years 29 days

Stock Based Compensation - Empl

Stock Based Compensation - Employee and Director Stock Option Activity (Details) - Employees, Directors and Consultants	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Number of Shares
Beginning balance (in shares) | shares	4,006,351
Granted (in shares) | shares	638,563
Exercised (in shares) | shares	(223,643)
Forfeited (in shares) | shares	(459,781)
Ending balance (in shares) | shares	3,961,490
Vested (in shares) | shares	1,022,419
Exercisable (in shares) | shares	1,022,419
Weighted Average Exercise Price
Beginning balance (in dollars per share) | $ / shares	$ 10.92
Granted (in dollars per share) | $ / shares	14.95
Exercised (in dollars per share) | $ / shares	7.87
Forfeited (in dollars per share) | $ / shares	12.22
Ending balance (in dollars per share) | $ / shares	11.59
Vested (in dollars per share) | $ / shares	11.72
Exercisable (in dollars per share) | $ / shares	$ 11.72

Stock Based Compensation - Summ

Stock Based Compensation - Summary of Warrant Activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Number of Warrants
Beginning balance (in shares)	1,550,975
Issued (in shares)	0	40,279
Expired (in shares)	0
Exercised (in shares)	(11,049)
Ending balance (in shares)	1,539,926
Exercisable (in shares)	1,539,926
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 6.08
Issued (in dollars per share)	0
Expired (in dollars per share)	0
Exercised (in dollars per share)	1.80
Ending balance (in dollars per share)	6.12
Exercisable (in dollars per share)	$ 6.12

Stock Based Compensation - Perf

Stock Based Compensation - Performance-based and Market-based Awards (Details)	1 Months Ended
	Aug. 31, 2018day$ / sharesshares	Apr. 30, 2018state$ / sharesshares	Dec. 31, 2017day$ / sharesshares
Market Based Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, share price (in dollars per share)	$ 15		$ 15
Threshold trading days | day	20		20
Threshold consecutive trading days | day	30		30
Fully Vest on January 1, 2023 | Market Based Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares) | shares	397,693		642,307
Stock options granted (in dollars per share)	$ 7.50		$ 7.50
Vest Annually On December 31 for One Fifth of Each Tranche | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares) | shares		115,950
Stock options granted (in dollars per share)		$ 7.50
Number of tranches | state		5

Leases - Narrative (Details)

Leases - Narrative (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Jul. 31, 2019USD ($)ft²	Mar. 31, 2020USD ($)	Mar. 31, 2019USD ($)
Lessee, Lease, Description [Line Items]
Area of real estate property (in sq. ft) | ft²	7,869
Operating lease, term	60 months
Base annual rent	$ 600
Operating lease liability		$ 2,123
Operating lease, right of use asset		2,300
Operating lease expense		166	$ 74
Computer Equipment
Lessee, Lease, Description [Line Items]
Capital lease, right of use asset		300
Lease amortization		$ 40

Leases - Operating Lease Cost (

Leases - Operating Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease expense	$ 166	$ 74
Short-term lease rent expense	27	3
Total rent expense	$ 193	$ 77

Leases - Operating Lease Inform

Leases - Operating Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Cash paid for Operating Lease Liabilities	$ 143	$ 99
Weighted-average remaining lease term – operating leases (years)	4 years 3 months 18 days	0 years
Weighted-average discount rate – operating leases	10.15%	9.25%

Leases - Maturities of Operatin

Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands	Mar. 31, 2020USD ($)
Leases [Abstract]
Remaining in 2020	$ 438
2021	603
2022	623
2023	644
2024	328
Total lease payments	2,636
Less: imputed interest	(513)
Present value of lease liabilities	2,123
Less: current portion	(389)
Lease liabilities, non-current	$ 1,734

Leases - Finance Lease Liabilit

Leases - Finance Lease Liabilities (Details) $ in Thousands	Mar. 31, 2020USD ($)
Leases [Abstract]
Total lease payments	$ 367
Less: interest	(26)
Present value of lease liabilities	341
Less: current portion	(144)
Lease liabilities, non-current	$ 197

Debt - Narrative (Details)

Debt - Narrative (Details)	1 Months Ended		3 Months Ended		6 Months Ended	12 Months Ended
	Sep. 30, 2019USD ($)	Mar. 31, 2019USD ($)trancherequirement$ / sharesshares	Mar. 31, 2020USD ($)$ / shares	Mar. 31, 2019USD ($)trancherequirement$ / shares	Jun. 30, 2019USD ($)	Dec. 31, 2019USD ($)$ / shares	Jun. 30, 2018USD ($)
Debt Instrument [Line Items]
Number of billing requirements | requirement		3		3
Exercise price of warrants (in dollars per share) | $ / shares			$ 6.12			$ 6.08
2024 Notes
Debt Instrument [Line Items]
Proceeds from debt	$ 35,000,000		$ 1,453,000	$ 0
Interest rate			15.75%
Purchase of additional debt	$ 10,000,000
2022 Loan
Debt Instrument [Line Items]
Interest rate		9.75%		9.75%
Principal amount of notes		$ 15,000,000		$ 15,000,000
Receivables financing facility		2,500,000		2,500,000			$ 2,500,000
A/R facility, amount borrowed					$ 1,900,000
A/R facility, amount repaid					$ 1,900,000
Additional loan amount		$ 7,500,000		$ 7,500,000
Number of revolving tranches | tranche		3		3
Additional loan, tranche one		$ 2,500,000		$ 2,500,000
Additional loan, tranche two		2,500,000		2,500,000
Additional loan, tranche three		2,500,000		$ 2,500,000
First billings threshold for additional loan		5,000,000
Second billings threshold for additional loan		7,000,000
Third billings threshold for additional loan		$ 8,000,000
Warrants issued (in shares) | shares		40,279
Term of warrants		7 years		7 years
Aggregate amount of debt purchased		$ 600,000
Duration of days preceding grant date		5 days
Exercise price of warrants (in dollars per share) | $ / shares		$ 9.93		$ 9.93
Equity financing securities issuance period following agreement date		18 months
Payment to lender		$ 150,000
Percentage of outstanding principal balance		6.00%		6.00%
Early termination costs						$ 1,100,000
2022 Loan | Other income/(expense)
Debt Instrument [Line Items]
Write off of debt issuance costs						$ 1,500,000
2022 Loan | Maximum
Debt Instrument [Line Items]
Principal amount of notes		$ 7,500,000		$ 7,500,000			$ 7,500,000
2022 Loan | Minimum | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%

Debt - Valuation Assumptions (D

Debt - Valuation Assumptions (Details)	Mar. 31, 2020
Volatility
Debt Instrument [Line Items]
Equity component valuation input	0.9801
Risk-free interest rate
Debt Instrument [Line Items]
Equity component valuation input	0.0158
Expected life (in years)
Debt Instrument [Line Items]
Equity component valuation input	7
Dividend yield
Debt Instrument [Line Items]
Equity component valuation input	0

Debt - Net Carrying Amounts (De

Debt - Net Carrying Amounts (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Principal	$ 37,955	$ 36,502
Less: debt discount	(4,705)	(4,905)
Net carrying amount	$ 33,250	$ 31,597

Debt - Interest Expense (Detail

Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Debt Disclosure [Abstract]
Contractual interest expense	$ 1,453	$ 221
Accretion of debt discount	200	100
Total	$ 1,653	$ 321

Fair Value Measurements - Fair

Fair Value Measurements - Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liabilities	$ 627	$ 691
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	408	408
Warrant liabilities	627	691
Total liabilities	627	691
Fair Value, Recurring | Restricted cash, long term
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	408	408
Fair Value, Recurring | Letter of credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	408	408
Level I | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	408	408
Warrant liabilities	0	0
Total liabilities	0	0
Level I | Fair Value, Recurring | Letter of credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	408	408
Level II | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Warrant liabilities	0	0
Total liabilities	0	0
Level II | Fair Value, Recurring | Letter of credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	0	0
Level III | Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Warrant liabilities	627	691
Total liabilities	627	691
Level III | Fair Value, Recurring | Letter of credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 0	$ 0

Fair Value Measurements - Fai_2

Fair Value Measurements - Fair Value Measurements Using Significant Level III Inputs (Details) - Warrants - Level III $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 691
Issuance of new warrant liability	0
Change in fair value of warrant liability	(64)
Ending balance	$ 627

Fair Value Measurements - Fai_3

Fair Value Measurements - Fair Value Assumptions, Warrant Liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)	Mar. 31, 2019USD ($)	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change in fair value of warrant liability	$ (64)	$ 91
Volatility
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	0.9804		0.9804
Risk-free interest rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	0.0055		0.0181
Expected life (in years)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	6.1		6.25
Dividend yield
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability assumptions	0		0

Variable Interest Entities - Na

Variable Interest Entities - Narrative (Details)	3 Months Ended
	Mar. 31, 2020
TIH
Variable Interest Entity [Line Items]
Capitalized cost, amortization period	5 years
TIH | Minimum
Variable Interest Entity [Line Items]
Foregoing costs, percent	10.00%
TIH | Maximum
Variable Interest Entity [Line Items]
Foregoing costs, percent	15.00%
CIH
Variable Interest Entity [Line Items]
Capitalized cost, amortization period	5 years

Variable Interest Entities - Su

Variable Interest Entities - Summary of Amounts and Classification of Assets and Liabilities of the VIE in Our Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Unbilled receivables	$ 2,719	$ 2,093
Prepaid expenses and other current assets	986	733
Total assets	22,887	23,855
Accounts payable	1,734	1,385
Deferred revenue	6,710	5,803
Total liabilities	50,340	47,764
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Cash and cash equivalents	634	379
Accounts receivable	694	564
Unbilled receivables	26	0
Prepaid expenses and other current assets	17	26
Total assets	1,371	969
Accounts payable	21	9
Accrued liabilities	168	100
Deferred revenue	65	73
Intercompany payable	938	685
Total liabilities	$ 1,192	$ 867