Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CNXR | |
Entity Registrant Name | CONNECTURE INC | |
Entity Central Index Key | 1,211,759 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,193,260 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 207 | $ 5,424 |
Accounts receivable - net of allowances | 5,766 | 10,792 |
Prepaid expenses and other current assets | 828 | 652 |
Total current assets | 6,801 | 16,868 |
PROPERTY AND EQUIPMENT - Net | 2,112 | 2,109 |
GOODWILL | 26,779 | 26,779 |
OTHER INTANGIBLE ASSETS - Net | 10,504 | 11,392 |
DEFERRED IMPLEMENTATION COSTS | 24,924 | 24,565 |
OTHER ASSETS | 1,302 | 976 |
TOTAL ASSETS | 72,422 | 82,689 |
CURRENT LIABILITIES: | ||
Accounts payable | 8,508 | 6,853 |
Accrued payroll and related liabilities | 3,545 | 3,560 |
Other liabilities | 2,163 | 2,188 |
Current maturities of debt | 1,908 | 1,441 |
Deferred revenue | 31,024 | 34,049 |
Total current liabilities | 47,148 | 48,091 |
DEFERRED REVENUE | 15,837 | 18,529 |
DEFERRED TAX LIABILITY | 23 | 23 |
LONG-TERM DEBT | 46,798 | 46,964 |
OTHER LONG-TERM LIABILITIES | 244 | 262 |
Total liabilities | $ 110,050 | $ 113,869 |
COMMITMENTS AND CONTINGENCIES (Note 5) | ||
STOCKHOLDERS' DEFICIT: | ||
Common stock, $0.001 par value, 75,000,000 shares authorized as of March 31, 2016 and December 31, 2015, and 22,115,225 and 22,063,357 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively | $ 23 | $ 22 |
Additional paid-in capital | 102,436 | 101,546 |
Accumulated deficit | (139,907) | (132,571) |
Treasury stock, at cost | (180) | (177) |
Total stockholders' deficit | (37,628) | (31,180) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 72,422 | $ 82,689 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, Shares authorized | 75,000,000 | 75,000,000 |
Common stock, Shares issued | 22,115,225 | 22,063,357 |
Common stock, Shares outstanding | 22,115,225 | 22,063,357 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
REVENUE | $ 17,557 | $ 20,648 |
COST OF REVENUE | 12,353 | 11,321 |
GROSS MARGIN | 5,204 | 9,327 |
OPERATING EXPENSES: | ||
Research and development | 5,504 | 6,528 |
Sales and marketing | 2,338 | 2,883 |
General and administrative | 3,264 | 3,605 |
Total operating expenses | 11,106 | 13,016 |
LOSS FROM OPERATIONS | (5,902) | (3,689) |
OTHER EXPENSES: | ||
Interest expense | 1,409 | 1,413 |
Other expense (income), net | 8 | |
Total other expenses | 1,409 | 1,421 |
LOSS BEFORE (PROVISION) BENEFIT FOR INCOME TAXES | (7,311) | (5,110) |
(PROVISION) BENEFIT FOR INCOME TAXES | (25) | 11 |
NET LOSS | (7,336) | (5,099) |
COMPREHENSIVE LOSS | $ (7,336) | $ (5,099) |
NET LOSS PER COMMON SHARE: | ||
Basic and diluted | $ (0.33) | $ (0.24) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic and diluted | 22,112,273 | 21,695,932 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, at Cost [Member] | Accumulated Deficit [Member] |
Beginning Balance, Value at Dec. 31, 2014 | $ (28,841) | $ 22 | $ 96,365 | $ (125,228) | |
Beginning Balance, Shares at Dec. 31, 2014 | 21,689,223 | ||||
Stock-based compensation expense | 717 | 717 | |||
Exercise of stock options and vesting of restricted stock units | 6 | 6 | |||
Exercise of stock options and vesting of restricted stock units, Shares | 11,269 | ||||
Net loss | (5,099) | (5,099) | |||
Ending Balance, Value at Mar. 31, 2015 | (33,217) | $ 22 | 97,088 | (130,327) | |
Ending Balance, Shares at Mar. 31, 2015 | 21,700,492 | ||||
Beginning Balance, Value at Dec. 31, 2015 | $ (31,180) | $ 22 | 101,546 | $ (177) | (132,571) |
Beginning Balance, Shares at Dec. 31, 2015 | 22,063,357 | 22,063,357 | |||
Stock-based compensation expense | $ 812 | 812 | |||
Exercise of stock options and vesting of restricted stock units | 79 | $ 1 | 78 | ||
Exercise of stock options and vesting of restricted stock units, Shares | 52,904 | ||||
Treasury stock acquired | $ (3) | (3) | |||
Treasury stock acquired, Shares | (51,185) | (1,036) | |||
Net loss | $ (7,336) | (7,336) | |||
Ending Balance, Value at Mar. 31, 2016 | $ (37,628) | $ 23 | $ 102,436 | $ (180) | $ (139,907) |
Ending Balance, Shares at Mar. 31, 2016 | 22,115,225 | 22,115,225 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (7,336) | $ (5,099) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,185 | 1,270 |
Bad debt expense | 45 | |
Stock-based compensation expense | 812 | 717 |
Interest accretion on financing obligations | 69 | 138 |
Change in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | 5,026 | 4,437 |
Prepaid expenses and other assets | (193) | 535 |
Deferred implementation costs | (359) | (637) |
Accounts payable | 1,108 | 75 |
Accrued expenses and other liabilities | (32) | 683 |
Deferred revenue | (5,717) | (8,423) |
Net cash used in operating activities | (5,437) | (6,259) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (49) | (251) |
Net cash used in investing activities | (49) | (251) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving line of credit | 1,000 | |
Repayments under revolving line of credit | (500) | (340) |
Repayments of term debt | (281) | (3,181) |
Payment of capital lease obligations | (26) | (694) |
Other | 76 | (139) |
Net cash provided by (used in) financing activities | 269 | (4,354) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (5,217) | (10,864) |
CASH AND CASH EQUIVALENTS - Beginning of period | 5,424 | 28,252 |
CASH AND CASH EQUIVALENTS - End of period | 207 | 17,388 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 1,282 | 2,159 |
Cash paid for income taxes | 14 | 49 |
Non-cash investing and financing activities: | ||
Purchase of property and equipment in accounts payable | $ 251 | $ 37 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Connecture, Inc. and its subsidiaries, including DestinationRx, Inc., (“DRX”), RxHealth Insurance Agency, Inc., and Insurix, Inc. (collectively, the “Company”), is a Delaware corporation. The Company is a web-based consumer shopping, enrollment and retention platform for health insurance distribution in the United States. The Company’s solutions support the industry evolution towards a consumer-centric experience that is transforming how health insurance is purchased and distributed. The Company’s solutions offer a personalized health insurance shopping experience that recommends the best fit insurance plan based on an individual’s preferences, health status, preferred providers, medications and expected out-of-pocket costs. The Company’s customers are health insurance marketplace operators, including health plans, brokers and exchange operators. The Company’s solutions automate key functions in the health insurance distribution process, allowing its customers to price and present plan options accurately to consumers and efficiently enroll, renew and manage plan members. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Interim Unaudited Condensed Consolidated Financial Information Use of Estimates— Cash and Cash Equivalents Accounts Receivable and Allowance for Doubtful Accounts Financial Instruments and Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash and cash equivalents and accounts receivable. The Company’s credit risk is managed by investing its cash and cash equivalents in high quality money market instruments with established financial institutions. Concentrations of credit risk relate to accounts receivable are limited to several customers to whom the Company makes substantial sales. The Company has not experienced any material losses related to receivables from individual customers, geographic regions or groups of customers. No customers accounted for 10% or greater of total accounts receivable as of March 31, 2016 or December 31, 2015. As of March 31, 2016 and 2015, the Company had the following customers that accounted for 10% or greater of total revenue: Revenue Customers Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 A < 10.0 % 23.4 % B < 10.0 % 10.6 % Revenue Recognition a) Software Automation Solutions Fees Contractual terms for the delivery and ongoing support of the Company’s software automation solutions generally consist of multiple components including: (a) software license fees (non-hosted arrangements), (b) software maintenance fees, (c) software usage fees, (d) professional services fees, (e) hosting fees and (f) production support fees. Software license fees represent amounts paid for the right to use the solution. Software usage fees represent amounts paid to cover only a specific period of time, after which usage and access rights expire. Software maintenance fees typically accompany software license fees and represent amounts paid for the right to receive commercially available updates and upgrades to the solution. Professional services fees represent amounts charged for services performed in connection with the configuration, integration and implementation of the solutions in accordance with customer specifications. Hosting fees represent fees related to post implementation hosting and monitoring of the solution. Production support fees are charged for the ongoing rate, benefits and related content management of the platform. The Company’s contracts with its customers typically bundle multiple services and are generally priced on a fixed fee basis. The term over which the Company is committed to deliver these services can range from several months to several years. The majority of the Company’s software automation solution services sold in the Enterprise/Commercial and Medicare segments and a portion of the Private Exchange segment are arrangements in which the Company hosts the web-based software automation solution and the customer pays a fee for access to and usage of the web-based software. The ownership of the technology and rights to the related code of such hosted web-based software remain with the Company and a customer has no contractual right to take possession of the software and run it on its own hardware platform. These arrangements are referred to as hosted arrangements and are accounted for as software-as-a-service under ASC 605, Revenue Recognition. A small percentage of the Company’s software automation solutions, sold primarily in the Enterprise/State segment, are arrangements in which the software is not hosted on the Company’s infrastructure. These arrangements include the licensed use of the software and are subject to accounting under ASC 985, Software Revenue Recognition. For all arrangements (whether hosted or non-hosted) that include multiple elements, the Company evaluates each element in an arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable. Elements generally include implementation services, software licensing or usage fees and maintenance or other services. Accounting guidance for multiple element arrangements containing hosted software provide a hierarchy to use when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (VSOE) of selling price, based on the price at which the item is regularly sold by the vendor on a standalone basis, should be used if it exists. If VSOE of selling price is not available, third-party evidence of selling price is used to establish the selling price if it exists. If VSOE and third-party evidence do not exist, the Company allocates the arrangement fee to the separate units of accounting based on its best estimate of selling price. For hosted arrangements with multiple elements that are separate units of accounting, VSOE and third- party evidence do not currently exist and accordingly, the Company allocates the arrangement fee to the separate units of accounting based on management’s best estimate of selling price, when available. The Company determines its best estimate of selling price for services based on its overall pricing objectives, taking into consideration market conditions and customer-specific factors and by reviewing historical data related to sales of the Company’s services. Hosted arrangement revenue is recognized as follows by revenue element: • Software usage fees and hosting fees • Professional services for new customer software solution implementation • Professional services for modifications to existing customer software solutions • Production support fees Multiple deliverable arrangements accounting guidance for non-hosted arrangements provide an allocation of revenue to the separate elements based upon VSOE. To date, the elements of the Company’s non-hosted arrangements, whereby the customers take possession of the software, have not been sold separately. Therefore, the contractual consideration for a delivered element for the non-hosted arrangements does not qualify as a separate unit of accounting as VSOE does not currently exist for any element of the Company’s non-hosted arrangements. Accordingly, the delivered elements are combined with the other consideration for the remaining undelivered elements as a single unit of accounting. Revenue for non-hosted arrangements is recognized once all elements are delivered over the longer of the customer contract or estimated period of customer benefit. As of March 31, 2016 the Company has a non-hosted arrangement with one remaining Enterprise/State customer. b) Broker Multi-Payer Quoting Platform Fees The Company provides an online quoting platform service to insurance brokers through its Private Exchange segment. The Company charges the brokers a monthly fee for access to the service. Revenue from the access fees is recognized in the period that the service is provided. c) Government Cost-Plus-Fixed-Fee The Company used a percentage-of-completion method of accounting for its federal government contract in its Medicare segment prior to the fourth quarter of 2015. Under percentage-of-completion, the costs incurred to date had been compared to total estimated project costs and revenue was recognized in proportion to costs incurred. In the fourth quarter of 2015, the contract was renewed as a fixed fee contract and is accounted for in accordance with the Company’s Software Automation Solution Fees, discussed above. d) Commissions Within the Private Exchange segment, the Company earns commissions on annual employee enrollments in which the Company’s health plan network and software solutions are used in connection with each enrollment. Commissions are recorded in the period the enrollment is completed. Cost of Revenue Deferred Implementation Costs Stock-Based Compensation Comprehensive Loss Income Taxes Basic and Diluted Net Loss Per Common Share New Accounting Standards In May 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which clarifies a customer accounting for fees paid in a cloud computing arrangement. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The Company has adopted the provisions of this update, with no impact to the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet. Assuming the Company remains an EGC through December 31, 2019, the provisions of this update are expected to be effective for the Company beginning in the first quarter of 2020. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently assessing the impact that this update will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 3. NET LOSS PER COMMON SHARE Diluted loss per common share is the same as basic loss per common share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented: Three Months Ended March 31, 2016 2015 Anti-Dilutive Common Share Equivalents Restricted Stock Units — — Stock options 407,081 924,580 Total anti-dilutive common share equivalents 407,081 924,580 Basic and diluted net loss per common share is calculated as follows: Three Months Ended March 31, 2016 2015 Numerator: Net loss attributable to common stock $ (7,336 ) $ (5,099 ) Denominator: Weighted-average common shares outstanding, basic and diluted 22,112,273 21,695,932 Net loss per common share, basic and diluted $ (0.33 ) $ (0.24 ) |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 4. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Total Enterprise/ Commercial Enterprise/ State Medicare Private Exchange 26,779 7,732 — 14,711 4,336 Other Intangibles Assets Useful Lives - Gross Carrying Accumulated Net Carrying Customer Relationship 3-10 $ 7,298 $ (2,526 ) $ 4,772 Covenants Not to Compete 2.5-5 800 (800 ) — Acquired Technology 3-5 11,792 (8,101 ) 3,691 Trademarks 10 2,800 (898 ) 1,902 Software 3 1,767 (1,628 ) 139 $ 24,457 $ (13,953 ) $ 10,504 Other intangible assets consist of the following at December 31, 2015: Useful Lives - Gross Carrying Accumulated Net Carrying Customer Relationship 3-10 $ 7,298 $ (2,346 ) $ 4,952 Covenants Not to Compete 2.5-5 800 (798 ) 2 Acquired Technology 3-5 11,792 (7,566 ) 4,226 Trademarks 10 2,800 (828 ) 1,972 Software 3 1,764 (1,524 ) 240 $ 24,454 $ (13,062 ) $ 11,392 Amortization expense for the three months ended March 31, 2016 and 2015 was $891 and $1,032, respectively, and has been recorded in cost of revenue and general and administrative expenses. Estimated future amortization expense for the Company’s intangible assets is as follows: Year Ending December 31 Amount Remainder of 2016 $ 2,123 2017 3,093 2018 1,093 2019 1,000 2020 1,000 thereafter 2,195 Total future amortization expense $ 10,504 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. COMMITMENTS AND CONTINGENCIES Operating Leases Letter of Credit Indemnifications Litigation |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 6. DEBT Debt consisted of the following at March 31, 2016 and December 31, 2015: 2016 2015 Senior term loans $ 18,844 $ 19,125 Senior revolving credit facility 783 316 Subordinated loans 30,000 30,000 49,627 49,441 Less: original issue discounts and deferred financing costs (921 ) (1,036 ) Less: current maturities of debt (1,908 ) (1,441 ) Long-term debt $ 46,798 $ 46,964 Senior Debt The Credit Facility provides for $22,500 of term loans (the “Senior Term Loans”) and a $10,000 revolving credit (the “Senior Revolving Credit Facility”) through January 15, 2018 (the “Maturity Date”). The Senior Term Loans require quarterly principal payments of $281, with the unpaid principal balance payable in full on the Maturity Date. The Senior Term Loans accrue interest at a rate based on LIBOR plus a LIBOR Margin payable monthly. The Senior Revolving Credit Facility accrues interest monthly at a rate based on LIBOR, the Fed Funds Rate or bank’s Prime Rate. As of March 31, 2016, the interest rate on the outstanding Senior Term Loans and the Senior Revolving Credit Facility were 5.87% and 8.00%, respectively. The Credit Facility contains customary representations, warranties and covenants of the Company, as well as various limitations on the activities of the Company as they relate to additional indebtedness, junior liens, investments, capital expenditures, paying dividends, and mergers and acquisitions. The Credit Facility financial covenants, include a quarterly building EBITDA covenant and a minimum liquidity covenant. The quarterly building EBITDA covenant sets forth specific levels of cumulative trailing twelve month EBITDA measured on calendar quarter ends. The quarterly building EBITDA covenant ranges from $5,905 to $9,500 for the year ending December 31, 2016. The minimum liquidity covenant requires us to maintain a minimum liquidity level of $5,000 until June 30, 2016, $7,500 from July 1, 2016 to September 30, 2016, and $10,000 subsequent to that. Minimum liquidity is defined as the sum of cash and cash equivalents and borrowing capacity available to us under the $10,000 Senior Revolving Credit Facility. The minimum liquidity covenant expires once we achieve a Fixed Coverage Ratio in excess of 1.25:1.00 for two consecutive quarters. As of March 31, 2016, the Company was in compliance with the financial covenants, and expects to be in compliance throughout the year ended December 31, 2016. THL Promissory Note The THL Note contains customary financial covenants, including a quarterly building EBITDA covenant and a minimum liquidity covenant. As of March 31, 2016, we were in compliance with the financial covenants. Subsequent to March 31, 2016 the Company repaid the $30,000 principal and accrued interest to settle the THL Note (see Note 11). DRX Seller Note— Based on rates for instruments with comparable maturities and credit quality, the estimated fair value of the Company’s total debt as of March 31, 2016 and December 31, 2015 approximates the carrying value. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2016 | |
Federal Home Loan Banks [Abstract] | |
Stockholders' Deficit | 7. STOCKHOLDERS’ DEFICIT The Company recognized stock-based compensation expense of $812 and $717 for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, approximately $6,154 of total unrecognized compensation expense related to unvested stock option and restricted stock unit awards is expected to be recognized over the remaining vesting periods of approximately 3 years. The maximum contractual term of equity awards is 10 years. Common Stock Treasury Stock Reserved Shares At March 31, 2016, a total of 319,454 shares of common stock have been reserved for issuance under the 2014 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides that on the first day of January each year through 2024, the available shares of common stock shall generally be increased by (a) 100,000 shares or (b) 0.25% of issued and outstanding shares of common stock on the immediately preceding December 31. Incentive Plans Stock Options Number of Average Price(a) Average Life Aggregate Outstanding—January 1, 2015 1,838,082 $ 1.93 7.39 Granted — Exercised (3,021 ) $ 1.87 Forfeited — Outstanding—March 31, 2015 1,835,061 $ 1.93 7.15 $ 15,450 Outstanding—January 1, 2016 2,306,726 $ 4.16 7.59 Granted 22,200 $ 3.44 Exercised (42,974 ) $ 1.82 Forfeited (49,426 ) $ 7.63 Outstanding—March 31, 2016 2,236,526 $ 4.12 7.37 $ 1,026 Exercisable—March 31, 2016 1,376,747 $ 1.91 6.56 $ 927 (a) Weighted-average exercise price (b) Weighted-average contractual life remaining The weighted average fair value per option granted during the three months ended March 31, 2016 was $1.38. No options were granted during the three months ended March 31, 2015. The weighted average fair value of stock options is estimated at the date of grant using a Black-Scholes option pricing model. The following are weighted average assumptions used for estimating the fair value of options granted for the three months ended March 31, 2016. Three months 2016 Common stock share value $ 3.44 Expected life (years) 4.00 Volatility 50.00 % Interest rate 1.51 % Dividend yield 0.00 % The Company currently estimates volatility by using the weighted average historical volatility of comparable public companies. The risk-free interest rate is the rate available as of the option date on zero-coupon U.S. government issues with a remaining term equal to the expected term of the option. The Company has not paid dividends in the past and does not plan to pay any dividends in the foreseeable future. The Company has estimated forfeitures in determining the weighted average fair value calculation. The forfeiture rate used for options granted in the three months ended March 31, 2016 was 0% for executive employees and 10% for all other employees. The Company’s estimate of forfeitures will be adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from the estimate. The Company recognizes the grant date fair value of stock options that are expected to vest on a straight-line basis over the vesting period, which is generally three years from the date of grant. Restricted Stock Units (RSUs) Shares Average Fair (c) Average Life (b) Aggregate Outstanding—January 1, 2015 — Granted 189,250 $ 9.83 Vested (8,248 ) $ 9.83 Forfeited — Outstanding—March 31, 2015 181,002 $ 9.83 10.58 $ 1,873 Outstanding—January 1, 2016 570,790 $ 8.35 Granted 394,800 $ 2.61 Vested (9,930 ) $ 9.97 Forfeited (14,000 ) $ 11.37 Outstanding—March 31, 2016 941,660 $ 5.88 10.65 $ 2,411 (a) Weighted-average grant date fair value (b) Weighted-average contractual life remaining The Company recognizes the grant date fair value of the RSUs that are expected to vest on a straight-line basis over the period of vesting, which is generally three years from the date of grant. The Company recognizes the income tax benefits resulting from vesting of RSUs in the period they vest, to the extent the compensation expense has been recognized. Employee Stock Purchase Plan No shares were purchased under the ESPP during the three months ended March 31, 2016 or 2015. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES The Company’s effective tax (provision)/benefit rate of (0.48%) and 0.22% for the three months ended March 31, 2016 and 2015, respectively, differs from statutory federal income tax rates primarily due to changes in the deferred tax asset valuation allowance and current state income taxes. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | 9. RELATED PARTIES The Company paid $2,900 of principal and $480 of interest to settle the DRX Seller Note during the three months ended March 31, 2015. Current employees of the Company, including the Company’s current Chief Innovation Officer, New Markets, were employees and stockholders of DRX at the time of its acquisition, and as previous stockholders of DRX they received an interest in the DRX Seller Note. The $480 interest was paid to two related party stockholders, or entities controlled by the stockholders of the Company, pursuant to a note guarantee agreement the DRX sellers had with such related parties. Subsequent to March 31, 2016, Chrysalis Ventures II, L.P., a holder of more than 5% of the Company’s outstanding common stock as of March 31, 2016, purchased $2,000 of the Preferred Stock offered in the Transaction discussed in Note 11. A member of the Company’s board of directors is the chairman of the general partner of Chrysalis Ventures II, L.P. |
Segments of Business
Segments of Business | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segments of Business | 10. SEGMENTS OF BUSINESS The Company is organized into four reportable segments, which are based on software and service offerings. Unallocated corporate expenses and assets that are not considered when evaluating segment performance are grouped with Corporate in the following segment information: Three Months Ended March 31, 2016 2015 Revenue from external customers by segment: Enterprise/Commercial $ 10,409 $ 10,985 Enterprise/State 781 4,291 Medicare 4,450 3,983 Private Exchange 1,917 1,389 Consolidated revenue $ 17,557 $ 20,648 Gross margin by segment: Enterprise/Commercial $ 1,914 $ 4,923 Enterprise/State 188 1,714 Medicare 2,825 2,276 Private Exchange 277 414 Consolidated gross margin $ 5,204 $ 9,327 Consolidated operating expenses: Research and development $ 5,504 $ 6,528 Sales and marketing 2,338 2,883 General and administrative 3,264 3,605 Total consolidated operating expenses $ 11,106 $ 13,016 Consolidated loss from operations $ (5,902 ) $ (3,689 ) Depreciation and amortization by segment: Enterprise/Commercial $ 161 $ 137 Enterprise/State 9 24 Medicare 644 641 Private Exchange 234 232 Corporate 137 236 Consolidated depreciation and amortization $ 1,185 $ 1,270 Identifiable assets by segment are as follows: As of March 31, 2016 As of December 31, 2015 Indentifiable assets by segment: Enterprise/Commercial $ 32,027 $ 33,857 Enterprise/State 1,471 1,975 Medicare 24,394 26,198 Private Exchange 9,943 11,255 Corporate 4,587 9,404 Consolidated assets $ 72,422 $ 82,689 All Company assets were held and all revenue was generated in the United States during the three months ended March 31, 2016 and 2015. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. SUBSEQUENT EVENTS On April 28, 2016, the Company’s shareholders approved the issuance of 52,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) and shares of common stock issuable upon conversion of the Preferred Stock pursuant to an Investment Agreement, dated March 11, 2016 and as amended April 28, 2016, by and among the Company, Francisco Partners IV, L.P., Francisco Partners IV-A, L.P. and Chrysalis Ventures II, L.P. On May 2, 2016, the Company issued and sold the newly created Preferred Stock for an aggregate purchase price of $52,000 (the “Transaction”). Net of customary transaction costs, the Company received cash of approximately $49,300, of which the Company used approximately $30,600 to subsequently repay the principal balance, accrued interest and loan termination fees associated with the THL Note (see Note 6), with the remainder available for general corporate purposes. The sale of the Preferred Stock was not registered under the Securities Act. The Company agreed to use reasonable best efforts to register the Preferred Stock and the Conversion Shares (as defined below) for resale within 180 days of the May 2, 2016 Transaction closing. The shares of Preferred Stock are convertible into shares of the Company’s common stock (the “Conversion Shares”) at the option of the investors at any time. Beginning in 2018, the Company may force conversion if the closing price of the common stock is at least 175% of the then-applicable conversion price of the common stock for 45 consecutive trading days with a minimum average trading volume of at least 75,000 shares for 40 of such 45 trading days. Each share of Preferred Stock is convertible into a number of Conversion Shares equal to (i) the sum of (a) the original purchase price, plus (b) all accrued and unpaid dividends thereon up to but not including the conversion date, divided by (ii) the conversion price of the common stock at such time (which initially is $4.50 per share, subject to customary anti-dilution adjustments). The number of Conversion Shares underlying the Preferred Stock will be increased annually by the accrual of 7.5% cumulative dividends payable in-kind (which will increase in certain circumstances, but in no event will be more than 16.5% annually). Following the second anniversary of the May 2, 2016 closing, the Company may elect to pay such cumulative dividends in cash. The conversion price for the Preferred Stock is also subject to adjustment in the event of a stock split, reverse stock split, stock dividend, rights issuance, recapitalization, tender offer or similar transaction and to weighted-average price-based anti-dilution adjustments. A member of the Company’s board of directors is a Managing Member of the general partner of Chrysalis, a holder of more than 5% of the Company’s outstanding common stock as of March 31, 2016. Chrysalis purchased $2,000 of the Preferred Stock offered in the Transaction. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
Interim Unaudited Condensed Consolidated Financial Information | Interim Unaudited Condensed Consolidated Financial Information |
Use of Estimates | Use of Estimates— |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts |
Financial Instruments and Concentration of Credit Risk | Financial Instruments and Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash and cash equivalents and accounts receivable. The Company’s credit risk is managed by investing its cash and cash equivalents in high quality money market instruments with established financial institutions. Concentrations of credit risk relate to accounts receivable are limited to several customers to whom the Company makes substantial sales. The Company has not experienced any material losses related to receivables from individual customers, geographic regions or groups of customers. No customers accounted for 10% or greater of total accounts receivable as of March 31, 2016 or December 31, 2015. As of March 31, 2016 and 2015, the Company had the following customers that accounted for 10% or greater of total revenue: Revenue Customers Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 A < 10.0 % 23.4 % B < 10.0 % 10.6 % |
Revenue Recognition | Revenue Recognition a) Software Automation Solutions Fees Contractual terms for the delivery and ongoing support of the Company’s software automation solutions generally consist of multiple components including: (a) software license fees (non-hosted arrangements), (b) software maintenance fees, (c) software usage fees, (d) professional services fees, (e) hosting fees and (f) production support fees. Software license fees represent amounts paid for the right to use the solution. Software usage fees represent amounts paid to cover only a specific period of time, after which usage and access rights expire. Software maintenance fees typically accompany software license fees and represent amounts paid for the right to receive commercially available updates and upgrades to the solution. Professional services fees represent amounts charged for services performed in connection with the configuration, integration and implementation of the solutions in accordance with customer specifications. Hosting fees represent fees related to post implementation hosting and monitoring of the solution. Production support fees are charged for the ongoing rate, benefits and related content management of the platform. The Company’s contracts with its customers typically bundle multiple services and are generally priced on a fixed fee basis. The term over which the Company is committed to deliver these services can range from several months to several years. The majority of the Company’s software automation solution services sold in the Enterprise/Commercial and Medicare segments and a portion of the Private Exchange segment are arrangements in which the Company hosts the web-based software automation solution and the customer pays a fee for access to and usage of the web-based software. The ownership of the technology and rights to the related code of such hosted web-based software remain with the Company and a customer has no contractual right to take possession of the software and run it on its own hardware platform. These arrangements are referred to as hosted arrangements and are accounted for as software-as-a-service under ASC 605, Revenue Recognition. A small percentage of the Company’s software automation solutions, sold primarily in the Enterprise/State segment, are arrangements in which the software is not hosted on the Company’s infrastructure. These arrangements include the licensed use of the software and are subject to accounting under ASC 985, Software Revenue Recognition. For all arrangements (whether hosted or non-hosted) that include multiple elements, the Company evaluates each element in an arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable. Elements generally include implementation services, software licensing or usage fees and maintenance or other services. Accounting guidance for multiple element arrangements containing hosted software provide a hierarchy to use when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (VSOE) of selling price, based on the price at which the item is regularly sold by the vendor on a standalone basis, should be used if it exists. If VSOE of selling price is not available, third-party evidence of selling price is used to establish the selling price if it exists. If VSOE and third-party evidence do not exist, the Company allocates the arrangement fee to the separate units of accounting based on its best estimate of selling price. For hosted arrangements with multiple elements that are separate units of accounting, VSOE and third- party evidence do not currently exist and accordingly, the Company allocates the arrangement fee to the separate units of accounting based on management’s best estimate of selling price, when available. The Company determines its best estimate of selling price for services based on its overall pricing objectives, taking into consideration market conditions and customer-specific factors and by reviewing historical data related to sales of the Company’s services. Hosted arrangement revenue is recognized as follows by revenue element: • Software usage fees and hosting fees • Professional services for new customer software solution implementation • Professional services for modifications to existing customer software solutions • Production support fees Multiple deliverable arrangements accounting guidance for non-hosted arrangements provide an allocation of revenue to the separate elements based upon VSOE. To date, the elements of the Company’s non-hosted arrangements, whereby the customers take possession of the software, have not been sold separately. Therefore, the contractual consideration for a delivered element for the non-hosted arrangements does not qualify as a separate unit of accounting as VSOE does not currently exist for any element of the Company’s non-hosted arrangements. Accordingly, the delivered elements are combined with the other consideration for the remaining undelivered elements as a single unit of accounting. Revenue for non-hosted arrangements is recognized once all elements are delivered over the longer of the customer contract or estimated period of customer benefit. As of March 31, 2016 the Company has a non-hosted arrangement with one remaining Enterprise/State customer. b) Broker Multi-Payer Quoting Platform Fees The Company provides an online quoting platform service to insurance brokers through its Private Exchange segment. The Company charges the brokers a monthly fee for access to the service. Revenue from the access fees is recognized in the period that the service is provided. c) Government Cost-Plus-Fixed-Fee The Company used a percentage-of-completion method of accounting for its federal government contract in its Medicare segment prior to the fourth quarter of 2015. Under percentage-of-completion, the costs incurred to date had been compared to total estimated project costs and revenue was recognized in proportion to costs incurred. In the fourth quarter of 2015, the contract was renewed as a fixed fee contract and is accounted for in accordance with the Company’s Software Automation Solution Fees, discussed above. d) Commissions Within the Private Exchange segment, the Company earns commissions on annual employee enrollments in which the Company’s health plan network and software solutions are used in connection with each enrollment. Commissions are recorded in the period the enrollment is completed. |
Cost of Revenue | Cost of Revenue |
Deferred Implementation Costs | Deferred Implementation Costs |
Stock-Based Compensation | Stock-Based Compensation |
Comprehensive Loss | Comprehensive Loss |
Income Taxes | Income Taxes |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share |
New Accounting Standards | New Accounting Standards In May 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which clarifies a customer accounting for fees paid in a cloud computing arrangement. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The Company has adopted the provisions of this update, with no impact to the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet. Assuming the Company remains an EGC through December 31, 2019, the provisions of this update are expected to be effective for the Company beginning in the first quarter of 2020. Early adoption of ASU 2016-02 is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently assessing the impact that this update will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Concentration of Risk | The Company has not experienced any material losses related to receivables from individual customers, geographic regions or groups of customers. No customers accounted for 10% or greater of total accounts receivable as of March 31, 2016 or December 31, 2015. As of March 31, 2016 and 2015, the Company had the following customers that accounted for 10% or greater of total revenue: Revenue Customers Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 A < 10.0 % 23.4 % B < 10.0 % 10.6 % |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Summary of Anti-Dilutive Securities Excluded From Calculation of Weighted-Average Common Shares Outstanding | The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented: Three Months Ended March 31, 2016 2015 Anti-Dilutive Common Share Equivalents Restricted Stock Units — — Stock options 407,081 924,580 Total anti-dilutive common share equivalents 407,081 924,580 |
Summary of Basic and Diluted Net Loss Per Common Share | Basic and diluted net loss per common share is calculated as follows: Three Months Ended March 31, 2016 2015 Numerator: Net loss attributable to common stock $ (7,336 ) $ (5,099 ) Denominator: Weighted-average common shares outstanding, basic and diluted 22,112,273 21,695,932 Net loss per common share, basic and diluted $ (0.33 ) $ (0.24 ) |
Goodwill and Other Intangible21
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consists of following as of March 31, 2016 and December 31, 2015: Total Enterprise/ Commercial Enterprise/ State Medicare Private Exchange 26,779 7,732 — 14,711 4,336 |
Schedule of Other Intangible Assets | Other Intangibles Assets Useful Lives - Gross Carrying Accumulated Net Carrying Customer Relationship 3-10 $ 7,298 $ (2,526 ) $ 4,772 Covenants Not to Compete 2.5-5 800 (800 ) — Acquired Technology 3-5 11,792 (8,101 ) 3,691 Trademarks 10 2,800 (898 ) 1,902 Software 3 1,767 (1,628 ) 139 $ 24,457 $ (13,953 ) $ 10,504 Other intangible assets consist of the following at December 31, 2015: Useful Lives - Gross Carrying Accumulated Net Carrying Customer Relationship 3-10 $ 7,298 $ (2,346 ) $ 4,952 Covenants Not to Compete 2.5-5 800 (798 ) 2 Acquired Technology 3-5 11,792 (7,566 ) 4,226 Trademarks 10 2,800 (828 ) 1,972 Software 3 1,764 (1,524 ) 240 $ 24,454 $ (13,062 ) $ 11,392 |
Summary of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets is as follows: Year Ending December 31 Amount Remainder of 2016 $ 2,123 2017 3,093 2018 1,093 2019 1,000 2020 1,000 thereafter 2,195 Total future amortization expense $ 10,504 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following at March 31, 2016 and December 31, 2015: 2016 2015 Senior term loans $ 18,844 $ 19,125 Senior revolving credit facility 783 316 Subordinated loans 30,000 30,000 49,627 49,441 Less: original issue discounts and deferred financing costs (921 ) (1,036 ) Less: current maturities of debt (1,908 ) (1,441 ) Long-term debt $ 46,798 $ 46,964 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Federal Home Loan Banks [Abstract] | |
Summary of Stock Option Activity | Stock Options Number of Average Price(a) Average Life Aggregate Outstanding—January 1, 2015 1,838,082 $ 1.93 7.39 Granted — Exercised (3,021 ) $ 1.87 Forfeited — Outstanding—March 31, 2015 1,835,061 $ 1.93 7.15 $ 15,450 Outstanding—January 1, 2016 2,306,726 $ 4.16 7.59 Granted 22,200 $ 3.44 Exercised (42,974 ) $ 1.82 Forfeited (49,426 ) $ 7.63 Outstanding—March 31, 2016 2,236,526 $ 4.12 7.37 $ 1,026 Exercisable—March 31, 2016 1,376,747 $ 1.91 6.56 $ 927 (a) Weighted-average exercise price (b) Weighted-average contractual life remaining |
Schedule of Weighted Average Assumptions Used for Estimating Fair Value of Options Granted | The following are weighted average assumptions used for estimating the fair value of options granted for the three months ended March 31, 2016. Three months 2016 Common stock share value $ 3.44 Expected life (years) 4.00 Volatility 50.00 % Interest rate 1.51 % Dividend yield 0.00 % |
Schedule of Restricted Stock Activity | Restricted Stock Units (RSUs) Shares Average Fair (c) Average Life (b) Aggregate Outstanding—January 1, 2015 — Granted 189,250 $ 9.83 Vested (8,248 ) $ 9.83 Forfeited — Outstanding—March 31, 2015 181,002 $ 9.83 10.58 $ 1,873 Outstanding—January 1, 2016 570,790 $ 8.35 Granted 394,800 $ 2.61 Vested (9,930 ) $ 9.97 Forfeited (14,000 ) $ 11.37 Outstanding—March 31, 2016 941,660 $ 5.88 10.65 $ 2,411 (a) Weighted-average grant date fair value (b) Weighted-average contractual life remaining |
Segments of Business (Tables)
Segments of Business (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Unallocated corporate expenses and assets that are not considered when evaluating segment performance are grouped with Corporate in the following segment information: Three Months Ended March 31, 2016 2015 Revenue from external customers by segment: Enterprise/Commercial $ 10,409 $ 10,985 Enterprise/State 781 4,291 Medicare 4,450 3,983 Private Exchange 1,917 1,389 Consolidated revenue $ 17,557 $ 20,648 Gross margin by segment: Enterprise/Commercial $ 1,914 $ 4,923 Enterprise/State 188 1,714 Medicare 2,825 2,276 Private Exchange 277 414 Consolidated gross margin $ 5,204 $ 9,327 Consolidated operating expenses: Research and development $ 5,504 $ 6,528 Sales and marketing 2,338 2,883 General and administrative 3,264 3,605 Total consolidated operating expenses $ 11,106 $ 13,016 Consolidated loss from operations $ (5,902 ) $ (3,689 ) Depreciation and amortization by segment: Enterprise/Commercial $ 161 $ 137 Enterprise/State 9 24 Medicare 644 641 Private Exchange 234 232 Corporate 137 236 Consolidated depreciation and amortization $ 1,185 $ 1,270 |
Schedule of Identifiable Assets by Segment | Identifiable assets by segment are as follows: As of March 31, 2016 As of December 31, 2015 Indentifiable assets by segment: Enterprise/Commercial $ 32,027 $ 33,857 Enterprise/State 1,471 1,975 Medicare 24,394 26,198 Private Exchange 9,943 11,255 Corporate 4,587 9,404 Consolidated assets $ 72,422 $ 82,689 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)CustomerSource | Mar. 31, 2015 | Dec. 31, 2015Customer | |
Schedule Of Significant Accounting Policies [Line Items] | |||
Interest-bearing amounts on deposit in excess of federally insured limits | $ | $ 0 | ||
Customer payment period | 30 days | ||
Number of revenue's sources | Source | 4 | ||
Customer Concentration Risk [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Customers accounted for 10% or greater of total accounts receivable | Customer | 0 | 0 | |
Customer Concentration Risk [Member] | Minimum [Member] | Revenue [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | |
Customer Concentration Risk [Member] | Minimum [Member] | Accounts Receivable [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Summary of Concentration of Risk (Detail) - Revenue [Member] | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 23.40% | |
Customer A [Member] | Maximum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.00% | |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.60% | |
Customer B [Member] | Maximum [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.00% |
Net Loss Per Common Share - Sum
Net Loss Per Common Share - Summary of Anti-Dilutive Securities Excluded From Calculation of Weighted-Average Common Shares Outstanding (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Common Share Equivalents | 407,081 | 924,580 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Common Share Equivalents | 407,081 | 924,580 |
Net Loss Per Common Share - S28
Net Loss Per Common Share - Summary of Basic and Diluted Net Loss Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss attributable to common stock | $ (7,336) | $ (5,099) |
Denominator: | ||
Weighted-average common shares outstanding, basic and diluted | 22,112,273 | 21,695,932 |
Net loss per common share, basic and diluted | $ (0.33) | $ (0.24) |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Accumulated goodwill impairments | $ 0 | $ 0 | |
Amortization expense | $ 891,000 | $ 1,032,000 |
Goodwill and Other Intangible30
Goodwill and Other Intangible Assets - Schedule of Goodwill (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
GOODWILL | $ 26,779 | $ 26,779 |
Enterprise/Commercial [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
GOODWILL | 7,732 | 7,732 |
Enterprise/State [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
GOODWILL | 0 | 0 |
Medicare [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
GOODWILL | 14,711 | 14,711 |
Private Exchange [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
GOODWILL | $ 4,336 | $ 4,336 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 24,457 | $ 24,454 |
Accumulated Amortization | (13,953) | (13,062) |
Net Carrying Value | 10,504 | 11,392 |
Customer Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 7,298 | 7,298 |
Accumulated Amortization | (2,526) | (2,346) |
Net Carrying Value | 4,772 | 4,952 |
Covenants Not to Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 800 | 800 |
Accumulated Amortization | (800) | (798) |
Net Carrying Value | 0 | 2 |
Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 11,792 | 11,792 |
Accumulated Amortization | (8,101) | (7,566) |
Net Carrying Value | $ 3,691 | $ 4,226 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 10 years | 10 years |
Gross Carrying Value | $ 2,800 | $ 2,800 |
Accumulated Amortization | (898) | (828) |
Net Carrying Value | $ 1,902 | $ 1,972 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | 3 years |
Gross Carrying Value | $ 1,767 | $ 1,764 |
Accumulated Amortization | (1,628) | (1,524) |
Net Carrying Value | $ 139 | $ 240 |
Minimum [Member] | Customer Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | 3 years |
Minimum [Member] | Covenants Not to Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 2 years 6 months | 2 years 6 months |
Minimum [Member] | Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | 3 years |
Maximum [Member] | Customer Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 10 years | 10 years |
Maximum [Member] | Covenants Not to Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 5 years | 5 years |
Maximum [Member] | Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 5 years | 5 years |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets - Summary of Estimated Future Amortization Expense (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2016 | $ 2,123 | |
2,017 | 3,093 | |
2,018 | 1,093 | |
2,019 | 1,000 | |
2,020 | 1,000 | |
thereafter | 2,195 | |
Total future amortization expense | $ 10,504 | $ 11,392 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | |||
Letter of credit, as security for leased property | $ 200 | $ 200 | |
Office Building [Member] | |||
Loss Contingencies [Line Items] | |||
Operating leases expire date | Through 2,025 | ||
Operating leases rent expense | $ 436 | $ 425 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Senior term loans | $ 18,844 | $ 19,125 |
Senior revolving credit facility | 783 | 316 |
Subordinated loans | 30,000 | 30,000 |
Total long-term debt | 49,627 | 49,441 |
Total long-term debt | 49,627 | 49,441 |
Less: original issue discounts and deferred financing costs | (921) | (1,036) |
Less: current maturities of debt | (1,908) | (1,441) |
LONG-TERM DEBT | $ 46,798 | $ 46,964 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | May. 02, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | Oct. 01, 2016 | Sep. 30, 2016 | Jun. 30, 2016 |
Debt Instrument [Line Items] | |||||||
Repayment of principal and accrued interest | $ 281,000 | $ 3,181,000 | |||||
THL Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of promissory note | 30,000,000 | ||||||
Debt instrument original issue discount | 683,000 | ||||||
DRX Seller Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument principal payment | 2,900,000 | ||||||
Debt instrument interest payment | $ 480,000 | ||||||
Subsequent Event [Member] | THL Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of principal and accrued interest | $ 30,600,000 | ||||||
Senior Term Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument principal amount | 22,500,000 | ||||||
Debt instrument principal payment | $ 281,000 | ||||||
Interest rate on outstanding debt | 5.87% | ||||||
Senior Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity of credit facility | $ 10,000,000 | ||||||
Revolving credit facility maturity date | Jan. 15, 2018 | ||||||
Interest rate on outstanding debt | 8.00% | ||||||
Senior Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Minimum liquidity covenant expiration description | The minimum liquidity covenant expires once we achieve a Fixed Coverage Ratio in excess of 1.25:1.00 for two consecutive quarters | ||||||
Fixed coverage ratio | 125.00% | ||||||
Senior Credit Facility [Member] | Scenario, Plan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Minimum liquidity covenant | $ 10,000,000 | $ 7,500,000 | $ 5,000,000 | ||||
Senior Credit Facility [Member] | Minimum [Member] | Scenario, Forecast [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Quarterly building EBITDA covenant | $ 5,905,000 | ||||||
Senior Credit Facility [Member] | Maximum [Member] | Scenario, Forecast [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Quarterly building EBITDA covenant | $ 9,500,000 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Detail) - USD ($) | Apr. 28, 2016 | Nov. 30, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 812,000 | $ 717,000 | |||
Unrecognized compensation costs | $ 6,154,000 | ||||
Approximate vesting period for unvested awards | 3 years | ||||
Maximum contractual term of equity awards | 10 years | ||||
Common stock, Shares authorized | 75,000,000 | 75,000,000 | |||
Common stock, Par value | $ 0.001 | $ 0.001 | |||
Treasury stock acquired | 51,185 | ||||
Common stock reserved for issuance | 167,146 | ||||
Weighted average fair value | $ 1.38 | ||||
Options granted | 22,200 | 0 | |||
Executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual forfeiture rate used | 0.00% | ||||
Other Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual forfeiture rate used | 10.00% | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock units, vesting period | 3 years | ||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock issued during the period, Shares | 52,000 | ||||
2014 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage increase in shares of common stock | 2.00% | ||||
2014 Employee Stock Purchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance | 319,454 | ||||
Increase in number of shares available for grant | 100,000 | ||||
Increase in number of shares available for grant, percentage of common stock issued and outstanding | 0.25% | ||||
Purchase of Common stock, percentage of fair market value | 90.00% | ||||
Maximum fair market value, that would permit employee to purchase common stock under plan | $ 25,000 | ||||
Number of shares purchased under the plan | 0 | 0 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Number of Shares Outstanding, Beginning balance | 2,306,726 | 1,838,082 | 1,838,082 | |
Number of Shares granted | 22,200 | 0 | ||
Number of Shares exercised | (42,974) | (3,021) | ||
Number of Shares forfeited | (49,426) | |||
Number of Shares Outstanding, Ending balance | 2,236,526 | 1,835,061 | 2,306,726 | 1,838,082 |
Number of Shares Exercisable | 1,376,747 | |||
Weighted Average Exercise Price Outstanding, Beginning balance | $ 4.16 | $ 1.93 | $ 1.93 | |
Weighted Average Exercise Price, Option granted | 3.44 | |||
Weighted Average Exercise Price, Option exercised | 1.82 | 1.87 | ||
Weighted Average Exercise Price, Option forfeited | 7.63 | |||
Weighted Average Exercise Price Outstanding, Ending balance | 4.12 | $ 1.93 | $ 4.16 | $ 1.93 |
Weighted Average Exercise Price, Exercisable | $ 1.91 | |||
Average Life, Outstanding | 7 years 4 months 13 days | 7 years 1 month 24 days | 7 years 7 months 2 days | 7 years 4 months 21 days |
Average Life, Exercisable | 6 years 6 months 22 days | |||
Aggregate Intrinsic Value, Outstanding | $ 1,026 | $ 15,450 | ||
Aggregate Intrinsic Value, Exercisable | $ 927 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Weighted Average Assumptions Used for Estimating Fair Value of Options Granted (Detail) | 3 Months Ended |
Mar. 31, 2016$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common stock share value | $ 3.44 |
Expected life (years) | 4 years |
Volatility | 50.00% |
Interest rate | 1.51% |
Dividend yield | 0.00% |
Stockholders' Deficit - Sched39
Stockholders' Deficit - Schedule of Restricted Stock Activity (Detail) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Outstanding, Beginning balance | 570,790 | 0 |
Shares Granted | 394,800 | 189,250 |
Shares Vested | (9,930) | (8,248) |
Shares Forfeited | (14,000) | 0 |
Shares Outstanding, Ending balance | 941,660 | 181,002 |
Average Fair Value Price per Share Outstanding, Beginning balance | $ 8.35 | |
Average Fair Value Price per Share Granted | 2.61 | $ 9.83 |
Average Fair Value Price per Share Vested | 9.97 | 9.83 |
Average Fair Value Price per Share Forfeited | 11.37 | |
Average Fair Value Price per Share Outstanding, Ending balance | $ 5.88 | $ 9.83 |
Average Life year, Outstanding | 10 years 7 months 24 days | 10 years 6 months 29 days |
Aggregate Intrinsic value, Outstanding | $ 2,411 | $ 1,873 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective tax benefit (provision) rate | (0.48%) | 0.22% |
Related Parties - Additional In
Related Parties - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($)Parties | |
DRX Seller Note [Member] | ||
Related Party Transaction [Line Items] | ||
Debt instrument principal payment | $ 2,900 | |
Debt instrument interest payment | $ 480 | |
Number of related party in which interest was paid | Parties | 2 | |
Series A Preferred Stock [Member] | Chrysalis [Member] | ||
Related Party Transaction [Line Items] | ||
Stock issued during the period, Value | $ 2,000 | |
Minimum [Member] | Chrysalis [Member] | ||
Related Party Transaction [Line Items] | ||
Percentage holding by the director | 5.00% |
Segments of Business - Addition
Segments of Business - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016Segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segments of Business - Summary
Segments of Business - Summary of Unallocated Corporate Expenses and Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Consolidated revenue | $ 17,557 | $ 20,648 |
Consolidated gross margin | 5,204 | 9,327 |
Research and development | 5,504 | 6,528 |
Sales and marketing | 2,338 | 2,883 |
General and administrative | 3,264 | 3,605 |
Total consolidated operating expenses | 11,106 | 13,016 |
Consolidated loss from operations | (5,902) | (3,689) |
Consolidated depreciation and amortization | 1,185 | 1,270 |
Enterprise/Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated revenue | 10,409 | 10,985 |
Consolidated gross margin | 1,914 | 4,923 |
Enterprise/State [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated revenue | 781 | 4,291 |
Consolidated gross margin | 188 | 1,714 |
Medicare [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated revenue | 4,450 | 3,983 |
Consolidated gross margin | 2,825 | 2,276 |
Private Exchange [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated revenue | 1,917 | 1,389 |
Consolidated gross margin | 277 | 414 |
Operating Segments [Member] | Enterprise/Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated depreciation and amortization | 161 | 137 |
Operating Segments [Member] | Enterprise/State [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated depreciation and amortization | 9 | 24 |
Operating Segments [Member] | Medicare [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated depreciation and amortization | 644 | 641 |
Operating Segments [Member] | Private Exchange [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated depreciation and amortization | 234 | 232 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated depreciation and amortization | $ 137 | $ 236 |
Segments of Business - Schedule
Segments of Business - Schedule of Identifiable Assets by Segment (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Consolidated assets | $ 72,422 | $ 82,689 |
Operating Segments [Member] | Enterprise/Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated assets | 32,027 | 33,857 |
Operating Segments [Member] | Enterprise/State [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated assets | 1,471 | 1,975 |
Operating Segments [Member] | Medicare [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated assets | 24,394 | 26,198 |
Operating Segments [Member] | Private Exchange [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated assets | 9,943 | 11,255 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Consolidated assets | $ 4,587 | $ 9,404 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | May. 02, 2016 | Apr. 28, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Subsequent Event [Line Items] | ||||
Repayment of principal balance, accrued interest and loan termination fees | $ 281 | $ 3,181 | ||
Series A Preferred Stock [Member] | Chrysalis [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued during the period, Value | $ 2,000 | |||
Minimum [Member] | Chrysalis [Member] | ||||
Subsequent Event [Line Items] | ||||
Percentage holding by the director | 5.00% | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Cash received | $ 49,300 | |||
Number of consecutive trading days needed to force conversion | 45 days | |||
Preferred stock dividend rate percentage | 7.50% | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued during the period, Shares | 52,000 | |||
Stock issued during the period, Value | $ 52,000 | |||
Subsequent Event [Member] | Anti-Dilution Adjustments [Member] | ||||
Subsequent Event [Line Items] | ||||
Conversion price for convertible preferred stock | $ 4.50 | |||
Subsequent Event [Member] | THL Note [Member] | ||||
Subsequent Event [Line Items] | ||||
Repayment of principal balance, accrued interest and loan termination fees | $ 30,600 | |||
Subsequent Event [Member] | Maximum [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of days to register sale of Preferred Stock and conversion Shares | 180 days | |||
Preferred stock dividend rate percentage | 16.50% | |||
Subsequent Event [Member] | Minimum [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock price as percentage of conversion price for option to force conversion | 175.00% | |||
Average trading volume of common stock | 75,000 | |||
Number of days needed with at least 75,000 trading volume | 40 days |