Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 31, 2020 | Jul. 31, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | May 31, 2020 | |
Entity File Number | 001-39348 | |
Entity Registrant Name | ACCOLADE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0969591 | |
Entity Address State Or Province | WA | |
Entity Address, Address Line One | 1201 Third Avenue | |
Entity Address, Address Line Two | Suite 1700 | |
Entity Address, City or Town | Seattle | |
Entity Address, Postal Zip Code | 98101 | |
City Area Code | 206 | |
Local Phone Number | 926-8100 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | ACCD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,143,591 | |
Entity Central Index Key | 0001481646 | |
Current Fiscal Year End Date | --02-28 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | May 31, 2020 | Feb. 29, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 77,682 | $ 33,155 |
Accounts receivable | 2,971 | 294 |
Unbilled revenue | 234 | 895 |
Current portion of deferred contract acquisition costs | 1,395 | 1,368 |
Current portion of deferred financing fees | 279 | 279 |
Prepaid and other current assets | 14,193 | 12,944 |
Total current assets | 96,754 | 48,935 |
Property and equipment, net | 12,598 | 13,625 |
Goodwill | 4,013 | 4,013 |
Acquired technology, net | 1,692 | 2,054 |
Deferred contract acquisition costs | 4,103 | 3,876 |
Other assets | 1,322 | 745 |
Total assets | 120,482 | 73,248 |
Current liabilities: | ||
Accounts payable | 4,940 | 5,273 |
Accrued expenses | 4,375 | 6,580 |
Accrued compensation | 26,627 | 23,838 |
Deferred rent and other current liabilities | 729 | 674 |
Due to customers | 4,278 | 4,674 |
Current portion of deferred revenue | 34,444 | 28,919 |
Total current liabilities | 75,393 | 69,958 |
Loans payable, net of unamortized issuance costs | 72,524 | 21,144 |
Deferred rent and other noncurrent liabilities | 5,614 | 5,523 |
Deferred revenue | 426 | 396 |
Total liabilities | 153,957 | 97,021 |
Convertible preferred stock : | ||
Preferred stock; 19,513,996 shares authorized; 19,513,939 issued and outstanding at May 31, 2020 and February 29, 2020, respectively (liquidation value of $239,244 at May 31, 2020) | 233,022 | 233,022 |
Stockholders' deficit | ||
Common stock par value $0.0001; 65,000,000 shares authorized; 6,381,257 and 6,033,450 shares issued and outstanding at May 31, 2020 and February 29, 2020, respectively | 2 | 2 |
Additional paid-in capital | 68,329 | 64,071 |
Accumulated deficit | (334,828) | (320,868) |
Total stockholders' deficit | (266,497) | (256,795) |
Total liabilities, convertible preferred stock and stockholders' deficit | $ 120,482 | $ 73,248 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | May 31, 2020 | Feb. 29, 2020 |
Condensed Consolidated Balance Sheets (unaudited) | ||
Preferred stock, shares authorized | 19,513,996 | 19,513,996 |
Preferred stock, shares issued | 19,513,939 | 19,513,939 |
Preferred stock, shares outstanding | 19,513,939 | 19,513,939 |
Preferred stock, liquidation value | $ 239,244 | |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 6,381,257 | 6,033,450 |
Common stock, shares outstanding | 6,381,257 | 6,033,450 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Condensed Consolidated Statements of Operations (unaudited) | ||
Revenue | $ 35,894 | $ 28,763 |
Cost of revenue, excluding depreciation and amortization | 22,239 | 17,435 |
Operating expenses: | ||
Product and technology | 11,370 | 11,246 |
Sales and marketing | 7,315 | 7,662 |
General and administrative | 5,667 | 5,563 |
Depreciation and amortization | 1,928 | 2,160 |
Total operating expenses | 26,280 | 26,631 |
Loss from operations | (12,625) | (15,303) |
Interest expense, net | (1,282) | (543) |
Other expense | (15) | (34) |
Loss before income taxes | (13,922) | (15,880) |
Income tax expense | (38) | (23) |
Net loss | $ (13,960) | $ (15,903) |
Net loss per share, basic and diluted | $ (1.86) | $ (3.22) |
Weighted-average common shares outstanding, basic and diluted | 7,524,016 | 4,945,593 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit (unaudited) - USD ($) $ in Thousands | Convertible Preferred stock | Common stock | Additional paid-in capital | Accumulated deficit | Total |
Balance at Feb. 28, 2019 | $ 1 | $ 38,881 | $ (269,503) | $ (230,621) | |
Balance (shares) at Feb. 28, 2019 | 3,616,549 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and common stock warrants | 356 | 356 | |||
Exercise of stock options and common stock warrants (shares) | 0 | 90,322 | |||
Stock-based compensation expense | 1,436 | 1,436 | |||
Net loss | (15,903) | (15,903) | |||
Balance at May. 31, 2019 | $ 1 | 40,673 | (285,406) | (244,732) | |
Balance (shares) at May. 31, 2019 | 3,706,871 | ||||
Balance at Feb. 28, 2019 | $ 214,664 | ||||
Balance (shares) at Feb. 28, 2019 | 18,640,901 | ||||
Balance at May. 31, 2019 | $ 214,664 | ||||
Balance (shares) at May. 31, 2019 | 18,640,901 | ||||
Balance at Feb. 29, 2020 | $ 2 | 64,071 | (320,868) | (256,795) | |
Balance (shares) at Feb. 29, 2020 | 6,033,450 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and common stock warrants | $ 0 | $ 0 | 2,999 | 0 | 2,999 |
Exercise of stock options and common stock warrants (shares) | 0 | 347,807 | |||
Stock-based compensation expense | 1,259 | 1,259 | |||
Net loss | (13,960) | (13,960) | |||
Balance at May. 31, 2020 | $ 2 | $ 68,329 | $ (334,828) | (266,497) | |
Balance (shares) at May. 31, 2020 | 6,381,257 | ||||
Balance at Feb. 29, 2020 | $ 233,022 | $ 233,022 | |||
Balance (shares) at Feb. 29, 2020 | 19,513,939 | 19,513,939 | |||
Balance at May. 31, 2020 | $ 233,022 | $ 233,022 | |||
Balance (shares) at May. 31, 2020 | 19,513,939 | 19,513,939 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (13,960) | $ (15,903) |
Adjustments to reconcile net loss to net cash used in | ||
Depreciation and amortization expense | 1,928 | 2,160 |
Amortization of deferred contract acquisition costs | 393 | 228 |
Noncash interest expense | 141 | 90 |
Stock-based compensation expense | 1,259 | 1,436 |
Changes in operating assets and liabilities: | ||
Accounts receivable and unbilled revenue | (2,016) | (43) |
Accounts payable and accrued expenses | (1,683) | (52) |
Deferred contract acquisition costs | (647) | (345) |
Deferred revenue and due to customer | 5,159 | 2,521 |
Accrued compensation | 2,789 | (5,572) |
Deferred rent and other liabilities | 146 | (134) |
Other assets | (1,826) | (1,266) |
Net cash used in operating activities | (8,317) | (16,880) |
Cash flows from investing activities: | ||
Capitalized software development costs | (289) | |
Purchases of property and equipment | (249) | (109) |
Net cash used in investing activities | (538) | (109) |
Cash flows from financing activities: | ||
Proceeds from stock option and warrant exercises | 2,937 | 345 |
Proceeds from borrowings on debt | 51,166 | |
Payments of initial public offering costs | (721) | |
Net cash provided by financing activities | 53,382 | 345 |
Net increase (decrease) in cash and cash equivalents | 44,527 | (16,644) |
Cash and cash equivalents, beginning of period | 33,155 | 42,701 |
Cash and cash equivalents, end of period | 77,682 | 26,057 |
Supplemental cash flow information: | ||
Interest paid | 586 | 601 |
Fixed assets included in accounts payable | 42 | 16 |
Other receivable related to stock option exercises | 234 | 11 |
Income taxes paid | 13 | |
Offering costs included in prepaid and other current assets and accounts payable and accrued expenses | $ 2,474 |
Background
Background | 3 Months Ended |
May 31, 2020 | |
Background | |
Background | (1) Background (a) Business Accolade, Inc. was initially organized as a limited liability company under the name Accretive Care LLC in Delaware on January 23, 2007. On June 14, 2010, the company converted from a limited liability company to a Delaware corporation and changed its name to Accolade, Inc. Accolade’s offices and operations are in Seattle, Washington; Plymouth Meeting, Pennsylvania; Scottsdale, Arizona; Santa Monica, California; and Prague, Czech Republic. On February 6, 2016, Accolade established a wholly owned subsidiary in the Czech Republic and on July 31, 2019, Accolade acquired all the equity interests of a Delaware corporation (together with Accolade, the Company), and their results of operations have been included in the consolidated financial statements since those respective dates. The Company provides personalized, technology-enabled solutions that help people better understand, navigate, and utilize the healthcare system and their workplace benefits. The Company’s customers are primarily employers that contract with Accolade to provide their employees and their employees’ families (the members) a single place to turn for their health, healthcare, and benefits needs. The service is designed to drive better healthcare outcomes and increased satisfaction for the participants while lowering costs for the payor. The Company provides its services to customers throughout the United States. (b) COVID-19 Due to the government-imposed quarantines and other public health safety measures put into place in March 2020, COVID-19 has caused disruption in the markets where we sell our offerings and related services. Although the Company has not experienced any significant impact as a result of the COVID-19 pandemic, the Company will continue to closely monitor for any changes to the Company’s operations and the operations of our customers. (c) Initial Public Offering On July 7, 2020, the Company closed its initial public offering of common stock (IPO) in which the Company issued and sold 11,526,134 shares (inclusive of the underwriters’ over-allotment option to purchase 1,503,408 shares) of common stock at $22.00 per share. The Company received net proceeds of $235,825 after deducting underwriting discounts and commissions and before deducting estimated offering costs of approximately $4,440, of which $3,330 was included in prepaid and other current assets as of May 31, 2020. Upon the closing of the IPO, all shares of outstanding convertible preferred stock converted into 29,479,483 shares of common stock, and an additional 1,401,836 shares of common stock were issued upon the automatic net exercise of warrants that were outstanding as of May 31, 2020. The shares and proceeds from the IPO and the conversion of outstanding redeemable convertible stock into shares of common stock are not reflected in the consolidated financial statements as of and for the three months ended May 31, 2020. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
May 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | (2) Basis of Presentation and Summary of Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended February 29, 2020 appearing in the Company’s Final Prospectus for our IPO, dated as of July 1, 2020 and filed with the Securities and Exchange Commission (the SEC) pursuant to Rule 424(b)(4) on July 2, 2020. Since the date of those audited financial statements, there have been no changes to the Company’s significant accounting policies, other than those detailed below. (a) Basis of Presentation and Principles of Consolidation Accolade’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Unaudited Interim Financial Statements The accompanying consolidated financial statements and the related footnote disclosures are unaudited. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s interim consolidated financial position as of May 31, 2020 and the results of its operations and its cash flows for the three months ended May 31, 2020 and 2019. The results for the three months ended May 31, 2020, are not necessarily indicative of results to be expected for the year ending February 28, 2021, any other interim periods, or any future year or period. The Company’s management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited financial statements and accompanying notes for the year ended February 29, 2020. (c) Capitalized Internal-Use Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, including tools that enable the Company’s employees to interact with members and their providers, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs related to minor upgrades, minor enhancements, and maintenance activities are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Internal-use software is included in property and equipment and is amortized on a straight-line basis over 3 years. For the three months ended May 31, 2020 and 2019, the Company capitalized $289 and $0, respectively, for internal-use software. Amortization expense related to capitalized internal-use software during the three months ended May 31, 2020 and 2019 was $1,011 and $1,377, respectively. (d) Intangible Assets As part of the acquisition of MD Insider, Inc. (MDI) in July 2019 (Note 4), the Company acquired an intangible asset in the form of acquired technology in the amount of $2,900. This intangible asset is subject to amortization and is being amortized on the straight-line basis over its estimated useful life of two years. The Company recognized $362 in amortization expense during the three months ended May 31, 2020. ( e ) Concentration of Credit Risk Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents. The Company maintains its cash primarily with domestic financial institutions of high credit quality, which may exceed federal deposit insurance corporation limits. The Company invests its cash equivalents in highly rated money market funds. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents and performs periodic evaluations of the credit standing of such institutions. Significant customers are those which represent 10% or more of the Company’s revenue during the period. For each significant customer, revenue as a percentage of total revenue was as follows: For the three months ended May 31, 2020 2019 Customer 1 20 % 28 % Customer 2 11 % 11 % Customer 3 11 % 13 % Total 42 % 52 % Accounts receivable outstanding related to these customers at May 31, 2020 was as follows: May 31, 2020 Customer 1 $ — Customer 2 1,716 Customer 3 132 (f) Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financing as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded in stockholders’ deficit as a reduction of additional paid-in-capital generated as a result of the offering. Deferred offering costs were $3,330 and $3,042 at May 31, 2020 and February 29, 2020, respectively, and are included within prepaid and other current assets on the accompanying consolidated balance sheets. (g) New Accounting Pronouncements Not Yet Adopted Leases Leases Codification Improvements to Topic 842 Leases Narrow-Scope Improvements for Lessor, Leases Codification Improvements to Topic 842 Credit Losses Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Internal Use Software Intangibles-Goodwill and Other-Internal-Use Software Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract costs incurred to develop or obtain internal-use-software. This ASU is effective for the year ending February 28, 2022, and interim periods within the year ending February 28, 2023. Early adoption is permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. |
Revenue
Revenue | 3 Months Ended |
May 31, 2020 | |
Revenue | |
Revenue | (3) Revenue The Company earns revenue from its customers by providing personalized health guidance solutions to members. The Company’s solutions allow its members to interact with its Accolade Health Assistants and clinicians through various means of communication, including telephony and secure messaging and via its mobile application and member portal. The Company prices its personalized health guidance solutions using a recurring per-member-per-month fee (PMPM), typically with a portion of the fee calculated as the product of a fixed rate times the number of members (fixed PMPM fee), plus a variable PMPM fee calculated as the product of a variable rate times the number of members (variable PMPM fee). The fees associated with the variable PMPM fee can be earned through the achievement of performance metrics and/or the realization of healthcare cost savings resulting from the utilization of the Company’s services. Collectively, the fixed PMPM fee and variable PMPM fee are referred to as the total PMPM fee. The Company’s PMPM pricing varies by contract. In certain contracts, the maximum total PMPM fee varies during the contract term (total PMPM rate increases or decreases annually), while in other contracts, the total PMPM maximum fee is consistent over the term, yet the fixed and variable portions vary. For example, in certain contracts the fixed PMPM fee increases on an annual basis while the variable PMPM fee decreases on an annual basis, resulting in the same total PMPM fee throughout the term of the contract. At contract inception, the Company assesses the type of services being provided and assesses the performance obligations in the contract. The Company’s contracts for personalized health guidance solutions generally include two performance obligations: stand ready services as discussed in the following sentence and reporting. The Company’s contracts include stand ready services to provide eligible participants with access to the Company’s services and to perform an unspecified quantity of interactions with members during the contract period. Accordingly, the Company’s services are generally viewed as stand ready performance obligations comprised of a series of distinct daily services that are substantially the same and have the same pattern of transfer. For the stand ready services, the Company satisfies these performance obligations over time and recognizes revenue related to its services as the services are provided using a measure of progress based upon the actual number of members eligible for the service during the respective period as a percentage of the estimated members expected to be eligible for the service over the term of the contract. The Company believes a measure of progress based on the number of members is the most appropriate measurement of control of the services being transferred to the customer as the amount of internal resources necessary to stand ready is directly correlated to the number of members who can use the services. In addition, the Company’s contracts may include additional add-on services as separate performance obligations that are also considered stand ready services. These add-on services have the same pattern of transfer and revenue recognition as discussed above. As of May 31, 2020, $166,095 of revenue is expected to be recognized from remaining performance obligations and is expected to be recognized as follows: Fiscal year ending February 28(29), Remainder of 2021 $ 95,911 2022 51,829 2023 15,655 2024 2,700 Total $ 166,095 The expected revenue includes variable fee estimates for the non-cancellable term of the Company’s contracts. The expected revenue does not include amounts of variable consideration that are constrained. Significant changes in the deferred revenue balances during the three months ended May 31, 2020 and 2019 were the result of recognized revenue of $21,689 and $16,805, respectively, that were previously included in deferred revenue. Revenue related to performance obligations satisfied in prior periods that was recognized during the three months ended May 31, 2020 and 2019 was $1,479 and $395, respectively. These amounts relate to prior changes in estimates that were due to the inclusion of consideration that was previously constrained related to the Company’s achievement of healthcare cost savings. Cost to obtain and fulfill a contract The Company capitalizes sales commissions paid to internal sales personnel that are both incremental to the acquisition of customer contracts and recoverable. These costs are recorded as deferred contract acquisition costs in the accompanying consolidated balance sheets. The Company capitalized commission costs of $503 and $294 for the three months May 31, 2020 and 2019, respectively. The Company defers costs based on its sales compensation plans only if the commissions are incremental and would not have occurred absent the customer contract. Payments to direct sales personnel are typically made in two increments as follows: 75% upon signature of the contract, with the remaining 25% upon customer launch. The Company does not pay commissions on contract renewals. Deferred commissions paid on the initial acquisition of a contract are amortized ratably over an estimated period of benefit of five years, which is the estimated customer life. The Company determined the period of amortization for deferred commissions by taking into consideration current customer contract terms, historical customer retention, and other factors. Amortization is included in sales and marketing expenses in the accompanying consolidated statements of operations and totaled $233 and $157 for the three months ended May 31, 2020 and 2019, respectively. The Company periodically reviews deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated period of benefit. There were no impairment losses recorded during the periods presented. For certain customer contracts, the Company may incur direct and incremental costs related to customer set-up and implementation. The Company recorded deferred implementation costs of $144 and $51 for the three months ended May 31, 2020 and 2019, respectively. These implementation costs are deferred and amortized over the expected useful life of the Company’s customers, which is five years. Amortization is included in cost of revenues in the Company’s consolidated statements of operations and totaled $160 and $71 for the three months ended May 31, 2020 and 2019, respectively. |
Acquisition of MD Insider
Acquisition of MD Insider | 3 Months Ended |
May 31, 2020 | |
Acquisition of MD Insider | |
Acquisition of MD Insider | (4) Acquisition of MD Insider On July 31, 2019, the Company acquired the outstanding equity interests of MDI. Based in California, MDI is a provider of machine learning-enabled physician performance transparency. The aggregate purchase price consideration of $6,488 was paid primarily through the issuance of up to 462,691 shares of the Company’s common stock, of which 289,320 were issued as of February 29, 2020, with the remaining shares issuable subject to certain working capital and indemnity adjustments (if applicable). Shareholders were eligible to receive 100,607 additional shares of the Company’s common stock upon the completion of a platform solution, as defined in the purchase agreement (MDI Earnout). The deadline to complete the cost transparency platform solution in order to qualify for the MDI Earnout was initially March 1, 2020, and was subsequently extended to July 1, 2020, by which time it had been earned. During August 2020, the Company issued 96,487 shares of common stock in connection with the MDI Earnout, with the remaining 4,120 shares of common stock expected to be issued during the remainder of fiscal 2021. The MDI Earnout was accounted for as an equity classified instrument and is not subject to remeasurement in subsequent periods. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | (5) Fair Value Measurements The following table sets forth the fair value of the Company’s financial assets and within the fair value hierarchy: May 31, 2020 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 58,107 $ — $ — $ 58,107 Certificates of deposit $ 10,005 $ — $ — $ 10,005 February 29, 2020 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 21,332 $ — $ — $ 21,332 Certificates of deposit $ 5,000 $ — $ — $ 5,000 Also, the carrying value of the Company’s debt approximates fair value based on interest rates available for debt with similar terms at May 31, 2020, and February 29, 2020. |
Debt Facility
Debt Facility | 3 Months Ended |
May 31, 2020 | |
Debt Facility | |
Debt Facility | (6) Debt Facility (a) Term Loan and Revolving Credit Facility Term Loan On January 30, 2017, the Company entered into two debt facilities, one of which was a $20,000 term loan (the Term Loan) and the other a $20,000 revolving credit facility (the 2017 Revolver). During July 2019, the Company amended the Term Loan, terminated the 2017 Revolver and entered into a new revolving credit facility (the 2019 Revolver). Under the terms of the Term Loan, the Company was permitted to borrow up to an aggregate principal amount of $20,000, with the total amount of available borrowings subject to certain monthly recurring revenue calculations. Interest on the outstanding balance was payable monthly at a rate of 11.75%. Principal payments were scheduled to be made monthly beginning January 31, 2019, in equal installments calculated as 1/24th of the outstanding balance on December 31, 2018. However, the Company had the ability to extend the interest only period for an additional twelve months, subject to an additional fee and other conditions, which would extend the maturity date from December 31, 2020 to December 31, 2021. The Company committed to extend this interest only period, and the maturity date was extended to December 31, 2021. As a result, principal payments were scheduled to start January 2020. During July 2019, an amendment was entered into which eliminated monthly payments, with principal to be paid in full in December 2022. During July 2019, the Company amended the existing Term Loan agreement (Amendment 1), which resulted in an additional $2,000 of availability, increasing total availability to $22,000. Pursuant to the Amendment 1, interest on the outstanding balance was payable monthly at a rate of 10.00% per annum and interest payable-in-kind accrued at a rate of 2.00% per annum, compounded monthly, and was due at maturity. Additionally, the Company was required to pay an exit fee equal to 1% of the aggregate principal borrowings at the time of maturity (end of term charge). During May 2020, the Company entered into an additional amendment (Amendment 2) to the existing Term Loan agreement, which resulted in an additional $2,500 of availability, increasing total availability to $24,500. Pursuant to Amendment 2, interest on the outstanding balance was payable monthly at a rate of 8.00% per annum and interest payable-in-kind accrued at a rate of 4.50% per annum, compounded monthly, and was due at maturity. Additionally, the Company was required to pay a prepayment fee equal to 2% of the aggregate principal borrowings if prepayment occurred on or prior to December 31, 2020, and 0.50% if prepayment occurred after December 31, 2020 but on or prior to maturity (prepayment fee), plus the end of term charge. As of May 31, 2020, there was $432 of accrued interest payable-in-kind. All outstanding principal, unpaid interest and interest payable-in-kind were due at maturity. Amendment 2 was accounted for as a debt modification, and all new lender fees were recorded as additional debt discount and third-party costs incurred in connection with the amendment were expensed as incurred. During the three months ended May 31, 2020 and 2019, the Company recorded interest expense of $794 and $669, respectively, related to the Term Loan of which $81 and $69, respectively, related to the amortization of the debt discount. As of May 31, 2020, and February 29, 2020, $24,500 and $22,000 was outstanding under the Term Loan, respectively. During July 2020, the Company repaid the amount outstanding in its entirety along with the end of term charge and prepayment fee. Concurrently with this prepayment, the Term Loan agreement was terminated. Revolving Credit Facility The 2017 Revolver was a 24-month senior secured $20,000 revolving line of credit, with borrowing availability subject to certain monthly recurring revenue calculations. On April 20, 2018, the Company amended the 2017 Revolver, which modified the revenue covenants, required the Company to exercise the extension of the interest only payment period of the Term Loan through December 2019 and in the event the Company raised proceeds in the aggregate of at least $45,000 as part of a financing event, extended the term of the 2017 Revolver to January 30, 2020. This financing event occurred, and, accordingly, the term of the 2017 Revolver was extended. Interest on the outstanding balance of the 2017 Revolver was due monthly at a rate of the lending institution’s prime referenced rate plus 1.00%, with the prime reference rate defined as the greater of (i) the lending institution’s prime rate and (ii) the 30-day LIBOR plus 2.50%. Principal and interest were due at maturity. During July 2019, the Company terminated the 2017 Revolver and entered into a new revolving credit facility (the 2019 Revolver) with a syndicate of two banks, of which one was the lender under the 2017 Revolver. Under the 2019 Revolver, the Company has the capacity to borrow up to $50,000 on a revolving facility, and to the extent certain customer bookings thresholds are achieved, the capacity on the 2019 Revolver may increase by an additional amount of up to $30,000 (resulting in total potential availability of $80,000). Availability of borrowings on the 2019 Revolver is calculated as a multiple of the Company’s eligible monthly recurring revenues (as defined in the 2019 Revolver). As of May 31, 2020 and February 29, 2020, the Company had outstanding letters of credit to serve as office landlord security deposits in the amount of $1,334. These letters of credit are secured through the revolving credit facility, thus reducing the capacity of the revolving credit facility to $48,666. As of May 31, 2020, and February 29, 2020, $48,666 and $0 was outstanding, respectively. During July 2020, the Company repaid all outstanding amounts, including interest, on the 2019 Revolver. No amounts are outstanding as of August 13, 2020. The 2019 Revolver has a term of 24 months, and there is an automatic extension of an additional 12-month period should the Company achieve certain revenues, as defined. The interest rate on the outstanding borrowings are at LIBOR plus 350 basis points or Base Rate (as defined) plus 250 basis points, and interest payments are to be made in installments of one, two, or three months as chosen by the Company. The 2019 Revolver was accounted for as a debt modification to which all new lender and third-party fees were deferred. Issuance costs of $543, including the fair value of warrants issued, were capitalized and are being amortized to interest expense over the remainder of the 2019 Revolver term. During the three months ended May 31, 2020 and 2019, the Company recorded interest expense of $557 and $6, respectively, related to the revolving credit facility of which $60 and $6, respectively, related to the amortization of deferred financing fees. As of May 31, 2020 and 2019, the balance of deferred financing fees was $302 and $17, respectively, and is recorded in other assets in the accompanying consolidated balance sheets. Both the Term Loan and 2019 Revolver are collateralized by substantially all of the assets of the Company. Current and long-term debt consisted of the following at May 31, 2020 and February 29, 2019: May 31, 2020 February 29, 2020 Current - Interest payable – 2019 Revolver $ 455 $ — Long-term 2019 Revolver $ 48,666 $ — Term loan - principal outstanding $ 24,500 $ 22,000 Interest payable-in-kind 432 273 Unamortized issuance costs $ (1,074) (1,129) Total long-term $ 72,524 $ 21,144 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
May 31, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | (7) Stockholders’ Equity (a) Convertible Preferred Stock As of May 31, 2020, the authorized, issued and outstanding convertible preferred stock and their principal terms were as follows: Par Shares Shares issued and Carrying Liquidation Series value authorized outstanding amount value A-1 $ 0.0001 3,560,000 3,559,995 $ 10,000 $ 10,000 A-2 0.0001 2,579,999 2,579,994 10,000 10,000 B 0.0001 4,058,736 4,058,731 16,944 16,944 C 0.0001 601,160 601,151 7,000 7,000 D 0.0001 1,751,874 1,751,871 30,000 30,000 E 0.0001 6,089,189 6,089,159 140,720 145,300 F 0.0001 873,038 873,038 18,358 20,000 19,513,996 19,513,939 $ 233,022 $ 239,244 On July 7, 2020, upon the closing of our IPO, all shares of our outstanding convertible preferred stock converted into 29,479,483 shares of common stock. |
Stock Options and Warrants
Stock Options and Warrants | 3 Months Ended |
May 31, 2020 | |
Stock Options and Warrants | |
Stock Options and Warrants | (8) Stock Options and Warrants (a) Stock Options In 2010, the Company adopted the Amended and Restated 2007 Stock Option Plan as amended (the Option Plan), which authorized the Company to grant shares of common stock to eligible employees, directors, and consultants to the Company in the form of restricted stock and stock options. As of May 31, 2020, the Company was authorized to issue up to 14,138,788 shares of common stock pursuant to the Option Plan. The amount, terms of grants, and exercisability provisions are determined by the board of directors. The term of the options may be up to 10 years and options generally vest over four years, with one remainder The following table summarizes the amount of stock-based compensation included in the consolidated statements of operations: Three months ended May 31, 2020 2019 Cost of revenue $ 109 $ 72 Product and technology 434 361 Sales and marketing 303 347 General and administrative 413 656 Total stock-based compensation $ 1,259 $ 1,436 The weighted average grant date fair value for stock options granted during the three months ended May 31, 2020 was $9.62. The Company did not grant any stock options during the three months ended May 31, 2019. The fair value of our option grants is estimated at the grant date using the Black-Scholes option-pricing model based on the following weighted average assumptions: Three Months Ended May 31, 2020 Estimated fair value of common stock $ 15.40 Exercise price $ 15.40 Expected volatility 70 % Expected term (in years) 6.25 Risk-free interest rate 0.54 % Dividend yield — The following is a summary of stock option activity under the Option Plan: Weighted Weighted average remaining Aggregate exercise contractual life intrinsic Stock Options price in years value Balance, February 29, 2020 7,996,056 $ 6.19 Granted 253,100 15.40 Exercised (187,807) 4.25 Forfeited (58,251) 6.07 Balance, May 31, 2020 8,003,098 $ 6.53 6.7 years $ 87,800 Vested and expected to vest as of May 31, 2020 8,003,098 $ 6.53 6.7 years $ 87,800 Exercisable as of May 31, 2020 4,908,687 $ 4.55 5.4 years $ 63,568 The aggregate intrinsic value of stock options exercised was $2,094 for three months ended May 31, 2020. As of May 31, 2020, approximately $13,323 of unrecognized compensation expense related to our stock options is expected to be recognized over a weighted average period of 2.0 years. During June 2020, the Company issued 525,907 fully-vested stock options in lieu of cash payments related to the Company’s fiscal 2020 bonus. (b) Common Stock Warrants The following tables summarize the activity for the Company’s warrants for the periods presented as well as the number of warrants outstanding and related terms at May 31, 2020: Common Stock Exercise Expiration Warrants Exercisable Price Date Balance, February 29, 2020 1,653,268 Issued — Exercised (160,000) Balance, May 31, 2020 1,493,268 1,493,268 $ 0.0005 - $23.75 April 2020 - October 2029 Number of Warrants Outstanding at May 31, Exercise Expiration 2020 Price Date Series E holders 1,129,114 $ 0.0005 July 2026 - March 2028 Series F holders 85,000 $ 0.0005 October 2029 Lenders 279,154 $ 0.005 - $23.75 Nov 2022 - July 2029 Total 1,493,268 On June 29, 2015, the Company issued a warrant to its initial customer to purchase up to 200,000 common shares. Based on the vesting provisions and the remaining period over which the warrant is exercisable, the maximum number of shares that could vest pursuant to the warrant was 160,000 shares of common stock, all of which were exercised in March 2020. In connection with the Term Loan amendment, the Company issued a warrant to purchase up to 86,600 shares of the Company’s common stock (the 2019 Term Loan Warrant) at an exercise price of $9.60 per share. The 2019 Term Loan Warrant vested 100% upon issuance and has a ten-year term, ending July 19, 2029. The Company calculated the fair value of the 2019 Term Loan Warrant using the Black-Scholes option pricing model, and the fair value of the 2019 Term Loan Warrant was determined to be $528. This amount was recorded as a debt discount and is being amortized ratably over the Term Loan period. In connection with the 2019 Revolver, the Company issued the lender warrants to purchase up to 36,363 and 12,631 shares of the Company’s common stock (the 2019 Revolver Warrants) at an exercise price of $13.75 and $23.75 per share, respectively. The 2019 Revolver Warrants vested 100% upon issuance and have a ten-year term, ending July 19, 2029. The Company calculated the fair value of the 2019 Revolver Warrants using the Black-Scholes option pricing model, and the fair value of the 2019 Revolver Warrants was determined to be $251. On July 7, 2020, upon the closing of our IPO, 1,401,836 shares of common stock were issued upon the automatic net exercise of all warrants that were outstanding as of May 31, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
May 31, 2020 | |
Income Taxes | |
Income Taxes | (9) Income Taxes The provision for income taxes consists of provisions for federal, state and foreign income taxes. The effective tax rates for the periods ended May 31, 2020 and May 31, 2019, reflect the Company’s expected tax rate on reported income from continuing operations before income tax and tax adjustments. The Company operates in a global environment with significant operations in the U.S. and operations in the Czech Republic. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act also allows for retroactive accelerated income tax depreciation on certain leasehold improvement assets and changes to the limitations on business interest deductions for tax years beginning in 2019 and 2020 which increases the allowable business interest deduction from 30% to 50% of adjusted taxable income. The Company does not expect a material tax expense or tax benefit as a result of the CARES Act in the current period or subsequent periods. For the three months ended May 31, 2020 and 2019, the Company recorded income tax expense of $38 and $23, respectively, which resulted in effective tax rates of (0.3%) and (0.1%), respectively. The tax expense relates to the local tax expense recorded for the Czech Republic. The Company's U.S. losses were not benefitted due to the U.S. full valuation allowance. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
May 31, 2020 | |
Net Loss Per Share Attributable to Common Stockholders | |
Net Loss Per Share Attributable to Common Stockholders | (10) Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to Accolade’s common stockholders: Three months ended May 31, 2020 2019 Net loss $ (13,960) $ (15,903) Weighted-average shares used in computing net loss per share 7,524,016 4,945,593 Net loss per share attributable to common stockholders, basic and diluted $ (1.86) $ (3.22) As the Company has reported net loss for each of the periods presented, all potentially dilutive securities are antidilutive. The following potential outstanding shares of common stock were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: Three months ended May 31, 2020 2019 Stock options 8,003,098 8,031,350 Common stock warrants 157,882 182,288 Total 8,160,980 8,213,638 |
Commitments
Commitments | 3 Months Ended |
May 31, 2020 | |
Commitments | |
Commitments | (11) Commitments (a) Legal Proceedings The Company is involved in various claims, inquiries and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s financial position or liquidity. On August 1, 2017, certain former and current employees filed a suit against the Company seeking back wages for unpaid overtime as a result of alleged misclassification by the Company under the Pennsylvania Minimum Wage Act and the Federal Fair Labor Standards Act. During March 2019, a settlement agreement (the Settlement Agreement) was executed by both parties in the amount of $1,100 (the Settlement). The Settlement Agreement was ultimately approved by the Court and the Company paid the Settlement during April 2020. (c) Employment Agreements Certain officers of the Company have employment agreements providing for severance, continuation of benefits, and other specified rights in the event of termination without cause, including in the event of a change of control of the Company, as defined in the agreements. |
Change Healthcare Joint Develop
Change Healthcare Joint Development Agreement | 3 Months Ended |
May 31, 2020 | |
Change Healthcare Joint Development Agreement | |
Change Healthcare Joint Development Agreement | ( In February 2020, the Company entered into a joint development agreement, or JDA, and a data licensing agreement with Change Healthcare Holdings, or Change Healthcare, whereby Change Healthcare will be a strategic partner in providing various services to support the Company’s Total Care and Provider Services product offerings. Pursuant to the terms of the JDA, Change Healthcare is providing intellectual property (IP), technical know-how, and advisory services to the Company as it develops price transparency products under the JDA that will be utilized by the Company in several of its product offerings. Either party is permitted to sell the price transparency product within each party’s respective service offerings. Each party is entitled to a royalty from the other party in connection with any net sales associated with the price transparency product that was developed under the JDA, not to exceed $2,500 in cumulative royalty payments. Concurrent with entering into the JDA, the Company entered into a five-year data licensing agreement with Change Healthcare who is one of the largest commercially available data set providers of de-identified claims in the United States. The licensing agreement includes annual increases in fees and the option to renew and extend beyond the initial five-year period. The annual licensing fees are subject to increases and decreases and contingent upon the achievement of performance objectives as defined in the data licensing agreement. Upfront payments for data licenses are deferred and will be amortized into cost of revenue, as they pertain to the delivery of the Company’s product offerings. Upon entering into the JDA and data licensing agreement, the Company issued 251,211 restricted shares of its common stock to Change Healthcare at an estimated fair value of $15.40 per share, or $3,869 in aggregate value. Pursuant to the terms of the restricted share agreement, 150,727 of the shares vested immediately and the remaining 100,484 restricted shares will vest upon the achievement of certain product development milestones, as defined. During July 2020, 75,363 of these shares vested upon the achievement of certain milestones. The aggregate equity value was allocated to the JDA and data licensing agreement based on the relative fair value of the IP and technical know-how contributed by Change Healthcare within the JDA and the discounted pricing received from Change Healthcare within the data licensing agreement. Equity value allocated to the JDA and data licensing agreement is capitalized and deferred as internally developed software and other assets within the Company’s consolidated balance sheet, respectively, with an offsetting increase to additional paid-in capital. Costs that are capitalized and classified as internally developed software will be amortized within depreciation and amortization in the Company’s consolidated statement of operations. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Covid-19 | Due to the government-imposed quarantines and other public health safety measures put into place in March 2020, COVID-19 has caused disruption in the markets where we sell our offerings and related services. Although the Company has not experienced any significant impact as a result of the COVID-19 pandemic, the Company will continue to closely monitor for any changes to the Company’s operations and the operations of our customers. |
Initial Public Offering | On July 7, 2020, the Company closed its initial public offering of common stock (IPO) in which the Company issued and sold 11,526,134 shares (inclusive of the underwriters’ over-allotment option to purchase 1,503,408 shares) of common stock at $22.00 per share. The Company received net proceeds of $235,825 after deducting underwriting discounts and commissions and before deducting estimated offering costs of approximately $4,440, of which $3,330 was included in prepaid and other current assets as of May 31, 2020. Upon the closing of the IPO, all shares of outstanding convertible preferred stock converted into 29,479,483 shares of common stock, and an additional 1,401,836 shares of common stock were issued upon the automatic net exercise of warrants that were outstanding as of May 31, 2020. The shares and proceeds from the IPO and the conversion of outstanding redeemable convertible stock into shares of common stock are not reflected in the consolidated financial statements as of and for the three months ended May 31, 2020. |
Basis of Presentation and Principles of Consolidation | Accolade’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Unaudited interim financial statements | The accompanying consolidated financial statements and the related footnote disclosures are unaudited. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s interim consolidated financial position as of May 31, 2020 and the results of its operations and its cash flows for the three months ended May 31, 2020 and 2019. The results for the three months ended May 31, 2020, are not necessarily indicative of results to be expected for the year ending February 28, 2021, any other interim periods, or any future year or period. The Company’s management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited financial statements and accompanying notes for the year ended February 29, 2020. |
Capitalized Internal-Use Software Costs | Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, including tools that enable the Company’s employees to interact with members and their providers, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs related to minor upgrades, minor enhancements, and maintenance activities are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Internal-use software is included in property and equipment and is amortized on a straight-line basis over 3 years. For the three months ended May 31, 2020 and 2019, the Company capitalized $289 and $0, respectively, for internal-use software. Amortization expense related to capitalized internal-use software during the three months ended May 31, 2020 and 2019 was $1,011 and $1,377, respectively. |
Intangible Assets | As part of the acquisition of MD Insider, Inc. (MDI) in July 2019 (Note 4), the Company acquired an intangible asset in the form of acquired technology in the amount of $2,900. This intangible asset is subject to amortization and is being amortized on the straight-line basis over its estimated useful life of two years. The Company recognized $362 in amortization expense during the three months ended May 31, 2020. |
Concentration of Credit Risk | Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents. The Company maintains its cash primarily with domestic financial institutions of high credit quality, which may exceed federal deposit insurance corporation limits. The Company invests its cash equivalents in highly rated money market funds. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents and performs periodic evaluations of the credit standing of such institutions. Significant customers are those which represent 10% or more of the Company’s revenue during the period. For each significant customer, revenue as a percentage of total revenue was as follows: For the three months ended May 31, 2020 2019 Customer 1 20 % 28 % Customer 2 11 % 11 % Customer 3 11 % 13 % Total 42 % 52 % Accounts receivable outstanding related to these customers at May 31, 2020 was as follows: May 31, 2020 Customer 1 $ — Customer 2 1,716 Customer 3 132 |
Deferred Offering Costs | The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financing as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded in stockholders’ deficit as a reduction of additional paid-in-capital generated as a result of the offering. Deferred offering costs were $3,330 and $3,042 at May 31, 2020 and February 29, 2020, respectively, and are included within prepaid and other current assets on the accompanying consolidated balance sheets. |
New Accounting Pronouncements Not Yet Adopted | Leases Leases Codification Improvements to Topic 842 Leases Narrow-Scope Improvements for Lessor, Leases Codification Improvements to Topic 842 Credit Losses Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Internal Use Software Intangibles-Goodwill and Other-Internal-Use Software Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract costs incurred to develop or obtain internal-use-software. This ASU is effective for the year ending February 28, 2022, and interim periods within the year ending February 28, 2023. Early adoption is permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
May 31, 2020 | |
Revenue [Member] | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Schedule of concentration of risk | For the three months ended May 31, 2020 2019 Customer 1 20 % 28 % Customer 2 11 % 11 % Customer 3 11 % 13 % Total 42 % 52 % |
Accounts receivable [Member] | Credit Concentration Risk | |
Concentration Risk [Line Items] | |
Schedule of concentration of risk | Accounts receivable outstanding related to these customers at May 31, 2020 was as follows: May 31, 2020 Customer 1 $ — Customer 2 1,716 Customer 3 132 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
May 31, 2020 | |
Revenue | |
Revenue expected to be recognized from remaining performance obligations | Fiscal year ending February 28(29), Remainder of 2021 $ 95,911 2022 51,829 2023 15,655 2024 2,700 Total $ 166,095 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 31, 2020 | |
Fair Value Measurements | |
Schedule of fair value of financial assets | May 31, 2020 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 58,107 $ — $ — $ 58,107 Certificates of deposit $ 10,005 $ — $ — $ 10,005 February 29, 2020 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 21,332 $ — $ — $ 21,332 Certificates of deposit $ 5,000 $ — $ — $ 5,000 |
Debt facility (Tables)
Debt facility (Tables) | 3 Months Ended |
May 31, 2020 | |
Debt Facility | |
Schedule Of Debt | May 31, 2020 February 29, 2020 Current - Interest payable – 2019 Revolver $ 455 $ — Long-term 2019 Revolver $ 48,666 $ — Term loan - principal outstanding $ 24,500 $ 22,000 Interest payable-in-kind 432 273 Unamortized issuance costs $ (1,074) (1,129) Total long-term $ 72,524 $ 21,144 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
May 31, 2020 | |
Stockholders' Equity | |
Schedule of convertible preferred stock | Par Shares Shares issued and Carrying Liquidation Series value authorized outstanding amount value A-1 $ 0.0001 3,560,000 3,559,995 $ 10,000 $ 10,000 A-2 0.0001 2,579,999 2,579,994 10,000 10,000 B 0.0001 4,058,736 4,058,731 16,944 16,944 C 0.0001 601,160 601,151 7,000 7,000 D 0.0001 1,751,874 1,751,871 30,000 30,000 E 0.0001 6,089,189 6,089,159 140,720 145,300 F 0.0001 873,038 873,038 18,358 20,000 19,513,996 19,513,939 $ 233,022 $ 239,244 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 3 Months Ended |
May 31, 2020 | |
Stock Options and Warrants | |
Schedule of stock-based compensation | Three months ended May 31, 2020 2019 Cost of revenue $ 109 $ 72 Product and technology 434 361 Sales and marketing 303 347 General and administrative 413 656 Total stock-based compensation $ 1,259 $ 1,436 |
Schedule of weighted average assumptions | Three Months Ended May 31, 2020 Estimated fair value of common stock $ 15.40 Exercise price $ 15.40 Expected volatility 70 % Expected term (in years) 6.25 Risk-free interest rate 0.54 % Dividend yield — |
Schedule of stock option activity | Weighted Weighted average remaining Aggregate exercise contractual life intrinsic Stock Options price in years value Balance, February 29, 2020 7,996,056 $ 6.19 Granted 253,100 15.40 Exercised (187,807) 4.25 Forfeited (58,251) 6.07 Balance, May 31, 2020 8,003,098 $ 6.53 6.7 years $ 87,800 Vested and expected to vest as of May 31, 2020 8,003,098 $ 6.53 6.7 years $ 87,800 Exercisable as of May 31, 2020 4,908,687 $ 4.55 5.4 years $ 63,568 |
Schedule of warrants | Common Stock Exercise Expiration Warrants Exercisable Price Date Balance, February 29, 2020 1,653,268 Issued — Exercised (160,000) Balance, May 31, 2020 1,493,268 1,493,268 $ 0.0005 - $23.75 April 2020 - October 2029 Number of Warrants Outstanding at May 31, Exercise Expiration 2020 Price Date Series E holders 1,129,114 $ 0.0005 July 2026 - March 2028 Series F holders 85,000 $ 0.0005 October 2029 Lenders 279,154 $ 0.005 - $23.75 Nov 2022 - July 2029 Total 1,493,268 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
May 31, 2020 | |
Net Loss Per Share Attributable to Common Stockholders | |
Schedule of computation of basic and diluted net loss per share | Three months ended May 31, 2020 2019 Net loss $ (13,960) $ (15,903) Weighted-average shares used in computing net loss per share 7,524,016 4,945,593 Net loss per share attributable to common stockholders, basic and diluted $ (1.86) $ (3.22) |
Schedule of common stock were excluded from the computation of diluted net loss per share attributable to common stockholders | Three months ended May 31, 2020 2019 Stock options 8,003,098 8,031,350 Common stock warrants 157,882 182,288 Total 8,160,980 8,213,638 |
Background - Initial Public Off
Background - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 08, 2020 | Jul. 07, 2020 | May 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued on conversion of convertible preferred stock | 29,479,483 | 29,479,483 | |
Number of additional shares issued | 1,401,836 | 1,401,836 | |
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued | 11,526,134 | ||
Share Price | $ 22 | ||
Proceeds from issuance of common stock | $ 235,825 | ||
Estimated Offering Costs | $ 4,440 | ||
IPO | Prepaids and other assets | |||
Subsidiary, Sale of Stock [Line Items] | |||
Estimated Offering Costs | $ 3,330 | ||
Overallotment | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued | 1,503,408 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Capitalized Internal-Use Software Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Amortization expenses | $ 1,928 | $ 2,160 |
Capitalized internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Capitalized cost | 289 | $ 0 |
Amortization expenses | $ 1,011 | $ 1,377 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Intangible Assets (Details) - MD Insider Inc - Technology - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Jul. 31, 2019 | May 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 2,900 | |
Estimated useful life | 2 years | |
Amortization expense | $ 362 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Customer 2 | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $ 1,716 | |
Customer 3 | ||
Concentration Risk [Line Items] | ||
Accounts receivable | $ 132 | |
Customer Concentration Risk | Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Revenue (as a percent) | 42.00% | 52.00% |
Customer Concentration Risk | Revenue [Member] | Customer 1 | ||
Concentration Risk [Line Items] | ||
Revenue (as a percent) | 20.00% | 28.00% |
Customer Concentration Risk | Revenue [Member] | Customer 2 | ||
Concentration Risk [Line Items] | ||
Revenue (as a percent) | 11.00% | 11.00% |
Customer Concentration Risk | Revenue [Member] | Customer 3 | ||
Concentration Risk [Line Items] | ||
Revenue (as a percent) | 11.00% | 13.00% |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($) $ in Thousands | May 31, 2020 | Feb. 29, 2020 |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Deferred Offering Costs | $ 3,330 | $ 3,042 |
Revenue - Revenue and Deferred
Revenue - Revenue and Deferred Revenue (Details) $ in Thousands | May 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 166,095 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 95,911 |
Revenue remaining performance obligation satisfaction period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 51,829 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 15,655 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 2,700 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue - Revenue and Deferre_2
Revenue - Revenue and Deferred Revenue Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Revenue | ||
Contract with customer liability revenue recognized | $ 21,689 | $ 16,805 |
Revenue related to performance obligations satisfied in prior periods | $ 1,479 | $ 395 |
Revenue - Cost to obtain and fu
Revenue - Cost to obtain and fulfill a contract (Details) $ in Thousands | 3 Months Ended | |
May 31, 2020USD ($)item | May 31, 2019USD ($) | |
Capitalized Contract Cost [Line Items] | ||
Deferred amortization term | 5 years | |
Impairment loss on deferred commission | $ 0 | $ 0 |
Selling and Marketing Expense [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Amortization of contract cost | 233 | 157 |
Sales commission | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized Contract Cost, Net | $ 503 | 294 |
Number of increments in which payment to sales person is made. | item | 2 | |
Sales commission paid upon signing of contract (as a percent) | 75.00% | |
Sales commission paid upon customer launch (as a percent) | 25.00% | |
Customer set up cost | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized Contract Cost, Net | $ 144 | 51 |
Deferred amortization term | 5 years | |
Amortization of contract cost | $ 160 | $ 71 |
Acquisition of MD Insider - Sha
Acquisition of MD Insider - Shares Issued (Details) - MD Insider Inc - USD ($) $ in Thousands | 1 Months Ended | |||
Aug. 31, 2020 | Jul. 31, 2020 | Feb. 29, 2020 | Jul. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Aggregate purchase price consideration | $ 6,488 | |||
Shares issued | 289,320 | |||
Additional shares issued | 100,607 | |||
Subsequent Event [Member] | ||||
Business Acquisition [Line Items] | ||||
Additional shares issued | 96,487 | |||
Stock Available For Issuance | 4,120 | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Shares issued | 462,691 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | May 31, 2020 | Feb. 29, 2020 |
Money Market Funds | ||
Cash equivalents: | ||
Fair value | $ 58,107 | $ 21,332 |
Money Market Funds | Level 1 | ||
Cash equivalents: | ||
Fair value | 58,107 | 21,332 |
Certificates of Deposit | ||
Cash equivalents: | ||
Fair value | 10,005 | 5,000 |
Certificates of Deposit | Level 1 | ||
Cash equivalents: | ||
Fair value | $ 10,005 | $ 5,000 |
Debt facility (Details)
Debt facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
May 31, 2020 | Jul. 31, 2019 | May 31, 2020 | May 31, 2019 | Feb. 29, 2020 | Jan. 30, 2017 | |
Debt Instrument [Line Items] | ||||||
Interest Rate | 8.00% | 8.00% | ||||
Debt issuance cost | $ 1,074 | $ 1,074 | $ 1,129 | |||
Interest Payable | 432 | 432 | 273 | |||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 20,000 | |||||
Maximum Borrowing Capacity | $ 24,500 | $ 22,000 | $ 24,500 | 20,000 | ||
Interest Rate | 11.75% | 10.00% | 11.75% | |||
Line of Credit Facility, Additional Borrowing Capacity | $ 2,500 | $ 2,000 | $ 2,500 | |||
Interest Payable in Kind Accrued Rate | 4.50% | 2.00% | ||||
Debt instrument exit fee | 1.00% | |||||
Interest Payable | $ 432 | 432 | ||||
Interest Expense, Debt | 794 | $ 669 | ||||
Amortization of Debt Issuance Costs and Discounts | 81 | 69 | ||||
Long-term Debt | $ 24,500 | 24,500 | $ 22,000 | |||
Term Loan | Prepayment of Loan Occur on or Before December 31, 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument exit fee | 2.00% | |||||
Term Loan | Prepayment of Loan Occur on or After December 31, 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument exit fee | 0.50% | |||||
Revolving Credit Facility, 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 20,000 | |||||
Maximum Borrowing Capacity | $ 20,000 | 20,000 | ||||
Revolving Credit Facility, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum Borrowing Capacity | 80,000 | $ 50,000 | 80,000 | |||
Debt issuance cost | 543 | 543 | ||||
Line of Credit Facility, Additional Borrowing Capacity | $ 30,000 | |||||
Interest Expense, Debt | 557 | 6 | ||||
Amortization of Debt Issuance Costs and Discounts | 60 | $ 6 | ||||
Long-term Debt | $ 48,666 | $ 48,666 |
Debt facility - Warrant Rights
Debt facility - Warrant Rights (Details) - USD ($) $ in Thousands | Apr. 20, 2018 | May 31, 2020 | May 31, 2019 | Aug. 13, 2020 | Feb. 29, 2020 | Jul. 31, 2019 |
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 72,524 | $ 21,144 | ||||
Debt issuance cost | 1,074 | 1,129 | ||||
Long-term Line of Credit | 1,334 | 1,334 | ||||
Other Assets | ||||||
Debt Instrument [Line Items] | ||||||
Debt Issuance Costs, Net | 302 | 17 | ||||
Revolving Credit Facility, 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum Borrowing Capacity | $ 20,000 | |||||
Minimum funds raised | $ 45,000 | |||||
Term of debt | 24 months | |||||
Revolving Credit Facility, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum Borrowing Capacity | $ 80,000 | $ 50,000 | ||||
Additional Borrowing Capacity | $ 30,000 | |||||
Long-term Debt | 48,666 | $ 0 | $ 0 | |||
Debt issuance cost | $ 543 | |||||
Term of debt | 24 months | |||||
Extension term of debt | 12 months | |||||
Interest Expense, Debt | $ 557 | $ 6 | ||||
Amortization of Debt Issuance Costs and Discounts | $ 60 | $ 6 | ||||
Lending Institution Prime Reference Rate | Revolving Credit Facility, 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | |||||
LIBOR | Revolving Credit Facility, 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||||
London Interbank Offered Rate | Revolving Credit Facility, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |||||
Base Rate | Revolving Credit Facility, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% |
Debt facility - Interest Payabl
Debt facility - Interest Payable (Details) - USD ($) $ in Thousands | Aug. 13, 2020 | May 31, 2020 | Feb. 29, 2020 |
Debt Instrument [Line Items] | |||
Current - Interest payable - 2019 Revolver | $ 455 | ||
Interest Payable in Kind | 432 | $ 273 | |
Unamortized issuance costs | (1,074) | (1,129) | |
Long-term Debt | 72,524 | 21,144 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 24,500 | 22,000 | |
Interest Payable in Kind | 432 | ||
Revolving Credit Facility, 2019 | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 48,666 | ||
Unamortized issuance costs | (543) | ||
Long-term Debt | $ 0 | $ 48,666 | $ 0 |
Stockholders' Equity - Converti
Stockholders' Equity - Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 08, 2020 | Jul. 07, 2020 | May 31, 2020 | Feb. 29, 2020 |
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 19,513,996 | 19,513,996 | ||
Preferred stock, shares issued | 19,513,939 | 19,513,939 | ||
Preferred stock, shares outstanding | 19,513,939 | 19,513,939 | ||
Carrying value | $ 233,022 | $ 233,022 | ||
Preferred stock, liquidation value | $ 239,244 | |||
Shares issued on conversion of convertible preferred stock | 29,479,483 | 29,479,483 | ||
Series A One Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 3,560,000 | |||
Preferred stock, shares issued | 3,559,995 | |||
Preferred stock, shares outstanding | 3,559,995 | |||
Carrying value | $ 10,000 | |||
Preferred stock, liquidation value | $ 10,000 | |||
Series A Two Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 2,579,999 | |||
Preferred stock, shares issued | 2,579,994 | |||
Preferred stock, shares outstanding | 2,579,994 | |||
Carrying value | $ 10,000 | |||
Preferred stock, liquidation value | $ 10,000 | |||
Series B Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 4,058,736 | |||
Preferred stock, shares issued | 4,058,731 | |||
Preferred stock, shares outstanding | 4,058,731 | |||
Carrying value | $ 16,944 | |||
Preferred stock, liquidation value | $ 16,944 | |||
Series C Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 601,160 | |||
Preferred stock, shares issued | 601,151 | |||
Preferred stock, shares outstanding | 601,151 | |||
Carrying value | $ 7,000 | |||
Preferred stock, liquidation value | $ 7,000 | |||
Series D Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 1,751,874 | |||
Preferred stock, shares issued | 1,751,871 | |||
Preferred stock, shares outstanding | 1,751,871 | |||
Carrying value | $ 30,000 | |||
Preferred stock, liquidation value | $ 30,000 | |||
Series E Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 6,089,189 | |||
Preferred stock, shares issued | 6,089,159 | |||
Preferred stock, shares outstanding | 6,089,159 | |||
Carrying value | $ 140,720 | |||
Preferred stock, liquidation value | $ 145,300 | |||
Series F Convertible Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Par Value | $ 0.0001 | |||
Preferred stock, shares authorized | 873,038 | |||
Preferred stock, shares issued | 873,038 | |||
Preferred stock, shares outstanding | 873,038 | |||
Carrying value | $ 18,358 | |||
Preferred stock, liquidation value | $ 20,000 |
Stock Options and Warrants - Sh
Stock Options and Warrants - Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2020 | May 31, 2020 | May 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 1,259 | $ 1,436 | |
Weighted average grant date fair value | $ 15.40 | ||
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options issued | 525,907 | ||
Weighted average grant date fair value | $ 9.62 | ||
Aggregate intrinsic value of stock options | $ 2,094 | ||
Unrecognized compensation expense | $ 13,323 | ||
Weighted average period | 2 years | ||
2007 Plan | Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock authorized to be issued | 14,138,788 | ||
Term of option | 10 years | ||
Vesting period | 4 years | ||
Common stock available for future grants | 1,768,851 | ||
2007 Plan | Stock Option | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Vesting percentage | 25.00% | ||
2007 Plan | Stock Option | Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Vesting percentage | 75.00% |
Stock Options and Warrants - Co
Stock Options and Warrants - Compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | $ 1,259 | $ 1,436 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | 109 | 72 |
Product and technology | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | 434 | 361 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | 303 | 347 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Compensation expense | $ 413 | $ 656 |
Stock Options and Warrants - Fa
Stock Options and Warrants - Fair value of common stock (Details) | 3 Months Ended |
May 31, 2020$ / shares | |
Stock Options and Warrants | |
Estimated fair value of common stock | $ 15.40 |
Exercise price | $ 15.40 |
Expected volatility | 70.00% |
Expected term (in years) | 6 years 3 months |
Risk-free interest rate | 0.54% |
Stock Options and Warrants - Aw
Stock Options and Warrants - Award Option (Details) - Stock Option $ / shares in Units, $ in Thousands | 3 Months Ended |
May 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Balance, February 29, 2020 | shares | 7,996,056 |
Granted | shares | 253,100 |
Exercised | shares | (187,807) |
Forfeited | shares | (58,251) |
Balance, May 31, 2020 | shares | 8,003,098 |
Vested and expected to vest as of May 31, 2020 | shares | 8,003,098 |
Exercisable as of May 31, 2020 | shares | 4,908,687 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Balance, February 29, 2020 | $ / shares | $ 6.19 |
Granted | $ / shares | 4.25 |
Exercised | $ / shares | 15.40 |
Forfeited | $ / shares | 6.07 |
Balance, May 31, 2020 | $ / shares | 6.53 |
Exercisable as of May 31, 2020 | $ / shares | 4.55 |
Vested and expected to vest as of May 31, 2020 | $ / shares | $ 6.53 |
Weighted remaining contractual life in years | 6 years 8 months 12 days |
Vested and expected to vest as of May 31, 2020 | 6 years 8 months 12 days |
Exercisable as of May 31, 2020 | 5 years 4 months 24 days |
Balance, May 31, 2020 | $ | $ 87,800 |
Vested and expected to vest as of May 31, 2020 | $ | 87,800 |
Exercisable as of May 31, 2020 | $ | $ 63,568 |
Stock Options and Warrants - Eq
Stock Options and Warrants - Equity Instrument (Details) | 3 Months Ended |
May 31, 2020$ / sharesshares | |
Series E Warrants [Member] | |
Class of Warrant or Right [Roll Forward] | |
Exercise price (in dollars per share) | $ / shares | $ 0.0005 |
Series F Warrants [Member] | |
Class of Warrant or Right [Roll Forward] | |
Exercise price (in dollars per share) | $ / shares | $ 0.0005 |
Common stock warrants | |
Class of Warrant or Right [Roll Forward] | |
Balance, February 29, 2020 | 1,653,268 |
Exercised | (160,000) |
Balance, May 31, 2020 | 1,493,268 |
Exercisable | 1,493,268 |
Common stock warrants | Series E Warrants [Member] | |
Class of Warrant or Right [Roll Forward] | |
Balance, May 31, 2020 | 1,129,114 |
Common stock warrants | Series F Warrants [Member] | |
Class of Warrant or Right [Roll Forward] | |
Balance, May 31, 2020 | 85,000 |
Common stock warrants | Lender Warrant | |
Class of Warrant or Right [Roll Forward] | |
Balance, May 31, 2020 | 279,154 |
Minimum | Common stock warrants | |
Class of Warrant or Right [Roll Forward] | |
Exercise price (in dollars per share) | $ / shares | $ 0.0005 |
Minimum | Common stock warrants | Lender Warrant | |
Class of Warrant or Right [Roll Forward] | |
Exercise price (in dollars per share) | $ / shares | 0.005 |
Maximum | Common stock warrants | |
Class of Warrant or Right [Roll Forward] | |
Exercise price (in dollars per share) | $ / shares | 23.75 |
Maximum | Common stock warrants | Lender Warrant | |
Class of Warrant or Right [Roll Forward] | |
Exercise price (in dollars per share) | $ / shares | $ 23.75 |
Stock Options and Warrants - Wa
Stock Options and Warrants - Warrant Rights (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 08, 2020 | Jul. 07, 2020 | Jul. 29, 2015 | May 31, 2020 |
Class of Warrant or Right [Line Items] | ||||
Conversion of Stock, Shares Issued | 1,401,836 | 1,401,836 | ||
Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercisable | 1,493,268 | |||
Maximum | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 23.75 | |||
Minimum | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | 0.0005 | |||
Lender Warrant | Maximum | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | 23.75 | |||
Lender Warrant | Minimum | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 0.005 | |||
Customer Warrant | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of Securities Called by Warrants or Rights | 200,000 | |||
Exercisable | 160,000 | |||
Term Loan Warrants | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of Securities Called by Warrants or Rights | 86,600 | |||
Exercise price (in dollars per share) | $ 9.60 | |||
Fair value of the warrants | $ 528 | |||
Vesting percentage | 100.00% | |||
Term of option | 10 years | |||
The 2019 Revolver Warrants [Member] | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Fair value of the warrants | $ 251 | |||
Vesting percentage | 100.00% | |||
Term of option | 10 years | |||
The 2019 Revolver Warrants [Member] | Maximum | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of Securities Called by Warrants or Rights | 36,363 | |||
Exercise price (in dollars per share) | $ 23.75 | |||
The 2019 Revolver Warrants [Member] | Minimum | Common stock warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of Securities Called by Warrants or Rights | 12,631 | |||
Exercise price (in dollars per share) | $ 13.75 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 12 Months Ended | |
May 31, 2020 | May 31, 2019 | May 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||||
Percentage of deductions from adjustable taxable income | 50.00% | 30.00% | ||
Income tax expense | $ 38 | $ 23 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | 0.30% | 0.10% |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Net Loss Per Share Attributable to Common Stockholders | ||
Net loss | $ (13,960) | $ (15,903) |
Weighted-average shares used in computing net loss per share | 7,524,016 | 4,945,593 |
Net loss per share attributable to common stockholders, basic and diluted | $ (1.86) | $ (3.22) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Stock Options (Details) - shares | 3 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 8,160,980 | 8,213,638 |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 8,003,098 | 8,031,350 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 157,882 | 182,288 |
Commitments - Legal Proceedings
Commitments - Legal Proceedings (Details) $ in Thousands | 1 Months Ended |
Mar. 31, 2019USD ($) | |
Certain former and current employees case | |
Loss Contingencies [Line Items] | |
Litigation settlement | $ 1,100 |
Change Healthcare Joint Devel_2
Change Healthcare Joint Development Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2020 | Feb. 29, 2020 | May 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Estimated fair value of common stock | $ 15.40 | ||
Basis of Presentation and Significant Accounting Policies [Text Block] | (2) Basis of Presentation and Summary of Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended February 29, 2020 appearing in the Company’s Final Prospectus for our IPO, dated as of July 1, 2020 and filed with the Securities and Exchange Commission (the SEC) pursuant to Rule 424(b)(4) on July 2, 2020. Since the date of those audited financial statements, there have been no changes to the Company’s significant accounting policies, other than those detailed below. (a) Basis of Presentation and Principles of Consolidation Accolade’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Unaudited Interim Financial Statements The accompanying consolidated financial statements and the related footnote disclosures are unaudited. The unaudited consolidated interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s interim consolidated financial position as of May 31, 2020 and the results of its operations and its cash flows for the three months ended May 31, 2020 and 2019. The results for the three months ended May 31, 2020, are not necessarily indicative of results to be expected for the year ending February 28, 2021, any other interim periods, or any future year or period. The Company’s management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited financial statements and accompanying notes for the year ended February 29, 2020. (c) Capitalized Internal-Use Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, including tools that enable the Company’s employees to interact with members and their providers, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs related to minor upgrades, minor enhancements, and maintenance activities are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Internal-use software is included in property and equipment and is amortized on a straight-line basis over 3 years. For the three months ended May 31, 2020 and 2019, the Company capitalized $289 and $0, respectively, for internal-use software. Amortization expense related to capitalized internal-use software during the three months ended May 31, 2020 and 2019 was $1,011 and $1,377, respectively. (d) Intangible Assets As part of the acquisition of MD Insider, Inc. (MDI) in July 2019 (Note 4), the Company acquired an intangible asset in the form of acquired technology in the amount of $2,900. This intangible asset is subject to amortization and is being amortized on the straight-line basis over its estimated useful life of two years. The Company recognized $362 in amortization expense during the three months ended May 31, 2020. ( e ) Concentration of Credit Risk Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents. The Company maintains its cash primarily with domestic financial institutions of high credit quality, which may exceed federal deposit insurance corporation limits. The Company invests its cash equivalents in highly rated money market funds. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents and performs periodic evaluations of the credit standing of such institutions. Significant customers are those which represent 10% or more of the Company’s revenue during the period. For each significant customer, revenue as a percentage of total revenue was as follows: For the three months ended May 31, 2020 2019 Customer 1 20 % 28 % Customer 2 11 % 11 % Customer 3 11 % 13 % Total 42 % 52 % Accounts receivable outstanding related to these customers at May 31, 2020 was as follows: May 31, 2020 Customer 1 $ — Customer 2 1,716 Customer 3 132 (f) Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financing as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs will be recorded in stockholders’ deficit as a reduction of additional paid-in-capital generated as a result of the offering. Deferred offering costs were $3,330 and $3,042 at May 31, 2020 and February 29, 2020, respectively, and are included within prepaid and other current assets on the accompanying consolidated balance sheets. (g) New Accounting Pronouncements Not Yet Adopted Leases Leases Codification Improvements to Topic 842 Leases Narrow-Scope Improvements for Lessor, Leases Codification Improvements to Topic 842 Credit Losses Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Internal Use Software Intangibles-Goodwill and Other-Internal-Use Software Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract costs incurred to develop or obtain internal-use-software. This ASU is effective for the year ending February 28, 2022, and interim periods within the year ending February 28, 2023. Early adoption is permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. | ||
Joint Development Agreement and Data Licensing Agreement | Maximum | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Cumulative royalty payments | $ 2,500 | ||
Joint Development Agreement and Data Licensing Agreement | Change Healthcare Holdings | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
License agreement term (in years) | 5 years | ||
License agreement renewal term (in years) | 5 years | ||
Joint Development Agreement and Data Licensing Agreement | Change Healthcare Holdings | Restricted shares | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Granted | 251,211 | ||
Estimated fair value of common stock | $ 15.40 | ||
Aggregate value of shares | $ 3,869 | ||
Vested shares | 75,363 | 150,727 | |
Non-vested shares | 100,484 |