Biotelemetry 10-Q 3 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 28, 2016
Document and Entity Information
Entity Registrant Name	BioTelemetry, Inc.
Entity Central Index Key	1,574,774
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		28,231,128
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 32,255	$ 18,986
Accounts receivable, net of allowance for doubtful accounts of $12,569 and $11,185, at September 30, 2016 and December 31, 2015, respectively	15,654	15,179
Other accounts receivable, net of allowance for doubtful accounts of $335 and $416, at September 30, 2016 and December 31, 2015, respectively	12,794	8,997
Inventory	3,810	2,378
Prepaid expenses and other current assets	3,831	1,505
Total current assets	68,344	47,045
Property and equipment, net	26,313	25,554
Intangible assets, net	31,606	19,981
Goodwill	37,251	29,831
Other assets	1,697	1,732
Total assets	165,211	124,143
Current liabilities:
Accounts payable	9,755	8,496
Accrued liabilities	14,958	11,230
Current portion of capital lease obligations	211	287
Current portion of long-term debt	12,818	1,250
Deferred revenue	4,945	2,625
Total current liabilities	42,687	23,888
Deferred tax liability	1,340	1,233
Long-term capital lease obligations	141	101
Long-term debt	24,244	21,944
Other liabilities	1,767	1,051
Total liabilities	70,179	48,217
Stockholders' equity:
Common stock-$.001 par value as of September 30, 2016 and December 31, 2015; 200,000,000 shares authorized as of September 30, 2016 and December 31, 2015; 28,231,078 and 27,277,939 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	28	27
Paid-in capital	278,767	272,070
Accumulated other comprehensive loss	(10)	(12)
Accumulated deficit	(183,753)	(196,159)
Total stockholders' equity	95,032	75,926
Total liabilities and stockholders' equity	$ 165,211	$ 124,143

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 12,569	$ 11,185
Other receivable, allowance for doubtful accounts (in dollars)	$ 335	$ 416
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	28,231,078	27,277,939
Common stock, shares outstanding	28,231,078	27,277,939

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Healthcare	$ 40,395	$ 35,687	$ 123,709	$ 106,923
Research	10,420	5,484	23,709	16,353
Technology	2,240	2,321	6,957	8,463
Total revenues	53,055	43,492	154,375	131,739
Cost of revenues:
Healthcare	13,030	12,314	39,662	38,299
Research	5,604	3,220	13,306	9,406
Technology	1,555	1,621	4,993	5,741
Total cost of revenues	20,189	17,155	57,961	53,446
Gross profit	32,866	26,337	96,414	78,293
Operating expenses:
General and administrative	13,853	11,497	40,577	35,100
Sales and marketing	7,018	6,632	21,687	20,741
Bad debt expense	2,495	2,245	7,797	6,769
Research and development	2,137	1,565	5,888	5,161
Other charges	2,397	1,392	5,844	4,462
Total operating expenses	27,900	23,331	81,793	72,233
Income from operations	4,966	3,006	14,621	6,060
Interest and other loss, net	(630)	(391)	(1,686)	(1,220)
Income before income taxes	4,336	2,615	12,935	4,840
Provision for income taxes	(235)	(137)	(529)	(260)
Net income	4,101	2,478	12,406	4,580
Other comprehensive income:
Foreign currency translation gain (loss)	150	1	2	(8)
Comprehensive income	$ 4,251	$ 2,479	$ 12,408	$ 4,572
Net income per common share:
Basic (in dollars per share)	$ 0.15	$ 0.09	$ 0.45	$ 0.17
Diluted (in dollars per share)	$ 0.14	$ 0.08	$ 0.42	$ 0.16
Weighted average number of common shares outstanding:
Basic (in shares)	28,102,196	27,181,250	27,810,763	27,062,630
Diluted (in shares)	30,333,577	29,311,060	29,857,225	29,019,141

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
OPERATING ACTIVITIES
Net income	$ 12,406	$ 4,580
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt expense	7,797	6,769
Depreciation	7,884	6,343
Non-cash lease expense	111	11
Deferred income tax expense	107	260
Stock-based compensation	3,757	3,321
Amortization of intangibles	2,735	2,781
Accretion of discount on debt	163	149
Changes in operating assets and liabilities:
Accounts and other receivables	(8,390)	(6,820)
Inventory	(1,221)	(241)
Prepaid expenses and other assets	(1,895)	(403)
Accounts payable	934	(2,682)
Accrued and other liabilities	2,017	(515)
Liability associated with the Civil Investigative Demand		(6,400)
Net cash provided by operating activities	26,405	7,153
INVESTING ACTIVITIES
Acquisition of businessess, net of cash acquired	(17,970)
Purchases of property and equipment and investment in internally developed software	(8,507)	(10,310)
Net cash used in investing activities	(26,477)	(10,310)
FINANCING ACTIVITIES
Proceeds (payments) related to the exercising of stock options and vesting of RSUs and PSUs	56	(352)
Borrowings under revolving loans	14,500
Principal payments on long-term debt	(958)	(625)
Principal payments on capital lease obligations	(257)	(382)
Net cash provided by (used in) financing activities	13,341	(1,359)
Net increase (decrease) in cash and cash equivalents	13,269	(4,516)
Cash and cash equivalents - beginning of period	18,986	20,007
Cash and cash equivalents - end of period	32,255	15,491
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	965	706
Cash paid for taxes	$ 289	$ 322

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, these consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows. In the opinion of management, these consolidated financial statements reflect all adjustments which are of a normal recurring nature and necessary for a fair presentation of BioTelemetry, Inc.’s (“BioTelemetry,” “Company,” “we,” “our” or “us” ) financial position as of September 30, 2016 and December 31, 2015, the results of operations for the three months and nine months ended September 30, 2016 and 2015 and cash flows for the nine months ended September 30, 2016 and 2015. The financial data and other information disclosed in these notes to the consolidated financial statements related to the three and nine months ended September 30, 2016 and 2015 are unaudited. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for any future period. Net Income Per Share We compute net income per share in accordance with Accounting Standards Codification (“ASC”) 260, Earnings Per Share. Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by giving effect to all potential dilutive common shares, including stock options and restricted stock units. The following table presents the calculation of basic net income per share: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (Net income in thousands) Numerator: Net income $ $ $ $ Denominator: Weighted average shares used in computing basic net income per share Potential dilutive common shares due to dilutive stock option and restricted stock units Weighted average shares used in computing diluted net income per share Net income per share: Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ Certain stock options, which are priced higher than the market price of our shares as of September 30, 2016 and 2015, would be anti-dilutive and therefore have been excluded from the weighted average shares used in computing diluted net income per share. These options could become dilutive in future periods. Fair Value of Financial Instruments The fair value of financial instruments is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. We have financial instruments falling into all three levels of the fair value hierarchy. Our Level 1 financial instruments consist primarily of cash and cash equivalents, accounts receivable, other accounts receivable and accounts payable. The carrying value of these financial instruments approximates their fair value because of their short-term nature. Long-term debt, which is given a Level 2 classification within the fair value hierarchy, was determined to have a fair value of $37,767 as of September 30, 2016. This is equal to the nominal value, which is the carrying value, exclusive of debt discount and deferred charges. The fair value of contingent consideration, which is a Level 3 fair value instrument, is measured on a recurring basis using unobservable inputs such as projected payment dates, probabilities of meeting specified milestones and other such variables resulting in payment amounts which are discounted back to present value using a probability-weighted discounted cash flow model. In addition to our recurring fair value measurements, we have assets acquired in connection with business combinations, which are recorded at fair value on the acquisition date using a discounted cash flow model, which is a Level 3 classification. This valuation technique requires the Company to make certain assumptions, including, but not limited to, future operating performance and cash flows, royalty rates and other such variables which are discounted to present value using a discount rate that reflects the risk factors associated with future operating cash flow of the acquired business, the characteristics of the assets acquired and liabilities assumed and the experience of the acquired business. Equity Method Investments We account for investments using the equity method of accounting if the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets as a component of other assets and is periodically adjusted for capital contributions, dividends received and our share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded as a component of interest and other loss, net in the consolidated statements of operations and comprehensive income. In December 2015, we acquired an ownership interest in Well Bridge Health, Inc. (“WellBridge”) through the conversion of an outstanding note receivable and the related accrued interest. The investment is accounted for under the equity method. At the time of the acquisition, the equity method basis difference of $891 was allocated to equity method goodwill. As of September 30, 2016, our investment in WellBridge represented 32% of the outstanding stock. A summary of our investment in Wellbridge is as follows: Three Months Ended Nine Months Ended Opening balance $ $ Capital contributions Our share of the investee’s losses ) ) September 30, 2016 Balance $ $ Goodwill and Acquired Intangible Assets Goodwill is the excess of the purchase price of an acquired business over the amounts assigned to the assets acquired and liabilities assumed in a business combination. In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill is reviewed for impairment annually, or when events arise that could indicate that an impairment exists. The provisions of ASC 350 require that we perform a two-step impairment test. In the first step, we compare the fair value of our reporting units to the carrying value of the reporting units. If the carrying value of the net assets assigned to the reporting units exceeds the fair value of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting units’ goodwill. If the carrying value of the reporting units’ goodwill exceeds the implied fair value, an impairment loss equal to the difference is recorded. For the purpose of performing our goodwill impairment analysis, we consider our business to be comprised of three reporting units: Healthcare, Research and Technology. We calculate the fair value of the reporting units utilizing a weighting of the income and market approaches. The income approach is based on a discounted cash flow methodology that includes assumptions for, among other things, forecasted income, cash flow, growth rates, income tax rates, expected tax benefits and long-term discount rates, all of which require significant judgment. The market approach utilizes our market data. There are inherent uncertainties related to these factors and the judgment applied in the analysis. We believe that the combination of an income and a market approach provides a reasonable basis to estimate the fair value of our reporting units. Acquired intangible assets are recorded at fair value on the acquisition date. The estimated fair values and useful lives of intangible assets are determined by assessing many factors including estimates of future operating performance and cash flow of the acquired business, the characteristics of the intangible assets acquired and the experience of the acquired business. Independent appraisal firms may assist with the valuation of acquired assets. The impairment test for indefinite-lived intangible assets other than goodwill consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset. Recent Accounting Pronouncements Not Yet Adopted In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting . The standard will revise accounting for share-based compensation arrangements, including the income tax impact and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . The standard will require lessees to recognize most leases on their balance sheet and makes selected changes to lessor accounting. The standard is effective for annual and interim reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required, with certain practical expedients available. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . The standard will require inventory to be measured at the lower of cost or net realizable value. The guidance will not apply to inventories for which cost is determined using the last-in, first-out method or the retail inventory method. The standard is effective for annual and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which has been updated through several revisions and clarifications since its original issuance. The standard will require revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which a company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. The standard will be effective January 1, 2018 with early adoption permissible beginning January 1, 2017. We are currently evaluating the transition method we will elect and the impact the adoption of this standard will have on our consolidated financial statements.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 30, 2016
Acquisitions
Acquisitions	2. Acquisitions VirtualScopics, Inc . On March 25, 2016, the Company, through its wholly-owned subsidiary BioTelemetry Research Acquisition Corporation, entered into a definitive Agreement and Plan of Merger with VirtualScopics, Inc. (“VirtualScopics”), a leading provider of clinical trial imaging solutions. Under the terms of the Merger Agreement, the Company purchased: (i) any and all outstanding shares of VirtualScopics’ $0.001 par value common stock for $4.05 per share; (ii) any and all outstanding shares of VirtualScopics’ $0.001 par value Series A and Series B Convertible Preferred Stock for $336.30 per share; and (iii) any and all outstanding shares of VirtualScopics’ $0.001 par value Series C-1 Convertible Preferred Stock for $920.00 per share. The all cash acquisition of VirtualScopics was completed on May 11, 2016. The total consideration paid at closing amounted to $14,970, net of cash acquired of $849. The acquisition of VirtualScopics expands the Company’s existing clinical research offerings and gives the Company further access to established customer relationships. We accounted for the transaction as a business combination, and as such, all assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of the consideration paid over the fair value of the net assets acquired has been recognized as goodwill, which represents the expected future benefits arising from the assembled workforce and other synergies attributable to cost savings opportunities. The Company recognized $4,453 of goodwill as a result of the acquisition, all of which has been assigned to the Research segment. We do not expect that any of this goodwill will be deductible for tax purposes. The amounts below represent our preliminary fair value estimates as of September 30, 2016 and are subject to subsequent adjustment as additional information is obtained during the applicable measurement period. The primary areas of these preliminary estimates that are not yet finalized relate to certain tangible assets acquired and liabilities assumed, as well as the identifiable intangible assets. The Company expects to finalize all accounting for the acquisition of VirtualScopics within one year of the acquisition date. The total consideration and related allocation for VirtualScopics is summarized as follows: Amount Fair value of assets acquired: Cash and cash equivalents $ Other accounts receivable Inventory Prepaid expenses and other current assets Weighted Property and equipment Average Life Identifiable intangible assets: (Years) Customer relationships 12 Technology 10 Backlog 4 Total identifiable intangible assets Total assets acquired Fair value of liabilities assumed: Accounts payable Accrued liabilities Current portion of capital lease obligations Current portion of long-term debt Deferred revenue Long-term capital lease obligations Long-term debt Total liabilities assumed Total identifiable net assets Goodwill Net assets acquired $ For the period from May 11, 2016 to September 30, 2016, VirtualScopics contributed revenues of $7,774 and net income of $1,091 to our consolidated results of operations. The following unaudited pro forma financial information has been prepared using historical financial results of the Company and VirtualScopics as if the acquisition had occurred as of January 1, 2015. Certain adjustments related to the elimination of transaction costs and acquisition related indebtedness, as well as the addition of depreciation and amortization related to fair value adjustments on the tangible and identifiable intangible assets acquired, have been reflected for the purposes of the unaudited pro forma financial information presented below. No adjustments for synergies or certain other expected benefits of the acquisition have been included. We believe the assumptions used in preparing the unaudited pro forma financial information are reasonable, but not necessarily indicative of actual results should the acquisitions have occurred on January 1, 2015. Pro forma financial information for the periods presented is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue $ $ $ $ Net income $ $ $ $ Net income per common share: Basic $ $ $ $ Diluted $ $ $ $ Weighted average number of common shares outstanding: Basic Diluted ePatch Division of DELTA Danish Electronics, Light, and Acoustics On April 1, 2016, the Company, through its wholly-owned subsidiary BioTelemetry Technology ApS, entered into an Asset Purchase Agreement (“APA”) with DELTA Danish Electronics, Light, and Acoustics (“DELTA”), pursuant to which the Company acquired substantially all of the assets of the ePatch division of DELTA, inclusive of all products and indications currently under development. The total consideration paid at closing amounted to $3,000 in cash and 244,519 shares of the Company’s common stock valued at $2,885. In addition, there is the potential for a performance based earn out up to $3,000 upon reaching certain milestones, as defined in the APA. The fair value of the total consideration transferred in the ePatch acquisition, including contingent consideration, was $6,490 at the acquisition date. The ePatch acquisition is expected to generate future cost savings for the Company and will provide control over proprietary components for the Company’s next generation Mobile Cardiac Outpatient TelemetryTM (“MCOTTM”) device. We accounted for the transaction as a business combination, and as such, all assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of the consideration paid over the fair value of the net assets acquired has been recognized as goodwill, which represents the expected future benefits arising from the assembled workforce and other synergies attributable to cost savings opportunities. The company recognized $2,965 of goodwill as a result of the acquisition, all of which has been assigned to the Technology segment. We expect all of this goodwill to be deductible for tax purposes. The amounts below represent our preliminary fair value estimates as of September 30, 2016 and are subject to subsequent adjustment as additional information is obtained during the applicable measurement period. The primary areas of these preliminary estimates that are not yet finalized relate to certain tangible assets acquired and liabilities assumed, as well as the identifiable intangible assets. The Company expects to finalize all accounting for the ePatch acquisition within one year of the acquisition date. The total consideration and related allocation for the ePatch acquisition is summarized as follows: Amount Fair value of assets acquired: Inventory $ Weighted Property and equipment Average Life Identifiable intangible assets: (Years) Customer relationships 10 Technology 10 Trade names Indefinite Total identifiable intangible assets Total assets acquired Fair value of liabilities assumed: Accrued liabilities Total liabilities assumed Total identifiable net assets Goodwill Net assets acquired $ While the ePatch acquisition provides control over proprietary components of our next generation cardiac monitoring device, the acquisition did not have a material effect on our consolidated results of operations. Contingent Consideration The APA includes the potential for a performance based earn out up to $3,000 upon reaching certain milestones. The fair value of the contingent consideration associated with the ePatch acquisition was $605 at September 30, 2016 and is included as a component of other liabilities in the accompanying consolidated balance sheets. The following summarizes the changes in our contingent consideration during the nine months ended September 30, 2016: Total Contingent Consideration Balance at December 31, 2015 — Purchase price contingent consideration $ Balance at September 30, 2016 $

Inventory

Inventory	9 Months Ended
	Sep. 30, 2016
Inventory
Inventory	3. Inventory Inventory consists of the following: September 30, 2016 December 31, 2015 Raw materials $ $ Finished goods Total inventory $ $ Inventory, which includes purchased parts, materials, direct labor and applied manufacturing overhead, is stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method.

Intangible Assets and Goodwill

Intangible Assets and Goodwill	9 Months Ended
	Sep. 30, 2016
Intangible Assets and Goodwill
Intangible Assets and Goodwill	4. Intangible Assets and Goodwill Goodwill was recognized at the time of our acquisitions. The carrying amount of goodwill as of September 30, 2016 and December 31, 2015 was $37,251 and $29,831, respectively. The increase in goodwill during the nine months ended September 30, 2016 relates to the Company’s acquisitions of VirtualScopics and the ePatch division of DELTA. The changes in the carrying amounts of goodwill by segment were as follows: Reporting Segment Healthcare Research Technology Total Balance at December 31, 2015 $ $ $ $ Goodwill acquired during the year — Impact of foreign exchange — — Balance at September 30, 2016 $ $ $ $ The gross carrying amounts and accumulated amortization of our intangible assets as of September 30, 2016 and December 31, 2015 are as follows: Estimated September 30, December 31, Customer relationships 5 - 15 $ $ Technology, including internally developed software 3 - 10 Signed backlog 1 - 4 Unsigned backlog 4 Covenants not to compete 5 - 7 Total intangible assets, gross Customer relationships accumulated amortization ) ) Technology accumulated amortization ) ) Signed backlog accumulated amortization ) ) Unsigned backlog accumulated amortization ) ) Covenants not to compete accumulated amortization ) ) Total accumulated amortization ) ) Indefinite-lived trade names Total intangible assets, net $ $ The estimated amortization expense for the next five years and thereafter is summarized as follows at September 30, 2016: Remainder of 2016 $ 2017 2018 2019 2020 2021 Thereafter Total estimated amortization $ Amortization expense for the three months ended September 30, 2016 and 2015 was $1,062 and $896, respectively, and amortization expense for the nine months ended September 30, 2016 and 2015 was $2,735 and $2,781, respectively.

Credit Agreement

Credit Agreement	9 Months Ended
	Sep. 30, 2016
Credit Agreement
Credit Agreement	5. Credit Agreement On December 30, 2014, we entered into a Credit Agreement with Healthcare Financial Solutions, LLC (“HFS”), previously the General Electric Capital Corporation, as agent for the lenders (“Lenders”), and as a lender and swingline lender. Pursuant to the Credit Agreement, the Lenders agreed to make loans to us as follows: (i) Term Loans in an amount of $25,000 as of the closing date with an uncommitted ability to increase such Term Loans up to an amount not to exceed $10,000 and (ii) Revolving Loans up to $15,000. As of September 30, 2016, $14,500 was drawn on the Revolving Loans. The loan, inclusive of Term Loans and Revolving Loans, is recorded on our consolidated balance sheets as of September 30, 2016 in the amount of $36,920, which is net of a debt discount and deferred charges of $705. The loan bears interest at an annual rate of LIBOR plus 4.0%, subject to a LIBOR floor of 1.0%. The outstanding principal of the Term Loans will be paid as follows: (i) beginning April 1, 2015, the principal amount of the Term Loans will be repaid, on a quarterly basis, in installments of $312, plus accrued interest; (ii) beginning January 1, 2018, the principal amount of the Term Loans will be repaid, on a quarterly basis, in installments of $625, plus accrued interest; and (iii) the remaining $16,563, along with any outstanding Revolving Loans, will be paid in full on or before December 30, 2019, or such earlier date upon an acceleration of the Term Loans by the Lenders upon an event of default or termination by us. The loan is secured by substantially all of our assets and by a pledge of the capital stock of our U.S. based subsidiaries, as well as a pledge of 65% of the capital stock of the Company’s foreign subsidiaries. The Credit Agreement contains affirmative and financial covenants regarding the operations of our business and certain negative covenants that, among other things, limit our ability to incur additional indebtedness, grant certain liens, make certain investments, merge or consolidate, make certain restricted payments and engage in certain asset dispositions, including a sale of all, or substantially all, of our property. As of September 30, 2016, we were in compliance with all covenants.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2016
Stockholders' Equity
Stockholders' Equity	6. Stockholders’ Equity Stock-Based Compensation Stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”) and performance stock options (“PSOs”) are granted under the BioTelemetry, Inc. 2008 Equity Incentive Plan (“EIP”). In January 2016, the number of shares available for grant was increased by 1,091,118 shares, per the EIP documents. At September 30, 2016, 2,744,028 shares remain available for grant under the EIP. We recognized $1,138 and $1,139 of stock-based compensation expense for the three months ended September 30, 2016 and 2015, respectively. We recognized $3,757 and $3,321 of stock-based compensation expense for the nine months ended September 30, 2016 and 2015, respectively. Stock option, RSU and PSU activity is summarized as follows: Stock Options Restricted Stock Units Performance Stock Units Number of Weighted Number of Weighted Average Number of Weighted Average Stock outstanding as of December 31, 2015 $ $ $ Granted — — Cancelled/forfeited ) ) — — Exercised/vested ) ) — — Stock outstanding as of March 31, 2016 $ $ $ Granted — — Cancelled/forfeited ) — — — — Exercised/vested ) ) ) Stock outstanding as of June 30, 2016 $ $ $ Granted — — — — Cancelled/forfeited ) ) — — Exercised/vested ) ) — — Stock outstanding as of September 30, 2016 $ $ $ Stock-based compensation expense is only recognized for outstanding PSUs where the performance conditions are deemed probable for achievement. For PSUs deemed probable for achievement, stock-based compensation expense is recognized ratably over the expected vesting period. For the three and nine months ended September 30, 2016 we incurred PSU expenses of $0 and $444, respectively. No stock-based compensation expense was recorded on our PSUs for the three and nine months ended September 30, 2015. As of September 30, 2016 the Company has not deemed it probable that the outstanding PSUs will vest. In 2015, 200,000 PSOs were granted to a non-employee. There were no forfeitures or vesting of PSOs during the three or nine months ended September 30, 2016. Stock-based compensation expense will only be recognized once the performance conditions of the outstanding PSOs have been met. Through September 30, 2016, no stock-based compensation expense has been recognized related to the PSOs. Employee Stock Purchase Plan In the nine months ended September 30, 2016, 150,888 shares were purchased in accordance with the Employee Stock Purchase Plan (“ESPP”). Net proceeds from the issuance of shares of common stock under the ESPP for the nine months ended September 30, 2016 were $1,050. In January 2016, the number of shares available for grant was increased by 272,779 shares, per the ESPP documents. At September 30, 2016, 625,176 shares remain available for purchase under the ESPP.

Other Charges

Other Charges	9 Months Ended
	Sep. 30, 2016
Other Charges
Other Charges	7. Other Charges We account for expenses associated with exit or disposal activities in accordance with ASC 420, Exit or Disposal Cost Obligations, and record the expenses in other charges in our consolidated statements of operations and comprehensive income and record the related accrual in the accrued liabilities line on our consolidated balance sheets. These costs are primarily disclosed as severance and employee related costs below. We account for expenses associated with integration and certain litigation as other charges as incurred. These expenses were primarily a result of legal fees related to patent litigation and activities surrounding our acquisitions. A summary of these expenses is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Legal fees $ $ $ $ Professional fees Severance and employee related costs Other costs — — Total $ $ $ $

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Taxes
Income Taxes	8. Income Taxes The income tax provision for interim periods is determined using an estimated annual effective tax rate adjusted for discrete items, if any, which are taken into account in the quarterly period in which they occur. We review and update our estimated annual effective tax rate each quarter. At September 30, 2016, our estimated annual effective tax rate was 4.78%. Income tax expense of $529 was recorded for the nine months ended September 30, 2016, primarily due to Alternative Minimum Tax (“AMT”) levied on current year taxable income, net of allowable AMT net operating loss carryovers. At September 30, 2015, our estimated annual effective tax rate was 5.57%. We recorded a tax provision of $260 for the nine months ended September 30, 2015, which includes a discrete charge of $117 related to a deferred tax liability recorded for indefinite-lived intangibles. As of September 30, 2016, in accordance with ASC 740, Income Taxes , we maintained a full valuation allowance against net deferred tax assets, with the exception of the deferred tax liability recorded for indefinite-lived intangibles. We will continue to maintain a full valuation allowance until such time we can reasonably estimate the probability of realizing a benefit from our deferred tax assets.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2016
Segment Information
Segment Information	9. Segment Information We operate under three segments: Healthcare, Research and Technology. The Healthcare segment is focused on the diagnosis and monitoring of cardiac arrhythmias or heart rhythm disorders with our comprehensive suite of cardiac monitoring solutions in a healthcare setting. Our Research segment is engaged in central core laboratory services providing cardiac monitoring, imaging, scientific consulting and data management services for drug and medical device trials. The Technology segment focuses on the development, manufacturing, testing and marketing of medical devices to medical companies, clinics and hospitals. Intercompany revenues relating to the manufacturing of devices by the Technology segment for the other segments is included on the intersegment revenues line. Expenses that can be specifically identified with a segment have been included as deductions in determining pre-tax segment income. Any remaining expenses, including research and development costs incurred by the Technology segment for the benefit of the other segments, as well as the elimination of costs associated with intercompany revenues are included in Corporate and Other. Also included in Corporate and Other is our net interest expense and other financing expenses as well as the loss from equity method investments. We do not allocate assets to the individual segments. For the three months ended: Healthcare Research Technology Corporate and Consolidated September 30, 2016 Revenues $ $ $ — $ Intersegment revenues — — $ ) — Income (loss) before income taxes ) Depreciation and amortization ) Capital expenditures — Healthcare Research Technology Corporate and Consolidated September 30, 2015 Revenues $ $ $ — $ Intersegment revenues — $ ) — Income (loss) before income taxes ) Depreciation and amortization Capital expenditures — — For the nine months ended: Healthcare Research Technology Corporate Consolidated September 30, 2016 Revenues $ $ $ — $ Intersegment revenues — — $ ) — Income (loss) before income taxes ) Depreciation and amortization ) Capital expenditures — Healthcare Research Technology Corporate Consolidated September 30, 2015 Revenues $ $ $ — $ Intersegment revenues — $ ) — Income (loss) before income taxes ) Depreciation and amortization Capital expenditures —

Subsequent events

Subsequent events	9 Months Ended
	Sep. 30, 2016
Subsequent Events
Subsequent Events	10. Subsequent Events On October 4, 2016, the performance condition for 100,000 of the outstanding PSOs was met. As a result of meeting the performance obligation, 100,000 options vested, with an exercise price of $18.33. The stock-based compensation expense related to these PSOs will be recognized in the fourth quarter of 2016. On October 11, 2016, we repaid $11,500 of Revolving Loans. As of November 3, 2016, $3,000 of Revolving Loans remains drawn. Under the Credit Agreement, we have the ability to draw up to $15,000 of Revolving Loans.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies
Net Income Per Share	Net Income Per Share We compute net income per share in accordance with Accounting Standards Codification (“ASC”) 260, Earnings Per Share. Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by giving effect to all potential dilutive common shares, including stock options and restricted stock units. The following table presents the calculation of basic net income per share: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (Net income in thousands) Numerator: Net income $ $ $ $ Denominator: Weighted average shares used in computing basic net income per share Potential dilutive common shares due to dilutive stock option and restricted stock units Weighted average shares used in computing diluted net income per share Net income per share: Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $ Certain stock options, which are priced higher than the market price of our shares as of September 30, 2016 and 2015, would be anti-dilutive and therefore have been excluded from the weighted average shares used in computing diluted net income per share. These options could become dilutive in future periods.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The fair value of financial instruments is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. We have financial instruments falling into all three levels of the fair value hierarchy. Our Level 1 financial instruments consist primarily of cash and cash equivalents, accounts receivable, other accounts receivable and accounts payable. The carrying value of these financial instruments approximates their fair value because of their short-term nature. Long-term debt, which is given a Level 2 classification within the fair value hierarchy, was determined to have a fair value of $37,767 as of September 30, 2016. This is equal to the nominal value, which is the carrying value, exclusive of debt discount and deferred charges. The fair value of contingent consideration, which is a Level 3 fair value instrument, is measured on a recurring basis using unobservable inputs such as projected payment dates, probabilities of meeting specified milestones and other such variables resulting in payment amounts which are discounted back to present value using a probability-weighted discounted cash flow model. In addition to our recurring fair value measurements, we have assets acquired in connection with business combinations, which are recorded at fair value on the acquisition date using a discounted cash flow model, which is a Level 3 classification. This valuation technique requires the Company to make certain assumptions, including, but not limited to, future operating performance and cash flows, royalty rates and other such variables which are discounted to present value using a discount rate that reflects the risk factors associated with future operating cash flow of the acquired business, the characteristics of the assets acquired and liabilities assumed and the experience of the acquired business.
Equity Method Investments	Equity Method Investments We account for investments using the equity method of accounting if the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets as a component of other assets and is periodically adjusted for capital contributions, dividends received and our share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded as a component of interest and other loss, net in the consolidated statements of operations and comprehensive income. In December 2015, we acquired an ownership interest in Well Bridge Health, Inc. (“WellBridge”) through the conversion of an outstanding note receivable and the related accrued interest. The investment is accounted for under the equity method. At the time of the acquisition, the equity method basis difference of $891 was allocated to equity method goodwill. As of September 30, 2016, our investment in WellBridge represented 32% of the outstanding stock. A summary of our investment in Wellbridge is as follows: Three Months Ended Nine Months Ended Opening balance $ $ Capital contributions Our share of the investee’s losses ) ) September 30, 2016 Balance $ $
Goodwill and Acquired Intangible Assets	Goodwill and Acquired Intangible Assets Goodwill is the excess of the purchase price of an acquired business over the amounts assigned to the assets acquired and liabilities assumed in a business combination. In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill is reviewed for impairment annually, or when events arise that could indicate that an impairment exists. The provisions of ASC 350 require that we perform a two-step impairment test. In the first step, we compare the fair value of our reporting units to the carrying value of the reporting units. If the carrying value of the net assets assigned to the reporting units exceeds the fair value of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting units’ goodwill. If the carrying value of the reporting units’ goodwill exceeds the implied fair value, an impairment loss equal to the difference is recorded. For the purpose of performing our goodwill impairment analysis, we consider our business to be comprised of three reporting units: Healthcare, Research and Technology. We calculate the fair value of the reporting units utilizing a weighting of the income and market approaches. The income approach is based on a discounted cash flow methodology that includes assumptions for, among other things, forecasted income, cash flow, growth rates, income tax rates, expected tax benefits and long-term discount rates, all of which require significant judgment. The market approach utilizes our market data. There are inherent uncertainties related to these factors and the judgment applied in the analysis. We believe that the combination of an income and a market approach provides a reasonable basis to estimate the fair value of our reporting units. Acquired intangible assets are recorded at fair value on the acquisition date. The estimated fair values and useful lives of intangible assets are determined by assessing many factors including estimates of future operating performance and cash flow of the acquired business, the characteristics of the intangible assets acquired and the experience of the acquired business. Independent appraisal firms may assist with the valuation of acquired assets. The impairment test for indefinite-lived intangible assets other than goodwill consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset.
Recent Accounting Pronouncements Not Yet Adopted	Recent Accounting Pronouncements Not Yet Adopted In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting . The standard will revise accounting for share-based compensation arrangements, including the income tax impact and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . The standard will require lessees to recognize most leases on their balance sheet and makes selected changes to lessor accounting. The standard is effective for annual and interim reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required, with certain practical expedients available. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory . The standard will require inventory to be measured at the lower of cost or net realizable value. The guidance will not apply to inventories for which cost is determined using the last-in, first-out method or the retail inventory method. The standard is effective for annual and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which has been updated through several revisions and clarifications since its original issuance. The standard will require revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which a company expects to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. The standard will be effective January 1, 2018 with early adoption permissible beginning January 1, 2017. We are currently evaluating the transition method we will elect and the impact the adoption of this standard will have on our consolidated financial statements.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2016
Summary of Significant Accounting Policies
Schedule of calculation of basic and diluted net income per share	Three Months Ended Nine Months Ended 2016 2015 2016 2015 (Net income in thousands) Numerator: Net income $ $ $ $ Denominator: Weighted average shares used in computing basic net income per share Potential dilutive common shares due to dilutive stock option and restricted stock units Weighted average shares used in computing diluted net income per share Net income per share: Basic net income per share $ $ $ $ Diluted net income per share $ $ $ $
Summary of investment	Three Months Ended Nine Months Ended Opening balance $ $ Capital contributions Our share of the investee’s losses ) ) September 30, 2016 Balance $ $

Acquisitions (Tables)

Acquisitions (Tables)	9 Months Ended
	Sep. 30, 2016
Acquisitions
Summary of changes in contingent consideration	Total Contingent Consideration Balance at December 31, 2015 — Purchase price contingent consideration $ Balance at September 30, 2016 $
VirtualScopics
Acquisitions
Schedule of total consideration and related allocation for net assets acquired	Amount Fair value of assets acquired: Cash and cash equivalents $ Other accounts receivable Inventory Prepaid expenses and other current assets Weighted Property and equipment Average Life Identifiable intangible assets: (Years) Customer relationships 12 Technology 10 Backlog 4 Total identifiable intangible assets Total assets acquired Fair value of liabilities assumed: Accounts payable Accrued liabilities Current portion of capital lease obligations Current portion of long-term debt Deferred revenue Long-term capital lease obligations Long-term debt Total liabilities assumed Total identifiable net assets Goodwill Net assets acquired $
Schedule of unaudited pro forma financial information	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue $ $ $ $ Net income $ $ $ $ Net income per common share: Basic $ $ $ $ Diluted $ $ $ $ Weighted average number of common shares outstanding: Basic Diluted
ePatch Division
Acquisitions
Schedule of total consideration and related allocation for net assets acquired	Amount Fair value of assets acquired: Inventory $ Weighted Property and equipment Average Life Identifiable intangible assets: (Years) Customer relationships 10 Technology 10 Trade names Indefinite Total identifiable intangible assets Total assets acquired Fair value of liabilities assumed: Accrued liabilities Total liabilities assumed Total identifiable net assets Goodwill Net assets acquired $

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2016
Inventory
Schedule of inventory	September 30, 2016 December 31, 2015 Raw materials $ $ Finished goods Total inventory $ $

Intangible Assets and Goodwill

Intangible Assets and Goodwill (Tables)	9 Months Ended
	Sep. 30, 2016
Intangible Assets and Goodwill
Schedule of changes in the carrying amounts of goodwill by segment	Reporting Segment Healthcare Research Technology Total Balance at December 31, 2015 $ $ $ $ Goodwill acquired during the year — Impact of foreign exchange — — Balance at September 30, 2016 $ $ $ $
Schedule of gross carrying amounts and accumulated amortization of the entity's intangible assets	Estimated September 30, December 31, Customer relationships 5 - 15 $ $ Technology, including internally developed software 3 - 10 Signed backlog 1 - 4 Unsigned backlog 4 Covenants not to compete 5 - 7 Total intangible assets, gross Customer relationships accumulated amortization ) ) Technology accumulated amortization ) ) Signed backlog accumulated amortization ) ) Unsigned backlog accumulated amortization ) ) Covenants not to compete accumulated amortization ) ) Total accumulated amortization ) ) Indefinite-lived trade names Total intangible assets, net $ $
Summary of estimated amortization expense for the next five years	The estimated amortization expense for the next five years and thereafter is summarized as follows at September 30, 2016: Remainder of 2016 $ 2017 2018 2019 2020 2021 Thereafter Total estimated amortization $

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2016
Stockholders' Equity
Summary of stock option and restricted stock units and performance stock units activity	Stock Options Restricted Stock Units Performance Stock Units Number of Weighted Number of Weighted Average Number of Weighted Average Stock outstanding as of December 31, 2015 $ $ $ Granted — — Cancelled/forfeited ) ) — — Exercised/vested ) ) — — Stock outstanding as of March 31, 2016 $ $ $ Granted — — Cancelled/forfeited ) — — — — Exercised/vested ) ) ) Stock outstanding as of June 30, 2016 $ $ $ Granted — — — — Cancelled/forfeited ) ) — — Exercised/vested ) ) — — Stock outstanding as of September 30, 2016 $ $ $

Other Charges (Tables)

Other Charges (Tables)	9 Months Ended
	Sep. 30, 2016
Other Charges
Summary of expenses related to other charges	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Legal fees $ $ $ $ Professional fees Severance and employee related costs Other costs — — Total $ $ $ $

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2016
Segment Information
Summary of financial information concerning the entity's reportable segments	For the three months ended: Healthcare Research Technology Corporate and Consolidated September 30, 2016 Revenues $ $ $ — $ Intersegment revenues — — $ ) — Income (loss) before income taxes ) Depreciation and amortization ) Capital expenditures — Healthcare Research Technology Corporate and Consolidated September 30, 2015 Revenues $ $ $ — $ Intersegment revenues — $ ) — Income (loss) before income taxes ) Depreciation and amortization Capital expenditures — — For the nine months ended: Healthcare Research Technology Corporate Consolidated September 30, 2016 Revenues $ $ $ — $ Intersegment revenues — — $ ) — Income (loss) before income taxes ) Depreciation and amortization ) Capital expenditures — Healthcare Research Technology Corporate Consolidated September 30, 2015 Revenues $ $ $ — $ Intersegment revenues — $ ) — Income (loss) before income taxes ) Depreciation and amortization Capital expenditures —

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Net Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerator:
Net income	$ 4,101	$ 2,478	$ 12,406	$ 4,580
Denominator:
Weighted average shares used in computing basic net income per share	28,102,196	27,181,250	27,810,763	27,062,630
Potential dilutive common shares due to dilutive stock option and restricted stock units	2,231,381	2,129,810	2,046,462	1,956,511
Weighted average shares used in computing diluted net income per share	30,333,577	29,311,060	29,857,225	29,019,141
Net income per share:
Basic net income per share	$ 0.15	$ 0.09	$ 0.45	$ 0.17
Diluted net income per share	$ 0.14	$ 0.08	$ 0.42	$ 0.16

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) $ in Thousands	Sep. 30, 2016USD ($)
Summary of Significant Accounting Policies
Fair value of long-term debt	$ 37,767

Summary of Significant Accoun26

Summary of Significant Accounting Policies - Equity Method Investments (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2016USD ($)segment	Sep. 30, 2016USD ($)
Segment Information
Number of reportable segments | segment		3
Well Bridge Health, Inc
Equity Method Investments
Equity method investment	$ 985	$ 1,100	$ 1,228
Percentage of ownership acquired			32.00%
Summary of investments
Beginning balance	985	1,100
Capital contributions	312	312
Our share of the investee's losses	(69)	(184)
Ending balance	$ 1,228	1,228
Well Bridge Health, Inc | Goodwill
Equity Method Investments
Equity method investment		891
Summary of investments
Beginning balance		$ 891

Acquisitions - VirtualScopics,

Acquisitions - VirtualScopics, Inc. (Details) - USD ($)	May 11, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Acquisitions
Common stock, par value (in dollars per share)		$ 0.001		$ 0.001	$ 0.001		$ 0.001
Total consideration paid, net of cash acquired					$ 17,970,000
Fair value of liabilities assumed:
Goodwill		$ 37,251,000		$ 37,251,000	37,251,000		$ 29,831,000
Revenues		53,055,000	$ 43,492,000		154,375,000	$ 131,739,000
Net income		4,101,000	$ 2,478,000		12,406,000	$ 4,580,000
VirtualScopics
Acquisitions
Total consideration paid, net of cash acquired	$ 14,970,000
Maximum period for finalizing accounting for acquisition from acquisition date (in years)	1 year
Fair value of assets acquired:
Cash and cash equivalents		849,000		849,000	849,000
Other accounts receivable		3,679,000		3,679,000	3,679,000
Inventory		111,000		111,000	111,000
Prepaid expenses and other current assets		396,000		396,000	396,000
Property and equipment		521,000		521,000	521,000
Identifiable intangible assets:
Total identifiable intangible assets		10,300,000		10,300,000	10,300,000
Total assets acquired		15,856,000		15,856,000	15,856,000
Fair value of liabilities assumed:
Accounts payable		325,000		325,000	325,000
Accrued liabilities		3,081,000		3,081,000	3,081,000
Current portion of capital lease obligations		59,000		59,000	59,000
Current portion of long-term debt		66,000		66,000	66,000
Deferred revenue		700,000		700,000	700,000
Long-term capital lease obligations		162,000		162,000	162,000
Long-term debt		97,000		97,000	97,000
Total liabilities assumed		4,490,000		4,490,000	4,490,000
Total identifiable net assets		11,366,000		11,366,000	11,366,000
Goodwill		4,453,000		4,453,000	4,453,000
Net assets acquired		15,819,000		15,819,000	15,819,000
Revenues				7,774,000
Net income				1,091,000
VirtualScopics | Customer relationships
Identifiable intangible assets:
Total identifiable intangible assets		5,200,000		5,200,000	$ 5,200,000
Weighted Average Life (Years)					12 years
VirtualScopics | Technology
Identifiable intangible assets:
Total identifiable intangible assets		2,000,000		2,000,000	$ 2,000,000
Weighted Average Life (Years)					10 years
VirtualScopics | Backlog
Identifiable intangible assets:
Total identifiable intangible assets		$ 3,100,000		$ 3,100,000	$ 3,100,000
Weighted Average Life (Years)					4 years
VirtualScopics | Common Stock
Acquisitions
Common stock, par value (in dollars per share)	$ 0.001
Share price (in dollars per share)	4.05
Series A and B Convertible Preferred Stock | VirtualScopics
Acquisitions
Share price (in dollars per share)	336.30
Preferred stock, par value (in dollars per share)	0.001
Series C-1 Convertible Preferred Stock | VirtualScopics
Acquisitions
Share price (in dollars per share)	920
Preferred stock, par value (in dollars per share)	$ 0.001

Acquisitions - Pro Forma Financ

Acquisitions - Pro Forma Financial Information VirtualScopics (Details) - VirtualScopics - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pro Forma Financial Information
Revenue	$ 53,055	$ 46,716	$ 160,313	$ 140,797
Net income	$ 4,353	$ 2,616	$ 13,996	$ 4,157
Net income per common share:
Basic (in dollars per share)	$ 0.15	$ 0.10	$ 0.50	$ 0.15
Diluted (in dollars per share)	$ 0.14	$ 0.09	$ 0.47	$ 0.14
Weighted average number of common shares outstanding:
Basic (in shares)	28,102,196	27,181,250	27,810,763	27,062,630
Diluted (in shares)	30,333,577	29,311,060	29,857,225	29,019,141

Acquisitions - ePatch Division

Acquisitions - ePatch Division of DELTA Danish Electronics, Light, and Acoustics (Details) - USD ($) $ in Thousands	Apr. 01, 2016	Sep. 30, 2016	Dec. 31, 2015
Fair value of liabilities assumed:
Goodwill		$ 37,251	$ 29,831
Technology
Fair value of liabilities assumed:
Goodwill		6,124	$ 3,157
ePatch Division
Acquisitions
Cash consideration	$ 3,000
Consideration in common stock (in shares)	244,519
Consideration in common stock	$ 2,885
Maximum performance based earn out	3,000
Total consideration transferred	$ 6,490
Maximum period for finalizing accounting for acquisition from acquisition date (in years)	1 year
Fair value of assets acquired:
Inventory		100
Property and equipment		175
Identifiable intangible assets:
Total identifiable intangible assets		3,500
Total assets acquired		3,775
Fair value of liabilities assumed:
Accrued liabilities		250
Total liabilities assumed		250
Total identifiable net assets		3,525
Goodwill		2,965
Net assets acquired		6,490
ePatch Division | Customer relationships
Identifiable intangible assets:
Total identifiable intangible assets		$ 400
Weighted Average Life (Years)		10 years
ePatch Division | Technology
Identifiable intangible assets:
Total identifiable intangible assets		$ 3,000
Weighted Average Life (Years)		10 years
ePatch Division | Trade Names
Identifiable intangible assets:
Total identifiable intangible assets		$ 100

Acquisitions - Contingent Consi

Acquisitions - Contingent Consideration (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Apr. 01, 2016
Contingent Consideration
Fair value of contingent consideration	$ 605
Summary of changes in contingent consideration
Purchase price contingent consideration	605
Ending balance	605
ePatch Division
Contingent Consideration
Maximum performance based earn out		$ 3,000
ePatch Division | Other liabilities
Contingent Consideration
Fair value of contingent consideration	605
Summary of changes in contingent consideration
Ending balance	$ 605

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventory
Raw materials	$ 3,123	$ 2,115
Finished goods	687	263
Total inventory	$ 3,810	$ 2,378

Intangible Assets and Goodwil32

Intangible Assets and Goodwill - Changes In Carrying Amounts (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Changes in the carrying amounts of goodwill by segment
Balance at the beginning of the period	$ 29,831
Goodwill acquired during the year	7,418
Impact of foreign exchange	2
Balance at the end of the period	37,251
VirtualScopics
Changes in the carrying amounts of goodwill by segment
Balance at the end of the period	4,453
ePatch Division
Changes in the carrying amounts of goodwill by segment
Balance at the end of the period	2,965
Healthcare
Changes in the carrying amounts of goodwill by segment
Balance at the beginning of the period	14,724
Balance at the end of the period	14,724
Research Services
Changes in the carrying amounts of goodwill by segment
Balance at the beginning of the period	11,950
Balance at the end of the period	16,403
Research Services | VirtualScopics
Changes in the carrying amounts of goodwill by segment
Goodwill acquired during the year	4,453
Technology
Changes in the carrying amounts of goodwill by segment
Balance at the beginning of the period	3,157
Impact of foreign exchange	2
Balance at the end of the period	6,124
Technology | ePatch Division
Changes in the carrying amounts of goodwill by segment
Goodwill acquired during the year	$ 2,965

Intangible Assets and Goodwil33

Intangible Assets and Goodwill - Gross Carrying Amounts and Accumulated Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Intangible assets
Total intangible assets, gross	$ 43,282		$ 43,282		$ 29,022
Total accumulated amortization	(14,276)		(14,276)		(11,541)
Total intangible assets, net	31,606		31,606		19,981
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2016	1,081		1,081
2,017	5,019		5,019
2,018	4,533		4,533
2,019	4,046		4,046
2,020	3,495		3,495
2,021	2,198		2,198
Thereafter	8,634		8,634
Total estimated amortization	29,006		29,006
Amortization of Intangible Assets	1,062	$ 896	2,735	$ 2,781
Trade Names
Intangible assets
Indefinite-lived trade names	2,600		2,600		2,500
Customer relationships
Intangible assets
Total intangible assets, gross	16,300		16,300		10,700
Total accumulated amortization	(3,443)		$ (3,443)		(2,520)
Customer relationships | Minimum
Intangible assets
Estimated Useful Life (Years)			5 years
Customer relationships | Maximum
Intangible assets
Estimated Useful Life (Years)			15 years
Technology, including internally developed software
Intangible assets
Total intangible assets, gross	19,082		$ 19,082		13,522
Total accumulated amortization	(6,240)		$ (6,240)		(5,422)
Technology, including internally developed software | Minimum
Intangible assets
Estimated Useful Life (Years)			3 years
Technology, including internally developed software | Maximum
Intangible assets
Estimated Useful Life (Years)			10 years
Signed backlog
Intangible assets
Total intangible assets, gross	6,260		$ 6,260		3,160
Total accumulated amortization	(3,357)		$ (3,357)		(2,609)
Signed backlog | Minimum
Intangible assets
Estimated Useful Life (Years)			1 year
Signed backlog | Maximum
Intangible assets
Estimated Useful Life (Years)			4 years
Unsigned backlog
Intangible assets
Estimated Useful Life (Years)			4 years
Total intangible assets, gross	600		$ 600		600
Total accumulated amortization	(600)		(600)		(500)
Covenants not to compete
Intangible assets
Total intangible assets, gross	1,040		1,040		1,040
Total accumulated amortization	$ (636)		$ (636)		$ (490)
Covenants not to compete | Minimum
Intangible assets
Estimated Useful Life (Years)			5 years
Covenants not to compete | Maximum
Intangible assets
Estimated Useful Life (Years)			7 years

Credit Agreement (Details)

Credit Agreement (Details) - USD ($) $ in Thousands	Dec. 30, 2014	Sep. 30, 2016
HSF | Term Loan
Credit Agreement
Maximum borrowing capacity	$ 25,000
Additional uncommitted borrowing capacity	10,000
HSF | Revolving Loan
Credit Agreement
Maximum borrowing capacity	15,000
Amount drawn on credit borrowing		$ 14,500
HSF | Term Loans and Revolving Loans
Credit Agreement
Loan balance net of original issue discount		36,920
Debt discount and deferred charges		$ 705
GE Capital
Credit Agreement
Percentage of capital stock of Cardiocore Lab Ltd. and BioTelemetry Belgium pledged to secure loan		65.00%
GE Capital | LIBOR
Credit Agreement
Debt instrument, basis spread on variable rate (as a percent)		4.00%
LIBOR floor (as a percent)		1.00%
GE Capital | Term Loan | April 2015 to December 2017
Credit Agreement
Principal amount of quarterly installment payments	312
GE Capital | Term Loan | January 2018 to September 2019
Credit Agreement
Principal amount of quarterly installment payments	625
GE Capital | Term Loan | October 2019 to December 2019
Credit Agreement
Principal amount of quarterly installment payments	$ 16,563

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended				9 Months Ended		12 Months Ended
	Jan. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Stock-Based Compensation
Stock based compensation		$ 1,138			$ 1,139	$ 3,757	$ 3,321
Stock options
Number of Shares
Balance at the beginning of the period (in shares)	3,420,519	3,593,098	3,557,717	3,420,519		3,420,519
Granted (in shares)		25,000	100,000	282,270
Cancelled/forfeited (in shares)		(20,050)	(7,600)	(19,422)
Exercised (in shares)		(121,178)	(57,019)	(125,650)
Balance at the end of the period (in shares)		3,476,870	3,593,098	3,557,717		3,476,870		3,420,519
Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 6.69	$ 7.33	$ 7.04	$ 6.69		$ 6.69
Granted (in dollars per share)		17.74	16.61	9.67
Cancelled (in dollars per share)		12.13	9.78	8.38
Exercised (in dollars per share)		5.17	4.94	3.37
Balance at the end of the period (in dollars per share)		$ 7.45	$ 7.33	$ 7.04		$ 7.45		$ 6.69
RSUs
Number of Shares
Balance at the beginning of the period (in shares)	690,936	620,696	588,950	690,936		690,936
Granted (in shares)			47,986	177,212
Forfeited (in shares)		(2,000)		(7,405)
Vested (in shares)		(11,367)	(16,240)	(271,793)
Balance at the end of the period (in shares)		607,329	620,696	588,950		607,329		690,936
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per shares)	$ 6.85	$ 10.06	$ 9.57	$ 6.85		$ 6.85
Granted (in dollars per share)			15.44	9.87
Forfeited (in dollars per share)		7.44		9.57
Vested (in dollars per share)		15.42	8.01	2.87
Balance at the end of the period (in dollars per shares)		$ 9.97	$ 10.06	$ 9.57		$ 9.97		$ 6.85
PSUs
Stock-Based Compensation
Stock based compensation		$ 0			$ 0	$ 444	$ 0
Number of Shares
Balance at the beginning of the period (in shares)	265,990	132,992	265,990	265,990		265,990
Vested (in shares)			(132,998)
Balance at the end of the period (in shares)		132,992	132,992	265,990		132,992		265,990
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per shares)	$ 8.68	$ 8.68	$ 8.68	$ 8.68		$ 8.68
Vested (in dollars per share)			8.68
Balance at the end of the period (in dollars per shares)		$ 8.68	$ 8.68	$ 8.68		$ 8.68		$ 8.68
PSOs
Stock-Based Compensation
Stock based compensation						$ 0
Number of Shares
Granted (in shares)								200,000
Number of Shares
Forfeited (in shares)		0				0
Vested (in shares)		0				0
2008 Option Plan
Stock-Based Compensation
Common stock available for grant (in shares)		2,744,028				2,744,028
2008 Option Plan | Stock options
Stock-Based Compensation
Increase in the number of options available to be granted (in shares)	1,091,118

Stockholders' Equity - Employee

Stockholders' Equity - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jan. 31, 2016	Sep. 30, 2016
Employee stock purchase plan
Common stock purchased (in shares)		150,888
Net proceeds from the issuance of shares of common stock (in dollars)		$ 1,050
Increase in number of shares available for grant	272,779
Number of remaining shares available for purchase		625,176

Other Charges (Details)

Other Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Other Charges
Legal fees	$ 1,965	$ 1,377	$ 4,576	$ 4,176
Professional fees	144	13	590	37
Severance and employee related costs	238	2	561	249
Other costs	50		117
Total	$ 2,397	$ 1,392	$ 5,844	$ 4,462

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Taxes
Estimated annual effective tax rate (as a percent)	4.78%	5.57%
Income tax expense (benefit)	$ 235	$ 137	$ 529	$ 260
Mednet
Income Taxes
Income tax expense (benefit)				(260)
State income tax expense (benefit)				$ 117

Segment Information (Details)

Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)
Segment information
Number of operating segments | item			3
Revenues	$ 53,055	$ 43,492	$ 154,375	$ 131,739
Income (loss) before income taxes	4,336	2,615	12,935	4,840
Depreciation and amortization	3,689	3,165	10,619	9,124
Capital expenditures	2,815	3,641	8,507	10,310
Healthcare
Segment information
Revenues	40,395	35,687	123,709	106,923
Capital expenditures	2,481	2,530	6,797	6,860
Research Services
Segment information
Revenues	10,420	5,484	23,709	16,353
Capital expenditures	327	1,111	1,677	3,380
Technology
Segment information
Revenues	2,240	2,321	6,957	8,463
Capital expenditures	7		33	70
Operating segments | Healthcare
Segment information
Revenues		1		5
Income (loss) before income taxes	14,722	11,141	44,504	31,020
Depreciation and amortization	2,434	1,820	7,415	5,482
Operating segments | Research Services
Segment information
Income (loss) before income taxes	1,442	148	1,847	350
Depreciation and amortization	1,180	1,053	3,064	2,894
Operating segments | Technology
Segment information
Revenues	3,396	3,476	9,070	7,490
Income (loss) before income taxes	1,059	1,276	2,752	3,548
Depreciation and amortization	141	93	333	278
Corporate and Other
Segment information
Revenues	(3,396)	(3,477)	(9,070)	(7,495)
Income (loss) before income taxes	(12,887)	(9,950)	(36,168)	(30,078)
Depreciation and amortization	$ (66)	$ 199	$ (193)	$ 470

Subsequent (Details)

Subsequent (Details) - USD ($) $ / shares in Units, $ in Thousands	Oct. 11, 2016	Oct. 04, 2016	Nov. 03, 2016	Sep. 30, 2016	Dec. 30, 2014
Subsequent event | PSOs
Subsequent events
Stock outstanding (in shares)		100,000
Options vested (in shares)		100,000
Exercise price (in dollars per share)		$ 18.33
HSF | Revolving Loan
Subsequent events
Amount drawn on credit borrowing				$ 14,500
Maximum borrowing capacity					$ 15,000
HSF | Subsequent event | Revolving Loan
Subsequent events
Repayments under revolving credit facility	$ 11,500
Amount drawn on credit borrowing			$ 3,000