Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 27, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | CNXR | ||
Entity Registrant Name | CONNECTURE INC | ||
Entity Central Index Key | 1,211,759 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 23,255,102 | ||
Entity Public Float | $ 9 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 7,743 | $ 6,208 |
Accounts receivable | 11,094 | 8,390 |
Prepaid expenses and other current assets | 1,033 | 1,153 |
Total current assets | 19,870 | 15,751 |
PROPERTY AND EQUIPMENT — Net | 1,079 | 1,957 |
GOODWILL | 30,872 | 31,072 |
OTHER INTANGIBLE ASSETS — Net | 5,910 | 9,188 |
DEFERRED IMPLEMENTATION COSTS | 24,264 | 23,257 |
OTHER ASSETS | 1,083 | 1,263 |
TOTAL ASSETS | 83,078 | 82,488 |
CURRENT LIABILITIES: | ||
Accounts payable | 5,589 | 7,387 |
Accrued payroll and related liabilities | 4,598 | 4,945 |
Other liabilities | 2,919 | 1,950 |
Current maturities of debt | 32,616 | 578 |
Deferred revenue | 28,830 | 31,606 |
Total current liabilities | 74,552 | 46,466 |
DEFERRED REVENUE | 8,840 | 9,310 |
DEFERRED TAX LIABILITY | 23 | 23 |
LONG-TERM DEBT | 31,944 | |
OTHER LONG-TERM LIABILITIES | 1,748 | 235 |
Total liabilities | 85,163 | 87,978 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
STOCKHOLDERS’ DEFICIT: | ||
Common stock, $0.001 par value, 75,000,000 shares authorized as of December 31, 2017 and December 31, 2016, and 23,080,978 and 22,524,655 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 23 | 23 |
Additional paid-in capital | 97,723 | 101,985 |
Accumulated deficit | (174,649) | (159,105) |
Treasury stock, at cost | (322) | (287) |
Total stockholders’ deficit | (77,225) | (57,384) |
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | 83,078 | 82,488 |
Redeemable Preferred Stock - Series A [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||
REDEEMABLE PREFERRED STOCK | 56,109 | $ 51,894 |
Redeemable Preferred Stock - Series B [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||
REDEEMABLE PREFERRED STOCK | $ 19,031 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 23,080,978 | 22,524,655 |
Common stock, Shares outstanding | 23,080,978 | 22,524,655 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
REVENUE | $ 76,746 | $ 81,894 | $ 95,847 |
COST OF REVENUE | 47,062 | 56,895 | 50,670 |
GROSS MARGIN | 29,684 | 24,999 | 45,177 |
OPERATING EXPENSES: | |||
Research and development | 16,679 | 22,297 | 22,718 |
Sales and marketing | 9,356 | 10,410 | 9,507 |
General and administrative | 15,378 | 13,162 | 14,439 |
Total operating expenses | 41,413 | 45,869 | 46,664 |
LOSS FROM OPERATIONS | (11,729) | (20,870) | (1,487) |
OTHER EXPENSES: | |||
Interest expense | 3,286 | 3,485 | 5,665 |
Other expense (income), net | 509 | 2,239 | 140 |
Total other expenses | 3,795 | 5,724 | 5,805 |
LOSS BEFORE INCOME TAXES | (15,524) | (26,594) | (7,292) |
BENEFIT (PROVISION) FOR INCOME TAXES | (20) | 60 | (51) |
NET LOSS | (15,544) | (26,534) | (7,343) |
COMPREHENSIVE LOSS | $ (15,544) | $ (26,534) | $ (7,343) |
NET LOSS PER COMMON SHARE: | |||
Basic and diluted | $ (0.96) | $ (1.31) | $ (0.34) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | |||
Basic and diluted | 22,791,178 | 22,275,256 | 21,813,407 |
Consolidated Statements of Stoc
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 | 4,712 | 4,712 | |||
Exercise of stock options and issuance of other stock awards | 469 | 469 | |||
Exercise of stock options and issuance of other stock awards, Shares | 424,283 | ||||
Treasury stock acquired | (177) | $ (177) | |||
Treasury stock acquired, Shares | (50,149) | ||||
Net loss | (7,343) | (7,343) | |||
Ending Balance, Value at Dec. 31, 2015 | (31,180) | $ 22 | 101,546 | (177) | (132,571) |
Ending Balance, Shares at Dec. 31, 2015 | 22,063,357 | ||||
Preferred stock dividends, Series A and Series B | (2,643) | (2,643) | |||
Stock-based compensation expense | 2,662 | 2,662 | |||
Exercise of stock options and issuance of other stock awards | 421 | $ 1 | 420 | ||
Exercise of stock options and issuance of other stock awards, Shares | 512,489 | ||||
Treasury stock acquired | $ (110) | (110) | |||
Treasury stock acquired, Shares | (101,340) | (51,191) | |||
Net loss | $ (26,534) | (26,534) | |||
Ending Balance, Value at Dec. 31, 2016 | $ (57,384) | $ 23 | 101,985 | (287) | (159,105) |
Ending Balance, Shares at Dec. 31, 2016 | 22,524,655 | 22,524,655 | |||
Preferred stock dividends, Series A and Series B | $ (6,445) | (6,445) | |||
Stock-based compensation expense | 2,074 | 2,074 | |||
Exercise of stock options and issuance of other stock awards | 109 | 109 | |||
Exercise of stock options and issuance of other stock awards, Shares | 596,279 | ||||
Treasury stock acquired | $ (35) | (35) | |||
Treasury stock acquired, Shares | (141,296) | (39,956) | |||
Net loss | $ (15,544) | (15,544) | |||
Ending Balance, Value at Dec. 31, 2017 | $ (77,225) | $ 23 | $ 97,723 | $ (322) | $ (174,649) |
Ending Balance, Shares at Dec. 31, 2017 | 23,080,978 | 23,080,978 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (15,544) | $ (26,534) | $ (7,343) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Depreciation and amortization | 4,403 | 4,601 | 5,043 |
Stock-based compensation expense | 2,227 | 2,662 | 4,712 |
Interest accretion on financing obligations | 102 | 489 | 921 |
Other financing fees and non-cash adjustments | 656 | 2,063 | 49 |
Loss on facility lease termination | 1,988 | ||
Impairment of goodwill | 200 | ||
Impairment of property, plant and equipment | 63 | ||
Change in operating assets and liabilities, net of acquisition: | |||
Accounts receivable | (2,704) | 2,831 | 1,291 |
Prepaid expenses and other assets | 14 | (546) | 757 |
Deferred implementation costs | (1,007) | 1,308 | (13) |
Accounts payable | (1,797) | 263 | 1,856 |
Accrued expenses and other liabilities | 25 | 623 | (2,306) |
Deferred revenue | (3,246) | (12,229) | (21,159) |
Net cash used in operating activities | (14,620) | (24,469) | (16,192) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (314) | (999) | (1,317) |
Business acquisition, net of cash acquired | 82 | (4,683) | |
Net cash used in investing activities | (232) | (5,682) | (1,317) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under revolving line of credit | 3,550 | ||
Repayments under revolving line of credit | (3,550) | (340) | |
Borrowings of term debt | 16,156 | ||
Repayments of term debt | (33,337) | (4,025) | |
Payment of financing fees | (457) | (1,372) | (103) |
Payment of capital lease obligations | (31) | (74) | (418) |
Proceeds from initial public offering, net of issuance costs | (725) | ||
Proceeds from preferred stock, net | 16,801 | 49,251 | |
Other | 74 | 311 | 292 |
Net cash provided by (used in) financing activities | 16,387 | 30,935 | (5,319) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,535 | 784 | (22,828) |
CASH AND CASH EQUIVALENTS — Beginning of period | 6,208 | 5,424 | 28,252 |
CASH AND CASH EQUIVALENTS — End of period | 7,743 | 6,208 | 5,424 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for interest | 3,171 | 3,363 | 5,721 |
Cash (received) paid for income taxes | 9 | (15) | $ 15 |
Non-cash investing and financing activities: | |||
Purchase of property and equipment in accounts payable | 3 | 4 | |
Accrued preferred stock dividends | $ 6,445 | $ 2,643 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Description of Business —Connecture, Inc. and its subsidiaries, including DestinationRx, Inc., or DRX, RxHealth Insurance Agency, Inc., ConnectedHealth, LLC, 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 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 payers, brokers, government agencies, and web-based insurance marketplace operators, who distribute health and ancillary insurance. The Company’s solutions automate key functions in the insurance distribution process, allowing customers to price and present plan options accurately to consumers and efficiently enroll, renew and manage plan members. On June 7, 2016, the Company acquired ConnectedHealth, LLC, a benefits technology company with a software and services platform that makes it easier for consumers and employees to shop for personalized insurance benefits online. On January 4, 2018, the Company entered into a Merger Agreement, which is expected to result in the Company becoming privately held in 2018 (See Note 17). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —The consolidated financial statements include the accounts of Connecture, Inc. and its wholly owned subsidiaries. All inter-company transactions and balances have been eliminated. Use of Estimates —The preparation of financial statements in conformity with generally accepted accounting principles requires management to make extensive estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. We use estimates in accounting for revenue recognition, deferred implementation costs, goodwill impairment, share-based compensation, and acquisitions, among other items. Actual results could differ from those estimates. Cash and Cash Equivalents —The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits as of December 31, 2017 were $7,493. Accounts Receivable and Allowance for Doubtful Accounts —The Company’s normal and customary terms for customer payment is 30 days. The outstanding accounts receivable can vary significantly based on timing of billing milestones, renewals and other factors. When necessary, the Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The estimates are based on the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, and current economic trends. The Company writes off uncollectible receivables after all reasonable efforts are made to collect payment. Property and Equipment —Property and equipment are stated at historical cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally three to five years. Repairs and maintenance are charged to expense as incurred and major leasehold improvements are capitalized and amortized over the remaining term of the lease or their estimated useful lives, whichever is shorter. The Company records a gain or loss on the disposal of property and equipment based on the difference between the proceeds received, if any, and the net book value of the assets disposed on the date of disposal. Impairment of Long-Lived Assets —The Company evaluates its long-lived assets for potential impairment when impairment indicators exist. Potential impairment is assessed when there is evidence that events or changes in circumstances have occurred that indicate that the carrying amount of an asset may not be recovered. The Company had no material impairments during the years ended December 31, 2017, 2016 and 2015. Intangible Assets —Intangible assets with definite lives are amortized using the straight-line method over their estimated useful lives, ranging from three to ten years. The carrying amount of intangible assets are reviewed whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. Recoverability of intangible assets is compared to the undiscounted future cash flows the assets are expected to generate. If the asset is considered to be impaired, the carrying value is compared to the fair value and this difference is recognized as an impairment loss. The Company had no impairments of intangible assets during the years ended December 31, 2017, 2016 and 2015. Goodwill —Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired and liabilities assumed in a business combination. Goodwill is tested annually, as of October 31, for impairment at a reporting unit level. The Company evaluates goodwill for impairment on an annual basis, or more frequently if an event or circumstance changes that would indicate that goodwill might be impaired. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business, or other factors. Financial Instruments and Concentration of Credit Risk —The estimated fair values of the Company’s financial instruments, which include cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to the short-term nature of these instruments. 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 related 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. As of and for the year ended December 31, 2017, the Company had the following customers that accounted for 10% or more of total revenue and/or total accounts receivable: 2017 Customers Revenue Accounts A 17.8% 27.6% Advertising Costs —Advertising costs are expensed as incurred. Advertising costs for the years ended December 31, 2017, 2016 and 2015, were $313, $486 and $502, respectively. Fair Value Measurements —Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, “Fair Value Measurements”, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that inputs that are most observable be used when available. Observable inputs are inputs that market participants operating within the same marketplace as the Company would use in pricing the Company’s asset or liability based on independently derived and objectively determinable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Company are traded. The input hierarchy is broken down into three levels based on the degree to which the exit price is independently observable or determinable as follows: Level 1 —Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, they do not entail a significant degree of judgment. The Company has no Level 1 financial instrument assets or liabilities. Level 2 —Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly, such as municipal bonds. The Company has no Level 2 financial instrument assets or liabilities. Level 3 —Valuation based on inputs that are unobservable and reflect management’s best estimate of what market participants would use as fair value. Revenue Recognition —The Company’s revenue is derived from four sources: (a) the sales of implementation and ongoing support of the Company’s software automation solutions; (b) fees from brokers for the right to access our multi-payer quoting platform; (c) a government cost-plus-fixed-fee contract; and (d) commissions. In all contractual arrangements, the Company determines whether persuasive evidence of an arrangement exists, services have been rendered, the fee is fixed or determinable and collection is probable. If any of these criteria are not met, the Company does not recognize revenue until all of the criteria are met. 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 usage fees, (c) software maintenance 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. Nearly all of the Company’s software automation solution services sold in the Enterprise/Commercial, Medicare, and Private Exchange segments 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, previously sold in the Enterprise/State segment, were arrangements in which the software was not hosted on the Company’s infrastructure. These arrangements included the licensed use of the software and were subject to accounting under ASC 985, Software Revenue Recognition. The last remaining arrangement ended in 2017 when the customer elected not to renew their contract. 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. 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 —Recognized ratably over the longer of the customer contract or estimated period of customer benefit based on facts and circumstances of each relationship. • Professional services for new customer software solution implementation —Initially deferred and recognized ratably from completion of implementation through the longer of the customer contract or estimated period of customer benefit based on facts and circumstances of each relationship. • Professional services to existing customers —Initially deferred and then recognized in the period services are completed. • Production support fees —Recognized as the work is performed consistent with the contractual terms of the production support. Multiple deliverable arrangements accounting guidance for non-hosted arrangements provide an allocation of revenue to the separate elements based upon VSOE. For the majority of the Company’s non-hosted arrangements, whereby the customers take possession of the software, have not sold the various deliverables separately and have therefore not established VSOE. As a result, the contractual consideration for a delivered element for the non-hosted arrangements generally 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 December 31, 2017, all of the Company’s non-hosted Enterprise/State contracts have either expired or terminated and the Company is providing transition services to 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 as a multiple element arrangement. 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 primarily consists of employee compensation and benefits, professional services costs and depreciation and amortization of assets directly associated with generating revenue. In addition, the Company allocates a portion of overhead, such as rent, facility depreciation and utilities, to cost of revenue based on employee salary. Deferred Implementation Costs —The Company’s accounting policy is to capitalize direct, incremental employee labor and fringe benefits along with third-party independent contractor costs related to implementing new customer software solutions, to the extent that they are deemed recoverable. Deferred implementation costs as of December 31, 2017, and 2016 are $24,264 and $23,257, respectively, with the increases for new customer implementations, offset by current period amortization on installed customer solutions. Deferred implementation costs are amortized over the respective term of the customer arrangement consistent with the recognition of deferred revenue. Stock-Based Compensation —The Company applies a fair-value based measurement method in accounting for stock-based payment transactions. Compensation cost is determined based on the grant-date fair value for stock options and performance-based restricted stock units and the grant-date closing market value for time-vested restricted stock units. Compensation cost is amortized on a straight-line basis over the vesting period for time-based awards and over the derived service period for performance-based restricted stock units. Preferred Stock Dividends —Given the Company’s accumulated deficit, the Company’s accounting policy is to record the mandatorily payable dividends as a reduction of additional paid-in capital (APIC) with the offset as an increase to redeemable preferred stock on the consolidated balance sheets. Comprehensive Loss —The Company’s net loss equals comprehensive loss for the years ending December 31, 2017, 2016 and 2015. Income Taxes —Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the change becomes enacted. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items in income tax expense. Basic and Diluted Net Loss Per Common Share — The Company uses the two-class method to compute net earnings per common share because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of the Company’s redeemable convertible preferred stock are entitled to participate in distributions, when and if declared by the Board of Directors that are made to common stockholders, and as a result are considered participating securities. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Due to net losses for the years ended December 31, 2017, 2016 and 2015, basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. New Accounting Standards —In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606) , that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. Assuming the Company remains an emerging growth company (EGC), the ASU becomes effective for the Company in the fiscal year ended December 31, 2019; early adoption is permitted. The Company has established a team that is currently analyzing customer contracts and assessing the accounting and disclosure impacts this standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In July 2017, the FASB issued ASU No. 2017-11, Earnings per Share (Topic:260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2017 | |
Going Concern [Abstract] | |
Going Concern | 3. GOING CONCERN The Company’s primary need for liquidity is to fund anticipated near-term operating losses and working capital requirements, capital expenditures and for general corporate purposes, including debt repayment. For the years ended December 31, 2017, 2016, and 2015, losses from operations were $11,729, $20,870, and $1,487, respectively, and cash used in operations was $14,620, $24,469, and $16,192, respectively. The Company has taken a number of actions from 2016 through the first quarter of 2018 to continue to support its operations. As discussed in Note 10, in May 2016, the Company completed the issuance of a newly created Series A Convertible Preferred Stock (the “Series A Preferred Stock”) for an aggregate purchase price of $52,000. In addition, as discussed in Note 9, the Company completed a June 2016 amendment and extension of its existing senior credit facility resulting in the extension of the facility to June 8, 2021 and increased the term loan funding to $35,000 from approximately $20,000. The funds received from these actions were used to repay $30,000 of outstanding subordinated term loans, to fund working capital and for other general corporate purposes. In the second half of 2016 and in 2017, the Company put a greater focus on overall profitability and aligning its cost structure with revenue and customer billings. The Company reduced its headcount to 320 at December 31, 2017, compared to 411 at December 31, 2015. The Company also consolidated the procurement of outside contract labor resources. In addition, in March 2017, the Company completed the issuance of a newly created Series B Convertible Preferred Stock (the “Series B Preferred Stock”) for an aggregate purchase price of $17,500 less approximately $675 of transaction fees (see Note 10). The Company used $624 of the proceeds to repay the outstanding balance on the Company's senior revolving credit facility, with the remainder of the net proceeds available for general corporate purposes. In March 2017 and again in January 2018, the Company amended its senior credit facility (“Senior Credit Facility”) to, among other things, (i) defer scheduled Senior Term Loan principal repayments until the later of June 4, 2018 and the approved outside date of an alternative acquisition as contemplated under the Merger Agreement (the “Outside Date”) hrough the later of June 4, 2018 or the Outside Date The Outside Date will be deemed to have occurred prior to the date set forth above upon (i) an event of default under the Senior Credit Facility, (ii) termination of the Merger Agreement under certain circumstances and (iii) the consummation of the Merger or alternative acquisition as contemplated under the Merger Agreement. Finally, on January 4, 2018, the Company entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with FP Healthcare Holdings, Inc. (“ Parent ”), and FP Healthcare Merger Sub Corporation, a wholly owned subsidiary of Parent (“ Merger Subsidiary ”), providing for the merger of Merger Subsidiary with and into the Company (the “ Merger ”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Merger, if consummated by June 4, 2018, will result in the Company becoming a privately held company reducing the ongoing public company expense. Additionally, the Parent sponsors have agreed to invest up to $15,000 of new capital and the Parent has secured a New Senior Credit Facility (“New Credit Facility”) that upon consummation of the Merger would provide the Company up to a $42,000 term loan and $5,000 line of credit. Although the Company believes the Merger and related equity and debt financing will likely of close and should provide the The Company’s historical operating results indicate conditions exist that raise uncertainty related to the Company's ability to continue as a going concern. As discussed above, the Company has taken certain actions to mitigate the uncertainty raised by the Company’s historical operating results, however, the Senior Credit Facility contains a minimum adjusted EBITDA covenant for the twelve months ending March 31, 2018 of at least negative $3,000 and a minimum liquidity covenant of $1,500 at all times prior to the earlier of (a) the Merger date, (b) June 4, 2018, or (c) an acquisition termination event, and $15,000 at all times thereafter. Without considering the effects of Merger, the Company currently projects that it will not comply with certain covenants during the twelve-month period following issuance of these consolidated financial statements. I f the Company is unable to meet or amend the Senior Credit Facility financial covenants, all of the Company’s scheduled senior indebtedness ($32,616 at December 31, 2017) could become immediately due and payable in the event of default. If the Company cannot generate sufficient additional liquidity through the proposed Merger described above or through additional support from the Company’s investor base, or some combination of other actions, the Company may not have sufficient funds to repay the debt. The conditions described above result in substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the issuance of these consolidated financial statements. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 4. 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: Year Ended December 31 2017 2016 2015 Anti-Dilutive Common Share Equivalents Redeemable convertible preferred stock 22,042,755 7,888,440 — Restricted Stock Units — 1,047 53,454 Stock options 6,195 177,010 1,069,243 Total anti-dilutive common share equivalents 22,048,950 8,066,497 1,122,697 The increase in redeemable convertible preferred stock is directly attributable to the additional Series B issuance in March 2017 and the modification to the share conversion for the Series A issuance as a result of the Series B issuance (see Note 10). Basic and diluted net loss per common share is calculated as follows: Year Ended December 31 2017 2016 2015 Numerator: Net loss $ (15,544 ) $ (26,534 ) $ (7,343 ) Less: Preferred stock dividends 6,445 2,643 — Net loss attributable to common stock $ (21,989 ) $ (29,177 ) $ (7,343 ) Denominator: Weighted-average common shares outstanding, basic and diluted 22,791,178 22,275,256 21,813,407 Net loss per common share, basic and diluted $ (0.96 ) $ (1.31 ) $ (0.34 ) |
ConnectedHealth Acquisition
ConnectedHealth Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ConnectedHealth Acquisition | 5. CONNECTEDHEALTH ACQUISITION On June 7, 2016, the Company completed the acquisition of all equity units of ConnectedHealth, LLC (“ConnectedHealth”) for a cash purchase price of $4,601, net of cash acquired and a working capital adjustment, using available excess cash. ConnectedHealth is a benefits technology company with a software and services platform that makes it easier for consumers and employees to shop for personalized insurance benefits online. The Company completed the acquisition to acquire ConnectedHealth’s software technology. The acquisition of ConnectedHealth was accounted for as a business combination in accordance with FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair value as of the acquisition date based on valuations using the income approach. The excess of purchase price over the estimated fair values of tangible assets, intangible assets and assumed liabilities was recorded as goodwill. The allocation of the purchase price for ConnectedHealth as of December 31, 2016, is as follows: Cash and cash equivalents $ 25 Trade accounts receivable 428 Prepaid expenses and other current assets 31 Intangible assets 1,200 Goodwill 4,293 Other long-term assets 54 Accounts payable and other current liabilities (1,225 ) Other long-term liabilities (180 ) Total purchase price $ 4,626 The goodwill is primarily attributable to synergies with the software and services that ConnectedHealth provides and the anticipated value of selling the Company’s software and services to ConnectedHealth’s existing client base. The goodwill and intangible assets have been assigned to the Private Exchange segment. The goodwill and intangible assets are deductible for income tax purposes. Revenue attributable to the acquired ConnectedHealth software solutions and technology was approximately $1,800 for the year ended December 31, 2017, and approximately $832 from the acquisition date through December 31, 2016. The following unaudited supplemental pro forma information presents the Company’s results of operations as though the acquisition of ConnectedHealth had occurred on January 1, 2015. The information is not indicative of the Company’s operating results which would have occurred had the acquisition been consummated as of that date. The pro forma information below does not include anticipated synergies, the impact of purchase accounting adjustments, or certain other expected benefits of the acquisition and should not be used as a predictive measure of the Company’s future results of operations. Year Ended December 31, 2016 2015 Total revenue $ 82,864 $ 98,448 Net (loss) (27,157 ) (13,879 ) Weighted average common shares outstanding - basic and diluted 22,275,256 21,813,407 Net (loss) per share - basic and diluted $ (1.34 ) $ (0.64 ) The pro forma financial information has been adjusted, where applicable, for: (i) amortization of acquired intangible assets, (ii) additional interest expense on presumed acquisition financing, (iii) the income tax effect of the pro forma adjustments, and (iv) to exclude acquisition related expenses. The acquisition related expenses were approximately $200 and are recorded in General and Administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2016. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of December 31: 2017 2016 Furniture and fixtures $ 344 $ 818 Computer equipment 4,994 5,136 Leasehold improvements 717 628 Property and equipment—gross 6,055 6,582 Accumulated depreciation (4,976 ) (4,625 ) Property and equipment—net $ 1,079 $ 1,957 Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $1,043, $1,191 and $1,020, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill —The following is a summary of the carrying amount of goodwill by goodwill reporting unit as of December 31: 2017 Enterprise/ Commercial Enterprise/ State Medicare Private Exchange Total Carrying Amount $ 7,732 $ — $ 14,711 $ 8,629 $ 31,072 Accumulated Impairment (200 ) — — — (200 ) Net 7,532 — 14,711 8,629 30,872 2016 Carrying Amount $ 7,732 $ — $ 14,711 $ 8,629 $ 31,072 Accumulated Impairment — — — — — Net 7,732 — 14,711 8,629 31,072 The Company recorded a $200 pre-tax non-cash impairment charge to reduce the carrying value of Enterprise/Commercial’s goodwill in the fourth quarter of 2017. The charge has been recorded in general and administrative expenses in the consolidated statement of operations and comprehensive loss. Although Enterprise/Commercial’s performance for fiscal 2017 was near plan, projected future cash flows have fallen below the levels we previously anticipated due to 2017 booking shortfalls and customer non-renewals, attributable to the unexpected decline of customers and prospective customers participating in the Individual and Family Plan (IFP) marketplace. The fair value of Enterprise/Commercial was calculated using an equal weighting of the fair value implied by a discounted cash flow analysis and a market approach utilizing market values of similar publicly traded companies, which are classified as Level 3 inputs (defined in Note 2). We believe the blended use of both models compensates for the inherent risk associated with either model if used on a stand-alone basis, and this combination is indicative of the factors a market participant would consider when performing a similar valuation. Other Intangible Assets —Other intangible assets consist of the following as of December 31, 2017: Useful In Years Gross Carrying Value Accumulated Amortization Net Carrying Value Customer Relationship 3-10 $ 7,398 $ (3,817 ) $ 3,581 Acquired Technology 3-5 12,892 (12,050 ) 842 Trademarks 10 2,800 (1,388 ) 1,412 Software 3 1,852 (1,777 ) 75 $ 24,942 $ (19,032 ) $ 5,910 Other intangible assets consisted of the following as of December 31, 2016: Useful Lives - In Years Gross Carrying Value Accumulated Amortization Net Carrying Value Customer Relationship 3-10 $ 7,398 $ (3,077 ) $ 4,321 Acquired Technology 3-5 12,892 (9,770 ) 3,122 Trademarks 10 2,800 (1,108 ) 1,692 Software 3 1,770 (1,717 ) 53 $ 24,860 $ (15,672 ) $ 9,188 Amortization expense for the years ended December 31, 2017, 2016 and 2015, was $3,360, $3,410 and $4,023, 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 2018 $ 1,364 2019 1,269 2020 1,247 2021 1,050 2022 940 Thereafter 40 Total future amortization expense $ 5,910 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES Operating Leases —The Company leases office space under operating leases that expire at various dates through 2025. Rent expense for the years ended December 31, 2017, 2016 and 2015, was approximately $1,945, $1,775 and $1,746, respectively. Future minimum lease payments under non-cancelable operating leases with initial or remaining terms equal to or exceeding one year are as follows: Years Ended December 31 Amount 2018 $ 1,414 2019 1,392 2020 911 2021 906 2022 1,077 Thereafter 1,420 Total minimum lease payments $ 7,120 The leases provide for escalating rent over the term of the leases. The rent costs associated with such leases are aggregated and recognized on a straight-line basis over the lease term. The difference between the monthly rent payment and the straight-line rent requires an accrual of rent to be recognized and then amortized over the term of the lease. Net accrued straight-line rent as of December 31, 2017 and 2016 amounted to approximately $343 and $199, respectively, and is included in other assets, other liabilities and other long-term liabilities in the accompanying consolidated balance sheets. Restructuring Charges —As of December 31, 2017, the Company concluded its strategic assessment of the Company’s long-term facility needs, resulting in the recording of a lease termination charge of $1,988, net of estimated sub-lease income of approximately $3,300, for the remaining approximately seven-year operating lease obligation for an office facility the Company vacated and will cease to benefit from. Additionally, a charge of $63 related to the write-down of leasehold improvements at this office facility was record with the lease termination charge and both charges are included in general and administration expenses in the consolidated statement of operations and comprehensive loss. The facility has been primarily used by the Enterprise Commercial segment. Letter of Credit —As security for certain leased property, the Company was required to provide a lessor an unconditional and irrevocable letter of credit in the amount $200 as of December 31, 2016. The letter of credit was extinguished when the related property lease expired and the Company exited the leased facility in fourth quarter of 2017. Deposits —From time to time the Company has been required to remit security deposits as a condition of certain of its office leases. Deposits of $856 at December 31, 2017 and 2016, are included in other assets on the consolidated balance sheet. Retention Compensation Plan – In July 2017, the Company’s Board of Directors approved the 2017 Executive Retention Plan (the “Retention Compensation Plan”), which provides for, among other things, up to a $1,875 fixed retention bonus that will be payable in cash upon a qualifying change in control of the Company or if a change in control has not occurred within five years of the date of the Retention Compensation Plan, in shares of the Company’s common stock. The fixed retention bonus is therefore accounted for as a share-based liability award (see Note 11). In addition, an up to $625 contingent bonus will be payable in cash upon a qualifying change in control that occurs within five years of the date of the Retention Compensation Plan and in which the consideration payable for a share of the Company’s common stock equals or exceeds a threshold established by the Board. The proposed Merger (see Note 17) is not a qualifying change in control and it is anticipated that no payments will be made under the Retention Compensation Plan as a result of the Merger. Indemnifications —The Company provides certain indemnifications from time to time in the normal course of business to its customers in its professional services and software license agreements and to strategic partners through certain insurance industry association marketing agreements that contain certain indemnifications for claims that may arise from acts or omissions, patent or trademark infringement, breach of contractual representations and warranties or intentional or grossly negligent acts. These indemnifications may require the Company to reimburse the indemnified party for losses suffered or incurred by the indemnified party. The Company has not had an indemnification claim, and does not expect to have a material claim in the future. As such, the Company has not recorded any liability for these indemnifications in the consolidated financial statements. Litigation —In the normal course of business, the Company and its subsidiaries are named as defendants in lawsuits and are party to contract terminations and settlements in which claims are or may be asserted against the Company. In the opinion of management, the liabilities, if any, which may ultimately result from such lawsuits and contract terminations are not expected to have a material effect on the Company’s consolidated financial statements. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT Debt consisted of the following as of December 31: 2017 2016 Senior term loans $ 32,616 $ 31,944 Senior revolving credit facility — 578 32,616 32,522 Less: original issue discounts and deferred financing costs — — Less: current maturities of debt (32,616 ) (578 ) Long-term debt $ — $ 31,944 Senior Debt — The Company has a bank senior credit facility, as amended and restated from time to time that provides for short-term working capital and long-term investment needs (the “Senior Credit Facility”). The Senior Credit Facility is collateralized by all of the Company’s assets. On June 8, 2016, the Senior Credit Facility was amended and restated (the “June 2016 Amendment”), to among other things, (i) extend the maturity date to June 8, 2021 from January 18, 2018, (ii) continue to provide for up to $10,000 of revolving credit through the maturity date (the “Senior Revolving Credit Facility”), and (iii) increase the term loan funding to $35,000 from approximately $20,000 at June 8, 2016 (the “Senior Term Loan”). The June 2016 Amendment was accounted for as an extinguishment of debt resulting in the immediate recognition of $381 of previously deferred financing costs, which was recorded in Other expense, net in the statements of operations for the year ended December 31, 2016. On November 4, 2016, the Company amended the Senior Credit Facility (the “November 2016 Amendment”), to among other things, (i) remove the Net Leverage Covenant and replace it with a trailing twelve month EBITDA covenant, as defined in the November 2016 Amendment, to be measured quarterly effective as of September 30, 2016, (ii) increase the Minimum Liquidity covenant from $10,000 to $11,500, effective November 4, 2016, and $15,000 effective September 30, 2017, (iii) increase the annual principal repayments on the Senior Term Loan, and (iv) increase the interest rate on applicable borrowings effective November 4, 2016. In connection with this amendment, the Company repaid $2,000 of the outstanding Senior Term Loan and incurred bank fees of approximately $300, which were recorded in Other expense, net in the consolidated statements of operations for the year ended December 31, 2016. On March 10, 2017, the Company amended the Senior Credit Facility (the “March 2017 Amendment”), to among other things, (i) defer scheduled Senior Term Loan principal repayments until March 31, 2018, at which time quarterly principal repayments of $1,313 will resume through March 31, 2021; (ii) replace the EBITDA and Minimum Liquidity covenants with (a) a trailing twelve month EBITDA covenant of negative $12,000 as of December 31, 2016, a quarterly building EBITDA covenant through December 31, 2017, and a trailing twelve month EBITDA from March 31, 2018 forward, as defined in the March 2017 Amendment, and (b) a minimum liquidity requirement of $1,500 at all times from March 1, 2017 through March 31, 2018, and $15,000 thereafter; and (iii) provide for an incremental 2.50% per annum paid-in-kind interest on all obligations from March 10, 2017 through the maturity date, which shall increase the outstanding principal balance of the Senior Term Loan. The quarterly building EBITDA, as defined in the March 2017 Amendment, requires the Company achieve at least negative $3,000 for twelve months ended December 31, 2017 and March 31, 2018, positive $8,000 for the twelve months ended June 30, 2018 and September 30, 2018, and positive $9,000 for the twelve months ended December 31, 2018 and March 31, 2019. On January 4, 2018, the Company amended the Senior Credit Facility (the “January 2018 Amendment”), to among other things, (i) increase the available Senior Revolving Credit Facility by $5,500 to $6,000 through the later of June 4, 2018 and the approved outside date of an alternative acquisition as contemplated under the January 4, 2018 Merger Agreement (the “Outside Date”), (ii) defer scheduled March 31, 2018 Term Loan principal repayments until the Outside Date, at which time the deferred $1,313 is due and quarterly principal repayments of $1,313 will resume through March 31, 2021; (iii) replace the existing covenants with a minimum liquidity requirement of $1,500 at all times from March 1, 2017 through the Outside Date. The Outside Date will be deemed to have occurred prior to the date set forth above upon (i) an event of default under the Senior Credit Facility, (ii) termination of the Merger Agreement under certain circumstances and (iii) the consummation of the Merger or alternative acquisition as contemplated under the Merger Agreement. The Senior Credit Facility contains covenants and customary representations and warranties 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. As of December 31, 2017, the Company was in compliance with the financial covenants under the Senior Credit Facility, and on March 29, 2018 the Company obtained a waiver from the bank to permit delivery of audited financial statement for the year ended December 31, 2017 with a going concern explanatory paragraph (see Note 3 for discussion of going concern). As of December 31, 2017, the interest rates on our outstanding Senior Term Loan and the Senior Revolving Credit Facility were 10.33% and 12.50%, respectively, including the incremental 2.50% per annum paid-in-kind interest. THL Promissory Note —The Company had a Senior Subordinated Term Loan Agreement with THL Corporate Finance, Inc., (the “THL Note”) for total proceeds of $30,000 less $683 of original issue discount, or OID. On May 3, 2016, the Company repaid the $30,000 principal and accrued interest to settle the THL Note. The early extinguishment of the THL Note triggered a $560 breakage fee and the immediate recognition of the remaining $480 of OID and deferred financing costs, which were recorded in Other expense, net in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2016. Future principal payments on debt as of December 31, 2017, are as follows: Years Ending December 31 2018 $ 32,616 2019 — 2020 — 2021 and thereafter — 32,616 Less original issue discount and deferred financing costs — Total $ 32,616 While the Agreement provides for principal repayments of $1,313 per quarter resuming in 2018 through March 31, 2021, with remaining principal and deferred PIK due in June 2021, the March 29, 2018 covenant violation waiver and potential covenant violation should the Merger Agreement not close, along with the Company’s intention to refinance the Agreement upon consummation of the Merger Agreement have resulted in the current classification of the outstanding debt as of December 31, 2017. Based on rates for instruments with comparable maturities and credit quality, which are classified as Level 2 inputs (defined in Note 2), the estimated fair value of the Company’s total debt approximated $34,500 as of December 31, 2017, and $29,000 as of December 31, 2016. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Deficit | 10. STOCKHOLDERS’ DEFICIT Common Stock —As of December 31, 2017 and 2016, the Company has authorized the issuance of 75,000,000 shares of common stock, respectively, par value of $0.001 per share. Preferred Stock — On May 2, 2016, the Company issued and sold newly created Series A Preferred Stock, par value $0.001, for an aggregate purchase price of $52,000. The shares of Series A Preferred Stock are convertible into shares of the Company’s common stock (the “Series A Conversion Shares”) at the option of the investors at any time and they are redeemable at the option of the investors after May 2, 2023, or if there is a Fundamental Change (as that term is defined in the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock). Beginning May 2, 2018, the Company may force conversion if the closing price of the common stock is at least 175% of the conversion price of the Series A Preferred 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 Series A Preferred Stock is convertible into a number of Series A Conversion Shares equal to (i) the sum of (a) the stated value per share of Series A Preferred Stock, plus (b) all accrued and unpaid dividends thereon up to but not including the conversion date, divided by (ii) the conversion price of the Series A Preferred Stock at such time (which initially was $4.50 per share, subject to customary anti-dilution adjustments). On March 10, 2017, the conversion price of the Series A Preferred Stock was adjusted to $3.96 per share as a result of the issuance of Series B Preferred Stock. The number of Conversion Shares underlying the Series A 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 Series A 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. On March 10, 2017, the Company issued and sold newly created Series B Preferred Stock, par value $0.001, for an aggregate purchase price of $17,500. The shares of Series B Preferred Stock are convertible into shares of the Company’s common stock (the “Series B Conversion Shares”) at the option of the investors at any time and they are redeemable at the option of the investors after May 2, 2023, or if there is a Fundamental Change (as that term is defined in the Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock). Beginning March 10, 2019, the Company may force conversion if the closing price of the common stock is at least 175% of the conversion price of the Series B Preferred 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 Series B Preferred Stock is convertible into a number of Series B Conversion Shares equal to (i) the sum of (a) the stated value per share of Series B Preferred Stock, 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 $1.91 per share, subject to customary anti-dilution adjustments). The number of Conversion Shares underlying the Series B Preferred Stock will be increased annually by the accrual of 15.0% cumulative dividends payable in-kind (which will increase in certain circumstances, but in no event will be more than 20.0% annually). Following the second anniversary of the March 10, 2017 issuance, the Company may elect to pay such cumulative dividends in cash. The conversion price for the Series B Preferred 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. The Series A Preferred Stock and Series B Preferred Stock are entitled to vote with common stock on an as-converted basis. Treasury Stock —The Company held 141,296 and 101,340 shares of common stock as of December 31, 2017 and 2016, respectively, which were acquired in the normal course of employees surrendering vested shares to settle withholding tax obligations triggered by stock-based compensation transactions. Reserved Shares —As of December 31, 2017, the Company has 1,072,882 shares of common stock reserved for issuance in connection with the Company’s stock incentive plans. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 11. STOCK-BASED COMPENSATION The Company’s equity incentive plans provide for the awarding of various equity awards including stock options and restricted stock units. The Company recognized stock-based compensation expense of $2,227, $2,662 and $4,712 for the years ended December 31, 2017, 2016 and 2015, respectively. Of the stock-based compensation expense recognized in the year ended December 31, 2017, $153 is related to a liability award for a fixed monetary amount that can be settled in a variable number of shares at the earliest of five years following the July 2017 grant date or upon certain events outside the Company’s control (the “Liability Award”).” As of December 31, 2017, approximately $3,737 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, approximately two years. Of that amount, $1,547 relates to the Liability Award. As a result of proposed Merger substantially all unvested equity awards are expected to be cancelled for no consideration. Equity Incentive Plans —In connection with the Company’s December 2014 initial public offering, the Board of Directors approved the 2014 Equity Incentive Plan (the 2014 “Plan”) as a replacement to the 2010 Plan. The Company will not grant any additional awards under the 2010 Plan; however, the 2010 Plan will continue to govern the terms and conditions of all outstanding equity awards previously granted under the 2010 Plan. The 2014 Plan provides for the awarding of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units, and other stock-based or cash settled equity awards as deemed appropriate by the compensation committee of the Company’s board of directors. The 2014 Plan provides that on the first day of January each year through 2024, the available shares of common stock shall generally be increased by the smaller of (a) 2.00% of the number of issued and outstanding shares of common stock on the immediately preceding December 31, or (b) an amount determined by the Company’s Board. On August 3, 2016, the Company’s Board of Directors approved an amendment to the 2014 Plan to increase the number of shares available for issuance under the 2014 Plan by 1,500,000 shares, subject to stockholder approval at a special meeting of stockholders. On September 26, 2016, a special meeting of stockholders was held and the amendment to the 2014 Plan to increase the shares reserved for issuance by 1,500,000 was approved and made effective as of such date. Stock Options— A summary of stock option activity for the years ended December 31, 2017 and 2016 is presented below: Number of Shares Average Exercise Price (a) Average Life (Years) (b) Aggregate Intrinsic Value Outstanding — January 1, 2016 2,306,726 $ 4.16 7.59 $ 2,735 Granted 572,200 $ 2.53 Exercised (101,953 ) $ 1.85 $ 100 Forfeited (486,274 ) $ 7.81 Expired (19,998 ) $ 11.37 Outstanding — December 31, 2016 2,270,701 $ 3.01 5.04 $ - Granted 160,000 $ 1.73 Exercised (23,753 ) $ 1.75 $ 14 Forfeited (1,219,343 ) $ 2.61 Outstanding — December 31, 2017 1,187,605 $ 3.26 7.40 $ - Exercisable — December 31, 2017 710,420 $ 3.60 6.59 $ - Vested and expected to vest — December 31, 2017 1,168,059 $ 3.28 7.37 $ - (a) Weighted-average exercise price (b) Weighted-average contractual life remaining The weighted average fair value per option granted during the years ended December 31, 2017, 2016 and 2015 was $0.82, $1.00 and $4.30, respectively. 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 years ended December 31: 2017 2016 2015 Common stock share value $ 1.73 $ 2.53 $ 10.31 Expected life (years) 5.56 4.00 5.01 Volatility 50.00 % 50.00 % 50.00 % Interest rate 2.02 % 1.01 % 1.45 % Dividend yield 0.00 % 0.00 % 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 the years ended December 31, 2017, 2016 and 2015 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)— A summary of RSU activity for the years ended December 31, 2017 and 2016 is presented below: Shares Average Fair Value per Share (a) Aggregate Intrinsic Value Outstanding — January 1, 2016 570,790 $ 8.35 Granted 503,440 $ 2.45 Vested (260,523 ) $ 6.90 $ 567 Forfeited (148,211 ) $ 9.31 Outstanding — December 31, 2016 665,496 $ 4.24 Granted 2,211,586 $ 0.72 Vested (448,404 ) $ 2.63 $ 353 Forfeited (84,958 ) $ 3.52 Outstanding — December 31, 2017 2,343,720 $ 1.26 (a) Weighted-average grant date fair value 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. 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 —In November 2014, the Company’s Board of Directors approved the 2014 Employee Stock Purchase Plan (the “ESPP”), which is a broadly-based stock purchase plan in which any eligible employee may elect to participate by authorizing the Company to make payroll deductions in a specific amount or designated percentage to purchase shares of the Company’s common stock at 90% of the lower of the fair market value on the first day of trading of the offering period or on the purchase date. In no event will an employee be granted ability under the ESPP that would permit the purchase of common stock with a fair market value in excess of $25 in any calendar year. The ESPP is designed to comply with Section 423 of the Code, and thus is eligible for the favorable tax treatment afforded by Section 423. At December 31, 2017, a total of 101,630 shares of common stock have been reserved for issuance under 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. During the years ended December 31, 2017, 2016, and 2015, shares purchased under the ESPP were 124,122, 150,013 and 29,927, respectively. Following the May 16, 2017 to November 15, 2017 offering period the Company’s Board of Directors indefinitely suspended the ESPP to new participants and the Company does not anticipate any future offerings under the ESPP. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. INCOME TAXES The (provision) benefit for income taxes for the years ended December 31 consists of: 2017 2016 2015 Current tax expense: Federal $ — $ — $ — State (20 ) 60 (47 ) Total current tax (provision) benefit (20 ) 60 (47 ) Deferred tax expense: Federal — — (3 ) State — — (1 ) Total deferred tax (provision) benefit — — (4 ) Total (provision) benefit for income taxes $ (20 ) $ 60 $ (51 ) The (provision) benefit for income taxes for the years ended December 31, 2017, 2016 and 2015 differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to the loss before (provision) benefit for income taxes as a result of the following: 2017 2016 2015 Federal statutory rate 34.0 % 34.0 % 34.0 % Effect of: State income taxes, net of federal benefit (0.1 )% 0.1 % (0.5 )% Valuation allowance 81.1 % (35.3 )% (32.9 )% Goodwill impairment (0.4 )% — — Change in federal tax law (112.5 )% — — Other, net (2.0 )% 1.4 % (1.3 )% Overall income tax rate 0.1 % 0.2 % (0.7 )% In December 2017, the U.S. Congress passed, and the President signed, legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), which contains many significant changes to the U.S. tax code including reducing the corporate tax rate from 35% to 21%. We have completed our analysis of The Tax Act which included reducing the benefit of the Company’s recorded net deferred tax assets, and valuation allowance against such deferred tax assets. There was no impact to the total provision for income taxes for the year ended December 31, 2017. The Other, net primarily includes the impact of stock-based compensation and changes in net operating loss carry forward deferred tax assets as a result of changes in state rates. Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are comprised of the following as of December 31: 2017 2016 Deferred tax assets: Net operating loss carryforward $ 33,387 $ 45,205 Deferred revenue 6,736 12,199 Research and development credit 45 45 Accrued payroll and related liabilities 1,433 2,070 Other 1,564 821 Valuation allowance (35,602 ) (48,192 ) Net deferred tax assets $ 7,563 $ 12,148 Deferred tax liabilities: Intangible assets $ (1,314 ) $ (3,100 ) Deferred implementation costs (6,272 ) (9,070 ) Total deferred tax liabilities (7,586 ) (12,170 ) Net deferred tax liability $ (23 ) $ (22 ) Based on the uncertainties associated with future realization of the deferred tax asset, the Company established a valuation allowance, which reduces the deferred tax assets to an amount whose realization is more likely than not. The net change in the valuation allowance for the deferred tax asset was $(12,590), $9,375 and $2,397 for the years ended December 31, 2017, 2016 and 2015, respectively. Differences between effective and statutory tax rates are caused substantially by the change in the valuation allowance. As of December 31, 2017, and 2016, the Company has federal net operating loss carryforwards of approximately $133,000 and $121,000, respectively, available to offset future earnings and federal research and development credits of approximately $45, also available to offset future federal income tax. The net operating loss carryforwards and research and development tax credit carryforwards expire at various dates from 2020 through 2038. As of December 31, 2017, and 2016, state net operating loss carryforwards were approximately $92,000 and $77,800, respectively. As of December 31, 2017, and 2016, management has recorded a full valuation allowance against net operating losses because management believes it is more likely than not that some portion or all of these deferred tax assets will not be realized. Under the provisions of the Internal Revenue Code (IRC), certain substantial changes in the Company’s ownership may result in a limitation of the amount of net operating loss and tax credit carryforwards which can be used in future years. Our last completed Section 382 limitation study was through the tax year ended December 31, 2013. We anticipate completing an updated Section 382 limitation study following the consummation of the proposed Merger, which we believe will qualify as an ownership change and result in significant further limitations of the amount of net operating losses which may be available in future years. The Company has recorded no liability for unrecognized tax benefits and related interest and penalties as of December 31, 2017 and 2016. The Company files income tax returns in the US federal tax jurisdiction and various state jurisdictions. The federal tax years for 2014 through 2017 remain open for examination. State tax years open for examination are generally 2013 through 2017, depending on the state. |
Employee Retirement Plan
Employee Retirement Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Retirement Plan | 13. EMPLOYEE RETIREMENT PLAN The Company sponsors a 401(k) profit sharing plan. All eligible employees of the Company who have reached the age of twenty-one may participate in the plan. Each plan year, the Company’s Board of Directors will determine the amount, if any, that the Company will contribute to the plan as a Company matching contribution for that year. The Company recognized expense of approximately $662, $729 and $679 for the years ended December 31, 2017, 2016 and 2015, respectively, to fund Company contributions to the plan. |
Segments of Business
Segments of Business | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segments of Business | 14. SEGMENTS OF BUSINESS Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, or CODM, for purposes of allocating resources and evaluating financial performance. The Company’s CODM is the Chief Executive Officer and the CODM reviews financial information presented on a consolidated basis and for each operating segment, for purposes of allocating resources and evaluating financial performance. The Company is organized into four reportable segments, which are based on software and service offerings. The Company’s reportable segments are consistent with its operating segments and are as follows: Enterprise/Commercial —Offers the Company’s insurance distribution solutions to health plans. Enterprise/State —Offers the Company’s sales automation solutions to state governments, which allows the Company’s state customers to offer customized individual and small group exchanges. The Enterprise/State segment had one remaining customer at December 31, 2017, 2016, and 2015, respectively. Medicare —Offers web-based Medicare plan comparison, prescription drug comparison and enrollment tools for health plans, pharmacy benefit managers, pharmacies, field marketing organizations, and call centers. Private Exchange —Offers defined-contribution benefit exchange solutions to benefit consultants, brokers, exchange operators and aggregators. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company does not allocate cash, prepaid expenses, and property and equipment assets or capital expenditures to reportable segments. The Company evaluates the performance of its segments based on gross margin, which is regularly reviewed by the CODM and provides insight into our individual segments and their ability to contribute to future debt service and working capital requirements of the Company. Unallocated corporate expenses, and assets that are not considered when the Company’s CODM evaluates segment performance are grouped within Corporate in the following segment information: Year Ended December 31 2017 2016 2015 Revenue from external customers by segment: Enterprise/Commercial $ 40,187 $ 49,081 $ 55,487 Enterprise/State 2,144 3,453 13,372 Medicare 22,101 18,565 17,973 Private Exchange 12,314 10,795 9,015 Consolidated revenue $ 76,746 $ 81,894 $ 95,847 Gross margin by segment: Enterprise/Commercial $ 13,216 $ 11,906 $ 23,715 Enterprise/State 1,469 1,325 6,300 Medicare 14,872 11,460 10,651 Private Exchange 127 308 4,511 Consolidated gross margin $ 29,684 $ 24,999 $ 45,177 Consolidated operating expenses: Research and development $ 16,679 $ 22,297 $ 22,718 Sales and marketing 9,356 10,410 9,507 General and administrative 15,378 13,162 14,439 Total consolidated operating expenses $ 41,413 $ 45,869 $ 46,664 Consolidated loss from operations $ (11,729 ) $ (20,870 ) $ (1,487 ) Depreciation and amortization by segment: Enterprise/Commercial $ 555 $ 642 $ 543 Enterprise/State 2 19 80 Medicare 2,563 2,576 2,588 Private Exchange 1,079 1,034 992 Corporate 204 330 840 Consolidated depreciation and amortization $ 4,403 $ 4,601 $ 5,043 As of December 31, 2017 2016 2015 Identifiable assets by segment: Enterprise/Commercial $ 31,650 $ 29,728 $ 33,857 Enterprise/State 85 627 1,975 Medicare 21,662 23,248 26,198 Private Exchange 18,666 18,247 11,255 Corporate 11,015 10,638 9,404 Consolidated assets $ 83,078 $ 82,488 $ 82,689 All Company assets were held and all revenue was generated in the United States during the years ended December 31, 2017, 2016 and 2015. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | 15. RELATED PARTIES On May 2, 2016, Chrysalis Ventures II, L.P. (“Chrysalis”), a holder of more than 5% of the Company’s outstanding common stock as of March 31, 2016, purchased $2,000 of the Series A Preferred Stock offered in the transaction discussed in Note 10. On March 10, 2017, Francisco Partners IV, L.P., Francisco Partners IV-A, L.P. (collectively, “Francisco Partners”) and Chrysalis, all holders of more than 5% of the Company’s outstanding common stock equivalents as of March 10, 2017, purchased $17,500 of the Series B Preferred Stock offered in the transaction discussed in Note 10. A member of the Company’s board of directors, is a Co-President of the managing companies of Francisco Partners and another member of the Company’s board of directors is a member of the general partner of Chrysalis. On January 4, 2018, the Company entered into a Merger Agreement and Chrysalis and Francisco Partners are Rollover Investors as discussed in Note 17. The Company paid approximately $650 of administrative fees to Humana, Inc. in connection with the administration of the Company’s employee health benefits plan for the years ended December 31, 2016 and 2015. The Company’s chairman of the board of directors is a member of the Humana, Inc. board of directors. |
Consolidated Selected Quarterly
Consolidated Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Consolidated Selected Quarterly Financial Data (unaudited) | 16. CONSOLIDATED SELECTED QUARTERLY FINANCIAL DATA (unaudited) The following sets forth selected quarterly financial data for each of the eight quarters in the years ended December 31, 2017 and 2016. Quarter Ended Dec 31, 2017 (1) Sept 30, 2017 Jun 30, 2017 Mar 30, 2017 Dec 31, 2016 Sept 30, 2016 (2) Jun 30, 2016 Mar 30, 2016 (in thousands, except share amounts) Revenue $ 19,639 $ 20,533 $ 18,302 $ 18,272 $ 20,879 $ 24,729 $ 18,729 $ 17,557 Gross margin 7,344 9,754 5,788 6,798 5,891 8,838 5,066 5,204 Total operating expenses 13,137 9,029 9,771 9,476 11,189 11,349 12,225 11,106 Income (loss) from operations (5,793 ) 725 (3,983 ) (2,678 ) (5,298 ) (2,511 ) (7,159 ) (5,902 ) Net loss $ (6,662 ) $ (171 ) $ (5,011 ) $ (3,700 ) $ (6,232 ) $ (3,066 ) $ (9,900 ) $ (7,336 ) Net loss per common share: Basic (0.37 ) (0.08 ) (0.30 ) (0.22 ) (0.32 ) (0.18 ) (0.47 ) (0.33 ) Diluted (0.37 ) (0.08 ) (0.30 ) (0.22 ) (0.32 ) (0.18 ) (0.47 ) (0.33 ) Weighted-average common shares outstanding: Basic 23,049,692 22,878,477 22,660,108 22,570,207 22,425,517 22,343,142 22,217,696 22,112,273 Diluted 23,049,692 22,878,477 22,660,108 22,570,207 22,425,517 22,343,142 22,217,696 22,112,273 (1) During the three months ended December 31, 2017, the Company recognized $200 of goodwill impairment expense, $1,988 of lease termination expense and $959 of proposed merger related professional advisor expenses in operating expenses. (2) During the three months ended September 30, 2016, the Company recognized $4,600 of previously deferred revenue and approximately $2,000 of gross margin resulting from the satisfaction of a customer obligation The sum of the 2017 and 2016 quarterly net loss per common share does not equal the net loss per common share for the entire year due to the impact on weighted-average shares outstanding of the conversions of the Series A Preferred Stock outstanding during each respective period. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENTS Merger Agreement – On January 4, 2018, the Company entered into an Agreement and Plan of Merger, or Merger Agreement, with FP Healthcare Holdings, Inc. (“Parent”) and FP Healthcare Merger Sub Corporation, a wholly owned subsidiary of Parent (“Merger Subsidiary”), providing for the merger of Merger Subsidiary with and into the Company with the Company surviving the Merger as a wholly owned subsidiary of the Parent. The Parent and Merger Subsidiary are owned by affiliates of the private equity investment firm Francisco Partners. At the Effective Time of the proposed Merger, each share of common stock, par value $0.001 per share, of the Company (the “Company Common Stock”) issued and outstanding as of immediately prior to the Effective Time (other than shares held by (a) Parent or Merger Subsidiary, (b) the Company in treasury or any wholly owned subsidiary of the Company, (c) holders of Common Stock who have properly demanded appraisal rights (and who have not failed to perfect or effectively withdraw such demand or otherwise waive or lose their rights to appraisal), and (d) Francisco Partners IV, L.P., Francisco Partners IV-A, L.P. and Chrysalis Ventures II, L.P. and certain of their affiliates (collectively, the “Rollover Investors”)), will be canceled and cease to exist and automatically converted into the right to receive cash in an amount equal to $0.35, without interest (the “Per Share Price”). The Rollover Investors have entered into a Rollover Agreement pursuant to which the Rollover Investors have agreed to contribute shares of Company Common Stock, Series A Preferred Stock of the Company and Series B Preferred Stock of the Company to Parent. Parent and Merger Subsidiary have secured committed financing, consisting of a combination of equity to be provided by investment funds affiliated with FP, and debt financing from PNC Bank, National Association, the aggregate proceeds of which will be sufficient for Parent and Merger Subsidiary to pay the aggregate merger consideration and all related fees and expenses. In addition, investment funds affiliated with FP have provided the Company with a guarantee in favor of the Company (the “Guarantee”). The Guarantee guarantees the payment of Merger Consideration owed by Parent to the holders of Company Common Stock pursuant to the Merger Agreement. The Merger Agreement contains certain termination rights for the Company and Parent. Upon termination of the Merger Agreement under specified circumstances, such as the Company accepting a superior proposal, the Company would be required to pay Parent a termination fee of up to $2,000 for reasonable and documented out-of-pocket fees and expenses (including legal fees and expenses). Other than the $959 of transaction expenses during the twelve months ended December 31, 2017, the terms of the Merger Agreement did not impact the Company’s consolidated financial statements. Subject to certain conditions, including regulatory and shareholder approvals, and other customary covenants and closing conditions, the Company expects the transaction to close in the second quarter of 2018. Credit Facility Amendment & Waiver - On January 4, 2018, the Company amended the Senior Credit Facility, to among other things, (i) increase the available Revolving Credit Facility by $5,500 through the later of June 4, 2018 and the approved outside date of an alternative acquisition as contemplated under the Merger Agreement (the “Outside Date”), (ii) defer scheduled March 31, 2018 Term Loan principal repayments until the Outside Date, at which time the deferred $1,313 is due and quarterly principal repayments of $1,313 will resume through March 31, 2021, (iii) replace the existing covenants with a minimum liquidity requirement of $1,500 at all times from March 1, 2017 through the Outside Date, and $15,000 thereafter. The Outside Date will be deemed to have occurred prior to the date set forth above upon (i) an event of default under the Senior Credit Facility, (ii) termination of the Merger Agreement under certain circumstances and (iii) the consummation of the proposed Merger or alternative acquisition as contemplated under the Merger Agreement. On March 29, 2018, Wells Fargo provided the Company a waiver with regards to the Senior Credit Facility covenant concerning issuance of an audit opinion having an explanatory going concern paragraph for the year ended December 31, 2017. * * * * * * |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule II-Valuation and Qualifying Accounts | FINANCIAL STATEMENT SCHEDULE Schedule II—Valuation and Qualifying Accounts (in thousands) Balance at Beginning of Period Additions (Reversals) Charged to Expense Additions (Reversals) Charged to Revenue Acquired Deductions Balance at End of Period Trade receivable allowances: Year ended December 31, 2017 $ — $ — $ — $ — $ — $ — Year ended December 31, 2016 — — — — — — Year ended December 31, 2015 246 45 (137 ) — (154 ) — Deferred tax asset valuation allowance: Year ended December 31, 2017 $ 48,192 $ (12,590 ) ( i ) N/A $ — $ — $ 35,602 Year ended December 31, 2016 38,817 9,375 N/A — — 48,192 Year ended December 31, 2015 36,420 2,397 N/A — — 38,817 ( i ) Includes an increase to the valuation allowance of $4,881 for federal and state net operating losses and a decrease to the valuation allowance of $17,471 resulting from the Tax Cuts and Jobs Act passed in December 2017. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The consolidated financial statements include the accounts of Connecture, Inc. and its wholly owned subsidiaries. All inter-company transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with generally accepted accounting principles requires management to make extensive estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. We use estimates in accounting for revenue recognition, deferred implementation costs, goodwill impairment, share-based compensation, and acquisitions, among other items. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents —The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits as of December 31, 2017 were $7,493. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts —The Company’s normal and customary terms for customer payment is 30 days. The outstanding accounts receivable can vary significantly based on timing of billing milestones, renewals and other factors. When necessary, the Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The estimates are based on the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, and current economic trends. The Company writes off uncollectible receivables after all reasonable efforts are made to collect payment. |
Property and Equipment | Property and Equipment —Property and equipment are stated at historical cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally three to five years. Repairs and maintenance are charged to expense as incurred and major leasehold improvements are capitalized and amortized over the remaining term of the lease or their estimated useful lives, whichever is shorter. The Company records a gain or loss on the disposal of property and equipment based on the difference between the proceeds received, if any, and the net book value of the assets disposed on the date of disposal. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —The Company evaluates its long-lived assets for potential impairment when impairment indicators exist. Potential impairment is assessed when there is evidence that events or changes in circumstances have occurred that indicate that the carrying amount of an asset may not be recovered. The Company had no material impairments during the years ended December 31, 2017, 2016 and 2015. |
Intangible Assets | Intangible Assets —Intangible assets with definite lives are amortized using the straight-line method over their estimated useful lives, ranging from three to ten years. The carrying amount of intangible assets are reviewed whenever circumstances arise that indicate the carrying amount of an asset may not be recoverable. Recoverability of intangible assets is compared to the undiscounted future cash flows the assets are expected to generate. If the asset is considered to be impaired, the carrying value is compared to the fair value and this difference is recognized as an impairment loss. The Company had no impairments of intangible assets during the years ended December 31, 2017, 2016 and 2015. |
Goodwill | Goodwill —Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired and liabilities assumed in a business combination. Goodwill is tested annually, as of October 31, for impairment at a reporting unit level. The Company evaluates goodwill for impairment on an annual basis, or more frequently if an event or circumstance changes that would indicate that goodwill might be impaired. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business, or other factors. |
Financial Instruments and Concentration of Credit Risk | Financial Instruments and Concentration of Credit Risk —The estimated fair values of the Company’s financial instruments, which include cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to the short-term nature of these instruments. 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 related 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. As of and for the year ended December 31, 2017, the Company had the following customers that accounted for 10% or more of total revenue and/or total accounts receivable: 2017 Customers Revenue Accounts A 17.8% 27.6% |
Advertising Costs | Advertising Costs —Advertising costs are expensed as incurred. Advertising costs for the years ended December 31, 2017, 2016 and 2015, were $313, $486 and $502, respectively. |
Fair Value Measurements | Fair Value Measurements —Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, “Fair Value Measurements”, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that inputs that are most observable be used when available. Observable inputs are inputs that market participants operating within the same marketplace as the Company would use in pricing the Company’s asset or liability based on independently derived and objectively determinable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Company are traded. The input hierarchy is broken down into three levels based on the degree to which the exit price is independently observable or determinable as follows: Level 1 —Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, they do not entail a significant degree of judgment. The Company has no Level 1 financial instrument assets or liabilities. Level 2 —Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly, such as municipal bonds. The Company has no Level 2 financial instrument assets or liabilities. Level 3 —Valuation based on inputs that are unobservable and reflect management’s best estimate of what market participants would use as fair value. |
Revenue Recognition | Revenue Recognition —The Company’s revenue is derived from four sources: (a) the sales of implementation and ongoing support of the Company’s software automation solutions; (b) fees from brokers for the right to access our multi-payer quoting platform; (c) a government cost-plus-fixed-fee contract; and (d) commissions. In all contractual arrangements, the Company determines whether persuasive evidence of an arrangement exists, services have been rendered, the fee is fixed or determinable and collection is probable. If any of these criteria are not met, the Company does not recognize revenue until all of the criteria are met. 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 usage fees, (c) software maintenance 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. Nearly all of the Company’s software automation solution services sold in the Enterprise/Commercial, Medicare, and Private Exchange segments 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, previously sold in the Enterprise/State segment, were arrangements in which the software was not hosted on the Company’s infrastructure. These arrangements included the licensed use of the software and were subject to accounting under ASC 985, Software Revenue Recognition. The last remaining arrangement ended in 2017 when the customer elected not to renew their contract. 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. 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 —Recognized ratably over the longer of the customer contract or estimated period of customer benefit based on facts and circumstances of each relationship. • Professional services for new customer software solution implementation —Initially deferred and recognized ratably from completion of implementation through the longer of the customer contract or estimated period of customer benefit based on facts and circumstances of each relationship. • Professional services to existing customers —Initially deferred and then recognized in the period services are completed. • Production support fees —Recognized as the work is performed consistent with the contractual terms of the production support. Multiple deliverable arrangements accounting guidance for non-hosted arrangements provide an allocation of revenue to the separate elements based upon VSOE. For the majority of the Company’s non-hosted arrangements, whereby the customers take possession of the software, have not sold the various deliverables separately and have therefore not established VSOE. As a result, the contractual consideration for a delivered element for the non-hosted arrangements generally 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 December 31, 2017, all of the Company’s non-hosted Enterprise/State contracts have either expired or terminated and the Company is providing transition services to 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 as a multiple element arrangement. 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 —Cost of revenue primarily consists of employee compensation and benefits, professional services costs and depreciation and amortization of assets directly associated with generating revenue. In addition, the Company allocates a portion of overhead, such as rent, facility depreciation and utilities, to cost of revenue based on employee salary. |
Deferred Implementation Costs | Deferred Implementation Costs —The Company’s accounting policy is to capitalize direct, incremental employee labor and fringe benefits along with third-party independent contractor costs related to implementing new customer software solutions, to the extent that they are deemed recoverable. Deferred implementation costs as of December 31, 2017, and 2016 are $24,264 and $23,257, respectively, with the increases for new customer implementations, offset by current period amortization on installed customer solutions. Deferred implementation costs are amortized over the respective term of the customer arrangement consistent with the recognition of deferred revenue. |
Stock-Based Compensation | Stock-Based Compensation —The Company applies a fair-value based measurement method in accounting for stock-based payment transactions. Compensation cost is determined based on the grant-date fair value for stock options and performance-based restricted stock units and the grant-date closing market value for time-vested restricted stock units. Compensation cost is amortized on a straight-line basis over the vesting period for time-based awards and over the derived service period for performance-based restricted stock units |
Preferred Stock Dividends | Preferred Stock Dividends —Given the Company’s accumulated deficit, the Company’s accounting policy is to record the mandatorily payable dividends as a reduction of additional paid-in capital (APIC) with the offset as an increase to redeemable preferred stock on the consolidated balance sheets. |
Comprehensive Loss | Comprehensive Loss —The Company’s net loss equals comprehensive loss for the years ending December 31, 2017, 2016 and 2015. |
Income Taxes | Income Taxes —Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the change becomes enacted. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items in income tax expense. |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share — The Company uses the two-class method to compute net earnings per common share because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of the Company’s redeemable convertible preferred stock are entitled to participate in distributions, when and if declared by the Board of Directors that are made to common stockholders, and as a result are considered participating securities. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Due to net losses for the years ended December 31, 2017, 2016 and 2015, basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. |
New Accounting Standards | New Accounting Standards —In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606) , that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. Assuming the Company remains an emerging growth company (EGC), the ASU becomes effective for the Company in the fiscal year ended December 31, 2019; early adoption is permitted. The Company has established a team that is currently analyzing customer contracts and assessing the accounting and disclosure impacts this standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment In July 2017, the FASB issued ASU No. 2017-11, Earnings per Share (Topic:260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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. As of and for the year ended December 31, 2017, the Company had the following customers that accounted for 10% or more of total revenue and/or total accounts receivable: 2017 Customers Revenue Accounts A 17.8% 27.6% |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: Year Ended December 31 2017 2016 2015 Anti-Dilutive Common Share Equivalents Redeemable convertible preferred stock 22,042,755 7,888,440 — Restricted Stock Units — 1,047 53,454 Stock options 6,195 177,010 1,069,243 Total anti-dilutive common share equivalents 22,048,950 8,066,497 1,122,697 |
Summary of Basic and Diluted Net Loss Per Common Share | Basic and diluted net loss per common share is calculated as follows: Year Ended December 31 2017 2016 2015 Numerator: Net loss $ (15,544 ) $ (26,534 ) $ (7,343 ) Less: Preferred stock dividends 6,445 2,643 — Net loss attributable to common stock $ (21,989 ) $ (29,177 ) $ (7,343 ) Denominator: Weighted-average common shares outstanding, basic and diluted 22,791,178 22,275,256 21,813,407 Net loss per common share, basic and diluted $ (0.96 ) $ (1.31 ) $ (0.34 ) |
ConnectedHealth Acquisition (Ta
ConnectedHealth Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The allocation of the purchase price for ConnectedHealth as of December 31, 2016, is as follows: Cash and cash equivalents $ 25 Trade accounts receivable 428 Prepaid expenses and other current assets 31 Intangible assets 1,200 Goodwill 4,293 Other long-term assets 54 Accounts payable and other current liabilities (1,225 ) Other long-term liabilities (180 ) Total purchase price $ 4,626 |
Summary of Pro Forma Information | The pro forma information below does not include anticipated synergies, the impact of purchase accounting adjustments, or certain other expected benefits of the acquisition and should not be used as a predictive measure of the Company’s future results of operations. Year Ended December 31, 2016 2015 Total revenue $ 82,864 $ 98,448 Net (loss) (27,157 ) (13,879 ) Weighted average common shares outstanding - basic and diluted 22,275,256 21,813,407 Net (loss) per share - basic and diluted $ (1.34 ) $ (0.64 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31: 2017 2016 Furniture and fixtures $ 344 $ 818 Computer equipment 4,994 5,136 Leasehold improvements 717 628 Property and equipment—gross 6,055 6,582 Accumulated depreciation (4,976 ) (4,625 ) Property and equipment—net $ 1,079 $ 1,957 |
Goodwill and Other Intangible30
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Carrying Amount of Goodwill by Goodwill Reporting Unit | Goodwill —The following is a summary of the carrying amount of goodwill by goodwill reporting unit as of December 31: 2017 Enterprise/ Commercial Enterprise/ State Medicare Private Exchange Total Carrying Amount $ 7,732 $ — $ 14,711 $ 8,629 $ 31,072 Accumulated Impairment (200 ) — — — (200 ) Net 7,532 — 14,711 8,629 30,872 2016 Carrying Amount $ 7,732 $ — $ 14,711 $ 8,629 $ 31,072 Accumulated Impairment — — — — — Net 7,732 — 14,711 8,629 31,072 |
Schedule of Other Intangible Assets | Other Intangible Assets —Other intangible assets consist of the following as of December 31, 2017: Useful In Years Gross Carrying Value Accumulated Amortization Net Carrying Value Customer Relationship 3-10 $ 7,398 $ (3,817 ) $ 3,581 Acquired Technology 3-5 12,892 (12,050 ) 842 Trademarks 10 2,800 (1,388 ) 1,412 Software 3 1,852 (1,777 ) 75 $ 24,942 $ (19,032 ) $ 5,910 Other intangible assets consisted of the following as of December 31, 2016: Useful Lives - In Years Gross Carrying Value Accumulated Amortization Net Carrying Value Customer Relationship 3-10 $ 7,398 $ (3,077 ) $ 4,321 Acquired Technology 3-5 12,892 (9,770 ) 3,122 Trademarks 10 2,800 (1,108 ) 1,692 Software 3 1,770 (1,717 ) 53 $ 24,860 $ (15,672 ) $ 9,188 |
Summary of Estimated Future Amortization Expense | Estimated future amortization expense for the Company’s intangible assets is as follows: Year Ending December 31 Amount 2018 $ 1,364 2019 1,269 2020 1,247 2021 1,050 2022 940 Thereafter 40 Total future amortization expense $ 5,910 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases with initial or remaining terms equal to or exceeding one year are as follows: Years Ended December 31 Amount 2018 $ 1,414 2019 1,392 2020 911 2021 906 2022 1,077 Thereafter 1,420 Total minimum lease payments $ 7,120 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following as of December 31: 2017 2016 Senior term loans $ 32,616 $ 31,944 Senior revolving credit facility — 578 32,616 32,522 Less: original issue discounts and deferred financing costs — — Less: current maturities of debt (32,616 ) (578 ) Long-term debt $ — $ 31,944 |
Schedule of Future Principal Payments on Debt | Future principal payments on debt as of December 31, 2017, are as follows: Years Ending December 31 2018 $ 32,616 2019 — 2020 — 2021 and thereafter — 32,616 Less original issue discount and deferred financing costs — Total $ 32,616 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | Stock Options— A summary of stock option activity for the years ended December 31, 2017 and 2016 is presented below: Number of Shares Average Exercise Price (a) Average Life (Years) (b) Aggregate Intrinsic Value Outstanding — January 1, 2016 2,306,726 $ 4.16 7.59 $ 2,735 Granted 572,200 $ 2.53 Exercised (101,953 ) $ 1.85 $ 100 Forfeited (486,274 ) $ 7.81 Expired (19,998 ) $ 11.37 Outstanding — December 31, 2016 2,270,701 $ 3.01 5.04 $ - Granted 160,000 $ 1.73 Exercised (23,753 ) $ 1.75 $ 14 Forfeited (1,219,343 ) $ 2.61 Outstanding — December 31, 2017 1,187,605 $ 3.26 7.40 $ - Exercisable — December 31, 2017 710,420 $ 3.60 6.59 $ - Vested and expected to vest — December 31, 2017 1,168,059 $ 3.28 7.37 $ - (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 years ended December 31: 2017 2016 2015 Common stock share value $ 1.73 $ 2.53 $ 10.31 Expected life (years) 5.56 4.00 5.01 Volatility 50.00 % 50.00 % 50.00 % Interest rate 2.02 % 1.01 % 1.45 % Dividend yield 0.00 % 0.00 % 0.00 % |
Schedule of Restricted Stock Activity | Restricted Stock Units (RSUs)— A summary of RSU activity for the years ended December 31, 2017 and 2016 is presented below: Shares Average Fair Value per Share (a) Aggregate Intrinsic Value Outstanding — January 1, 2016 570,790 $ 8.35 Granted 503,440 $ 2.45 Vested (260,523 ) $ 6.90 $ 567 Forfeited (148,211 ) $ 9.31 Outstanding — December 31, 2016 665,496 $ 4.24 Granted 2,211,586 $ 0.72 Vested (448,404 ) $ 2.63 $ 353 Forfeited (84,958 ) $ 3.52 Outstanding — December 31, 2017 2,343,720 $ 1.26 (a) Weighted-average grant date fair value |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Taxes (Provision) Benefit | The (provision) benefit for income taxes for the years ended December 31 consists of: 2017 2016 2015 Current tax expense: Federal $ — $ — $ — State (20 ) 60 (47 ) Total current tax (provision) benefit (20 ) 60 (47 ) Deferred tax expense: Federal — — (3 ) State — — (1 ) Total deferred tax (provision) benefit — — (4 ) Total (provision) benefit for income taxes $ (20 ) $ 60 $ (51 ) |
Schedule of Income Tax (Provision) Benefit Differs from Amounts Obtained by Applying U.S. Statutory Federal Income Tax Rate to Income Before Taxes | The (provision) benefit for income taxes for the years ended December 31, 2017, 2016 and 2015 differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to the loss before (provision) benefit for income taxes as a result of the following: 2017 2016 2015 Federal statutory rate 34.0 % 34.0 % 34.0 % Effect of: State income taxes, net of federal benefit (0.1 )% 0.1 % (0.5 )% Valuation allowance 81.1 % (35.3 )% (32.9 )% Goodwill impairment (0.4 )% — — Change in federal tax law (112.5 )% — — Other, net (2.0 )% 1.4 % (1.3 )% Overall income tax rate 0.1 % 0.2 % (0.7 )% |
Schedule of Components of Deferred Tax Assets | Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are comprised of the following as of December 31: 2017 2016 Deferred tax assets: Net operating loss carryforward $ 33,387 $ 45,205 Deferred revenue 6,736 12,199 Research and development credit 45 45 Accrued payroll and related liabilities 1,433 2,070 Other 1,564 821 Valuation allowance (35,602 ) (48,192 ) Net deferred tax assets $ 7,563 $ 12,148 Deferred tax liabilities: Intangible assets $ (1,314 ) $ (3,100 ) Deferred implementation costs (6,272 ) (9,070 ) Total deferred tax liabilities (7,586 ) (12,170 ) Net deferred tax liability $ (23 ) $ (22 ) |
Segments of Business (Tables)
Segments of Business (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Unallocated corporate expenses, and assets that are not considered when the Company’s CODM evaluates segment performance are grouped within Corporate in the following segment information: Year Ended December 31 2017 2016 2015 Revenue from external customers by segment: Enterprise/Commercial $ 40,187 $ 49,081 $ 55,487 Enterprise/State 2,144 3,453 13,372 Medicare 22,101 18,565 17,973 Private Exchange 12,314 10,795 9,015 Consolidated revenue $ 76,746 $ 81,894 $ 95,847 Gross margin by segment: Enterprise/Commercial $ 13,216 $ 11,906 $ 23,715 Enterprise/State 1,469 1,325 6,300 Medicare 14,872 11,460 10,651 Private Exchange 127 308 4,511 Consolidated gross margin $ 29,684 $ 24,999 $ 45,177 Consolidated operating expenses: Research and development $ 16,679 $ 22,297 $ 22,718 Sales and marketing 9,356 10,410 9,507 General and administrative 15,378 13,162 14,439 Total consolidated operating expenses $ 41,413 $ 45,869 $ 46,664 Consolidated loss from operations $ (11,729 ) $ (20,870 ) $ (1,487 ) Depreciation and amortization by segment: Enterprise/Commercial $ 555 $ 642 $ 543 Enterprise/State 2 19 80 Medicare 2,563 2,576 2,588 Private Exchange 1,079 1,034 992 Corporate 204 330 840 Consolidated depreciation and amortization $ 4,403 $ 4,601 $ 5,043 |
Schedule of Identifiable Assets by Segment | As of December 31, 2017 2016 2015 Identifiable assets by segment: Enterprise/Commercial $ 31,650 $ 29,728 $ 33,857 Enterprise/State 85 627 1,975 Medicare 21,662 23,248 26,198 Private Exchange 18,666 18,247 11,255 Corporate 11,015 10,638 9,404 Consolidated assets $ 83,078 $ 82,488 $ 82,689 |
Consolidated Selected Quarter36
Consolidated Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Quarterly Financial Data | The following sets forth selected quarterly financial data for each of the eight quarters in the years ended December 31, 2017 and 2016. Quarter Ended Dec 31, 2017 (1) Sept 30, 2017 Jun 30, 2017 Mar 30, 2017 Dec 31, 2016 Sept 30, 2016 (2) Jun 30, 2016 Mar 30, 2016 (in thousands, except share amounts) Revenue $ 19,639 $ 20,533 $ 18,302 $ 18,272 $ 20,879 $ 24,729 $ 18,729 $ 17,557 Gross margin 7,344 9,754 5,788 6,798 5,891 8,838 5,066 5,204 Total operating expenses 13,137 9,029 9,771 9,476 11,189 11,349 12,225 11,106 Income (loss) from operations (5,793 ) 725 (3,983 ) (2,678 ) (5,298 ) (2,511 ) (7,159 ) (5,902 ) Net loss $ (6,662 ) $ (171 ) $ (5,011 ) $ (3,700 ) $ (6,232 ) $ (3,066 ) $ (9,900 ) $ (7,336 ) Net loss per common share: Basic (0.37 ) (0.08 ) (0.30 ) (0.22 ) (0.32 ) (0.18 ) (0.47 ) (0.33 ) Diluted (0.37 ) (0.08 ) (0.30 ) (0.22 ) (0.32 ) (0.18 ) (0.47 ) (0.33 ) Weighted-average common shares outstanding: Basic 23,049,692 22,878,477 22,660,108 22,570,207 22,425,517 22,343,142 22,217,696 22,112,273 Diluted 23,049,692 22,878,477 22,660,108 22,570,207 22,425,517 22,343,142 22,217,696 22,112,273 (1) During the three months ended December 31, 2017, the Company recognized $200 of goodwill impairment expense, $1,988 of lease termination expense and $959 of proposed merger related professional advisor expenses in operating expenses. (2) During the three months ended September 30, 2016, the Company recognized $4,600 of previously deferred revenue and approximately $2,000 of gross margin resulting from the satisfaction of a customer obligation |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Source | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Schedule Of Significant Accounting Policies [Line Items] | |||
Amounts on deposit in excess of federally insured limits | $ 7,493,000 | ||
Customer payment period | 30 days | ||
Impairments of long-lived assets | $ 0 | $ 0 | $ 0 |
Impairments of intangible assets | 0 | 0 | 0 |
Advertising costs | $ 313,000 | 486,000 | $ 502,000 |
Number of revenue's sources | Source | 4 | ||
Deferred implementation costs | $ 24,264,000 | $ 23,257,000 | |
Minimum [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Property plant and equipment useful life | 3 years | ||
Intangible assets estimated useful life | 3 years | ||
Minimum [Member] | Customer Concentration Risk [Member] | Revenue [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Minimum [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Maximum [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Property plant and equipment useful life | 5 years | ||
Intangible assets estimated useful life | 10 years |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Summary of Concentration of Risk (Detail) - Customer A [Member] - Customer Concentration Risk [Member] | 12 Months Ended |
Dec. 31, 2017 | |
Revenue [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 17.80% |
Accounts Receivable [Member] | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 27.60% |
Going Concern - Additional Info
Going Concern - Additional Information (Detail) | Mar. 10, 2017USD ($) | Jun. 08, 2016USD ($) | May 02, 2016USD ($) | Dec. 31, 2017USD ($)Headcount | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 30, 2016USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)Headcount | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)Headcount | Jun. 04, 2018USD ($) | Jun. 03, 2018USD ($) | Apr. 01, 2018USD ($) | Nov. 04, 2016USD ($) |
Going Concern [Line Items] | |||||||||||||||||||||||
Net losses from continuing operations | $ 5,793,000 | $ (725,000) | $ 3,983,000 | $ 2,678,000 | $ 5,298,000 | $ 2,511,000 | $ 7,159,000 | $ 5,902,000 | $ 11,729,000 | $ 20,870,000 | $ 1,487,000 | ||||||||||||
Cash used in operations | $ 14,620,000 | 24,469,000 | $ 16,192,000 | ||||||||||||||||||||
Number of headcount | Headcount | 320 | 320 | 411 | ||||||||||||||||||||
Repayment of outstanding balance on senior revolving credit facility | 3,550,000 | $ 340,000 | |||||||||||||||||||||
Line of credit | 578,000 | 578,000 | |||||||||||||||||||||
Senior indebtedness | $ 32,616,000 | $ 31,944,000 | $ 32,616,000 | 31,944,000 | |||||||||||||||||||
Maximum [Member] | Scenario, Forecast [Member] | Merger Agreement [Member] | FP Healthcare Holdings, Inc. [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Line of credit | $ 5,000,000 | ||||||||||||||||||||||
Senior Term Loan [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Repayment of outstanding subordinated term loan | $ 30,000,000 | ||||||||||||||||||||||
Senior Term Loan [Member] | Maximum [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Debt instrument principal amount | $ 35,000,000 | ||||||||||||||||||||||
Senior Term Loan [Member] | Maximum [Member] | Scenario, Forecast [Member] | Merger Agreement [Member] | FP Healthcare Holdings, Inc. [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Debt instrument principal amount | 42,000,000 | ||||||||||||||||||||||
Senior Term Loan [Member] | Minimum [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Debt instrument principal amount | $ 20,000,000 | ||||||||||||||||||||||
Senior Revolving Credit Facility [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Credit facility extended maturity date | Jun. 8, 2021 | ||||||||||||||||||||||
Available revolving credit facility | $ 10,000,000 | ||||||||||||||||||||||
Minimum liquidity covenant requirement, description | A minimum liquidity requirement of $1,500 at all times from March 1, 2017 through March 31, 2018, and $15,000 thereafter; | ||||||||||||||||||||||
EBITDA | $ (3,000,000) | $ (12,000,000) | |||||||||||||||||||||
Minimum liquidity covenant | $ 15,000,000 | $ 10,000,000 | $ 11,500,000 | ||||||||||||||||||||
Senior Revolving Credit Facility [Member] | Scenario, Forecast [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
EBITDA | $ 9,000,000 | $ 9,000,000 | $ 8,000,000 | $ 8,000,000 | $ (3,000,000) | ||||||||||||||||||
Minimum liquidity covenant | $ 1,500,000 | $ 15,000,000 | |||||||||||||||||||||
Senior Revolving Credit Facility [Member] | Credit Facility, March 2017 and January 2018 Amendment [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Credit facility, description | In March 2017 and again in January 2018, the Company amended its senior credit facility (“Senior Credit Facility”) to, among other things, (i) defer scheduled Senior Term Loan principal repayments until the later of June 4, 2018 and the approved outside date of an alternative acquisition as contemplated under the Merger Agreement (the “Outside Date”), (ii) revise the EBITDA and Minimum Liquidity covenants, and (iii) increase the available revolving credit facility from $500 to $6,000 through the later of June 4, 2018 or the Outside Date (See Note 9). The Outside Date will be deemed to have occurred prior to the date set forth above upon (i) an event of default under the Senior Credit Facility, (ii) termination of the Merger Agreement under certain circumstances and (iii) the consummation of the Merger or alternative acquisition as contemplated under the Merger Agreement. | ||||||||||||||||||||||
Minimum liquidity covenant requirement, description | the Senior Credit Facility contains a minimum adjusted EBITDA covenant for the twelve months ending March 31, 2018 of at least negative $3,000 and a minimum liquidity covenant of $1,500 at all times prior to the earlier of (a) the Merger date, (b) June 4, 2018, or (c) an acquisition termination event, and $15,000 at all times thereafter. | ||||||||||||||||||||||
Senior indebtedness | $ 32,616,000 | $ 32,616,000 | |||||||||||||||||||||
Going concern period on issuance of financial statements | 12 months | ||||||||||||||||||||||
Senior Revolving Credit Facility [Member] | Credit Facility, March 2017 and January 2018 Amendment [Member] | Scenario, Forecast [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Minimum liquidity covenant | 15,000,000 | $ 1,500,000 | |||||||||||||||||||||
Senior Revolving Credit Facility [Member] | Maximum [Member] | Credit Facility, March 2017 and January 2018 Amendment [Member] | Scenario, Forecast [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Available revolving credit facility | 6,000,000 | ||||||||||||||||||||||
Senior Revolving Credit Facility [Member] | Minimum [Member] | Credit Facility, March 2017 and January 2018 Amendment [Member] | Scenario, Forecast [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Available revolving credit facility | $ 500,000 | ||||||||||||||||||||||
New Senior Credit Facility [Member] | Scenario, Forecast [Member] | Merger Agreement [Member] | FP Healthcare Holdings, Inc. [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Maximum investment in new capital | $ 15,000,000 | ||||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Stock issued during the period, Value | $ 52,000,000 | ||||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Stock issued during the period, Value | $ 17,500,000 | ||||||||||||||||||||||
Transaction fees | 675,000 | ||||||||||||||||||||||
Series B Preferred Stock [Member] | Senior Revolving Credit Facility [Member] | |||||||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||||||
Repayment of outstanding balance on senior revolving credit facility | $ 624,000 |
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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-Dilutive Common Share Equivalents | 22,048,950 | 8,066,497 | 1,122,697 |
Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-Dilutive Common Share Equivalents | 0 | 1,047 | 53,454 |
Stock Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-Dilutive Common Share Equivalents | 6,195 | 177,010 | 1,069,243 |
Redeemable Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-Dilutive Common Share Equivalents | 22,042,755 | 7,888,440 | 0 |
Net Loss Per Common Share - S41
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 | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net loss | $ (6,662) | $ (171) | $ (5,011) | $ (3,700) | $ (6,232) | $ (3,066) | $ (9,900) | $ (7,336) | $ (15,544) | $ (26,534) | $ (7,343) |
Less: Preferred stock dividends | 6,445 | 2,643 | |||||||||
Net loss attributable to common stock | $ (21,989) | $ (29,177) | $ (7,343) | ||||||||
Denominator: | |||||||||||
Weighted-average common shares outstanding, basic and diluted | 22,791,178 | 22,275,256 | 21,813,407 | ||||||||
Net loss per common share, basic and diluted | $ (0.96) | $ (1.31) | $ (0.34) |
ConnectedHealth Acquisition - A
ConnectedHealth Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 07, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Business acquisition, net of cash acquired and working capital adjustment | $ (82) | $ 4,683 | |||
Business acquisition related expenses | $ 959 | ||||
ConnectedHealth LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, net of cash acquired and working capital adjustment | $ 4,601 | ||||
Business acquisition related expenses | $ 200 | ||||
ConnectedHealth Software Solutions and Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Revenue | $ 832 | $ 1,800 |
ConnectedHealth Acquisition - S
ConnectedHealth Acquisition - Summary of Purchase Price Allocation (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Goodwill | $ 30,872 | $ 31,072 |
ConnectedHealth LLC [Member] | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | 25 | |
Trade accounts receivable | 428 | |
Prepaid expenses and other current assets | 31 | |
Intangible assets | 1,200 | |
Goodwill | 4,293 | |
Other long-term assets | 54 | |
Accounts payable and other current liabilities | (1,225) | |
Other long-term liabilities | (180) | |
Total purchase price | $ 4,626 |
ConnectedHealth Acquisition -44
ConnectedHealth Acquisition - Summary of Pro Forma Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition Pro Forma Information [Line Items] | |||
Weighted-average common shares outstanding, basic and diluted | 22,791,178 | 22,275,256 | 21,813,407 |
ConnectedHealth LLC [Member] | |||
Business Acquisition Pro Forma Information [Line Items] | |||
Total revenue | $ 82,864 | $ 98,448 | |
Net (loss) | $ (27,157) | $ (13,879) | |
Weighted-average common shares outstanding, basic and diluted | 22,275,256 | 21,813,407 | |
Net (loss) per share - basic and diluted | $ (1.34) | $ (0.64) |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment—gross | $ 6,055 | $ 6,582 |
Accumulated depreciation | (4,976) | (4,625) |
Property and equipment—net | 1,079 | 1,957 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment—gross | 344 | 818 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment—gross | 4,994 | 5,136 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment—gross | $ 717 | $ 628 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 1,043 | $ 1,191 | $ 1,020 |
Goodwill and Other Intangible47
Goodwill and Other Intangible Assets - Summary of Carrying Amount of Goodwill by Goodwill Reporting Unit (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | ||
Carrying Amount | $ 31,072 | $ 31,072 |
Accumulated Impairment | (200) | 0 |
Net | 30,872 | 31,072 |
Enterprise/Commercial [Member] | ||
Goodwill [Line Items] | ||
Carrying Amount | 7,732 | 7,732 |
Accumulated Impairment | (200) | 0 |
Net | 7,532 | 7,732 |
Enterprise/State [Member] | ||
Goodwill [Line Items] | ||
Carrying Amount | 0 | 0 |
Accumulated Impairment | 0 | 0 |
Net | 0 | 0 |
Medicare [Member] | ||
Goodwill [Line Items] | ||
Carrying Amount | 14,711 | 14,711 |
Accumulated Impairment | 0 | 0 |
Net | 14,711 | 14,711 |
Private Exchange [Member] | ||
Goodwill [Line Items] | ||
Carrying Amount | 8,629 | 8,629 |
Accumulated Impairment | 0 | 0 |
Net | $ 8,629 | $ 8,629 |
Goodwill and Other Intangible48
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||||
Pre-tax non-cash impairment charge of goodwill | $ 200 | $ 200 | ||
Amortization expense | $ 3,360 | $ 3,410 | $ 4,023 | |
Enterprise/Commercial [Member] | ||||
Goodwill [Line Items] | ||||
Pre-tax non-cash impairment charge of goodwill | $ 200 |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 24,942 | $ 24,860 |
Accumulated Amortization | (19,032) | (15,672) |
Net Carrying Value | $ 5,910 | 9,188 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 10 years | |
Customer Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 7,398 | 7,398 |
Accumulated Amortization | (3,817) | (3,077) |
Net Carrying Value | $ 3,581 | $ 4,321 |
Customer Relationship [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | 3 years |
Customer Relationship [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 10 years | 10 years |
Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 12,892 | $ 12,892 |
Accumulated Amortization | (12,050) | (9,770) |
Net Carrying Value | $ 842 | $ 3,122 |
Acquired Technology [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | 3 years |
Acquired Technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 5 years | 5 years |
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 | (1,388) | (1,108) |
Net Carrying Value | $ 1,412 | $ 1,692 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives - In Years | 3 years | 3 years |
Gross Carrying Value | $ 1,852 | $ 1,770 |
Accumulated Amortization | (1,777) | (1,717) |
Net Carrying Value | $ 75 | $ 53 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets - Summary of Estimated Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2,018 | $ 1,364 | |
2,019 | 1,269 | |
2,020 | 1,247 | |
2,021 | 1,050 | |
2,022 | 940 | |
Thereafter | 40 | |
Net Carrying Value | $ 5,910 | $ 9,188 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | ||||
Net accrued straight line rent | $ 343,000 | $ 199,000 | ||
Letter of credit, as security for leased property | 200,000 | |||
Deposits | 856,000 | |||
Retention Compensation Plan [Member] | ||||
Loss Contingencies [Line Items] | ||||
Change in control has not occured from the date of retention compensation plan | 5 years | |||
Change in control occurs from date of retention compensation plan | 5 years | |||
Retention Compensation Plan [Member] | Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Fixed retention bonus payable in cash | $ 1,875,000 | |||
Contingent bonus payable in cash | $ 625,000 | |||
General and Administrative Expense [Member] | ||||
Loss Contingencies [Line Items] | ||||
Lease termination charge, net of estimated sub-lease income | 1,988,000 | |||
Estimated sub-lease income | $ 3,300,000 | |||
Operating lease obligation, term of contract | 7 years | |||
Write-down of leasehold improvements | $ 63,000 | |||
Office Building [Member] | ||||
Loss Contingencies [Line Items] | ||||
Operating leases expire date | Through 2,025 | |||
Operating leases rent expense | $ 1,945,000 | $ 1,775,000 | $ 1,746,000 |
Commitments and Contingencies52
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,018 | $ 1,414 |
2,019 | 1,392 |
2,020 | 911 |
2,021 | 906 |
2,022 | 1,077 |
Thereafter | 1,420 |
Total minimum lease payments | $ 7,120 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Senior term loans | $ 32,616 | $ 31,944 |
Senior revolving credit facility | 578 | |
Total long-term debt | 32,616 | 32,522 |
Less: current maturities of debt | $ (32,616) | (578) |
Long-term debt | $ 31,944 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Nov. 04, 2016 | Jun. 08, 2016 | May 03, 2016 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2021 | Jun. 04, 2018 | Jun. 03, 2018 | Apr. 01, 2018 | Sep. 30, 2017 | Mar. 10, 2017 | Mar. 01, 2017 | Sep. 30, 2016 |
Debt Instrument [Line Items] | ||||||||||||||||||
Senior term loans | $ 32,616,000 | $ 31,944,000 | ||||||||||||||||
Proceeds from issuance of promissory note | 16,156,000 | |||||||||||||||||
Estimated fair value of total debt | $ 34,500,000 | 29,000,000 | ||||||||||||||||
THL Note [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Proceeds from issuance of promissory note | 30,000,000 | |||||||||||||||||
Debt instrument original issue discount | 683,000 | |||||||||||||||||
Repayment of promissory note | $ 30,000,000 | |||||||||||||||||
Other Expense (Income) [Member] | THL Note [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Breakage fee | 560,000 | |||||||||||||||||
Remaining amount of original issue discount and deferred financing costs | 480,000 | |||||||||||||||||
Senior Term Loan [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Repayment of outstanding debt | $ 2,000,000 | |||||||||||||||||
Bank fees incurred for repayment of debt | 300,000 | |||||||||||||||||
Interest rates on debt | 10.33% | |||||||||||||||||
Repayment of promissory note | $ 30,000,000 | |||||||||||||||||
Senior Term Loan [Member] | Maximum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument principal amount | $ 35,000,000 | |||||||||||||||||
Senior Term Loan [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument principal amount | $ 20,000,000 | |||||||||||||||||
Senior Revolving Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Revolving credit facility extended maturity date | Jun. 8, 2021 | |||||||||||||||||
Revolving credit facility maturity date | Jan. 18, 2018 | |||||||||||||||||
Available revolving credit facility | $ 10,000,000 | |||||||||||||||||
Minimum liquidity covenant | $ 11,500,000 | $ 15,000,000 | $ 10,000,000 | |||||||||||||||
EBITDA | $ (3,000,000) | (12,000,000) | ||||||||||||||||
Minimum liquidity covenant requirement, description | A minimum liquidity requirement of $1,500 at all times from March 1, 2017 through March 31, 2018, and $15,000 thereafter; | |||||||||||||||||
Interest rates on debt | 12.50% | |||||||||||||||||
Senior Revolving Credit Facility [Member] | Scenario, Forecast [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Minimum liquidity covenant | $ 1,500,000 | $ 15,000,000 | ||||||||||||||||
EBITDA | $ 9,000,000 | $ 9,000,000 | $ 8,000,000 | $ 8,000,000 | (3,000,000) | |||||||||||||
Senior Revolving Credit Facility [Member] | Other Expense (Income) [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Deferred financing costs | $ 381,000 | |||||||||||||||||
Senior Revolving Credit Facility [Member] | Senior Term Loan [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Incremental interest paid in kind | 2.50% | 2.50% | ||||||||||||||||
Senior Revolving Credit Facility [Member] | Senior Term Loan [Member] | Scenario, Forecast [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Repayment of principal amount | $ 1,313,000 | |||||||||||||||||
Senior Credit Facility Amendment [Member] | Merger Agreement [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Minimum liquidity covenant | $ 1,500,000 | |||||||||||||||||
Senior Credit Facility Amendment [Member] | Scenario, Forecast [Member] | Merger Agreement [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Available revolving credit facility | $ 6,000,000 | $ 5,500,000 | ||||||||||||||||
Senior Credit Facility Amendment [Member] | Senior Term Loan [Member] | Scenario, Forecast [Member] | Merger Agreement [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Repayment of principal amount | $ 1,313,000 | |||||||||||||||||
Senior term loans | $ 1,313,000 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Payments on Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 32,616 | |
Long term debt gross | 32,616 | |
Total long-term debt | $ 32,616 | $ 32,522 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 10, 2017 | May 02, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Class Of Stock [Line Items] | ||||
Common stock, Shares authorized | 75,000,000 | 75,000,000 | ||
Common stock, Par value | $ 0.001 | $ 0.001 | ||
Treasury stock acquired | 141,296 | 101,340 | ||
Common stock reserved for issuance | 1,072,882 | |||
Series A Preferred Stock [Member] | ||||
Class Of Stock [Line Items] | ||||
Preferred stock, Par value | $ 0.001 | |||
Stock issued during the period, Value | $ 52,000 | |||
Number of consecutive trading days needed to force conversion | 45 days | |||
Conversion price for convertible preferred stock | $ 3.96 | |||
Preferred stock dividend rate percentage | 7.50% | |||
Series A Preferred Stock [Member] | Anti-Dilution Adjustments [Member] | ||||
Class Of Stock [Line Items] | ||||
Conversion price for convertible preferred stock | $ 4.50 | |||
Series A Preferred Stock [Member] | Minimum [Member] | ||||
Class Of Stock [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 | |||
Series A Preferred Stock [Member] | Maximum [Member] | ||||
Class Of Stock [Line Items] | ||||
Preferred stock dividend rate percentage | 16.50% | |||
Series B Preferred Stock [Member] | ||||
Class Of Stock [Line Items] | ||||
Preferred stock, Par value | $ 0.001 | |||
Stock issued during the period, Value | $ 17,500 | |||
Number of consecutive trading days needed to force conversion | 45 days | |||
Preferred stock dividend rate percentage | 15.00% | |||
Series B Preferred Stock [Member] | Anti-Dilution Adjustments [Member] | ||||
Class Of Stock [Line Items] | ||||
Conversion price for convertible preferred stock | $ 1.91 | |||
Series B Preferred Stock [Member] | Minimum [Member] | ||||
Class Of Stock [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 | |||
Series B Preferred Stock [Member] | Maximum [Member] | ||||
Class Of Stock [Line Items] | ||||
Preferred stock dividend rate percentage | 20.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | Sep. 26, 2016 | Nov. 30, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 2,227,000 | $ 2,662,000 | $ 4,712,000 | ||
Unrecognized compensation costs | $ 3,737,000 | ||||
Approximate vesting period for unvested awards | 2 years | ||||
Maximum contractual term of equity awards | 10 years | ||||
Weighted average fair value | $ 0.82 | $ 1 | $ 4.30 | ||
Stock units, vesting period | 3 years | ||||
Common stock reserved for issuance | 1,072,882 | ||||
Executive Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual forfeiture rate used | 0.00% | 0.00% | 0.00% | ||
Other Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual forfeiture rate used | 10.00% | 10.00% | 10.00% | ||
2014 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Increase in number of shares of common stock reserved for issuance | 1,500,000 | ||||
2014 Employee Stock Purchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
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 | ||||
Common stock reserved for issuance | 101,630 | ||||
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% | ||||
Number of shares purchased under the plan | 124,122 | 150,013 | 29,927 | ||
Liability Award [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 153,000 | ||||
Liability award, grant month and year | 2017-07 | ||||
Unrecognized compensation costs | $ 1,547,000 | ||||
Maximum [Member] | 2014 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage increase in shares of common stock | 2.00% | ||||
Maximum [Member] | Liability Award [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Settlement period of liability award | 5 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Number of Shares Outstanding, Beginning balance | 2,270,701 | 2,306,726 | |
Number of Shares granted | 160,000 | 572,200 | |
Number of Shares exercised | (23,753) | (101,953) | |
Number of Shares forfeited | (1,219,343) | (486,274) | |
Number of Shares expired | (19,998) | ||
Number of Shares Outstanding, Ending balance | 1,187,605 | 2,270,701 | 2,306,726 |
Number of Shares Exercisable | 710,420 | ||
Number of Shares Vested and expected to vest | 1,168,059 | ||
Weighted Average Exercise Price Outstanding, Beginning balance | $ 3.01 | $ 4.16 | |
Weighted Average Exercise Price, Option granted | 1.73 | 2.53 | |
Weighted Average Exercise Price, Option exercised | 1.75 | 1.85 | |
Weighted Average Exercise Price, Option forfeited | 2.61 | 7.81 | |
Weighted Average Exercise Price, Option expired | 11.37 | ||
Weighted Average Exercise Price Outstanding, Ending balance | 3.26 | $ 3.01 | $ 4.16 |
Weighted Average Exercise Price, Exercisable | 3.60 | ||
Weighted Average Exercise Price, Vested and expected to vest | $ 3.28 | ||
Average Life, Outstanding | 7 years 4 months 24 days | 5 years 14 days | 7 years 7 months 2 days |
Average Life, Exercisable | 6 years 7 months 2 days | ||
Average Life, Vested and expected to vest | 7 years 4 months 13 days | ||
Aggregate Intrinsic Value, Outstanding | $ 2,735 | ||
Aggregate Intrinsic Value, Exercised | $ 14 | $ 100 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Weighted Average Assumptions Used for Estimating Fair Value of Options Granted (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Common stock share value | $ 1.73 | $ 2.53 | $ 10.31 |
Expected life (years) | 5 years 6 months 21 days | 4 years | 5 years 3 days |
Volatility | 50.00% | 50.00% | 50.00% |
Interest rate | 2.02% | 1.01% | 1.45% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - Sc60
Stock-Based Compensation - Schedule of Restricted Stock Activity (Detail) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Outstanding, Beginning balance | 665,496 | 570,790 |
Shares Granted | 2,211,586 | 503,440 |
Shares Vested | (448,404) | (260,523) |
Shares Forfeited | (84,958) | (148,211) |
Shares Outstanding, Ending balance | 2,343,720 | 665,496 |
Average Fair Value Price per Share Outstanding, Beginning balance | $ 4.24 | $ 8.35 |
Average Fair Value Price per Share Granted | 0.72 | 2.45 |
Average Fair Value Price per Share Vested | 2.63 | 6.90 |
Average Fair Value Price per Share Forfeited | 3.52 | 9.31 |
Average Fair Value Price per Share Outstanding, Ending balance | $ 1.26 | $ 4.24 |
Aggregate Intrinsic value, Vested | $ 353 | $ 567 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Taxes (Provision) Benefit (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax expense: | |||
State | $ (20) | $ 60 | $ (47) |
Total current tax (provision) benefit | (20) | 60 | (47) |
Deferred tax expense: | |||
Federal | (3) | ||
State | (1) | ||
Total deferred tax (provision) benefit | (4) | ||
Total (provision) benefit for income taxes | $ (20) | $ 60 | $ (51) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax (Provision) Benefit Differs from Amounts Obtained by Applying U.S. Statutory Federal Income Tax Rate to Income Before Taxes (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 34.00% | 34.00% | 34.00% |
Effect of: | |||
State income taxes, net of federal benefit | (0.10%) | 0.10% | (0.50%) |
Valuation allowance | 81.10% | (35.30%) | (32.90%) |
Goodwill impairment | (0.40%) | ||
Change in federal tax law | (112.50%) | ||
Other, net | (2.00%) | 1.40% | (1.30%) |
Overall income tax rate | 0.10% | 0.20% | (0.70%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Line Items] | ||||
Federal statutory rate | 34.00% | 34.00% | 34.00% | |
Net change in the valuation allowance for the deferred tax asset | $ (12,590,000) | $ 9,375,000 | $ 2,397,000 | |
Research and development credits | 45,000 | 45,000 | ||
Liability for unrecognized tax benefits | 0 | 0 | ||
Federal Tax Authority [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards | 133,000,000 | 121,000,000 | ||
Research and development credits | $ 45,000 | |||
Operating Loss Carryforwards, Expiration beginning year | 2,020 | |||
Operating Loss Carryforwards, Expiration ending year | 2,038 | |||
Federal Tax Authority [Member] | Earliest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years open for examination | 2,014 | |||
Federal Tax Authority [Member] | Latest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years open for examination | 2,017 | |||
State and Local Jurisdiction [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards | $ 92,000,000 | $ 77,800,000 | ||
State and Local Jurisdiction [Member] | Earliest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years open for examination | 2,013 | |||
State and Local Jurisdiction [Member] | Latest Tax Year [Member] | ||||
Income Taxes [Line Items] | ||||
Tax years open for examination | 2,017 | |||
Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Federal statutory rate | 35.00% | |||
Scenario Plan [Member] | ||||
Income Taxes [Line Items] | ||||
Federal statutory rate | 21.00% |
Income Taxes - Schedule of Co64
Income Taxes - Schedule of Components of Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 33,387 | $ 45,205 |
Deferred revenue | 6,736 | 12,199 |
Research and development credit | 45 | 45 |
Accrued payroll and related liabilities | 1,433 | 2,070 |
Other | 1,564 | 821 |
Valuation allowance | (35,602) | (48,192) |
Net deferred tax assets | 7,563 | 12,148 |
Deferred tax liabilities: | ||
Intangible assets | (1,314) | (3,100) |
Deferred implementation costs | (6,272) | (9,070) |
Total deferred tax liabilities | (7,586) | (12,170) |
Net deferred tax liability | $ (23) | $ (22) |
Employee Retirement Plan - Addi
Employee Retirement Plan - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |||
Employee retirement plan, Expense recognized | $ 662 | $ 729 | $ 679 |
Segments of Business - Addition
Segments of Business - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2017SegmentCustomer | Dec. 31, 2016Customer | Dec. 31, 2015Customer | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 4 | ||
Enterprise/State [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of customers | Customer | 1 | 1 | 1 |
Segments of Business - Summary
Segments of Business - Summary of Unallocated Corporate Expenses and Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | $ 19,639 | $ 20,533 | $ 18,302 | $ 18,272 | $ 20,879 | $ 24,729 | $ 18,729 | $ 17,557 | $ 76,746 | $ 81,894 | $ 95,847 |
Consolidated gross margin | 7,344 | 9,754 | 5,788 | 6,798 | 5,891 | 8,838 | 5,066 | 5,204 | 29,684 | 24,999 | 45,177 |
Research and development | 16,679 | 22,297 | 22,718 | ||||||||
Sales and marketing | 9,356 | 10,410 | 9,507 | ||||||||
General and administrative | 15,378 | 13,162 | 14,439 | ||||||||
Total consolidated operating expenses | 13,137 | 9,029 | 9,771 | 9,476 | 11,189 | 11,349 | 12,225 | 11,106 | 41,413 | 45,869 | 46,664 |
Consolidated loss from operations | $ (5,793) | $ 725 | $ (3,983) | $ (2,678) | $ (5,298) | $ (2,511) | $ (7,159) | $ (5,902) | (11,729) | (20,870) | (1,487) |
Consolidated depreciation and amortization | 4,403 | 4,601 | 5,043 | ||||||||
Enterprise/Commercial [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | 40,187 | 49,081 | 55,487 | ||||||||
Consolidated gross margin | 13,216 | 11,906 | 23,715 | ||||||||
Enterprise/State [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | 2,144 | 3,453 | 13,372 | ||||||||
Consolidated gross margin | 1,469 | 1,325 | 6,300 | ||||||||
Medicare [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | 22,101 | 18,565 | 17,973 | ||||||||
Consolidated gross margin | 14,872 | 11,460 | 10,651 | ||||||||
Private Exchange [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | 12,314 | 10,795 | 9,015 | ||||||||
Consolidated gross margin | 127 | 308 | 4,511 | ||||||||
Operating Segments [Member] | Enterprise/Commercial [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated depreciation and amortization | 555 | 642 | 543 | ||||||||
Operating Segments [Member] | Enterprise/State [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated depreciation and amortization | 2 | 19 | 80 | ||||||||
Operating Segments [Member] | Medicare [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated depreciation and amortization | 2,563 | 2,576 | 2,588 | ||||||||
Operating Segments [Member] | Private Exchange [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated depreciation and amortization | 1,079 | 1,034 | 992 | ||||||||
Corporate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated depreciation and amortization | $ 204 | $ 330 | $ 840 |
Segments of Business - Schedule
Segments of Business - Schedule of Identifiable Assets by Segment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | |||
Consolidated assets | $ 83,078 | $ 82,488 | $ 82,689 |
Operating Segments [Member] | Enterprise/Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Consolidated assets | 31,650 | 29,728 | 33,857 |
Operating Segments [Member] | Enterprise/State [Member] | |||
Segment Reporting Information [Line Items] | |||
Consolidated assets | 85 | 627 | 1,975 |
Operating Segments [Member] | Medicare [Member] | |||
Segment Reporting Information [Line Items] | |||
Consolidated assets | 21,662 | 23,248 | 26,198 |
Operating Segments [Member] | Private Exchange [Member] | |||
Segment Reporting Information [Line Items] | |||
Consolidated assets | 18,666 | 18,247 | 11,255 |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Consolidated assets | $ 11,015 | $ 10,638 | $ 9,404 |
Related Parties - Additional In
Related Parties - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 10, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | May 02, 2016 |
Series B Preferred Stock [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock issued during the period, Value | $ 17,500 | ||||
Chrysalis And Francisco Partners | Series B Preferred Stock [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock issued during the period, Value | $ 17,500 | ||||
Humana, Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Administrative fees | $ 650 | $ 650 | |||
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 related party | 5.00% | 5.00% | |||
Minimum [Member] | Francisco Partners [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage holding by the related party | 5.00% |
Consolidated Selected Quarter70
Consolidated Selected Quarterly Financial Data (Unaudited) - Schedule of Selected Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 19,639 | $ 20,533 | $ 18,302 | $ 18,272 | $ 20,879 | $ 24,729 | $ 18,729 | $ 17,557 | $ 76,746 | $ 81,894 | $ 95,847 |
Gross margin | 7,344 | 9,754 | 5,788 | 6,798 | 5,891 | 8,838 | 5,066 | 5,204 | 29,684 | 24,999 | 45,177 |
Total operating expenses | 13,137 | 9,029 | 9,771 | 9,476 | 11,189 | 11,349 | 12,225 | 11,106 | 41,413 | 45,869 | 46,664 |
Income (loss) from operations | (5,793) | 725 | (3,983) | (2,678) | (5,298) | (2,511) | (7,159) | (5,902) | (11,729) | (20,870) | (1,487) |
Net loss | $ (6,662) | $ (171) | $ (5,011) | $ (3,700) | $ (6,232) | $ (3,066) | $ (9,900) | $ (7,336) | $ (15,544) | $ (26,534) | $ (7,343) |
Net loss per common share: | |||||||||||
Basic | $ (0.37) | $ (0.08) | $ (0.30) | $ (0.22) | $ (0.32) | $ (0.18) | $ (0.47) | $ (0.33) | |||
Diluted | $ (0.37) | $ (0.08) | $ (0.30) | $ (0.22) | $ (0.32) | $ (0.18) | $ (0.47) | $ (0.33) | |||
Weighted-average common shares outstanding: | |||||||||||
Basic | 23,049,692 | 22,878,477 | 22,660,108 | 22,570,207 | 22,425,517 | 22,343,142 | 22,217,696 | 22,112,273 | |||
Diluted | 23,049,692 | 22,878,477 | 22,660,108 | 22,570,207 | 22,425,517 | 22,343,142 | 22,217,696 | 22,112,273 |
Consolidated Selected Quarter71
Consolidated Selected Quarterly Financial Data (Unaudited) - Schedule of Selected Quarterly Financial Data (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||
Goodwill impairment expense | $ 200 | $ 200 | |
Lease termination expense | 1,988 | $ (1,988) | |
Merger related professional advisor expenses | $ 959 | ||
Amount of previously reported deferred recognized as revenue | $ 4,600 | ||
Gross margin resulting from the satisfaction of a customer obligation | $ 2,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jan. 04, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Mar. 31, 2021 | Mar. 31, 2018 | Mar. 01, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | |||||||
Common stock, Par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Transaction expenses | $ 959 | $ 959 | |||||
Senior term loans | $ 32,616 | $ 32,616 | $ 31,944 | ||||
Outside Date [Member] | Senior Credit Facility Amendment [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Minimum liquidity covenant | $ 1,500 | ||||||
Outside Date [Member] | Senior Term Loan [Member] | Senior Credit Facility Amendment [Member] | Scenario, Forecast [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Senior term loans | $ 1,313 | ||||||
Repayment of principal amount | $ 1,313 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, Par value | $ 0.001 | ||||||
Right to receive cash by rollover investors price per share | $ 0.35 | ||||||
Subsequent Event [Member] | Outside Date [Member] | Senior Credit Facility Amendment [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Increase in available credit facility | $ 5,500 | ||||||
Maximum liquidity covenant | 15,000 | ||||||
Subsequent Event [Member] | FP Healthcare Holdings, Inc. [Member] | Maximum [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Termination fee upon termination of the merger agreement | $ 2,000 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Trade Receivable Allowances [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 246 | ||
Additions (Reversals) Charged to Expense | 45 | ||
Additions (Reversals) Charged to Revenue | (137) | ||
Deductions | (154) | ||
Deferred Tax Asset Valuation Allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 48,192 | $ 38,817 | 36,420 |
Additions (Reversals) Charged to Expense | (12,590) | 9,375 | 2,397 |
Balance at End of Period | $ 35,602 | $ 48,192 | $ 38,817 |
Schedule II - Valuation and Q74
Schedule II - Valuation and Qualifying Accounts (Parenthetical) (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Tax Cuts and Jobs Act [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Increase (decrease) in valuation allowance | $ (17,471) |
Federal and State Net Operating Losses [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Increase (decrease) in valuation allowance | $ 4,881 |