Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'American Caresource Holdings, Inc. | ' |
Entity Central Index Key | '0001316645 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 5,713,960 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net revenues | $6,493 | $8,186 | $20,541 | $25,802 |
Cost of revenues | ' | ' | ' | ' |
Provider payments | 4,811 | 6,119 | 15,539 | 18,992 |
Administrative fees | 265 | 340 | 853 | 1,168 |
Claims administration and provider development | 653 | 740 | 2,019 | 2,317 |
Total cost of revenues | 5,729 | 7,199 | 18,411 | 22,477 |
Contribution margin | 764 | 987 | 2,130 | 3,325 |
Selling, general and administrative expenses | 1,424 | 1,836 | 5,016 | 5,097 |
Depreciation and amortization | 192 | 222 | 615 | 662 |
Total operating expenses | 1,616 | 2,058 | 5,631 | 5,759 |
Loss before income taxes | -852 | -1,071 | -3,501 | -2,434 |
Income tax provision | 6 | 4 | 17 | 28 |
Net loss | ($858) | ($1,075) | ($3,518) | ($2,462) |
Loss per basic and diluted common share | ($0.15) | ($0.19) | ($0.62) | ($0.43) |
Basic and diluted weighted average common shares outstanding | 5,716 | 5,711 | 5,711 | 5,706 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $6,427 | $10,705 |
Accounts receivable, net | 1,723 | 2,432 |
Prepaid expenses and other current assets | 438 | 290 |
Deferred income taxes | 6 | 6 |
Total current assets | 8,594 | 13,433 |
Property and equipment, net | 1,284 | 1,593 |
Other assets: | ' | ' |
Deferred income taxes | 221 | 222 |
Other non-current assets | 391 | 16 |
Intangible assets, net | 672 | 768 |
Total assets | 11,162 | 16,032 |
Current liabilities: | ' | ' |
Due to service providers | 1,595 | 3,100 |
Accounts payable and accrued liabilities | 1,270 | 1,343 |
Total current liabilities | 2,865 | 4,443 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock, $0.01 par value; 10,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value; 40,000 shares authorized; 5,711 and 5,706 shares issued and outstanding in 2013 and 2012, respectively. | 57 | 57 |
Additional paid-in capital | 23,071 | 22,845 |
Accumulated deficit | -14,831 | -11,313 |
Total stockholders' equity | 8,297 | 11,589 |
Total liabilities and stockholders' equity | $11,162 | $16,032 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Shareholders' equity: | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 5,711 | 5,706 |
Common Stock, shares outstanding | 5,711 | 5,706 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
In Thousands, unless otherwise specified | ||||
Balance at Dec. 31, 2012 | $11,589 | $57 | $22,845 | ($11,313) |
Balance, shares at Dec. 31, 2012 | 5,706 | 5,706 | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' |
Net loss | -3,518 | 0 | 0 | -3,518 |
Stock-based compensation expense | 221 | 0 | 221 | 0 |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | ' | 5 | ' | ' |
Stock Issued During Period, Value, Stock Options Exercised | 5 | 0 | 5 | 0 |
Balance at Sep. 30, 2013 | $8,297 | $57 | $23,071 | ($14,831) |
Balance, shares at Sep. 30, 2013 | 5,711 | 5,711 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($3,518) | ($2,462) |
Adjustments to reconcile net loss to net cash used in operations: | ' | ' |
Non-cash stock-based compensation expense | 221 | 333 |
Depreciation and amortization | 615 | 662 |
Amortization of long-term client agreement | 0 | 187 |
Deferred income taxes | 1 | 3 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 709 | 1,697 |
Prepaid expenses and other assets | -523 | 0 |
Accounts payable and accrued liabilities | -73 | 73 |
Due to service providers | -1,505 | -1,103 |
Net cash used in operating activities | -4,073 | -610 |
Cash flows from investing activities: | ' | ' |
Investment in software development costs | -199 | -302 |
Additions to property and equipment | -11 | -100 |
Net cash used in investing activities | -210 | -402 |
Cash flows from financing activities: | ' | ' |
Proceeds from exercise of equity incentives | 5 | 0 |
Payments of income tax withholdings on net exercise of equity incentives | 0 | -8 |
Net cash provided by (used in) financing activities | 5 | -8 |
Net decrease in cash and cash equivalents | -4,278 | -1,020 |
Cash and cash equivalents at beginning of period | 10,705 | 11,315 |
Cash and cash equivalents at end of period | 6,427 | 10,295 |
Supplemental cash flow information: | ' | ' |
Cash paid for taxes | 63 | 49 |
Supplemental non-cash operating and financing activity: | ' | ' |
Accrued bonus paid with equity incentives | $0 | $23 |
Description_of_Business_and_Ba
Description of Business and Basis of Presentation | 9 Months Ended | |
Sep. 30, 2013 | ||
Description of Business and Basis of Presentation [Abstract] | ' | |
Description of Business and Basis of Presentation | ' | |
Description of Business and Basis of Presentation | ||
American CareSource Holdings, Inc. (“ACS,” “Company,” the “Registrant,” “we,” “us,” or “our”) works to help its clients control healthcare costs by offering cost containment strategies, primarily through the utilization of a comprehensive national network of ancillary healthcare service providers. The Company markets its services to a number of healthcare companies including third party administrators (“TPAs”), insurance companies, large self-funded organizations, various employer groups and preferred provider organizations ("PPOs"). The Company offers payors this solution by: | ||
• | lowering its payors’ ancillary care costs through its network of high quality, cost effective providers that the Company has under contract at more favorable terms than they could generally obtain on their own; | |
• | providing payors with a comprehensive network of ancillary healthcare service providers that is tailored to each payor’s specific needs and is available to each payor’s members for covered services; | |
• | providing payors with claims management, reporting and processing and payment services; | |
• | performing network/needs analysis to assess the benefits to payors of adding additional/different service providers to the payor-specific provider networks; and | |
• | credentialing network service providers for inclusion in the payor-specific provider networks. | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), interim reporting requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the rules and regulations of the Securities and Exchange Commission (“SEC”). Consequently, financial information and disclosures normally included in financial statements prepared annually in accordance with GAAP have been condensed or omitted. Balance sheet amounts are as of September 30, 2013 and December 31, 2012 and operating results are for the three and nine months ended September 30, 2013 and 2012, and include all normal and recurring adjustments we consider necessary for the fair, summarized presentation of our financial position and operating results. Certain prior year amounts have been reclassified within the consolidated statement of operations to conform to the current year presentation. As these are condensed financial statements, readers of this report should, therefore, refer to the consolidated financial statements and the notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed with the SEC on March 4, 2013. | ||
The Company uses the “management approach” for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the “management approach” model, the Company has determined that its business is comprised of a single operating segment. | ||
Our interim results of operations are not necessarily indicative of results of operations that will be realized for the full fiscal year. |
Revenue_Recognition
Revenue Recognition | 9 Months Ended | |||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | ' | |||||||||||||||||||||||||||||||||||
Revenue Recognition | ' | |||||||||||||||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||||||||||||||||
The Company recognizes revenue on the services that it provides, which includes (i) providing payor clients with a comprehensive network of ancillary healthcare providers, (ii) providing claims management, reporting, processing and payment services, (iii) providing network/need analysis to assess the benefits to payor clients of adding additional/different service providers to the client-specific provider networks and (iv) providing credentialing of network service providers for inclusion in the client payor-specific provider networks. Revenue is recognized when services are delivered, which occurs after processed claims are billed to the client payors and collections are reasonably assured. The Company estimates revenues and costs of revenues using average historical collection rates and average historical margins earned on claims. Periodically, revenues are adjusted to reflect actual cash collections so that revenues recognized accurately reflect cash collected. | ||||||||||||||||||||||||||||||||||||
The Company determines whether it is acting as a principal or agent in the fulfillment of the services rendered. After careful evaluation of the key gross and net revenue recognition indicators, the Company acknowledges that while the determination of gross versus net reporting is highly judgmental in nature, the Company has concluded that its circumstances are most consistent with those key indicators that support gross revenue reporting. | ||||||||||||||||||||||||||||||||||||
Following are the key indicators that support the Company’s conclusion that it acts as a principal when settling claims for service providers through its contracted service provider network: | ||||||||||||||||||||||||||||||||||||
• | The Company is the primary obligor in the arrangement. The Company has assessed its role as primary obligor as a strong indicator of gross reporting. The Company believes that it is the primary obligor in its transactions because it is responsible for providing the services desired by its client payors. The Company has distinct, separately negotiated contractual relationships with its client payors and with the ancillary healthcare providers in its networks. The Company does not negotiate “on behalf of” its client payors and does not hold itself out as the agent of the client payors when negotiating the terms of the Company’s ancillary healthcare service provider agreements. The Company’s agreements contractually prohibit client payors and service providers to enter into direct contractual relationships with one another. The client payors have no control over the terms of the Company’s agreements with the service providers. In executing transactions, the Company assumes key performance-related risks. The client payors hold the Company responsible for fulfillment, as the provider, of all of the services the client payors are entitled to under their contracts; client payors do not look to the service providers for fulfillment. In addition, the Company bears the pricing/margin risk as the principal in the transactions. Because the contracts with the client payors and service providers are separately negotiated, the Company has complete discretion in negotiating both the prices it charges its client payors and the financial terms of its agreements with the service providers. Since the Company’s profit is the spread between the amounts received from the client payors and the amount paid to the service providers, it bears significant pricing/margin risk. There is no guaranteed mark-up payable to the Company on the amount the Company has contracted. Thus, the Company bears the risk that amounts paid to the service provider will be greater than the amounts received from the client payors, resulting in a loss or negative claim. | |||||||||||||||||||||||||||||||||||
• | The Company has latitude in establishing pricing. As stated above, the Company has complete latitude in negotiating the price to be paid to the Company by each client payor and the price to be paid to each contracted service provider. This type of pricing latitude indicates that the Company has the risks and rewards normally attributed to a principal in the transactions. | |||||||||||||||||||||||||||||||||||
• | The Company changes the product or performs part of the services. The Company provides the benefits associated with the relationships it builds with the client payors and the service providers. While the parties could deal with each other directly, the client payors would not have the benefit of the Company’s experience and expertise in assembling a comprehensive network of service providers, in claims management, reporting and processing and payment services, in performing network/needs analysis to assess the benefits to client payors of adding additional/different service providers to the client payor-specific provider networks, and in credentialing network service providers. | |||||||||||||||||||||||||||||||||||
• | The Company has complete discretion in supplier selection. One of the key factors considered by client payors who engage the Company is to have the Company undertake the responsibility for identifying, qualifying, contracting with and managing the relationships with the ancillary healthcare service providers. As part of the contractual arrangement between the Company and its client payors, the payors identify their obligations to their respective covered persons and then work with the Company to determine the types of ancillary healthcare services required in order for the payors to meet their obligations. The Company may select the providers and contract with them to provide services at its discretion. | |||||||||||||||||||||||||||||||||||
• | The Company is involved in the determination of product or service specifications. The Company works with its client payors to determine the types of ancillary healthcare services required in order for the payors to meet their obligations to their respective covered persons. In some respects, the Company is customizing the product through its efforts and ability to assemble a comprehensive network of providers for its payors that is tailored to each payor’s specific needs. In addition, as part of its claims processing and payment services, the Company works with the client payors, on the one hand, and the providers, on the other, to set claims review, management and payment specifications. | |||||||||||||||||||||||||||||||||||
• | The supplier (and not the Company) has credit risk. The Company believes it has some level of credit risk, but that risk is mitigated because the Company does not remit payment to providers unless and until it has received payment from the relevant client payors following the Company’s processing of a claim. | |||||||||||||||||||||||||||||||||||
• | The amount that the Company earns is not fixed. The Company does not earn a fixed amount per transaction nor does it realize a per-person per-month charge for its services. | |||||||||||||||||||||||||||||||||||
The Company has evaluated the other indicators of gross and net revenue recognition, including whether or not the Company has general inventory risk. The Company does not have any general inventory risk, as its business is not related to the manufacture, purchase or delivery of goods and it does not purchase in advance any of the services to be provided by the ancillary healthcare service providers. While the absence of this risk would be one indicator in support of net revenue reporting, as described in detail above, the Company has carefully evaluated all of the key gross and net revenue recognition indicators and has concluded that its circumstances are most consistent with those key indicators that support gross revenue reporting. | ||||||||||||||||||||||||||||||||||||
If the Company were to report its revenues net of provider payments rather than on a gross reporting basis, for the three and nine months ended September 30, 2013, its net revenues would have been approximately $1.7 million and $5.0 million, respectively. For the three and nine months ended September 30, 2012, its net revenues would have been approximately $2.1 million and $6.8 million, respectively. | ||||||||||||||||||||||||||||||||||||
The Company records a provision for refunds based on an estimate of historical refund amounts. Refunds are paid to payors for overpayments on claims, claims paid in error, and claims paid for non-covered services. In some instances, we will recoup payments made to the ancillary service provider if the claim has been fully resolved. The evaluation is performed periodically and is based on historical data. We present revenue net of the provision for refunds on the consolidated statement of operations. | ||||||||||||||||||||||||||||||||||||
During the three and nine months ended September 30, 2013 and 2012, five of the Company’s clients comprised a significant portion of the Company’s revenues. The following is a summary of the approximate amounts of the Company’s revenue and accounts receivable contributed by each of those clients as of the dates and for the periods presented (amounts in thousands): | ||||||||||||||||||||||||||||||||||||
Periods ended September 30, 2013 | Periods ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
As of September 30, 2013 | Three Months | Nine Months | As of September 30, 2012 | Three Months | Nine Months | |||||||||||||||||||||||||||||||
Accounts Receivable | Net Revenue | % of Total Revenue | Net Revenue | % of Total Revenue | Accounts Receivable | Net Revenue | % of Total Revenue | Net Revenue | % of Total Revenue | |||||||||||||||||||||||||||
Material Client Relationship | $ | 453 | $ | 1,048 | 16.1 | % | $ | 4,843 | 24 | % | $ | 814 | $ | 2,508 | 30.6 | % | $ | 8,461 | 32 | % | ||||||||||||||||
Benefit Administrative Systems, LLC | 180 | 955 | 14.7 | 2,080 | 10 | 108 | 550 | 6.7 | 1,861 | 8 | ||||||||||||||||||||||||||
HealthSCOPE Benefits, Inc. | 179 | 940 | 14.5 | 2,060 | 10 | 42 | 339 | 4.1 | 973 | 3 | ||||||||||||||||||||||||||
HealthMarkets, Inc. | 165 | 800 | 12.3 | 2,338 | 11 | 120 | 632 | 7.7 | 1,915 | 8 | ||||||||||||||||||||||||||
MultiPlan, Inc. (formerly Viant Holdings, Inc.) | — | 213 | 3.3 | 892 | 4 | 200 | 706 | 8.6 | 2,412 | 9 | ||||||||||||||||||||||||||
All Others | 1,195 | 2,712 | 41.8 | 8,610 | 42 | 1,571 | 3,528 | 43.1 | 10,368 | 41 | ||||||||||||||||||||||||||
Allowance for Uncollectable Receivables/Provision for refunds | (449 | ) | (175 | ) | (2.7 | ) | (282 | ) | (1 | ) | (235 | ) | (77 | ) | (0.8 | ) | (188 | ) | (1 | ) | ||||||||||||||||
$ | 1,723 | $ | 6,493 | 100 | % | $ | 20,541 | 100 | % | $ | 2,620 | $ | 8,186 | 100 | % | 25,802 | 100 | % | ||||||||||||||||||
Reverse_Stock_Split
Reverse Stock Split | 9 Months Ended |
Sep. 30, 2013 | |
Reverse Stock Split [Abstract] | ' |
Reverse Stock Split | ' |
Reverse Stock Split | |
On August 31, 2012 the Company filed a Certificate of Amendment to its Certificate of Incorporation, as amended (the “Amendment”), to effect a 1-for-3 reverse stock split (“reverse split”) of its common stock, par value $0.01 per share (the “Common Stock”), effective September 4, 2012 (the “Effective Day”). Because the Amendment did not result in a reduction in the number of authorized shares of Common Stock, its effect was to increase the number of shares of Common Stock available for issuance relative to the number of shares issued and outstanding. In addition, the par value per share of Common Stock remained $0.01, thus Common Stock and Additional Paid-In Capital were adjusted $114,000 to reflect the reverse split on the consolidated balance sheet. | |
At the Company's annual meeting of stockholders, held on June 11, 2012, the stockholders voted to amend the Company's certificate of incorporation for the purpose of effecting a reverse stock split and authorized its Board of Directors to determine, in its sole discretion, whether to effect the amendment, the timing of the amendment, and the specific ratio of the reverse stock split, provided that such ratio is 1-for-2, 1-for-2.5, 1-for-3, 1-for-3.5 or 1-for-4. | |
On the Effective Day, every three shares of the Company's Common Stock issued and outstanding immediately prior to the Effective Day were automatically combined into one share of Common Stock. Stockholders that were left with a fraction of a share as a result of the reverse split received cash in lieu of the fractional share in an amount based on the closing sale price of the Common Stock on the business day immediately preceding the Effective Day as reported on the The Nasdaq Capital Market. The amount paid to stockholders was less than $1,000. In addition, any options, warrants and restricted stock units outstanding as of the Effective Day were adjusted accordingly. As a result of the reverse split, the Company had approximately 5,711,000 shares of common stock issued and outstanding as of September 30, 2012. | |
Shares of common stock and common stock equivalents, along with earnings per share and other per share amounts, have been retroactively restated to reflect the 1-for-3 reverse stock split that occurred on September 4, 2012 for all periods presented. |
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' |
Earnings (Loss) Per Share | ' |
Earnings (Loss) Per Share | |
For purposes of this calculation, outstanding stock options, stock warrants, and unvested restricted stock units are considered common stock equivalents using the treasury stock method, and are the only such equivalents outstanding. For all periods presented all equivalent units outstanding were anti-dilutive. As of September 30, 2013, options to purchase approximately 726,000 shares of common stock, warrants to purchase 44,400 shares of common stock and approximately 42,700 unvested restricted stock units were excluded from the calculation as their impact would be anti-dilutive. |
Software_Development_Costs
Software Development Costs | 9 Months Ended |
Sep. 30, 2013 | |
Software Development Costs [Abstract] | ' |
Software Development Costs | ' |
Software Development Costs | |
The Company capitalizes costs associated with internally developed software, developed for internal use only, during the application development stage. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality also are capitalized, whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software projects. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. Capitalized costs are amortized using the straight-line method over the useful life of the software, which is typically five years. | |
During the three and nine months ended September 30, 2013, the Company capitalized approximately $23,000 and $199,000, respectively. During the three and nine months ended September 30, 2012, the Company capitalized approximately $164,000 and $302,000, respectively. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2013 | |
Warrants [Abstract] | ' |
Warrants | ' |
Warrants | |
The Company entered into an agreement as of February 25, 2011 with an employee, whereby the Company agreed to issue warrants to purchase 83,333 shares of common stock with an exercise price of $5.01. The warrants have a term of 5 years and vest in increments over a time period of 2 years depending on the achievement of defined, agreed upon revenue targets generated by new clients. The agreement also obligates the Company to issue warrants to purchase up to an additional 166,666 shares of common stock (issued in 83,333 increments) pursuant to the achievement of additional defined agreed upon revenue targets. During the twelve months ended December 31, 2011, we did not recognize compensation costs associated with these warrants due to the low probability of vesting. | |
On February 1, 2012, certain terms of the agreement were modified, including the revenue targets and the total number of shares under the initial and future warrants. The warrants initially granted now cover 44,444 shares to be purchased at an exercise price of $1.50, 22,222 of which vested immediately, and the remaining 22,222 shares vesting upon the achievement of certain revenue targets. The number of shares underlying warrants to be issued under the agreement in the future was reduced to 88,889 shares (issued in 44,444 increments) based upon the achievement of additional defined agreed upon revenue targets. During the first quarter of 2012, we recognized compensation costs of approximately $21,000 associated with the initial vesting of 22,222 shares. | |
We did not recognize compensation costs associated with the warrants, during the three and nine months ended September 30, 2013. Additional costs associated with the warrants will be recognized based on the probability that the revenue targets will be reached. That probability will be re-evaluated and updated based on current market conditions, on a quarterly basis, and compensation costs will be adjusted accordingly. | |
Shares of common stock and exercise price have been restated to reflect the 1-for-3 reverse stock split that occurred on September 4, 2012. |
Severance_Charges
Severance Charges | 9 Months Ended |
Sep. 30, 2013 | |
Restructuring and Related Activities [Abstract] | ' |
Severance Charges | ' |
Severance Charges | |
At the Company's annual meeting of shareholders on May 30, 2013, the Company's shareholders reduced the Board of Directors from nine to five directors. Richard W. Turner, Ph.D., was appointed Chairman of the Board to lead the reconstituted Board consisting of four existing directors and one new director. Additionally, the Board appointed Matthew D. Thompson Acting Chief Operating Officer of the Company, replacing William J. Simpson, Jr. in that role. In addition to his duties as Acting Chief Operating Officer, Mr. Thompson continues to serve as the Company's Chief Financial Officer. The Board furthermore appointed Laura L. Little to the position of Vice President of Finance and Principal Accounting Officer. Ms. Little has been with the Company since December 2009. | |
On June 3, 2013, the Board of Directors accepted the resignation of Rost A. Ginevich from his position with the Company as Chief Information Officer and appointed James A. Honn to this position. In connection with his resignation, Mr. Ginevich entered into a severance agreement and general release with the Company, effective June 14, 2013. Under the agreement, Mr. Ginevich will receive, in addition to any base compensation owed and earned but unused vacation pay, severance payments over a three month period that in the aggregate equal three months' worth of his annual base compensation. During the second quarter of 2013, the Company recorded a severance charge of approximately $46,000 in connection with the severance agreement. | |
Mr. Simpson continued to serve as President of the Company until July 2, 2013 when he resigned, effective July 1, 2013. In connection with his resignation, Mr. Simpson entered into a severance agreement and general release with the Company, effective July 1, 2013. Under the agreement, Mr. Simpson will receive, in addition to any base compensation owed and earned but unused vacation pay, severance payments over a six month period that in the aggregate equal six months' worth of his annual base compensation, or $147,500, and has the right to continue participation in the Company-sponsored group health insurance plan in accordance with applicable laws, rules and regulations. The total severance charge recorded by the Company during the three months ended June 30, 2013 related to Mr. Simpson's resignation was approximately $170,000. | |
The severance charges related to Mr. Simpson and Mr. Ginevich are included in selling, general and administrative expenses on the consolidated statement of operations. The Company did not record severance charges during the three months ended September 30, 2013. |
Revenue_Recognition_Tables
Revenue Recognition (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | ' | |||||||||||||||||||||||||||||||||||
Summary of Revenues and Accounts Receivable Contributed by Client | ' | |||||||||||||||||||||||||||||||||||
The following is a summary of the approximate amounts of the Company’s revenue and accounts receivable contributed by each of those clients as of the dates and for the periods presented (amounts in thousands): | ||||||||||||||||||||||||||||||||||||
Periods ended September 30, 2013 | Periods ended September 30, 2012 | |||||||||||||||||||||||||||||||||||
As of September 30, 2013 | Three Months | Nine Months | As of September 30, 2012 | Three Months | Nine Months | |||||||||||||||||||||||||||||||
Accounts Receivable | Net Revenue | % of Total Revenue | Net Revenue | % of Total Revenue | Accounts Receivable | Net Revenue | % of Total Revenue | Net Revenue | % of Total Revenue | |||||||||||||||||||||||||||
Material Client Relationship | $ | 453 | $ | 1,048 | 16.1 | % | $ | 4,843 | 24 | % | $ | 814 | $ | 2,508 | 30.6 | % | $ | 8,461 | 32 | % | ||||||||||||||||
Benefit Administrative Systems, LLC | 180 | 955 | 14.7 | 2,080 | 10 | 108 | 550 | 6.7 | 1,861 | 8 | ||||||||||||||||||||||||||
HealthSCOPE Benefits, Inc. | 179 | 940 | 14.5 | 2,060 | 10 | 42 | 339 | 4.1 | 973 | 3 | ||||||||||||||||||||||||||
HealthMarkets, Inc. | 165 | 800 | 12.3 | 2,338 | 11 | 120 | 632 | 7.7 | 1,915 | 8 | ||||||||||||||||||||||||||
MultiPlan, Inc. (formerly Viant Holdings, Inc.) | — | 213 | 3.3 | 892 | 4 | 200 | 706 | 8.6 | 2,412 | 9 | ||||||||||||||||||||||||||
All Others | 1,195 | 2,712 | 41.8 | 8,610 | 42 | 1,571 | 3,528 | 43.1 | 10,368 | 41 | ||||||||||||||||||||||||||
Allowance for Uncollectable Receivables/Provision for refunds | (449 | ) | (175 | ) | (2.7 | ) | (282 | ) | (1 | ) | (235 | ) | (77 | ) | (0.8 | ) | (188 | ) | (1 | ) | ||||||||||||||||
$ | 1,723 | $ | 6,493 | 100 | % | $ | 20,541 | 100 | % | $ | 2,620 | $ | 8,186 | 100 | % | 25,802 | 100 | % | ||||||||||||||||||
Revenue_Recognition_Net_Provid
Revenue Recognition (Net Provider Payments) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue Recognition [Abstract] | ' | ' | ' | ' |
Revenues, net of provider payments | $1.70 | $2.10 | $5 | $6.80 |
Revenue_Recognition_Revenue_an
Revenue Recognition (Revenue and Accounts Receivable) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Entity Wide Revenue Major Customer Number | ' | ' | 5 | ' | ' |
Allowance for Uncollectable Receivables | ($449) | ($235) | ($449) | ($235) | ' |
Accounts Receivable, Net | 1,723 | 2,620 | 1,723 | 2,620 | 2,432 |
Provision for refunds | -175 | -77 | -282 | -188 | ' |
Revenue, Net | 6,493 | 8,186 | 20,541 | 25,802 | ' |
Sales Revenue | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 100.00% | 100.00% | 100.00% | 100.00% | ' |
Sales Revenue | Provision for refunds | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | -2.70% | -0.80% | -1.00% | -1.00% | ' |
Customer Concentration Risk | Material Client Relationship | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 453 | 814 | 453 | 814 | ' |
Revenue, Gross | 1,048 | 2,508 | 4,843 | 8,461 | ' |
Customer Concentration Risk | Benefit Administrative Systems, LLC [Member] | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 180 | 108 | 180 | 108 | ' |
Revenue, Gross | 955 | 550 | 2,080 | 1,861 | ' |
Customer Concentration Risk | HealthSCOPE Benefits, Inc. [Member] | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 179 | 42 | 179 | 42 | ' |
Revenue, Gross | 940 | 339 | 2,060 | 973 | ' |
Customer Concentration Risk | HealthMarkets, Inc | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 165 | 120 | 165 | 120 | ' |
Revenue, Gross | 800 | 632 | 2,338 | 1,915 | ' |
Customer Concentration Risk | MultiPlan, Inc. | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 0 | 200 | 0 | 200 | ' |
Revenue, Gross | 213 | 706 | 892 | 2,412 | ' |
Customer Concentration Risk | All Others | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 1,195 | 1,571 | 1,195 | 1,571 | ' |
Revenue, Gross | $2,712 | $3,528 | $8,610 | $10,368 | ' |
Customer Concentration Risk | Sales Revenue | Material Client Relationship | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 16.10% | 30.60% | 24.00% | 32.00% | ' |
Customer Concentration Risk | Sales Revenue | Benefit Administrative Systems, LLC [Member] | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 14.70% | 6.70% | 10.00% | 8.00% | ' |
Customer Concentration Risk | Sales Revenue | HealthSCOPE Benefits, Inc. [Member] | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 14.50% | 4.10% | 10.00% | 3.00% | ' |
Customer Concentration Risk | Sales Revenue | HealthMarkets, Inc | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 12.30% | 7.70% | 11.00% | 8.00% | ' |
Customer Concentration Risk | Sales Revenue | MultiPlan, Inc. | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 3.30% | 8.60% | 4.00% | 9.00% | ' |
Customer Concentration Risk | Sales Revenue | All Others | ' | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' |
% of Total Revenue | 41.80% | 43.10% | 42.00% | 41.00% | ' |
Reverse_Stock_Split_Details
Reverse Stock Split (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Sep. 04, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Sep. 04, 2012 | Jun. 11, 2012 | Jun. 11, 2012 | Jun. 11, 2012 | Jun. 11, 2012 | Jun. 11, 2012 | Aug. 31, 2012 | Sep. 04, 2012 |
Maximum | Scenario 1 | Scenario 2 | Scenario 3 | Scenario 4 | Scenario 5 | Immediately prior to reverse split | Immediately after reverse split | |||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split conversion ratio | 0.3333 | ' | ' | ' | ' | 0.5 | 0.4 | 0.3333 | 0.2857 | 0.25 | ' | ' |
Common stock, par value (in dollars per share) | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | $0.01 | $0.01 |
Common Stock and Additional Paid-In Capital adjustment to reflect reverse split | ' | $114,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount paid to stockholders | ' | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares outstanding | ' | 5,711 | 5,706 | 5,711 | ' | ' | ' | ' | ' | ' | ' | ' |
Earnings_Loss_Per_Share_Detail
Earnings (Loss) Per Share (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Stock options | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive shares excluded from calculation of earnings per share | 726,000 | 726,000 |
Stock warrants | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive shares excluded from calculation of earnings per share | 44,400 | 44,400 |
Restricted Stock Units (RSU's) | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive shares excluded from calculation of earnings per share | 42,700 | 42,700 |
Software_Development_Costs_Det
Software Development Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Software Development Costs [Abstract] | ' | ' | ' | ' |
Useful life of developed software | ' | ' | '5 years | ' |
Capitalized software development costs | $23 | $164 | $199 | $302 |
Warrants_Details
Warrants (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||||
Sep. 04, 2012 | Feb. 25, 2011 | Feb. 01, 2012 | Mar. 31, 2012 | Feb. 01, 2012 | Feb. 25, 2011 | Feb. 01, 2012 | Feb. 01, 2012 | Feb. 25, 2011 | |
Vested immediately | Vested immediately | Vested upon acheivement of additional defined revenue targets | Vested upon acheivement of additional defined revenue targets | Acheivement of additional defined revenue targets | Acheivement of additional defined revenue targets | ||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split conversion ratio | 0.3333 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued | ' | 83,333 | 44,444 | ' | 22,222 | ' | 22,222 | 88,889 | 166,666 |
Exercise price | ' | 5.01 | 1.5 | ' | ' | ' | ' | ' | ' |
Award expiration period | ' | '5 years | ' | ' | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | '2 years | ' | ' | ' |
Incremental warrant issues | ' | ' | ' | ' | ' | ' | ' | 44,444 | 83,333 |
Compensation costs | ' | ' | ' | $21,000 | ' | ' | ' | ' | ' |
Severance_Charges_Details
Severance Charges (Details) (USD $) | 31-May-13 | 30-May-13 | Sep. 30, 2013 | Sep. 30, 2013 |
Director | Director | Chief Information Officer [Member] | President [Member] | |
Selling, General and Administrative Expenses [Member] | Selling, General and Administrative Expenses [Member] | |||
Special Severance Benefits [Member] | Special Severance Benefits [Member] | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Number of directors | 5 | 9 | ' | ' |
Number of existing directors | 4 | ' | ' | ' |
Number of new directors | 1 | ' | ' | ' |
Period over which aggregate benefits are to be paid | ' | ' | '3 months | '6 months |
Base compensation owed, vacation pay, and severance payments | ' | ' | ' | $147,500 |
Total severance charge | ' | ' | $46,000 | $170,000 |