Performant Healthcare (PHLT) 10-Q 9 Nov 22 2022 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Nov. 08, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-35628
Entity Registrant Name	PERFORMANT FINANCIAL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0484934
Entity Address, Address Line One	333 North Canyons Parkway
Entity Address, City or Town	Livermore
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94551
City Area Code	(925)
Local Phone Number	960-4800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $.0001 per share
Trading Symbol	PFMT
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding (in shares)		74,278,495
Entity Central Index Key	0001550695
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 25,591	$ 17,347
Restricted cash	81	2,203
Trade accounts receivable, net of allowance for doubtful accounts of $0 and $0, respectively	15,850	20,808
Contract assets	9,735	8,113
Prepaid expenses and other current assets	2,395	3,077
Income tax receivable	3,211	3,159
Total current assets	56,863	54,707
Property, equipment, and leasehold improvements, net	10,681	15,708
Goodwill	47,372	47,372
Right-of-use assets	2,394	3,235
Other assets	970	963
Total assets	118,280	121,985
Current liabilities:
Current maturities of notes payable, net of unamortized debt issuance costs of $16 and $11, respectively	859	489
Accrued salaries and benefits	6,532	8,476
Accounts payable	785	1,124
Other current liabilities	2,304	3,732
Contract liabilities	531	634
Estimated liability for appeals and disputes	1,148	1,190
Lease liabilities	1,303	1,862
Total current liabilities	13,462	17,507
Notes payable, net of current portion and unamortized debt issuance costs of $341 and $416, respectively	18,409	19,084
Lease liabilities	1,365	1,803
Other liabilities	1,148	1,168
Total liabilities	34,384	39,562
Commitments and contingencies (note 3 and note 4)
Stockholders’ equity:
Common stock, $0.0001 par value. Authorized, 500,000 shares at September 30, 2022 and December 31, 2021 respectively; issued and outstanding 74,212 and 69,281 shares at September 30, 2022 and December 31, 2021, respectively	7	7
Additional paid-in capital	141,437	133,662
Accumulated deficit	(57,548)	(51,246)
Total stockholders’ equity	83,896	82,423
Total liabilities and stockholders’ equity	$ 118,280	$ 121,985

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 0	$ 0
Debt issuance costs, current portion	16,000	11,000
Debt issuance costs, net of current portion	$ 341,000	$ 416,000
Common stock, par or stated value per share (in usd per share)	$ 0.0001	$ 0.0001
Common stock, authorized shares (in shares)	500,000	500,000
Common stock, issued shares (in shares)	74,212	74,212
Common stock, outstanding shares (in shares)	69,281	69,281

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenues	$ 27,178	$ 28,582	$ 79,942	$ 92,814
Operating expenses:
Salaries and benefits	21,759	19,686	63,101	67,071
Other operating expenses	7,733	8,781	23,945	29,896
Total operating expenses	29,492	28,467	87,046	96,967
Income (loss) from operations	(2,314)	115	(7,104)	(4,153)
Gain on sale of certain recovery contracts	0	579	382	2,428
Gain on sale of land and buildings	1,120	0	1,120	0
Interest expense	(277)	(2,394)	(648)	(5,866)
Loss before provision for income taxes	(1,471)	(1,700)	(6,250)	(7,591)
Provision for (benefit from) income taxes	(11)	(9)	52	61
Net loss	$ (1,460)	$ (1,691)	$ (6,302)	$ (7,652)
Earnings Per Share [Abstract]
Basic (in usd per share)	$ (0.02)	$ (0.03)	$ (0.09)	$ (0.13)
Diluted (in usd per share)	$ (0.02)	$ (0.03)	$ (0.09)	$ (0.13)
Weighted average shares
Basic (in shares)	74,021	62,127	72,480	57,512
Diluted (in shares)	74,021	62,127	72,480	57,512

Consolidated Statement of Chang

Consolidated Statement of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2020		54,764
Beginning balance at Dec. 31, 2020	$ 41,980	$ 5	$ 82,933	$ (40,958)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares)		1,976
Common stock issued under stock plans, net of shares withheld for employee taxes	(632)	$ 1	(633)
Stock-based compensation expense	1,963		1,963
Recognition of warrants associated with notes payable	5,237		5,237
Recognition of earnout shares issued (in shares)		300
Recognition of earnout shares issued	801		801
Proceeds from exercise of stock options	41		41
Proceeds from public offering, net of costs (in shares)		12,104
Proceeds from public offering, net of costs	42,649	$ 1	42,648
Net loss	(7,652)			(7,652)
Ending balance (in shares) at Sep. 30, 2021		69,144
Ending balance at Sep. 30, 2021	84,387	$ 7	132,990	(48,610)
Beginning balance (in shares) at Jun. 30, 2021		56,401
Beginning balance at Jun. 30, 2021	42,871	$ 6	89,784	(46,919)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares)		639
Common stock issued under stock plans, net of shares withheld for employee taxes	(23)		(23)
Stock-based compensation expense	540		540
Proceeds from exercise of stock options	41		41
Proceeds from public offering, net of costs (in shares)		12,104
Proceeds from public offering, net of costs	42,649	$ 1	42,648
Net loss	(1,691)			(1,691)
Ending balance (in shares) at Sep. 30, 2021		69,144
Ending balance at Sep. 30, 2021	$ 84,387	$ 7	132,990	(48,610)
Beginning balance (in shares) at Dec. 31, 2021	69,281	69,281
Beginning balance at Dec. 31, 2021	$ 82,423	$ 7	133,662	(51,246)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares)		1,068
Stock-based compensation expense	2,212		2,212
Proceeds from exercise of stock options (in shares)		3,863
Proceeds from exercise of stock options	5,563		5,563
Net loss	$ (6,302)			(6,302)
Ending balance (in shares) at Sep. 30, 2022	69,281	74,212
Ending balance at Sep. 30, 2022	$ 83,896	$ 7	141,437	(57,548)
Beginning balance (in shares) at Jun. 30, 2022		73,818
Beginning balance at Jun. 30, 2022	84,425	$ 7	140,506	(56,088)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares)		394
Stock-based compensation expense	931		931
Net loss	$ (1,460)			(1,460)
Ending balance (in shares) at Sep. 30, 2022	69,281	74,212
Ending balance at Sep. 30, 2022	$ 83,896	$ 7	$ 141,437	$ (57,548)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (6,302)	$ (7,652)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss on disposal of assets and impairment of long-lived assets	40	718
Depreciation and amortization	3,355	3,883
Right-of-use assets amortization	841	1,413
Stock-based compensation	2,212	1,963
Interest expense from debt issuance costs	71	2,453
Gain on sale of certain recovery contracts	(382)	(2,428)
Gain on sale of land and buildings	(1,120)	0
Changes in operating assets and liabilities:
Trade accounts receivable	4,958	4,270
Contract assets	(1,622)	(484)
Prepaid expenses and other current assets	682	1,245
Income tax receivable	(52)	1,305
Other assets	(7)	120
Accrued salaries and benefits	(1,944)	(3,739)
Accounts payable	(339)	422
Contract liabilities and other current liabilities	(1,515)	(1,363)
Estimated liability for appeals, disputes, and refunds	(42)	1,240
Lease liabilities	(997)	(1,635)
Other liabilities	(19)	(445)
Net cash (used in) provided by operating activities	(2,182)	1,286
Cash flows from investing activities:
Purchase of property, equipment, and leasehold improvements	(2,198)	(2,695)
Proceeds from sale of certain recovery contracts	382	3,171
Proceeds from sales of property, equipment, and leasehold improvements	4,934	0
Net cash provided by investing activities	3,118	476
Cash flows from financing activities:
Repayment of notes payable	(375)	(8,438)
Debt issuance costs paid	(2)	(150)
Taxes paid related to net share settlement of stock awards	0	(633)
Proceeds from exercise of warrants	5,563	41
Proceeds from public offering, net of costs	0	42,648
Net cash provided by financing activities	5,186	33,468
Net increase in cash, cash equivalents and restricted cash	6,122	35,230
Cash, cash equivalents and restricted cash at beginning of period	19,550	18,296
Cash, cash equivalents and restricted cash at end of period	25,672	53,526
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents	25,591	51,323
Restricted cash	81	2,203
Total cash, cash equivalents and restricted cash at end of period	25,672	53,526
Non-cash financing activities:
Recognition of earnout shares issued	0	801
Recognition of warrants associated with notes payable	0	5,237
Supplemental disclosures of cash flow information:
Cash paid (received) for income taxes	267	(683)
Cash paid for interest	$ 449	$ 3,413

Organization and Description of

Organization and Description of Business	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Organization and Description of Business	Organization and Description of Business (a) Basis of Presentation and Organization The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the interim unaudited consolidated financial statements furnished herein include all adjustments necessary (consisting only of normal recurring adjustments) for a fair presentation of our financial position at September 30, 2022, and the results of our operations for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021. Interim financial statements are prepared on a basis consistent with our annual consolidated financial statements. The interim financial statements included herein should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2021. Performant Financial Corporation (the Company, we, or our) is a leading provider of technology-enabled audit, recovery, and analytics services in the United States with a focus in the healthcare payment integrity services industry. The Company works with healthcare payers through claims auditing and eligibility-based (also known as coordination-of-benefits or COB) services to identify improper payments. The Company engages clients in both government and commercial markets. The Company also has a call center which serves clients with complex consumer engagement needs. Clients of the Company typically operate in complex and highly regulated environments and contract for their payment integrity needs in order to reduce losses on improper healthcare payments. The Company historically worked in recovery markets such as defaulted student loans, federal and state treasury receivables, and commercial recovery. However, with the ongoing impact of the COVID-19 pandemic, and the continued pause on student loan recovery work, the Company sold certain of its non-healthcare recovery contracts in 2021 and did not renew or restart existing contracts, nor pursued new non-healthcare recovery opportunities. The Company's consolidated financial statements include the operations of Performant Financial Corporation (Performant), its wholly-owned subsidiary Performant Business Services, Inc. (PBS), and PBS's wholly-owned subsidiaries Performant Recovery, Inc. (PRI), and Performant Technologies, LLC (PTL). The Company's consolidated financial statements also included the operations of Premiere Credit of North America, LLC (Premiere) through the end of 2021, when the entity was dissolved. Performant is a Delaware corporation headquartered in California and was formed in 2003. PBS is a Nevada corporation founded in 1997. PRI is a California corporation founded in 1976. PTL is a California limited liability company that was originally formed in 2004. All intercompany balances and transactions have been eliminated in consolidation. The Company is managed and operated as one business, with a single management team that reports to the Chief Executive Officer. The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, contract assets, goodwill, right-of-use assets, estimated liability for appeals and disputes, lease liabilities, other liabilities, provision for income taxes, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from these estimates. (b) Revenues, Accounts Receivable, Contract Assets, Contract Liabilities, Estimated Liability for Appeals and Disputes The Company derives its revenues primarily from providing audit, recovery, and analytics services. Revenues are recognized upon completion of these services for its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the performance obligations are satisfied. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s contracts generally contain a single performance obligation, delivered over time as a series of services that are substantially the same and have the same pattern of transfer to the client, as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct. The Company’s contracts are composed primarily of variable consideration. Fees earned under the Company’s audit and recovery service contracts consist primarily of contingency fees based on a specified percentage of the amount the Company enables its clients to recover. The contingency fee percentage for a particular recovery depends on the type of recovery or claim facilitated. The Company generally either applies the as-invoiced practical expedient where its right to consideration corresponds directly to its right to invoice its clients, or the variable consideration allocation exception where the variable consideration is attributable to one or more, but not all, of the services promised in a series of distinct services that form part of a single performance obligation. As such, the Company has elected the optional exemptions related to the as-invoiced practical expedient and the variable consideration allocation exception, whereby the disclosure of the amount of transaction price allocated to the remaining performance obligations is not required. The Company estimates variable consideration only if it can reasonably measure the progress toward complete satisfaction of the performance obligation using an output method based on reliable information and recognizes such revenue over the performance period only if it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Any change made to the measure of progress toward complete satisfaction of the Company’s performance obligation is recorded as a change in estimate. The Company exercises judgment to estimate the amount of constraint on variable consideration based on the facts and circumstances of the relevant contract operations and the availability and reliability of data. The Company reviews the constraint on variable consideration at least quarterly. Although the Company believes the estimates made are reasonable and appropriate, different assumptions and estimates could materially impact the amount of variable consideration recognized. For contracts that contain a refund right, these amounts are considered variable consideration and the Company estimates its refund liability for each claim, as needed, and recognizes revenue net of such estimate. Under certain contracts, consideration can include periodic performance-based bonuses which can be awarded based on the Company’s performance under the specific contract. These performance-based bonuses are considered variable and may be constrained by the Company until there is not a risk of a significant reversal. The Company has applied the as-invoiced practical expedient or the variable consideration allocation exception to contracts with performance obligations that have an average remaining duration of less than a year. For healthcare claims audit contracts, the Company may recognize revenue upon delivering its findings from claims audits, when sufficient reliable information is available to the Company for estimating the variable consideration earned based on an output metric that reasonably measures the Company's satisfaction of its performance obligation. For eligibility-based or COB contracts, the Company recognizes revenue when insurance companies or other responsible parties have remitted payments to its clients. For customer care / outsourced services, the Company recognizes revenues based on the volume of processed transactions or the quantity of labor hours provided. For certain recovery contracts, revenue is recognized when the clients collect on amounts owed to them as a result of the Company’s services. For student loan recovery services, loan rehabilitation revenue was recognized when the rehabilitated loans are funded by clients. Bonuses were recognized upon receipt of official notification of bonus awards from customers. The following table presents revenue disaggregated by category for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 (in thousands) (in thousands) Eligibility-based $ 13,142 $ 12,727 39,773 32,215 Claims-based 10,377 7,280 28,866 19,680 Healthcare Total 23,519 20,007 68,639 51,895 Recovery (1) 41 5,490 166 31,072 Customer Care / Outsourced Services 3,618 3,085 11,137 9,847 Total Revenues $ 27,178 $ 28,582 $ 79,942 $ 92,814 (1) Represented student lending, state and municipal tax authorities, IRS and Department of Treasury markets, as well as Premiere. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in cash used in operating activities in the consolidated statements of cash flows. The Company determines the allowance for doubtful accounts by specific identification. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $0 at each of September 30, 2022 and December 31, 2021. Contract assets were approximately $9.7 million and $8.1 million as of September 30, 2022 and December 31, 2021, respectively. Contract assets relate to the Company’s rights to consideration for services completed during the respective periods, but not invoiced at the reporting date, and receipt of payment is conditional upon factors other than the passage of time. Contract assets primarily consist of commissions the Company estimates it has earned from claims audit findings submitted to healthcare clients. The increase in contract assets primarily resulted from additional consideration earned for services provided to healthcare clients, offset by invoiced amounts. Contract assets are recorded to accounts receivable when the Company's right to payment becomes unconditional, which is generally when healthcare providers have paid our clients. There was no impairment loss related to contract assets for the nine months ended September 30, 2022. Contract liabilities were $0.5 million and $0.6 million as of September 30, 2022 and December 31, 2021, respectively. The Company’s contract liabilities relate to certain reimbursable costs due to a healthcare client. Healthcare providers of our clients have the right to appeal claims audit findings and may pursue additional appeals if the initial appeal is found in favor of healthcare clients. For eligibility or COB contracts, insurance companies or other responsible parties may dispute the Company’s findings regarding our clients not being the primary payer of healthcare claims. Total estimated liability for appeals and disputes was $1.1 million as of September 30, 2022 and $1.2 million as of December 31, 2021. This represents the Company’s best estimate of the amount probable of being refunded to the Company’s healthcare clients. The Company determined that it does not have any material costs related to obtaining or fulfilling a contract that are recoverable and as such, these contract costs are generally expensed as incurred. (c) Prepaid Expenses and Other Current Assets At September 30, 2022, prepaid expenses and other current assets were $2.4 million and included approximately $1.6 million related to prepaid software licenses and maintenance agreements, $0.2 million for prepaid insurance, and $0.6 million for various other prepaid expenses. At December 31, 2021, prepaid expenses and other current assets were $3.1 million and included approximately $1.4 million related to prepaid software licenses and maintenance agreements, $1.1 million for prepaid insurance, and $0.6 million for various other prepaid expenses. (d) Impairment of Goodwill and Long-Lived Assets The balance of goodwill was $47.4 million as of September 30, 2022 and $47.4 million as of December 31, 2021, both of which were net of accumulated impairment loss of $34.2 million. Goodwill is reviewed for impairment at least annually in December or as certain events or conditions arise during the year. The Company may first assess qualitative factors for indicators of impairment to determine whether it is necessary to perform the quantitative goodwill impairment test. In performing the quantitative assessment of goodwill, if the carrying value of the Company, as one reporting unit, exceeds its fair value, goodwill is considered impaired. The amount of impairment loss is measured as the difference between the carrying value and the fair value of the reporting unit. Impairment testing is based upon the best information available and estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. Significant assumptions and estimates are required, including, but not limited to, our market capitalization, projecting future cash flows and other assumptions, to estimate the fair value of the reporting unit. Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact the amount of impairment. Based on management’s analysis, there was no impairment to goodwill as of September 30, 2022. Long-lived assets and intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. For the nine months ended September 30, 2022, there was no impairment. For the nine months ended September 30, 2021, there was a $0.6 million non-cash impairment charge to long-lived assets, included in other operating expenses. (e) Other Current Liabilities As of September 30, 2022, other current liabilities primarily included $1.9 million for services received for which we have not received an invoice, $0.1 million for estimated workers' compensation claims incurred but not reported, $0.1 million for 3rd party fees, and $0.2 million for accrued interest under our Credit Agreement (Note 3). As of December 31, 2021, other current liabilities primarily included $3.6 million for services received for which we have not received an invoice, $0.1 million for estimated workers' compensation claims incurred but not reported, 3rd party fees, and equipment financing payables. (f) New Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity", which is intended to simplify the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt-Debt with Conversion and Other Options, for convertible instruments. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The Company's adoption of ASU 2020-06 as of January 1, 2022 had no impact on our financial position, results of operations, or cash flows.

Property, Equipment, and Leaseh

Property, Equipment, and Leasehold Improvements	9 Months Ended
	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Property, Equipment, and Leasehold Improvements	Property, Equipment, and Leasehold Improvements Property, equipment, and leasehold improvements consist of the following at September 30, 2022 and December 31, 2021 (in thousands): September 30, December 31, Land $ — $ 1,943 Building and leasehold improvements 3,849 7,411 Furniture and equipment 3,257 5,757 Computer hardware and software 75,584 74,850 82,690 89,961 Less accumulated depreciation and amortization (72,009) (74,253) Property, equipment and leasehold improvements, net $ 10,681 $ 15,708 Depreciation expense of property, equipment and leasehold improvements was $1.1 million and $0.8 million for the three months ended September 30, 2022 and 2021, respectively, and $3.4 million and $3.2 million for the nine months ended September 30, 2022 and 2021 respectively. The Company sold two buildings and related land during the three months ended September 30, 2022, which resulted in a gain of $1.1 million in the consolidated statements of cash flows.

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Notes Payable	Notes Payable As of September 30, 2022, $19.6 million was outstanding under the credit agreement with MUFG Union Bank, N.A. (the Credit Agreement). The Company’s interest rate at September 30, 2022 was 5.3%. On December 17, 2021, the Company entered into a Credit Agreement with MUFG Union Bank, N.A. The Credit Agreement includes a $20 million term loan commitment, which was fully advanced at closing and a $15 million revolving loan commitment, which remains undrawn as of September 30, 2022. A portion of the revolving loan commitment of up to $2.5 million is available for the issuance of letters of credit. Subject to certain customary exceptions, the obligations under the Credit Agreement are, or will be, guaranteed by each of the Company’s existing and future, direct or indirect, domestic subsidiaries. The obligations of the Company under the Credit Agreement are secured by liens on substantially all of the assets of the Company and each of its domestic subsidiaries that are guarantors under the Credit Agreement. The Credit Agreement matures on December 17, 2026. The proceeds from the term loan under the Credit Agreement were used by the Company, together with cash on hand, to repay in full its credit agreement dated as of August 17, 2017, with ECMC Group, Inc. (as amended, the Prior Credit Agreement), and to pay fees and expenses in connection with the Credit Agreement. Pursuant to the Credit Agreement, the Company is required to repay the aggregate outstanding principal amount of the term loan under the Credit Agreement in quarterly installments which commenced on March 31, 2022 in an amount that would result in amortization of (a) 2.5% of the term loan principal in the first full year following commencement of amortization, (b) 5.0% of the term loan principal in the second full year following commencement of amortization, (c) 7.5% of the term loan principal in each of the third and fourth full years following commencement of amortization, and (d) 10% of the term loan principal in the fifth full year (or portion thereof) following commencement of amortization. In addition, the Company must make mandatory prepayments of the term loan principal under the Credit Agreement with the net cash proceeds received in connection with certain specified events, including certain asset sales, casualty and condemnation events (subject to customary reinvestment rights). Any remaining outstanding principal balance of the term loan under the Credit Agreement is repayable on the maturity date. Amounts repaid or prepaid by the Company with respect to the term loan under the Credit Agreement cannot be reborrowed. The Company may, at its option, prepay any revolving loan borrowings under the Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except in certain circumstances). Borrowings of revolving loans under the Credit Agreement are also subject to mandatory prepayment in the event that outstanding borrowings and letter of credit usage exceed aggregate revolving loan commitments then in effect. Under the Credit Agreement, loans may bear interest based on term SOFR (the secured overnight financing right) or an annual base rate, as applicable, plus an applicable margin based on the Company’s leverage ratio each quarter that may range between 2.50% per annum and 3.00% per annum in the case of term SOFR loans and between 1.50% per annum and 2.00% per annum in the case of base rate loans. In addition, a commitment fee based on the unused availability of the revolving credit facility is also payable which may vary from 0.30% per annum to 0.40% per annum, also based on the Company’s leverage ratio. The Credit Agreement contains certain customary representations, warranties, and affirmative and negative covenants of the Company and its subsidiaries that restrict the Company’s and its subsidiaries’ ability to take certain actions, including: incurrence of indebtedness, creation of liens, making certain investments, mergers or consolidations, dispositions of assets, assignments, sales or transfers of equity in subsidiaries, repurchase or redemption of capital stock, entering into certain transactions with affiliates, or changing the nature of the Company’s business. The Credit Agreement also contains two financial covenants, which require the Company to maintain, as of the last day of each fiscal quarter commencing with March 31, 2022, (a) a total leverage ratio of not greater than (i) 3.00 to 1.00 through September 30, 2022 and (ii) 2.50 to 1.00 thereafter and (b) a fixed charge coverage ratio of not less than 1.20 to 1.00. The obligations under the Credit Agreement may be accelerated or the commitments terminated upon the occurrence of events of default under the Credit Agreement, which include payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, cross defaults to other material indebtedness, defaults arising in connection with changes in control, and other customary events of default. As of September 30, 2022, the Company was in compliance with all financial covenants under the Credit Agreement. Outstanding debt obligations were as follows (in thousands): September 30, 2022 December 31, 2021 Principal amount $ 19,625 $ 20,000 Less unamortized discount and issuance costs (357) (427) Notes payable, net of unamortized discount and issuance costs 19,268 19,573 Less current maturities, net of unamortized discount and issuance costs (859) (489) Long-term notes payable, net of current maturities and unamortized discount and issuance costs $ 18,409 $ 19,084 The following is a schedule, by years, of maturities of notes payable as of September 30, 2022 (in thousands): Year Ending December 31, Amount Remainder of 2022 $ 125 2023 1,000 2024 1,500 2025 1,500 2026 15,500 Total notes payable $ 19,625

Leases

Leases	9 Months Ended
	Sep. 30, 2022
Leases [Abstract]
Leases	Leases The Company has entered into various non-cancelable operating lease agreements for office facilities and equipment with original lease periods expiring between 2022 and 2025. Certain of these arrangements have free rent periods and/or escalating rent payment provisions. As such, the Company recognizes rent expense under such arrangements on a straight-line basis in accordance with U.S. GAAP. Some leases include options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease expense was $0.5 million and $0.6 million for the three months ended September 30, 2022 and 2021, respectively, and $1.6 million and $1.8 million for the nine months ended September 30, 2022 and 2021, respectively. Supplemental cash flow and other information related to operating leases were as follows: September 30, September 30, Weighted Average Remaining Lease Term (in years) 2.3 2.5 Weighted Average Discount Rate 6.1% 6.4% Cash paid for amounts included in the measurement of operating lease liabilities $0.5 million $2.1 million The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2022 (in thousands): Year Ending December 31, Amount Remainder of 2022 $ 403 2023 1,337 2024 697 2025 441 Total undiscounted cash flows $ 2,878 Less imputed interest (210) Present value of lease liabilities $ 2,668

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation (a) Stock Options Total stock-based compensation expense charged as salaries and benefits expense in the consolidated statements of operations was $0.9 million and $0.5 million for the three months ended September 30, 2022 and 2021 respectively, and $2.2 million and $2.0 million for the nine months ended September 30, 2022 and 2021, respectively. The following table sets forth a summary of the Company's stock option activity for the nine months ended September 30, 2022: Outstanding Weighted Weighted Aggregate Outstanding at December 31, 2021 1,593,101 $ 10.51 0.82 $ 7 Granted — — — Forfeited (1,343,101) 10.55 — Exercised — — — Outstanding at September 30, 2022 250,000 $ 10.31 1.13 $ 1 Vested, exercisable, expected to vest (1) at September 30, 2022 250,000 $ 10.31 1.13 $ 1 Exercisable at September 30, 2022 250,000 $ 10.31 1.13 $ 1 (1) Options expected to vest reflect an estimated forfeiture rate. The Company recognizes share-based compensation costs as expense on a straight-line basis over the option vesting period, which generally is four years. As of September 30, 2022, all options have vested and there was no unrecognized compensation costs. (b) Restricted Stock Units and Performance Stock Units The following table summarizes restricted stock unit and performance stock unit activity for the nine months ended September 30, 2022: Number of Awards Weighted Outstanding at December 31, 2021 2,935,351 $ 2.85 Granted 2,390,406 2.67 Forfeited (234,483) 2.64 Vested and converted to shares, net of units withheld for taxes (1,067,698) 2.41 Outstanding at September 30, 2022 4,023,576 $ 2.87 Expected to vest at September 30, 2022 3,550,968 $ 2.87 Restricted stock units and performance stock units granted under the Performant Financial Corporation Amended and Restated 2012 Stock Incentive Plan generally vest over periods between one year and four years. As of September 30, 2022, there was approximately $9.2 million of total unrecognized compensation cost related to unvested restricted stock units granted to employees. This unrecognized compensation cost is expected to be recognized over an estimated weighted-average amortization period of approximately 3.3 years.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company's effective income tax rate is (1)% for the nine months ended September 30, 2022 and (1)% for the nine months ended September 30, 2021. Similar to September 30, 2021, the primary driver of the effective income tax rate is the overall losses from operations for the nine months ended September 30, 2022 for which no benefit is recognized due to valuation allowance. The Company files income tax returns with the U.S. federal government and various state jurisdictions. The Company operates in a number of state and local jurisdictions, most of which have never audited our records. Accordingly, the Company is subject to state and local income tax examinations based upon the various statutes of limitations in each jurisdiction. For tax years before 2017, earlier tax years are subject to examination and assessment to the extent of net operating losses carryback refunds requested. The Company has ongoing federal examinations by the Internal Revenue Service for tax years 2017 and 2018.

Net Income (Loss) per Share

Net Income (Loss) per Share	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Net Income (Loss) per Share	Net Income (Loss) per Share For the three and nine months ended September 30, 2022 and 2021, basic net income (loss) per share is calculated by dividing net income (loss) by the sum of the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of shares of common stock and dilutive common share equivalents outstanding during the period. Common share equivalents consist of stock options, restricted stock units, performance stock units, and warrants. When there is a loss in the period, dilutive common share equivalents are excluded from the calculation of diluted earnings per share, as their effect would be anti-dilutive. For example, for the nine months ended September 30, 2022 and 2021, respectively, diluted weighted average shares outstanding are the same as basic average shares outstanding. When there is net income in the period, the Company excludes stock options, restricted stock units, performance stock units, and warrants from the calculation of diluted earnings per share when their combined exercise price and unamortized fair value exceeds the average market price of the Company's common stock because their effect would be anti-dilutive. The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Weighted average shares outstanding – basic 74,021 62,127 72,480 57,512 Dilutive effect of stock options — — — — Weighted average shares outstanding – diluted 74,021 62,127 72,480 57,512 Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share, as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (shares in thousands): September 30, 2022 September 30, 2021 Options to purchase common stock 250 1,661 RSUs 4,024 3,056 Warrants outstanding 2,447 6,310 Total 6,721 11,027

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsWe have evaluated subsequent events through the date these consolidated financial statements are filed with the Securities and Exchange Commission and there are no other events that have occurred that would require adjustments or disclosures to our consolidated financial statements.

Organization and Description _2

Organization and Description of Business (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation and Organization	Basis of Presentation and Organization The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the interim unaudited consolidated financial statements furnished herein include all adjustments necessary (consisting only of normal recurring adjustments) for a fair presentation of our financial position at September 30, 2022, and the results of our operations for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021. Interim financial statements are prepared on a basis consistent with our annual consolidated financial statements. The interim financial statements included herein should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2021. Performant Financial Corporation (the Company, we, or our) is a leading provider of technology-enabled audit, recovery, and analytics services in the United States with a focus in the healthcare payment integrity services industry. The Company works with healthcare payers through claims auditing and eligibility-based (also known as coordination-of-benefits or COB) services to identify improper payments. The Company engages clients in both government and commercial markets. The Company also has a call center which serves clients with complex consumer engagement needs. Clients of the Company typically operate in complex and highly regulated environments and contract for their payment integrity needs in order to reduce losses on improper healthcare payments. The Company historically worked in recovery markets such as defaulted student loans, federal and state treasury receivables, and commercial recovery. However, with the ongoing impact of the COVID-19 pandemic, and the continued pause on student loan recovery work, the Company sold certain of its non-healthcare recovery contracts in 2021 and did not renew or restart existing contracts, nor pursued new non-healthcare recovery opportunities. The Company's consolidated financial statements include the operations of Performant Financial Corporation (Performant), its wholly-owned subsidiary Performant Business Services, Inc. (PBS), and PBS's wholly-owned subsidiaries Performant Recovery, Inc. (PRI), and Performant Technologies, LLC (PTL). The Company's consolidated financial statements also included the operations of Premiere Credit of North America, LLC (Premiere) through the end of 2021, when the entity was dissolved. Performant is a Delaware corporation headquartered in California and was formed in 2003. PBS is a Nevada corporation founded in 1997. PRI is a California corporation founded in 1976. PTL is a California limited liability company that was originally formed in 2004. All intercompany balances and transactions have been eliminated in consolidation. The Company is managed and operated as one business, with a single management team that reports to the Chief Executive Officer. The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, contract assets, goodwill, right-of-use assets, estimated liability for appeals and disputes, lease liabilities, other liabilities, provision for income taxes, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from these estimates.
Revenues, Accounts Receivable, Contract Assets, Contract Liabilities, Estimated Liability for Appeals, Disputes and Refunds	Revenues, Accounts Receivable, Contract Assets, Contract Liabilities, Estimated Liability for Appeals and Disputes The Company derives its revenues primarily from providing audit, recovery, and analytics services. Revenues are recognized upon completion of these services for its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the performance obligations are satisfied. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s contracts generally contain a single performance obligation, delivered over time as a series of services that are substantially the same and have the same pattern of transfer to the client, as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct. The Company’s contracts are composed primarily of variable consideration. Fees earned under the Company’s audit and recovery service contracts consist primarily of contingency fees based on a specified percentage of the amount the Company enables its clients to recover. The contingency fee percentage for a particular recovery depends on the type of recovery or claim facilitated. The Company generally either applies the as-invoiced practical expedient where its right to consideration corresponds directly to its right to invoice its clients, or the variable consideration allocation exception where the variable consideration is attributable to one or more, but not all, of the services promised in a series of distinct services that form part of a single performance obligation. As such, the Company has elected the optional exemptions related to the as-invoiced practical expedient and the variable consideration allocation exception, whereby the disclosure of the amount of transaction price allocated to the remaining performance obligations is not required. The Company estimates variable consideration only if it can reasonably measure the progress toward complete satisfaction of the performance obligation using an output method based on reliable information and recognizes such revenue over the performance period only if it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Any change made to the measure of progress toward complete satisfaction of the Company’s performance obligation is recorded as a change in estimate. The Company exercises judgment to estimate the amount of constraint on variable consideration based on the facts and circumstances of the relevant contract operations and the availability and reliability of data. The Company reviews the constraint on variable consideration at least quarterly. Although the Company believes the estimates made are reasonable and appropriate, different assumptions and estimates could materially impact the amount of variable consideration recognized. For contracts that contain a refund right, these amounts are considered variable consideration and the Company estimates its refund liability for each claim, as needed, and recognizes revenue net of such estimate. Under certain contracts, consideration can include periodic performance-based bonuses which can be awarded based on the Company’s performance under the specific contract. These performance-based bonuses are considered variable and may be constrained by the Company until there is not a risk of a significant reversal. The Company has applied the as-invoiced practical expedient or the variable consideration allocation exception to contracts with performance obligations that have an average remaining duration of less than a year. For healthcare claims audit contracts, the Company may recognize revenue upon delivering its findings from claims audits, when sufficient reliable information is available to the Company for estimating the variable consideration earned based on an output metric that reasonably measures the Company's satisfaction of its performance obligation. For eligibility-based or COB contracts, the Company recognizes revenue when insurance companies or other responsible parties have remitted payments to its clients. For customer care / outsourced services, the Company recognizes revenues based on the volume of processed transactions or the quantity of labor hours provided. For certain recovery contracts, revenue is recognized when the clients collect on amounts owed to them as a result of the Company’s services. For student loan recovery services, loan rehabilitation revenue was recognized when the rehabilitated loans are funded by clients. Bonuses were recognized upon receipt of official notification of bonus awards from customers. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in cash used in operating activities in the consolidated statements of cash flows. The Company determines the allowance for doubtful accounts by specific identification. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was $0 at each of September 30, 2022 and December 31, 2021. Contract assets were approximately $9.7 million and $8.1 million as of September 30, 2022 and December 31, 2021, respectively. Contract assets relate to the Company’s rights to consideration for services completed during the respective periods, but not invoiced at the reporting date, and receipt of payment is conditional upon factors other than the passage of time. Contract assets primarily consist of commissions the Company estimates it has earned from claims audit findings submitted to healthcare clients. The increase in contract assets primarily resulted from additional consideration earned for services provided to healthcare clients, offset by invoiced amounts. Contract assets are recorded to accounts receivable when the Company's right to payment becomes unconditional, which is generally when healthcare providers have paid our clients. There was no impairment loss related to contract assets for the nine months ended September 30, 2022. Contract liabilities were $0.5 million and $0.6 million as of September 30, 2022 and December 31, 2021, respectively. The Company’s contract liabilities relate to certain reimbursable costs due to a healthcare client. Healthcare providers of our clients have the right to appeal claims audit findings and may pursue additional appeals if the initial appeal is found in favor of healthcare clients. For eligibility or COB contracts, insurance companies or other responsible parties may dispute the Company’s findings regarding our clients not being the primary payer of healthcare claims. Total estimated liability for appeals and disputes was $1.1 million as of September 30, 2022 and $1.2 million as of December 31, 2021. This represents the Company’s best estimate of the amount probable of being refunded to the Company’s healthcare clients. The Company determined that it does not have any material costs related to obtaining or fulfilling a contract that are recoverable and as such, these contract costs are generally expensed as incurred.
Impairment of Goodwill and Long-Lived Assets	Goodwill is reviewed for impairment at least annually in December or as certain events or conditions arise during the year. The Company may first assess qualitative factors for indicators of impairment to determine whether it is necessary to perform the quantitative goodwill impairment test. In performing the quantitative assessment of goodwill, if the carrying value of the Company, as one reporting unit, exceeds its fair value, goodwill is considered impaired. The amount of impairment loss is measured as the difference between the carrying value and the fair value of the reporting unit.Impairment testing is based upon the best information available and estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value. Significant assumptions and estimates are required, including, but not limited to, our market capitalization, projecting future cash flows and other assumptions, to estimate the fair value of the reporting unit. Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact the amount of impairment. Based on management’s analysis, there was no impairment to goodwill as of September 30, 2022.Long-lived assets and intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
New Accounting Pronouncements	New Accounting PronouncementsIn August 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity", which is intended to simplify the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt-Debt with Conversion and Other Options, for convertible instruments. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The Company's adoption of ASU 2020-06 as of January 1, 2022 had no impact on our financial position, results of operations, or cash flows.In February 2020, the FASB issued ASU 2020-02, “Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).” This ASU provides updated guidance on how an entity should measure credit losses on financial instruments, including trade receivables, held at the reporting date. The amendments make each Topic easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. It also addresses transition and open effective date information for Topic 842. ASU 2016-13, ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02 (collectively, “ASC 326”) are effective for public entities for fiscal years beginning after December 15, 2019, except for Smaller Reporting Companies. This ASU is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company is in the process of evaluating the effects of the provisions of this pronouncement on our financial statements.

Organization and Description _3

Organization and Description of Business (Tables)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Schedule of Disaggregated Revenue by Category	The following table presents revenue disaggregated by category for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 (in thousands) (in thousands) Eligibility-based $ 13,142 $ 12,727 39,773 32,215 Claims-based 10,377 7,280 28,866 19,680 Healthcare Total 23,519 20,007 68,639 51,895 Recovery (1) 41 5,490 166 31,072 Customer Care / Outsourced Services 3,618 3,085 11,137 9,847 Total Revenues $ 27,178 $ 28,582 $ 79,942 $ 92,814 (1) Represented student lending, state and municipal tax authorities, IRS and Department of Treasury markets, as well as Premiere.

Property, Equipment, and Leas_2

Property, Equipment, and Leasehold Improvements (Tables)	9 Months Ended
	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Schedule of Property, Equipment, and Leasehold Improvements	Property, equipment, and leasehold improvements consist of the following at September 30, 2022 and December 31, 2021 (in thousands): September 30, December 31, Land $ — $ 1,943 Building and leasehold improvements 3,849 7,411 Furniture and equipment 3,257 5,757 Computer hardware and software 75,584 74,850 82,690 89,961 Less accumulated depreciation and amortization (72,009) (74,253) Property, equipment and leasehold improvements, net $ 10,681 $ 15,708

Notes Payable (Tables)

Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Schedule of Outstanding Debt	Outstanding debt obligations were as follows (in thousands): September 30, 2022 December 31, 2021 Principal amount $ 19,625 $ 20,000 Less unamortized discount and issuance costs (357) (427) Notes payable, net of unamortized discount and issuance costs 19,268 19,573 Less current maturities, net of unamortized discount and issuance costs (859) (489) Long-term notes payable, net of current maturities and unamortized discount and issuance costs $ 18,409 $ 19,084
Schedule of Maturities of Long-term Debt	The following is a schedule, by years, of maturities of notes payable as of September 30, 2022 (in thousands): Year Ending December 31, Amount Remainder of 2022 $ 125 2023 1,000 2024 1,500 2025 1,500 2026 15,500 Total notes payable $ 19,625

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2022
Leases [Abstract]
Schedule of Lease Cost	Supplemental cash flow and other information related to operating leases were as follows: September 30, September 30, Weighted Average Remaining Lease Term (in years) 2.3 2.5 Weighted Average Discount Rate 6.1% 6.4% Cash paid for amounts included in the measurement of operating lease liabilities $0.5 million $2.1 million
Schedule of Maturities of Lease Liabilities	The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2022 (in thousands): Year Ending December 31, Amount Remainder of 2022 $ 403 2023 1,337 2024 697 2025 441 Total undiscounted cash flows $ 2,878 Less imputed interest (210) Present value of lease liabilities $ 2,668

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Schedule of Stock Option Activity	The following table sets forth a summary of the Company's stock option activity for the nine months ended September 30, 2022: Outstanding Weighted Weighted Aggregate Outstanding at December 31, 2021 1,593,101 $ 10.51 0.82 $ 7 Granted — — — Forfeited (1,343,101) 10.55 — Exercised — — — Outstanding at September 30, 2022 250,000 $ 10.31 1.13 $ 1 Vested, exercisable, expected to vest (1) at September 30, 2022 250,000 $ 10.31 1.13 $ 1 Exercisable at September 30, 2022 250,000 $ 10.31 1.13 $ 1 (1) Options expected to vest reflect an estimated forfeiture rate.
Schedule of Restricted Stock Activity	The following table summarizes restricted stock unit and performance stock unit activity for the nine months ended September 30, 2022: Number of Awards Weighted Outstanding at December 31, 2021 2,935,351 $ 2.85 Granted 2,390,406 2.67 Forfeited (234,483) 2.64 Vested and converted to shares, net of units withheld for taxes (1,067,698) 2.41 Outstanding at September 30, 2022 4,023,576 $ 2.87 Expected to vest at September 30, 2022 3,550,968 $ 2.87

Net Income (Loss) per Share (Ta

Net Income (Loss) per Share (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Schedule of Reconciliation of Basic to Diluted Weighted Average Shares	The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Weighted average shares outstanding – basic 74,021 62,127 72,480 57,512 Dilutive effect of stock options — — — — Weighted average shares outstanding – diluted 74,021 62,127 72,480 57,512
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (shares in thousands): September 30, 2022 September 30, 2021 Options to purchase common stock 250 1,661 RSUs 4,024 3,056 Warrants outstanding 2,447 6,310 Total 6,721 11,027

Organization and Description _4

Organization and Description of Business - Narrative (Details)	9 Months Ended
	Sep. 30, 2022 USD ($) reporting_unit segment	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Accounting Policies [Abstract]
Number of operating segments | segment	1
Allowance for doubtful accounts	$ 0		$ 0
Contract assets	9,735,000		8,113,000
Contract liabilities	531,000		634,000
Estimated liability for appeals	1,148,000		1,190,000
Prepaid expenses and other current assets	2,395,000		3,077,000
Prepaid expenses and other current assets, prepaid software licenses and maintenance agreement	1,600,000		1,400,000
Prepaid expenses and other current assets, prepaid insurance	200,000		1,100,000
Prepaid expenses and other current assets, various other prepaid expenses	600,000		600,000
Goodwill	47,372,000		47,372,000
Goodwill, accumulated impairment loss	$ 34,200,000		34,200,000
Number of reporting units | reporting_unit	1
Non-cash impairment charge	$ 0	$ 600,000
Accrued liabilities, current	1,900,000		3,600,000
Workers' compensation liability, incurred	100,000		$ 100,000
Accrued third party fees	100,000
Accrued interest on loan	$ 200,000

Organization and Description _5

Organization and Description of Business - Disaggregated Revenue by Category (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Total Revenues	$ 27,178	$ 28,582	$ 79,942	$ 92,814
Healthcare Total
Disaggregation of Revenue [Line Items]
Total Revenues	23,519	20,007	68,639	51,895
Eligibility-based
Disaggregation of Revenue [Line Items]
Total Revenues	13,142	12,727	39,773	32,215
Claims-based
Disaggregation of Revenue [Line Items]
Total Revenues	10,377	7,280	28,866	19,680
Recovery
Disaggregation of Revenue [Line Items]
Total Revenues	41	5,490	166	31,072
Customer Care / Outsourced Services
Disaggregation of Revenue [Line Items]
Total Revenues	$ 3,618	$ 3,085	$ 11,137	$ 9,847

Property, Equipment, and Leas_3

Property, Equipment, and Leasehold Improvements - Summary (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, equipment and leasehold improvements, gross	$ 82,690	$ 89,961
Less accumulated depreciation and amortization	(72,009)	(74,253)
Property, equipment and leasehold improvements, net	10,681	15,708
Land
Property, Plant and Equipment [Line Items]
Property, equipment and leasehold improvements, gross	0	1,943
Building and leasehold improvements
Property, Plant and Equipment [Line Items]
Property, equipment and leasehold improvements, gross	3,849	7,411
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property, equipment and leasehold improvements, gross	3,257	5,757
Computer hardware and software
Property, Plant and Equipment [Line Items]
Property, equipment and leasehold improvements, gross	$ 75,584	$ 74,850

Property, Equipment, and Leas_4

Property, Equipment, and Leasehold Improvements - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) building	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense of property, equipment and leasehold improvements	$ 1,100	$ 800	$ 3,400	$ 3,200
Number of buildings sold | building	2
Gain on sale of land and buildings	$ 1,120	$ 0	$ 1,120	$ 0

Notes Payable - Narrative (Deta

Notes Payable - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Dec. 17, 2021
Line of Credit Facility [Line Items]
Principal amount	$ 19,625	$ 20,000
MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Fixed charge coverage ratio	1.20
Minimum | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Unused commitment fee percentage	0.30%
Maximum | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Unused commitment fee percentage	0.40%
Letter of Credit | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility			$ 2,500
The Credit Agreement
Line of Credit Facility [Line Items]
Principal amount	$ 19,600
Debt instrument, interest rate	5.30%
Term Loan | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Principal amount			20,000
Revolving Loan Commitment | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility			$ 15,000
SOFR | Minimum | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	2.50%
SOFR | Maximum | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	3%
Base Rate | Minimum | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.50%
Base Rate | Maximum | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	2%
Redemption Period One | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Amortization of principal, percentage			2.50%
Total leverage ratio	3
Redemption Period Two | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Amortization of principal, percentage			5%
Total leverage ratio	2.50
Redemption Period Three | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Amortization of principal, percentage			7.50%
Redemption Period Four | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Amortization of principal, percentage			7.50%
Redemption Period Five | MUFG Union Bank, N.A.
Line of Credit Facility [Line Items]
Amortization of principal, percentage			10%

Notes Payable - Outstanding Deb

Notes Payable - Outstanding Debt Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Principal amount	$ 19,625	$ 20,000
Less unamortized discount and issuance costs	(357)	(427)
Notes payable, net of unamortized discount and issuance costs	19,268	19,573
Less current maturities, net of unamortized discount and issuance costs	(859)	(489)
Long-term notes payable, net of current maturities and unamortized discount and issuance costs	$ 18,409	$ 19,084

Notes Payable - Maturities of L

Notes Payable - Maturities of Long Term Debt (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Debt Disclosure [Abstract]
Remainder of 2022	$ 125
2023	1,000
2024	1,500
2025	1,500
2026	15,500
Total notes payable	$ 19,625

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Operating lease expense	$ 0.5	$ 0.6	$ 1.6	$ 1.8

Leases - Components of Lease Te

Leases - Components of Lease Term and Discount Rate (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Weighted Average Remaining Lease Term (in years)	2 years 3 months 18 days	2 years 6 months
Weighted Average Discount Rate	6.10%	6.40%
Cash paid for amounts included in the measurement of operating lease liabilities	$ 0.5	$ 2.1

Leases - Schedule of Maturities

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Remainder of 2022	$ 403,000
2023	1,337,000
2024	697,000
2025	441,000
Total undiscounted cash flows	2,878,000
Less imputed interest	(210,000)
Present value of lease liabilities	$ 2,668,000

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 900,000	$ 500,000	$ 2,200,000	$ 2,000,000
Options to purchase common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period			4 years
Unrecognized compensation expense	0		$ 0
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 9,200,000		$ 9,200,000
Unrecognized compensation expense, recognition term			3 years 3 months 18 days
Minimum | Restricted Stock and Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period			1 year
Maximum | Restricted Stock and Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period			4 years

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - Options to purchase common stock - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Outstanding Options
Balance at beginning of period (in shares)	1,593,101
Granted (in shares)	0
Forfeited (in shares)	(1,343,101)
Exercised (in shares)	0
Balance at end of period (in shares)	250,000	1,593,101
Vested, exercisable, expected to vest (in shares)	250,000
Exercisable (in shares)	250,000
Weighted average exercise price per share
Balance at beginning of period (in usd per share)	$ 10.51
Granted (in usd per share)	0
Forfeited (in usd per share)	10.55
Exercised (in usd per share)	0
Balance at end of period (in usd per share)	10.31	$ 10.51
Vested, exercisable, expected to vest (in usd per share)	10.31
Exercisable (in usd per share)	$ 10.31
Weighted average remaining contractual life (Years)
Outstanding	1 year 1 month 17 days	9 months 25 days
Vested, exercisable, expected to vest	1 year 1 month 17 days
Exercisable	1 year 1 month 17 days
Aggregate Intrinsic Value (in thousands)
Outstanding	$ 1	$ 7
Vested, exercisable, expected to vest	1
Exercisable	$ 1

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock and Performance Stock Units Activity (Details) - Restricted Stock and Performance Stock Units	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Number of Awards
Outstanding at beginning of period (in shares) | shares	2,935,351
Granted (in shares) | shares	2,390,406
Forfeited (in shares) | shares	(234,483)
Vested and converted to shares, net of units withheld for taxes (in shares) | shares	(1,067,698)
Outstanding at end of period (in shares) | shares	4,023,576
Expected to vest (in shares) | shares	3,550,968
Weighted average grant date fair value per share
Outstanding at beginning of period (in usd per share) | $ / shares	$ 2.85
Granted (in usd per share) | $ / shares	2.67
Forfeited (in usd per share) | $ / shares	2.64
Vested and converted to shares, net of units withheld for taxes (in usd per share) | $ / shares	2.41
Outstanding at end of period (in usd per share) | $ / shares	2.87
Expected to vest (in usd per share) | $ / shares	$ 2.87

Income Taxes (Details)

Income Taxes (Details)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Effective income tax rate (as a percent)	(1.00%)	(1.00%)

Net Income (Loss) per Share - R

Net Income (Loss) per Share - Reconciliation of Basic to Diluted Weighted Average Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Weighted average shares outstanding – basic (in shares)	74,021	62,127	72,480	57,512
Dilutive effect of stock options (in shares)	0	0	0	0
Weighted average shares outstanding – diluted (in shares)	74,021	62,127	72,480	57,512

Net Income (Loss) per Share - A

Net Income (Loss) per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	6,721	11,027
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	250	1,661
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	4,024	3,056
Warrants outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	2,447	6,310