Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | Tabula Rasa HealthCare, Inc. | ||
Entity Central Index Key | 1,651,561 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 148,490,000 | ||
Entity Common Stock, Shares Outstanding | 20,013,491 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 10,430 | $ 4,345 |
Accounts receivable, net | 17,087 | 6,646 |
Inventories | 2,795 | 2,911 |
Rebates receivable | 342 | 312 |
Prepaid expenses | 2,253 | 869 |
Other current assets | 702 | 581 |
Total current assets | 33,609 | 15,664 |
Property and equipment, net | 9,243 | 6,409 |
Software development costs, net | 5,001 | 3,350 |
Goodwill | 74,613 | 21,686 |
Intangible assets, net | 62,736 | 25,297 |
Other assets | 788 | 333 |
Total assets | 185,990 | 72,739 |
Current liabilities: | ||
Current portion of long-term debt | 921 | 674 |
Acquisition-related consideration payable | 568 | |
Acquisition-related contingent consideration | 1,640 | 1,493 |
Accounts payable | 16,218 | 6,115 |
Accrued expenses and other liabilities | 8,988 | 2,159 |
Total current liabilities | 27,767 | 11,009 |
Long-term debt | 784 | 1,072 |
Long-term acquisition-related contingent consideration | 31,789 | 1,515 |
Deferred income tax liability | 545 | 832 |
Other long-term liabilities | 2,615 | 2,205 |
Total liabilities | 63,500 | 16,633 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2017 and December 31, 2016 | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, 19,371,005 and 16,628,476 shares issued and 19,297,539 and 16,628,476 shares outstanding at December 31, 2017 and December 31, 2016, respectively | 2 | 2 |
Additional paid-in capital | 144,074 | 91,027 |
Treasury stock, at cost; 73,466 and no shares at December 31, 2017 and December 31, 2016, respectively | (959) | |
Accumulated deficit | (20,627) | (34,923) |
Total stockholders' equity | 122,490 | 56,106 |
Total liabilities and stockholders' equity | $ 185,990 | $ 72,739 |
CONSOLIDATED BALANCE SHEETS (pa
CONSOLIDATED BALANCE SHEETS (parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,371,005 | 16,628,476 |
Common stock, shares outstanding | 19,297,539 | 16,628,476 |
Treasury stock (in shares) | 73,466 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Product revenue | $ 98,523 | $ 79,446 | $ 60,060 |
Service revenue | 36,023 | 14,616 | 9,979 |
Total revenue | 134,546 | 94,062 | 70,039 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Product cost | 75,123 | 59,901 | 45,829 |
Service cost | 18,532 | 5,276 | 3,299 |
Total cost of revenue, exclusive of depreciation and amortization | 93,655 | 65,177 | 49,128 |
Operating expenses: | |||
Research and development | 5,628 | 3,811 | 2,877 |
Sales and marketing | 5,542 | 3,860 | 2,880 |
General and administrative | 21,181 | 11,886 | 7,115 |
Change in fair value of acquisition-related contingent consideration expense (income) | (6,173) | (338) | (2,059) |
Depreciation and amortization | 9,512 | 5,115 | 3,933 |
Total operating expenses | 35,690 | 24,334 | 14,746 |
Income (loss) from operations | 5,201 | 4,551 | 6,165 |
Other (income) expense: | |||
Change in fair value of warrant liability | (639) | 2,786 | |
Interest expense | 688 | 4,488 | 5,915 |
Loss on extinguishment of debt | 6,411 | ||
Total other expense | 688 | 10,260 | 8,701 |
Income (loss) before income taxes | 4,513 | (5,709) | (2,536) |
Income tax (benefit) expense | (9,783) | 541 | 328 |
Net income (loss) | 14,296 | (6,250) | (2,864) |
Net income (loss) attributable to common stockholders: | |||
Basic | 14,296 | (3,811) | (12,830) |
Diluted | $ 14,296 | $ (6,889) | $ (12,830) |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ 0.85 | $ (0.51) | $ (2.97) |
Diluted (in dollars per share) | $ 0.76 | $ (0.59) | $ (2.97) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 16,730,418 | 7,486,131 | 4,318,779 |
Diluted (in shares) | 18,774,374 | 11,591,210 | 4,318,779 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Increase (Decrease) in Temporary Equity | ||
Balance at beginning of period | $ 28,973 | $ 19,007 |
Accretion (decretion) of redeemable convertible preferred stock | (2,439) | 9,966 |
Conversion of redeemable convertible preferred stock upon initial public offering | (26,534) | |
Balance at end of period | 28,973 | |
Series A redeemable convertible preferred stock | ||
Increase (Decrease) in Temporary Equity | ||
Balance at beginning of period | $ 4,019 | $ 3,781 |
Balance at beginning of period (in shares) | 4,411,766 | 4,411,766 |
Accretion (decretion) of redeemable convertible preferred stock | $ 188 | $ 238 |
Conversion of redeemable convertible preferred stock upon initial public offering | $ (4,207) | |
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | (4,411,766) | |
Balance at end of period | $ 4,019 | |
Balance at end of period (in shares) | 4,411,766 | |
Series A-1 redeemable convertible preferred stock | ||
Increase (Decrease) in Temporary Equity | ||
Balance at beginning of period | $ 2,534 | $ 2,384 |
Balance at beginning of period (in shares) | 2,500,000 | 2,500,000 |
Accretion (decretion) of redeemable convertible preferred stock | $ 118 | $ 150 |
Conversion of redeemable convertible preferred stock upon initial public offering | $ (2,652) | |
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | (2,500,000) | |
Balance at end of period | $ 2,534 | |
Balance at end of period (in shares) | 2,500,000 | |
Series B redeemable convertible preferred stock | ||
Increase (Decrease) in Temporary Equity | ||
Balance at beginning of period | $ 22,420 | $ 12,842 |
Balance at beginning of period (in shares) | 2,961,745 | 2,961,745 |
Accretion (decretion) of redeemable convertible preferred stock | $ (2,745) | $ 9,578 |
Conversion of redeemable convertible preferred stock upon initial public offering | $ (19,675) | |
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | (2,961,745) | |
Balance at end of period | $ 22,420 | |
Balance at end of period (in shares) | 2,961,745 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common StockSt. Mary Prescription PharmacyClass A | Common StockCapstoneClass A | Common StockQuebec Inc. | Common StockClass A | Common StockClass B | Common Stock | Treasury Stock | Additional Paid-in CapitalSt. Mary Prescription Pharmacy | Additional Paid-in CapitalCapstone | Additional Paid-in CapitalQuebec Inc. | Additional Paid-in Capital | Accumulated Deficit | St. Mary Prescription Pharmacy | Capstone | Quebec Inc. | Total |
Balance at beginning of period at Dec. 31, 2014 | $ (20,002) | $ (20,002) | ||||||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2014 | 2,059,069 | 2,075,471 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Issuance of common stock in connection with acquisition | $ 94 | $ 107 | $ 94 | $ 107 | ||||||||||||
Issuance of common stock relating to acquisition (in shares) | 16,237 | 18,418 | ||||||||||||||
Accretion (decretion) of redeemable convertible preferred stock | $ (1,204) | (8,762) | (9,966) | |||||||||||||
Transfer of common stock(in shares) | 4,124 | (4,124) | ||||||||||||||
Exercise of stock options | 422 | 422 | ||||||||||||||
Exercise of stock options (in shares) | 3,132 | 403,570 | ||||||||||||||
Issuance of common stock warrants | 16 | 16 | ||||||||||||||
Stock based compensation expense | 565 | 565 | ||||||||||||||
Net income (loss) | (2,864) | (2,864) | ||||||||||||||
Balance at end of period at Dec. 31, 2015 | (31,628) | (31,628) | ||||||||||||||
Balance at end of period (in shares) at Dec. 31, 2015 | 2,100,980 | 2,474,917 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Issuance of common stock in connection with acquisition | $ 35 | $ 4,500 | $ 35 | $ 4,500 | ||||||||||||
Issuance of common stock relating to acquisition (in shares) | 10,824 | 395,407 | ||||||||||||||
Accretion (decretion) of redeemable convertible preferred stock | (516) | 2,955 | 2,439 | |||||||||||||
Transfer of common stock(in shares) | 2,577 | (2,577) | ||||||||||||||
Issuance of common stock (in shares) | 1 | |||||||||||||||
Issuance of restricted stock (in shares) | 722,646 | |||||||||||||||
Issuance of common stock upon initial public offering, net of issuance costs | 51,226 | 51,226 | ||||||||||||||
Issuance of common stock upon public offering, net of issuance costs (in shares) | 4,945,000 | |||||||||||||||
Conversion of redeemable convertible preferred stock upon initial public offering | $ 1 | 26,533 | 26,534 | |||||||||||||
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | 5,089,436 | |||||||||||||||
Redesignation of Class A and Class B common stock upon initial public offering | $ 1 | 1 | ||||||||||||||
Redesignation of Class A and Class B common stock upon initial public offering (in shares) | (2,837,028) | (2,746,377) | 5,583,405 | |||||||||||||
Conversion of warrants upon initial public offering | 4,930 | 4,930 | ||||||||||||||
Shares surrendered by stockholder | (20,372) | |||||||||||||||
Issuance of common stock in connection with Leadership Exit Bonus Plan (in shares) | 20,372 | |||||||||||||||
Shares withheld for tax in connection with Leadership Exit Bonus Plan | (84) | (84) | ||||||||||||||
Shares withheld for tax in connection with Leadership Exit Bonus Plan (in shares) | (7,010) | |||||||||||||||
Net exercise of stock warrants (in shares) | 210,817 | 490,385 | ||||||||||||||
Net exercise of stock options (in shares) | 63,220 | 7,052 | ||||||||||||||
Exercise of stock options | 153 | 153 | ||||||||||||||
Exercise of stock options (in shares) | 124,801 | |||||||||||||||
Stock based compensation expense | 4,250 | 4,250 | ||||||||||||||
Net income (loss) | (6,250) | (6,250) | ||||||||||||||
Balance at end of period at Dec. 31, 2016 | $ 2 | 91,027 | (34,923) | 56,106 | ||||||||||||
Balance at end of period (in shares) at Dec. 31, 2016 | 16,628,476 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Issuance of common stock, net of issuance costs | 34,309 | 34,309 | ||||||||||||||
Issuance of common stock, net of issuance costs (in shares) | 1,350,000 | |||||||||||||||
Issuance of common stock in connection with acquisition | 11,541 | 11,541 | ||||||||||||||
Issuance of common stock relating to acquisition (in shares) | 520,821 | |||||||||||||||
Issuance of restricted stock (in shares) | 43,384 | |||||||||||||||
Shares surrendered by stockholder | (246) | |||||||||||||||
Shares repurchased | $ (959) | (959) | ||||||||||||||
Shares repurchased (in shares) | (73,466) | |||||||||||||||
Net exercise of stock warrants (in shares) | 28,431 | |||||||||||||||
Net exercise of stock options | (2,035) | (2,035) | ||||||||||||||
Net exercise of stock options (in shares) | 593,887 | |||||||||||||||
Exercise of stock options | 480 | 480 | ||||||||||||||
Exercise of stock options (in shares) | 206,252 | |||||||||||||||
Stock based compensation expense | 8,752 | 8,752 | ||||||||||||||
Net income (loss) | 14,296 | 14,296 | ||||||||||||||
Balance at end of period at Dec. 31, 2017 | $ 2 | $ (959) | $ 144,074 | $ (20,627) | $ 122,490 | |||||||||||
Balance at end of period (in shares) at Dec. 31, 2017 | 19,371,005 | (73,466) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 14,296 | $ (6,250) | $ (2,864) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 9,512 | 5,115 | 3,933 |
Amortization of deferred financing costs and debt discount | 92 | 1,279 | 2,148 |
Payment of imputed interest on debt | (3,893) | (105) | |
Deferred taxes | (9,911) | 498 | 290 |
Issuance of common stock warrants | 16 | ||
Stock-based compensation | 8,752 | 4,250 | 565 |
Change in fair value of warrant liability | (639) | 2,786 | |
Change in fair value of acquisition-related contingent consideration | (6,173) | (338) | (2,059) |
Change in fair value of acquisition-related consideration | 55 | ||
Loss on extinguishment of debt | 6,411 | ||
Other noncash items | 18 | (10) | |
Changes in operating assets and liabilities, net of effect from acquisitions: | |||
Accounts receivable, net | (2,132) | (633) | (1,711) |
Inventories | 116 | (607) | (264) |
Rebates receivable | (30) | 752 | (96) |
Prepaid expenses and other current assets | (369) | (929) | (259) |
Other assets | (187) | 1 | (4) |
Acquisition-related contingent consideration | (610) | ||
Accounts payable | 1,288 | 665 | 440 |
Accrued expenses and other liabilities | 2,626 | (1,168) | 1,060 |
Other long-term liabilities | 410 | 2,205 | |
Net cash provided by operating activities | 18,308 | 6,774 | 3,256 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (3,303) | (3,813) | (234) |
Software development costs | (3,314) | (1,854) | (940) |
Purchases of intangible assets | (29) | ||
Change in restricted cash | 200 | 300 | |
Acquisition of businesses, net of cash acquired | (34,451) | (5,400) | (2,403) |
Net cash used in investing activities | (41,068) | (10,896) | (3,277) |
Cash flows from financing activities: | |||
Payments for repurchase of common stock | (959) | ||
Proceeds from exercise of stock options | 480 | 153 | 12 |
Payments for employee taxes for shares withheld | (2,123) | ||
Payments for debt financing costs | (221) | (1,521) | (69) |
Repayments of notes payable to related parties | (250) | (354) | |
Borrowings on line of credit | 35,342 | 6,000 | 10,000 |
Repayments of line of credit | (35,342) | (16,000) | (6,860) |
Payments of acquisition-related consideration | (600) | (180) | (1,895) |
Repayment of note payable related to acquisition | (14,337) | ||
Payments of equity offering costs | (365) | (3,346) | (481) |
Payments of contingent consideration | (1,498) | (1,895) | (267) |
Proceeds from long-term debt | 30,000 | ||
Repayments of long-term debt | (766) | (47,369) | (2,161) |
Proceeds from issuance of common stock, net of underwriting costs | 34,897 | 55,186 | |
Net cash provided by (used in) financing activities | 28,845 | 6,441 | (2,075) |
Net increase (decrease) in cash | 6,085 | 2,319 | (2,096) |
Cash, beginning of period | 4,345 | 2,026 | 4,122 |
Cash, end of period | 10,430 | 4,345 | 2,026 |
Supplemental disclosure of cash flow information: | |||
Acquisition of equipment under capital leases | 50 | 1,605 | 373 |
Additions to property, equipment, and software development purchases included in accounts payable | 540 | 373 | 46 |
Deferred offering costs included in accounts payable | 355 | 132 | 1,817 |
Cash paid for interest | $ 599 | 8,457 | 2,409 |
(Decretion) accretion of redeemable convertible preferred stock to redemption value | $ (2,439) | $ 9,966 | |
Stock issued in connection with acquisition | 11,541 | 4,500 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Business | |
Nature of Business | 1. Nature of Busines Tabula Rasa HealthCare, Inc. (the “Company”) provides patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk. The Company delivers its solutions through a comprehensive suite of technology-enabled products and services for medication risk management and risk adjustment. The Company serves healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements. The Company's suite of cloud-based software solutions provides prescribers, pharmacists and healthcare organizations with sophisticated and innovative tools to better manage the medication-related needs of patients. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding annual financial reporting. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation . (b) Liquidity The Company's audited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. Management believes that the Company's cash on hand of $10,430 as of December 31, 2017, cash flows from operations and borrowing availability under the Amended and Restated 2015 Revolving Line (Note 10) are sufficient to fund the Company's planned operations through at least March 31, 2019. (c) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates or assumptions. On an ongoing basis, management evaluates its estimates and assumptions, including, but not limited to, those related to: (i) the fair value of assets acquired and liabilities assumed for business combinations, (ii) the recognition and disclosure of contingent liabilities, (iii) the useful lives of long-lived assets (including definite-lived intangible assets), (iv) the evaluation of revenue recognition criteria, and (v) the realizability of long-lived assets, including goodwill and intangible assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company has engaged and may, in the future, engage third-party valuation specialists to assist with estimates related to the valuation of assets and liabilities acquired. Such estimates often require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions or circumstances. (d) Revenue Recognition The Company recognizes revenue from product sales or services rendered when (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to its client is fixed or determinable and (iv) collectability is reasonably assured. When the Company enters into arrangements with multiple deliverables, it applies the accounting guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a standalone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each element in an arrangement based on a selling price hierarchy. The selling price for a deliverable is based on estimated selling prices ("ESP") as vendor specific objective evidence or third party evidence is not available. The Company establishes ESP for the elements of its arrangements based upon its pricing practices and class of customers. The stated prices for the various deliverables of the Company's contracts are consistent across classes of customers. The Company evaluates its contractual arrangements to determine the performance obligations and transaction prices. Revenue is allocated to each performance obligation and recognized when the related performance obligations are satisfied . Product Revenue The Company enters into multiple-element arrangements with healthcare organizations to provide software enabled medication risk management solutions. Under these contracts, revenue is generated through the components listed below. Prescription medication revenue The Company sells prescription medications directly to healthcare organizations through its prescription fulfillment pharmacies. Prescription medication fees are based upon the prices stated in customer contracts for the prescription and include a dispensing fee. Prescription medication revenue, including dispensing fees, is recognized when the product is shipped to the customer. Prescription medications are considered a separate unit of accounting. Per member per month fees — medication risk management services The Company receives a fixed monthly administrative fee for each member in the program contracted for medication risk management services. This fee, which is included in Product Revenue in the consolidated statement of operations, is recognized on a monthly basis as medication risk management services are provided. The services associated with the per member per month fees are considered a separate unit of accounting. Service Revenue The Company provides medication risk management services utilizing the Medication Risk Mitigation Matrix (“MRM Matrix”) technology alone, without the related fulfillment services, which are referred to as MRM Service Contracts. The Company began entering into these MRM Service Contracts in the third quarter of 2016. The Company’s MRM Service Contracts also include services provided by the SinfoníaRx business, which was acquired on September 6, 2017. The SinfoníaRx business provides Medication Therapy Management (“MTM”) technology and services for Medicare, Medicaid, commercial health plans, and pharmacies, which are referred to as MTM Contracts. See Note 4 for additional information about the acquisition of the SinfoníaRx business. The Company also enters into contracts with healthcare organizations to provide (i) risk adjustment and (ii) pharmacy cost management services, which include training client staff and providers about documentation and diagnosis coding, analyzing clients' data collection and submission processes, and delivering meaningful analytics for understanding reimbursement complexities. Under the MRM Service Contracts, MTM Contracts and risk adjustment contracts, there are generally four revenue generating components: Set up fees: The Company's contracts for Medication Risk Mitigation (“MRM”) and risk adjustment services often require customers to pay non-refundable set up fees, which are deferred and recognized over the estimated term of the contract. These fees are charged at the beginning of the customer relationship as compensation for the Company's efforts to prepare the customer and configure its system for the data collection process. The set up activities do not represent a separate unit of accounting as they do not have value apart from the broader MRM Service Contracts, MTM Contracts and risk adjustment contracts. Incremental direct costs associated with such set up activities are also deferred and amortized over the shorter of the estimated customer life or stated contract period. Per member per month fees The Company receives a fixed monthly fee for each member in the respective programs. These services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized each month as the services are performed. Per member per month fees on MTM contracts are recognized as comprehensive medication reviews are completed. Per transaction fee The Company also receives transactional fees based on a fixed fee per comprehensive medication review under several of its MTM contracts. Revenue is recognized as comprehensive medication reviews are completed. Hourly consulting fees The Company sometimes contracts with customers to perform various other services. Such services are billed on a time and materials basis, at agreed hourly rates. Consulting services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized as time is incurred on the project. The Company's pharmacy cost management services include subscription revenue from customers and revenues from drug manufacturers for the sale of drug utilization data. Subscription revenue is recognized monthly as either a flat fee or as a percentage of monthly transactions incurred. Data and statistics fees from drug manufacturers are recognized as revenue when received due to the unpredictable nature of the payments and because fees are not fixed and determinable until received. In addition, the Company receives hosting fees for SRx’s cloud-based platform used to deliver MTM services and data analytics support to pharmacies managing their value-based contracts. These hosting fees are recognized monthly as either a flat fee or on a fixed monthly fee per user basis. (e) Cost of Product Revenue Cost of product revenue includes all costs directly related to the product revenue, including costs relating to the Company's pharmacists' collaboration on a patient's medication management, clinical analysis of the results and, when necessary, offering guidance to the prescriber based upon the review of the medication risk mitigation matrix and the individual patient's medical history, as well as the fulfillment and distribution of prescription drugs. Costs consist primarily of the purchase price of the prescription drugs the Company dispenses, expenses to package, dispense and distribute prescription drugs, expenses associated with the Company's medication care plan support centers and prescription fulfillment centers, including employment costs and stock-based compensation, and expenses related to the hosting of the Company's technology platform. Such costs also include direct overhead expenses, as well as allocated miscellaneous overhead costs. The Company allocates miscellaneous overhead costs among functions based on employee headcount. (f) Cost of Service Revenue Cost of service revenue includes all labor costs, including stock-based compensation expense, directly related to the risk adjustment and pharmacy cost management services and expenses for claims processing, technology services and overhead costs. In addition, service costs include all costs directly related to servicing the Company’s MRM Service Contracts and MTM Contracts, which primarily consist of labor costs, consultant fees, technology services and overhead costs. (g) Research and Development Research and development expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in the Company's research and development functions, which include software developers and other employees engaged in scientific education and research. Research and development expenses also include costs relating to the design and development of new software and technology and new service offerings, as well as enhancement of existing software and technology and new service offerings, including fees paid to third-party consultants, costs relating to quality assurance and testing, and other allocated facility-related overhead and expenses. Costs incurred in research and development are charged to expense as incurred. (h) Stock-Based Compensation The Company accounts for stock-based awards granted to employees and directors in accordance with ASC Topic 718, Compensation — Stock Compensation , which requires that compensation cost be recognized for awards based on the grant-date fair value of the award. That cost is recognized on a straight-line basis over the period during which an employee or director is required to provide service in exchange for the award — the requisite service period ("vesting period"). The grant-date fair value of employee and director stock-based awards is determined using the Black-Scholes option-pricing model. Compensation expense for options granted to non-employees is determined based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense is recognized over the period during which services are rendered by such non-employees until completed on a straight-line basis over the vesting period on each separate vesting tranche of the award, or the accelerated attribution method. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company's common stock and updated assumption inputs in the Black-Scholes option-pricing model. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient's payroll costs or recipient’s service payments are classified. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The Company was a private company until its common stock commenced public trading on September 29, 2016, and therefore lacks company-specific historical and implied volatility information. Therefore, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company's stock options has been determined utilizing the "simplified" method. The expected term of the stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. (i) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. (j) Accretion (Decretion) of Redeemable Convertible Preferred Stock Historically, accretion (decretion) of redeemable convertible preferred stock included the accretion of accruing dividends on and issuance costs of the Company's Series A, Series A-1 and Series B redeemable convertible preferred stock. The carrying values of Series A and Series A-1 redeemable convertible preferred stock were being accreted to their respective redemption values at each reporting period using the effective interest method, from the date of issuance to the earliest date the holders could demand redemption. The carrying value of Series B redeemable convertible preferred stock was being accreted (decreted) to redemption value at each reporting period at the greater of (i) the original issuance price plus unpaid accrued dividends or (ii) the fair value of the redeemable convertible preferred stock. Upon the completion of the IPO on October 4, 2016, the preferred stock automatically converted into shares of common stock. (k) Net Income (Loss) per Share Attributable to Common Stockholders The Company computed net income per share of common stock using the treasury stock method for the year ended December 31, 2017. For the years ended December 31, 2016 and 2015, the Company used the two-class method to compute net loss attributable to common stockholders because the Company had issued securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings of the Company. The two-class method requires net loss applicable to common stockholders for the period, after an allocation of earnings to participating securities, to be allocated between common and participating securities based upon their respective rights to receive distributed and undistributed earnings. The Company's preferred stockholders were entitled to receive annual cumulative dividends payable prior and in preference to dividends paid to holders of common stock when, as and if declared by the Company's Board. In the event a dividend was paid on common stock, holders of preferred stock were entitled to a proportionate share of any such dividend as if they were holders of common shares (on an as-if converted basis). Immediately prior to the closing of the IPO on October 4, 2016, all accumulated dividends were forfeited upon conversion of preferred stock into shares of common stock. (l) Cash Cash at December 31, 2017 and 2016 consists of cash on deposit with banks. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2017 or 2016. (m) Accounts Receivable, net Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and its clients' financial condition, the amount of receivables in dispute and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts monthly. The allowance for doubtful accounts was $63 and $39 as of December 31, 2017 and 2016, respectively. (n) Inventories Inventories consist of prescription medications and are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. (o) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Additions or improvements that increase the useful life of existing assets are capitalized, while expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer hardware and purchased software over a life of three years and office furniture and equipment over a life of five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Property and equipment under capital leases are amortized over the shorter of the lease term or the estimated useful life of the asset. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations. (p) Software Development Costs, net Certain development costs of the Company's internal-use software are capitalized in accordance with ASC Topic 350, Intangibles — Goodwill and Other ("ASC 350"), which outlines the stages of computer software development and specifies when capitalization of costs is required. The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services and payroll costs for employees directly involved with the software development. Projects that are determined to be in the development stage are capitalized. Subsequent additions, modifications, or upgrades to internal-use software are capitalized to the extent that they allow the software to perform tasks it previously did not perform. Capitalized software costs are amortized beginning when the software project is substantially complete and the asset is ready for its intended use. Capitalized internal-use software costs are amortized using the straight-line method over the remaining estimated useful life of the assets, which is generally three years. Costs incurred in the preliminary project stage and post-implementation stage, as well as maintenance and training costs, are expensed as incurred as part of research and development expense. (q) Goodwill Goodwill consists of the excess purchase price over fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but instead tested for impairment annually. Goodwill is assessed for impairment on October 1 st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. ASU 2011-08, Testing Goodwill for Impairment , provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed. The Company has one reporting unit. For the years ended December 31, 2017 and 2016, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair values of its reporting unit is less than the carrying amount. Accordingly, no impairment loss was recorded for the years ended December 31, 2017 or 2016. (r) Impairment of Long-Lived Assets Including Other Intangible Assets Long-lived assets consist of property and equipment, software development costs and definite-lived intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets. (s) Deferred Debt Financing Costs Costs related to obtaining debt financing are capitalized and amortized to interest expense over the term of the related debt using the effective-interest method. If debt is prepaid or retired early, the related unamortized deferred financing costs are written off in the period the debt is retired. Deferred financing costs of $219 and $59, net of accumulated amortization, are included in other assets on the accompanying consolidated balance sheets as of December 31, 2017 and 2016, respectively. (t) Deferred Rent Rent expense is recorded on a straight-line basis over the term of the lease. Lease incentives, including tenant improvement allowances, are recorded to deferred rent and amortized on a straight-line basis over the lease term. Approximately $163 and $13 of deferred rent are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets as of December 31, 2017 and 2016, respectively. Approximately $2,615 and $2,205 of deferred rent is included in long-term liabilities in the accompanying balance sheets as of December 31, 2017 and 2016, respectively. (u) Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal fees and other expenses related to litigation are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations. (v) Shipping and Handling Costs Shipping and handling costs are charged to cost of product revenue when incurred. Shipping and handling costs totaled $3,652, $2,673, and $1,876 for the years ended December 31, 2017, 2016, and 2015, respectively. (w) Advertising Costs Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $117, $117, and $43 for the years ended December 31, 2017, 2016, and 2015, respectively, which is included in sales and marketing expense. (x) Business Combinations The costs of business combinations are allocated to the assets acquired and liabilities assumed, in each case based on estimates of their respective fair values at the acquisition dates, using the purchase method of accounting. Fair values of intangible assets are estimated by valuation models prepared by management and third-party specialists. The assets purchased and liabilities assumed have been reflected in the Company's consolidated balance sheets, and the results are included in the consolidated statements of operations and consolidated statements of cash flows from the date of acquisition. Acquisition-related contingent consideration is classified as a liability and measured at fair value at the acquisition date with changes in fair value after the acquisition date affecting earnings in the period of the estimated fair value change. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in general and administrative expenses in the consolidated statements of operations. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. (y) Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company's chief operating decision maker allocates resources and assesses performance based upon financial information at the consolidated level. The Company's chief operating decision maker is the Chief Executive Officer. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. All revenues are generated and all tangible assets are held in the United States. (z) Concentration of Credit Risk The Company's medication risk management and risk adjustment clients consist primarily of healthcare organizations, which are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) and dual funded by Medicaid and Medicare and, therefore, subject to the reporting requirements established by the Centers for Medicaid and Medicare Services ("CMS"). Under CMS guidelines, Medicare Part D sponsors are required to remit payment for claims within 14 calendar days of the date on which an electronic claim is received and within 30 calendar days of the date on which non-electronically submitted claims are received. The Company extends credit to clients based upon such terms, as well as management's evaluation of creditworthiness, and generally collateral is not required. The Company’s MTM clients consistent primarily of healthcare organizations, commercial health plans, and pharmacies. The Company’s pharmacy cost management clients consist primarily of post-acute care facilities. Credit associated with these accounts is extended based upon management’s evaluation of creditworthiness and is monitored on an on-going basis. As of December 31, 2017, two clients represented 15% and 12% of net accounts receivable, respectively. As of December 31, 2016, two clients represented 12% and 10% of net accounts receivable, respectively. During 2017, the Company signed a master agreement with a healthcare organization covering 11 PACE facilities, which represented 18% of total revenue for the year ended December 31, 2017. Prior to signing this master agreement, each of these PACE facilities had separate contracts with the Company and were considered separate, individual, clients. For the year ended December 31, 2016 no single client accounted for greater than 10% of revenue. For the year ended December 31, 2015, one client accounted for 10% of total revenue. On a combined basis, the 11 PACE facilities represented 17% and 15% of total revenue for the years ended December 31, 2016, and 2015, respectively. (aa) Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities or other inputs that are observable or can be corroborated by observable market. Level 3 — Unobservable inputs which are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The fair value hierarchy also requires an entity to maximize |
Net Income (Loss) per Share
Net Income (Loss) per Share | 12 Months Ended |
Dec. 31, 2017 | |
Net Income (Loss) per Share | |
Net Income (Loss) per Share | 3. Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock of the Company outstanding during the period. The Company computed net income (loss) per share of common stock using the treasury stock method for the year ended December 31, 2017, and using the two-class method required for participating securities for the years ended December 31, 2016 and 2015. The Company considered its redeemable convertible preferred stock to be participating securities as the holders of the preferred stock were entitled to receive a dividend in the event that a dividend was paid on common stock. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock during the period plus the impact of dilutive securities, to the extent that they are not anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per share for the Company’s common stock: Year Ended December 31, 2017 2016 2015 Numerator: Net income (loss) $ 14,296 $ (6,250) $ (2,864) Decretion (accretion) of redeemable convertible preferred stock — 2,439 (9,966) Net income (loss) attributable to common stockholders, basic $ 14,296 $ (3,811) $ (12,830) Decretion of redeemable convertible preferred stock — (2,439) — Revaluation of warrant liability, net of tax — (639) — Net income (loss) attributable to common stockholders, diluted $ 14,296 $ (6,889) $ (12,830) Denominator (basic): Weighted average shares of common stock outstanding, basic 7,486,131 4,318,779 Denominator (diluted): Weighted average shares of common stock outstanding 7,486,131 4,318,779 Effect of potential dilutive securities: Weighted average dilutive effect of stock options 1,395,687 — — Weighted average dilutive effect of restricted shares 638,938 Weighted average dilutive effect of common shares from warrants 9,331 — — Dilutive effect from preferred stock and preferred stock warrants assuming conversion — 4,105,079 — Weighted average shares of common stock outstanding, diluted 4,318,779 Net income (loss) per share attributable to common stockholders, basic $ 0.85 $ (0.51) $ (2.97) Net income (loss) per share attributable to common stockholders, diluted $ 0.76 $ (0.59) $ (2.97) The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2017 2016 2015 Stock options to purchase common stock — 3,059,690 2,791,754 Restricted stock — 722,646 — Common stock warrants — 32,216 446,593 Preferred stock warrants (as converted to common stock) — — 463,589 Redeemable convertible preferred stock (as converted to common stock) — — 5,089,436 — 3,814,552 8,791,372 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions | |
Acquisitions | 4. Acquisitions SinfoníaRx On September 6, 2017, the Company, TRCRD, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub I”), and TRSHC Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub II,” and together with Merger Sub I, the “Merger Subs”), entered into, and consummated the transactions contemplated by, an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, the Merger Subs, Sinfonía HealthCare Corporation, a Delaware corporation (“Sinfonía”), Michael Deitch, Fletcher McCusker and Mr. Deitch in his capacity as the Stockholders’ Representative. Under the terms of the Merger Agreement, the Company acquired the SinfoníaRx business (“SRx”) as a result of Merger Sub I merging with and into Sinfonía, with Sinfonía surviving as a wholly-owned subsidiary of the Company (the “First Merger”), and, immediately following the First Merger, Sinfonía merging with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned subsidiary of the Company. The SRx business provides MTM technology and services for Medicare, Medicaid, commercial health plans and pharmacies. The consideration for the acquisition of SRx was comprised of (i) cash consideration of $35,000 paid upon closing, subject to certain customary post-closing adjustments, in each case upon the terms and subject to the conditions contained in the Merger Agreement; (ii) common stock consideration issued upon closing valued at $11,541; and (iii) contingent purchase price consideration with an estimated acquisition-date fair value of $38,092 to be paid 50% in cash and 50% in the Company’s common stock, subject to adjustments as set forth in the Merger Agreement, based on the achievement of certain performance goals for each of the twelve-month periods ended December 31, 2017 and December 31, 2018. In addition, the Company is not obligated to pay more than $35,000 in cash and the Company’s common stock for the first contingent payment, or more than $130,000 for the aggregate overall closing consideration (not taking into account certain adjustments set forth in the Merger Agreement) and contingent payments. A portion of the cash merger consideration is being held in escrow to secure potential claims by the Company for indemnification under the Merger Agreement and in respect of adjustments to the acquisition consideration. The Company issued 520,821 shares of the Company’s common stock valued at $19.20 per share in satisfaction of the stock consideration issued at closing. The value of the stock consideration issued was calculated based on the arithmetic average of the daily volume-weighted average trading price per share of the Company’s common stock for the 20 trading days ended on and including the trading day prior to the date of the Merger Agreement, using trading prices reported on the NASDAQ Global Market. The stock consideration issued at the closing of the acquisition had an acquisition-date fair value of $11,541. In connection with the acquisition of SRx, the Company incurred direct acquisition costs of $1,015, which are recorded in general and administrative expenses in the consolidated statements of operations. The Company, with the assistance of a third-party appraiser, utilized a Monte Carlo simulation to determine the estimated acquisition-date fair value of the acquisition-related contingent consideration of $38,092. The fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The following table summarizes the purchase price consideration based on the estimated acquisition-date fair value of the acquisition consideration: Cash consideration at closing, net of post-closing adjustments $ 34,492 Stock consideration at closing 11,541 Estimated fair value of contingent consideration 38,092 Total fair value of acquisition consideration $ 84,125 The following table summarizes the preliminary allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 218 Accounts receivable 8,309 Prepaid expenses and other current assets 1,056 Property and equipment 1,419 Other assets 127 Trade name 4,776 Developed technology 13,291 Client relationships 20,265 Non-competition agreement 4,752 Goodwill 52,927 Total assets acquired $ 107,140 Accrued expenses and other liabilities (3,848) Trade accounts payable (8,868) Debt assumed (675) Deferred income tax liability, net (9,624) Total purchase price, including contingent consideration of $38,092 $ 84,125 The purchase price was allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based on their acquisition-date estimated fair values. The identifiable intangible assets principally included a trade name, developed technology, client relationships, and a non-competition agreement, each of which are subject to amortization on a straight-line basis being amortized over a weighted average of 10, 7, 7.46 and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 7.33 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets of SRx. The fair values of the trademarks and technology were estimated using the relief from royalty method. The Company, with the assistance of a third party appraiser, derived the hypothetical royalty income from the projected revenues of SRx. The fair value of client relationships was estimated using a multi-period excess earnings method. To calculate fair value, the Company, with the assistance of a third party appraiser, used cash flows discounted at a rate considered appropriate given the inherent risks associated with each client grouping. The fair value of the non-competition agreement was estimated using the differential approach which involves valuing the business under two different scenarios. The first valuation assumes the non-compete agreement is in place and the second valuation assumes that it is not. The difference in the value of the business under each approach is attributed to the non-compete agreement. The useful lives of the intangible assets were estimated based on the expected future economic benefit of the assets and is being amortized over the estimated useful life in proportion to the economic benefits consumed using the straight-line method. The amortization of intangible assets is not deductible for income tax purposes. The Company believes the goodwill related to the acquisition was a result of providing the Company exposure to a larger customer base that will enable the Company to leverage its technology in the broader market, as well as offering cross-selling market exposure opportunities. The goodwill is not deductible for income tax purposes. Revenue from SRx is primarily comprised of transactional fees based on a fixed fee per comprehensive medication review and based on a fixed monthly fee for each eligible member, or per member per month, in the respective programs. Revenue for these services and the related costs are recognized each month as comprehensive medication reviews are completed and costs are incurred, and are included in service revenue and cost of revenue – service cost, respectively, in the consolidated statements of operations. For the year ended December 31, 2017, service revenue of $12,119 and net income of $3,736 from SRx were included in the Company’s consolidated statements of operations since the acquisition date. The Company continues to evaluate the fair value of certain assets and liabilities related to the acquisition, including the fair value of deferred tax assets acquired and income tax liabilities assumed. Additional information, which existed as of the acquisition date but was at that time unknown to the Company, may become known during the remainder of the measurement period. Changes to amounts recorded as a result of the final determination may result in a corresponding adjustment to these assets and liabilities, including goodwill. The determination of the estimated fair values of all assets acquired is expected to be completed within one year from the date of acquisition. 9179-1916 Quebec Inc. On September 15, 2016, the Company acquired certain assets, consisting primarily of intellectual property and software assets of 9176-1916 Quebec Inc. (an entity indirectly controlled by the Company’s former Chief Scientific Officer, Jacques Turgeon). The intellectual property and software assets were previously licensed by the Company and are integrated into the Company’s MRM Matrix. The purchase price consisted of cash consideration of up to $6,000, consisting of $1,000 which was paid upon closing, $2,200 paid on November 2, 2016, $2,200 paid on December 9, 2016, $550 paid on September 15, 2017, and $50 paid on October 13, 2017. In addition to the cash consideration, the purchase price included $5,000 of common stock, consisting of $2,500, or 201,353 shares, of common stock issued on November 15, 2016 and $2,500, or 194,054 shares, of common stock issued on December 29, 2016. The stock consideration issued was calculated based on the arithmetic average of the daily volume-weighted average price of the Company’s common stock for the 30 business days ending on, and including, the 30th and 60th business day, respectively, following the completion of the IPO. The deferred acquisition cash consideration of $5,000 was recorded at its acquisition-date fair value of $4,955, using an assumed cost of debt of 7.8%. The $45 discount was being amortized to interest expense using the effective interest method through the consideration payment date. The Company amortized $32 and $13 of the discount to interest expense for the years ended December 31, 2017 and 2016, respectively. Additionally, the deferred stock consideration of $5,000 was recorded at its acquisition-date fair value of $4,445 and was accreted up to its payment-date fair value of $4,500. The stock consideration paid in connection with the acquisition is subject to a lock-up agreement and, as a result, a discount for lack of marketability of 10% was applied to determine the fair value of the stock consideration as of the acquisition date. As of December 31, 2017, the acquisition-related consideration balance was fully paid. The assets acquired, and revenue generated from the acquired assets, are included in the Company’s consolidated financial statements from the date of acquisition. The following table summarizes the final allocation of the purchase price based on the estimated fair values of the assets acquired at the date of acquisition: Developed technology $ 10,100 Trade name 220 Goodwill 80 Total assets acquired $ 10,400 The purchase price was allocated to identifiable intangible assets acquired based on their acquisition-date estimated fair values. The identifiable intangible assets principally included developed technology valued at $10,100 and trade name valued at $220, each of which are subject to amortization on a straight-line basis over 7 and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 6.96 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets. The fair value of the developed technology was estimated using a discounted present value income approach. To calculate fair value, the Company used cash flows discounted at a rate considered appropriate given the inherent risks associated with the intangible asset. The Company believes that the level and timing of cash flows appropriately reflect market participant assumptions. The fair value of the trade name was estimated using the relief from royalty method. The Company derived the hypothetical royalty income from the incremental projected revenues related to utilizing the acquired technology. The amortization of intangible assets is deductible for income tax purposes. Medliance LLC On December 31, 2014, the Company acquired all of the authorized, issued and outstanding equity interests of Medliance LLC ("Medliance"), which provides pharmacy cost management services through data analytics. The acquisition consideration was comprised of $16,385 in non-cash consideration in the form of promissory notes to the sellers with a fair value of $14,347 (see Note 9) and cash consideration consisting of $12,000 payable upon closing and contingent purchase price consideration with an estimated fair value of $7,300 ("Medliance Earnout") due upon achieving specified revenue targets as of the 12, 24 and 36 month anniversaries of the acquisition. The Company paid $9,597 in cash upon closing in 2014, with the remaining $2,403 paid in the first quarter of 2015. The aggregate Medliance acquisition-related contingent consideration is equal to the difference of (i) the product of yearly revenue for the 2015 calendar year multiplied by 4.5 minus (ii) $26,000 (the "Aggregate Earn-Out Amount"). The Aggregate Earn-Out Amount was payable in cash, subject to achieving specified revenue targets, at three intervals: one-third following the 12-month anniversary of the closing date (the "Twelve Month Contingent Payment Date"), one-third following the 24-month anniversary of the closing date (the "Twenty-four Month Contingent Payment Date") and the Aggregate Earn-Out Amount less any portion actually paid at the Twelve Month Contingent Payment Date and Twenty-four Month Contingent Payment Date, following the 36-month anniversary of the closing date. The Aggregate Earn-Out Amount was payable based on the yearly revenue of the acquired business during the twelve month period preceding each Contingent Payment Date ("Measurement Period"). If the yearly revenue was equal to or exceeded the 2015 Medliance calendar year revenue target ("Yearly Revenue Target") during a Measurement Period, the portion of the Aggregate Earn-Out Amount due, as defined above, was payable in full. If the yearly revenue was less than the Yearly Revenue Target for a Measurement Period, then an amount was payable equal to the portion of the Aggregate Earn-Out Amount due multiplied by a fraction, the numerator of which was the yearly revenue for the Measurement Period and the denominator of which was the Yearly Revenue Target. The final Earn-Out amount was paid in February 2018 (see Note 15). The Company, with the assistance of a third-party appraiser, utilized a Monte Carlo simulation to estimate the acquisition-date fair value of the acquisition-related contingent consideration. The fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy (see Note 15). Capstone On April 22, 2014, the Company acquired substantially all of the assets, and assumed certain liabilities, of Capstone Performance Systems, LLC (“Capstone”), a consulting business providing expert Medicare risk adjustment services for healthcare organizations. The acquisition consideration was comprised of cash consideration consisting of $3,000 paid upon closing and deferred cash consideration of $2,500. During 2014, the Company paid $500, which was recorded at its acquisition date fair value of $487 and the related $13 discount was amortized to interest expense using the effective interest method through its payment date. During 2015, the Company paid $2,000, which was recorded at its acquisition date fair value of $1,895 and the $105 discount was amortized to interest expense using the effective interest method through its consideration payment date. The Company amortized $33 of the discount to interest expense for the year ended December 31, 2015. The Company also paid $577 in cash and issued 18,418 shares of the Company's common stock, with a fair value of $107, during 2015 in full satisfaction of the acquisition-related contingent consideration. St. Mary Prescription Pharmacy On January 7, 2014, the Company acquired all of the authorized, issued and outstanding shares of capital stock of J.A. Robertson, Inc., doing business as St. Mary Prescription Pharmacy (“SMPP”). SMPP is a pharmacy based in San Francisco, California that has been servicing the needs of Program of All-inclusive Care for the Elderly participants for over 30 years. The acquisition consideration was comprised of cash consideration of up to $2,000 and stock consideration of up to 108,247 shares of common stock, with certain payments contingent upon the achievement of specific revenue targets. During 2014, the Company paid $1,500 cash and issued 81,186 shares of common stock, with a fair value of $291. During 2015, the Company paid $300 in cash and issued 16,237 shares of the Company's common stock, with a fair value of $94 in satisfaction of the SMPP acquisition-related contingent consideration. During 2016, the Company made a final cash payment of $185, which included a $15 reduction for an indemnification claim made by the Company pursuant to the purchase agreement, and issued 10,824 shares of common stock, with a fair value of $35, in satisfaction of the remaining obligations under the purchase agreement. Proforma (unaudited) The unaudited pro forma results presented below include the results of the SRx acquisition and the 9176-1916 Quebec Inc. acquisition as if they had been consummated as of January 1, 2015. The unaudited pro forma results include the amortization associated with acquired intangible assets, interest expense on the debt incurred to fund these acquisitions, insurance expense for additional required business insurance coverage, stock compensation expense related to options granted to an employee of SRx at the closing of the acquisition, and the estimated tax effect of adjustments to income before income taxes. Material nonrecurring charges directly attributable to the transactions are excluded, and consisted of direct acquisition costs of $1,015 for the year ended December 31, 2017. In addition, the unaudited pro forma results do not include any expected benefits of the acquisitions. Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2015. Year Ended December 31, 2017 2016 2015 Revenue $ 156,012 $ 121,157 $ 91,122 Net income (loss) 116 (7,668) (6,143) Net income (loss) per share attributable to common stockholders, basic 0.01 (0.63) (3.08) Net income (loss) per share attributable to common stockholders, diluted 0.01 (0.67) (3.08) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment As of December 31, 2017 and 2016, property and equipment consisted of the following: Estimated December 31, useful life 2017 2016 Computer hardware and purchased software 3 years $ 2,565 $ 1,789 Office furniture and equipment 5 years 7,275 5,671 Leasehold improvements 5-15 years 5,366 3,744 11,204 Less: accumulated depreciation (5,963) (4,795) Property and equipment, net $ 9,243 $ 6,409 Depreciation and amortization expense on property and equipment for the years ended December 31, 2017, 2016, and 2015 were $2,146, $1,267, and $969, respectively. |
Software Development Costs
Software Development Costs | 12 Months Ended |
Dec. 31, 2017 | |
Software Development Costs | |
Software Development Costs | 6. Software Development Costs The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services and payroll costs for employees directly involved with the software development. As of December 31, 2017 and 2016, capitalized software costs consisted of the following: December 31, 2017 December 31, 2016 Software development costs $ 9,873 $ 6,501 Less: accumulated amortization (4,872) (3,151) Software development costs, net $ 5,001 $ 3,350 Capitalized software costs not yet subject to amortization $ 1,021 $ 911 Amortization expense for the years ended December 31, 2017, 2016, and 2015 was $1,721, $1,106, and $655, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company’s goodwill and related changes during the years ended December 31, 2017 and 2016 are as follows: Balance at January 1, 2016 $ 21,606 Goodwill from 2016 acquisition 80 Balance at December 31, 2016 21,686 Goodwill from 2017 acquisition 52,927 Balance at December 31, 2017 $ 74,613 There were no indicators of impairment during the years ended December 31, 2017 and 2016 and there are no accumulated impairment charges as of December 31, 2017 and 2016. Intangible assets consisted of the following as of December 31, 2017 and 2016: Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2017 Trade names 8.56 $ 6,716 $ (1,320) $ 5,396 Client relationships 8.48 34,949 (5,652) 29,297 Non-competition agreements 4.96 5,404 (739) 4,665 Developed technology 7.38 26,791 (3,438) 23,353 Domain name 10.00 29 (4) 25 Total intangible assets $ 73,889 $ (11,153) $ 62,736 Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2016 Trade names 5.00 $ 1,940 $ (791) $ 1,149 Client relationships 10.02 14,684 (3,289) 11,395 Non-competition agreements 4.64 652 (326) 326 Developed technology 7.76 13,500 (1,101) 12,399 Domain name 10.00 29 (1) 28 Total intangible assets $ 30,805 $ (5,508) $ 25,297 Amortization expense for intangible assets for the years ended December 31, 2017, 2016, and 2015 was $5,645, $2,739, and $2,306 respectively. The estimated amortization expense for each of the next five years and thereafter is as follows: Years Ending December 31, 2018 $ 10,079 2019 9,636 2020 9,296 2021 9,283 2022 8,975 Thereafter 15,467 Total estimated amortization expense $ 62,736 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 8. Accrued Expenses and Other Liabilities At December 31, 2017 and 2016, accrued expenses and other liabilities consisted of the following: December 31, 2017 December 31, 2016 Employee related expenses $ 4,572 $ 1,174 Deferred revenue 1,350 851 Accrued payables due to customers 1,200 — Contract labor 463 — Interest 13 16 Deferred rent 163 13 Professional fees 288 — Income taxes payable 20 27 Other expenses 919 78 Total accrued expenses and other liabilities $ 8,988 $ 2,159 |
Notes Payable Related to Acquis
Notes Payable Related to Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable Related to Acquisition | |
Notes Payable Related to Acquisition | 9. Notes Payable Related to Acquisition In December 2014, as part of the acquisition-related consideration of the Medliance acquisition (see Note 4), the Company issued multiple subordinated convertible promissory notes (the "Medliance Notes") to the owners of Medliance for aggregate borrowings of $16,385. Interest was 8% and compounded annually. All unpaid principal and unpaid accrued interest was due and payable on June 30, 2016. On July 1, 2016, the Company repaid the Medliance Notes with the proceeds from a long-term credit facility (see Note 10). Interest expense was $709 and $1,310 for the years ended December 31, 2016 and 2015, respectively. The Company recorded the Medliance Notes at their aggregate acquisition date fair values of $14,347 and the notes were accreted up to their face values of $16,385 over the 18 month term using the effective-interest method. For the years ended December 31, 2016 and 2015, the Company amortized $755 and $1,280 of the discount to interest expense, respectively. |
Lines of Credit and Long-Term D
Lines of Credit and Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Lines of Credit and Long-Term Debt | |
Lines of Credit and Long-Term Debt | 10 Lines of Credit and Long-Term Debt (a) Lines of Credit On April 29, 2015, the Company entered into a revolving line of credit (the “2015 Revolving Line”) with Bridge Bank pursuant to a loan and security agreement, which provided for borrowings in an aggregate amount up to $15,000 to be used for general corporate purposes, including repayment of a previous facility. On July 1, 2016, the Company entered into a Loan and Security Modification Agreement (the "Amended 2015 Revolving Line") with Western Alliance Bank, successor in interest to Bridge Bank, whereby the 2015 Revolving Line was amended to increase the Company's borrowing availability to up to $25,000 and extend the maturity date to July 1, 2018. On September 6, 2017, in connection with the acquisition of SRx (Note 4), the Company entered into an Amended and Restated Loan and Security Agreement (the “Amended and Restated 2015 Revolving Line”) whereby the Amended 2015 Revolving Line was amended to extend the maturity date to September 6, 2020, and increase the Company's borrowing availability to up to $40,000 with a $1,000 sublimit for cash management services and letters of credit and foreign exchange transactions. The Company may also request an increase in the Amended and Restated 2015 Revolving Line of up to $10,000 upon the successful syndication of such additional amounts. Interest on the Amended and Restated 2015 Revolving Line was also amended to be calculated at a variable rate based upon Western Alliance Bank's prime rate plus an applicable margin which will range from (0.25%) to 0.25% depending on the Company’s leverage ratio, with Western Alliance Bank's prime rate having a floor of 3.5%. Financial covenants under the Amended and Restated 2015 Revolving Line require that the Company (i) maintain an unrestricted cash and unused availability balance under the Amended and Restated 2015 Revolving Line of at least $3,000 at all times (the liquidity covenant), (ii) maintain a leverage ratio of less than 2.50:1.00, on a trailing twelve-month basis starting with the twelve-month period ending December 31, 2017, measured quarterly, and (iii) maintain a minimum quarterly EBITDA starting with the quarter ending December 31, 2017 and each quarter thereafter, of at least 75% of the plan approved by the Company’s Board of Directors (the “Board”). In addition, the Company may not contract to make capital expenditures, excluding capitalized software development costs and tenant leasehold improvements, greater than $5,000 in any fiscal year without the consent of Western Alliance Bank. As of December 31, 2017, the Company was in compliance with all of the financial covenants related to the Amended and Restated 2015 Revolving Line, and management expects that the Company will be able to maintain compliance with the financial covenants. In September 2015, the Company arranged for Bridge Bank to issue a $500 letter of credit on its behalf in connection with the Company’s lease agreement for the office space in Moorestown, NJ (see Note 16). The letter of credit was issued under the Amended 2015 Revolving Line. During the fourth quarter of 2017, the letter of credit was amended and reduced to $400. The letter of credit renews annually and expires in September 2027 and reduces amounts available on the line of credit. As of December 31, 2017 and 2016, there were no aggregate borrowings outstanding under the Amended and Restated 2015 Revolving Line. As of December 31, 2017, amounts available for borrowings under the Amended and Restated 2015 Revolving Line were $39,600. As of December 31, 2017, 2016 and 2015, the interest rate on the Amended and Restated 2015 Revolving Line was 4.31% , 4.06% and 4.56%, respectively. Interest expense was $389, $570 and $290 for the years ended December 31, 2017, 2016 and 2015, respectively. In connection with the Amended and Restated 2015 Revolving Line (and all predecessor agreements prior to the amendment or the amendment and restatement thereof), the Company recorded deferred financing costs of $361. The Company is amortizing the deferred financing costs associated with the Amended and Restated 2015 Revolving Line to interest expense using the effective-interest method over the term of the Amended and Restated 2015 Revolving Line and amortized $60, $46 and $35 to interest expense for the years ended December 31, 2017, 2016 and 2015, respectively. (b) Term Loan Facility On July 1, 2016, the Company entered into a term loan facility (the “ABC Credit Facility”) with ABC Funding, LLC, an affiliate of Summit Partners, L.P. (“Summit”). The proceeds of the initial term loan advance of $30,000 under the ABC Credit Facility were used to repay all outstanding principal and interest under the Medliance Notes, as well as loans entered into with Eastward Capital Partners V, L.P. and its affiliates in April 2014 and December 2014 with an original principal balance of $15,000 (collectively, the “Eastward Loans”) . For the year ended December 31, 2016, the Company recognized a $1,396 loss on extinguishment of debt as a result of a prepayment premium and the recognition of the remaining unamortized discounts and finance costs on the Eastward Loans. On October 4, 2016, the Company repaid all the then outstanding principal and interest on the ABC Credit Facility, as well as a prepayment penalty of $3,597, with proceeds received from the IPO and, in connection with such repayment, the ABC Credit Facility was terminated. The Company recorded a loss on debt extinguishment of $5,015 in the fourth quarter of 2016 related to the settlement of the ABC Credit Facility for the prepayment premium plus the amortization of the remaining deferred financing costs. (c) Capital Lease Obligations The following table represents the total capital lease obligations of the Company at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Capital leases $ 1,705 $ 1,746 Less current portion, net (921) (674) Total capital leases, less current portion, net $ 784 $ 1,072 The Company has entered into leases for certain equipment and software, which are recorded as capital lease obligations. These leases have interest rates ranging from 6% to 19%. Interest expense related to the capital leases was $209, $200, and $181 and for the years ended December 31, 2017, 2016, and 2015, respectively. Amortization of assets held under capital leases is included in depreciation and amortization expense. The net book value of equipment and software acquired under capital lease was $1,918 and $2,364 as of December 31, 2017 and 2016, respectively, and are reflected in property and equipment on the consolidated balance sheets. (d) Long-Term Debt Maturities As of December 31, 2017, the Company's long-term debt consisted of capital lease obligations and is payable as follows: Total long-term debt 2018 1,065 2019 725 2020 102 2021 4 1,896 Less amount representing interest (191) Present value of payments 1,705 Less current portion (921) Total long-term debt, net of current portion $ 784 (e) Other Financing In May 2016, the Company signed a prime vendor agreement with AmerisourceBergen Drug Corporation, which was effective March 2016 and requires a monthly minimum purchase obligation of approximately $1,750. The Company fully expects to meet this requirement. This agreement was subsequently amended and restated effective May 1, 2016 with a three-year term expiring April 2019. As of December 31, 2017 and 2016, the Company had $4,055 and $3,327, respectively, due to AmerisourceBergen Drug Corporation as a result of prescription drug purchases. Pursuant to the terms of a security agreement entered into in connection with the prime vendor agreement, AmerisourceBergen also holds a subordinated security interest in all of the Company’s assets. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The Company accounts for income taxes under ASC Topic 740 — Income Taxes ("ASC 740"). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Reform Act") was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, providing for the immediate expensing of certain domestic assets placed in service after September 22, 2017, and implementing a territorial tax system. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax liabilities at December 31, 2017 and recognized a provisional $105 income tax benefit in the Company’s consolidated statement of income for the year ended December 31, 2017. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impacts related to the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The accounting is expected to be complete when the 2017 U.S. corporate income tax return is filed in 2018. The Company's income (loss) before income taxes was $4,513, $(5,709), and $(2,536) for the years ended December 31, 2017, 2016 and 2015, respectively, and the Company has no foreign sources of income or loss. The expense (benefit) for income taxes consists of the following: Years Ended December 31, 2017 2016 2015 Current: US federal $ 20 $ (4) $ 3 State and local 108 47 35 Total current income tax expense 128 43 38 Deferred: US federal (9,335) 440 278 State and local (576) 58 12 Total deferred income tax (benefit) expense (9,911) 498 290 Total income tax expense (benefit) $ (9,783) $ 541 $ 328 For the years ended December 31, 2017, 2016, and 2015 the Company had an effective tax rate of (216.8)% , (9.5%), and (12.9%) respectively. In conjunction with the acquisition of SRx in the third quarter of 2017, the Company recognized a net deferred tax liability of $9,624 primarily related to intangible assets other than goodwill. The Company determined that the deferred tax liabilities related to the acquisition and future income before taxes provide sufficient sources of recoverability to realize the Company’s deferred tax assets associated with those jurisdictions that file consolidated returns. As a result, the Company released $5,786 of its deferred tax asset valuation allowance. For the years ended December 31, 2016 and 2015, the Company’s income tax provision was comprised of current Federal alternative minimum tax, current state taxes and deferred tax expense associated with indefinite-lived deferred tax liabilities for goodwill amortization, in addition to a change in the valuation allowance related to deferred tax assets for income generated in the current period. As of December 31, 2017, the Company had federal net operating loss ("NOL") carryforwards of $29,821 and state NOL carry forwards of $17,053, each of which are available to reduce future taxable income. The NOL carryforwards, if not utilized, will begin to expire in 2029 for federal purposes and in 2021 for state purposes. The tax benefits of uncertain tax positions are recognized only when the Company believes it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized income tax benefits in income tax expense. Through December 31, 2017, the Company had no unrecognized tax benefits or related interest and penalties accrued. The principal components of the Company's deferred tax assets (liabilities) are as follows: December 31, 2017 2016 Deferred tax assets: Net federal operating loss carry forward $ 6,269 $ 4,748 Net state operating loss carry forward 1,662 599 Accruals 305 256 Intangibles — 536 Stock options 2,837 1,557 Deferred rent 765 862 Other 177 182 Deferred tax assets 12,015 8,740 Less: valuation allowances (1,338) (7,389) Deferred tax assets after valuation allowance 10,677 1,351 Deferred tax liabilities: Fixed assets (1,043) (1,351) Amortizable intangible assets (9,295) — Indefinite-lived intangibles (772) (832) Other (112) — Deferred tax liabilities (11,222) (2,183) Net deferred tax liabilities $ (545) $ (832) ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2016, the Company recorded a full valuation allowance against its deferred tax assets because the Company's management determined that it was more-likely-than-not that the assets would not be fully realized. As noted above, in 2017 the Company determined that the deferred tax liabilities related to the SRx acquisition and its estimated future pretax income provided sufficient sources of recoverability to realize the Company’s deferred tax assets associated with those jurisdictions that file consolidated returns, and as a result the Company released $5,786 of its deferred tax asset valuation allowance as of December 31, 2017. The changes in valuation allowance were as follows: Year-Ended December 31, 2017 2016 Balance at beginning of the period $ 7,389 $ 4,489 (Decrease) increase due to NOLs and temporary differences (265) 2,900 Deferred benefit recognized (5,786) — Balance at end of the period $ 1,338 $ 7,389 A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: December 31, 2017 2016 2015 Federal statutory rate 34.0 % 34.0 % 34.0 % State income taxes, net of federal income tax (16.5) (1.6) (1.4) Change in tax rate (2.3) — — Change in fair value of warrant liabilities — 3.8 (37.4) Change in valuation allowance (133.1) (42.1) (1.1) Non-deductible stock compensation and tax windfall benefits, net (60.7) (2.7) (6.0) Change in fair value of contingent consideration (47.5) — — Non-deductible expenses and other 9.3 (0.9) (1.0) Effective income tax rate (216.8) % (9.5) % (12.9) % In the normal course of business, the Company is subject to examination by taxing authorities from the federal and state governments within the United States. As of December 31, 2017, the Company's tax years beginning in 2014 remain open for examination by taxing authorities. |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Long-term Liabilities | |
Other Long-term Liabilities | 12. Other Long-term Liabilities Other long term liabilities as of December 31, 2017 and 2016 consisted of $2,615 and $2,205, respectively, which represents the long-term portion of deferred rent primarily related to the Company's operating leases for office space in New Jersey and South Carolina dedicated to software development. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 13. Stockholders' Equity (a) Capitalization On October 4, 2016, the Company closed its IPO in which the Company issued and sold 4,300,000 shares of common stock, plus the exercise of the underwriters’ option to purchase an additional 645,000 shares of common stock, at an issuance price of $12.00 per share. The Company received net proceeds of $55,186 after deducting underwriting discounts and commissions of $4,154 but before deducting other offering expenses. In addition, upon the closing of the IPO, all of the Company’s then outstanding Class A Non-Voting common stock and Class B Voting common stock, totaling 5,583,405 shares, were automatically redesignated into shares of common stock, and all of the Company’s then outstanding convertible preferred stock converted into an aggregate of 5,089,436 shares of common stock. Upon completion of the IPO on October 4, 2016, the Company filed an amended and restated certificate of incorporation to, among other things, state that the aggregate number of shares of stock that the Company is authorized to issue is 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.0001 per share. On December 8, 2017, the Company closed on a follow-on underwritten public offering (the “Offering”) in which the Company issued 1,350,000 shares of common stock, at an issuance price of $27.50 per share. The Company received net proceeds of $34,897 after deducting underwriting discounts and commissions of $2,228 but before deducting other offering expenses. Proceeds from the Offering were used to repay outstanding indebtedness under the Company’s Amended and Restated 2015 Revolving Line of Credit. (b) Common Stock Warrants During the year ended December 31, 2017, 28,431 shares of common stock were issued upon the net exercise of 32,216 warrants to purchase common stock at an exercise price of $1.55 per share. As of December 31, 2017, no warrants to purchase shares of common stock were outstanding. During 2016 prior to the IPO, the Company issued 210,817 shares of common stock upon the cashless exercise of warrants to purchase 232,787 shares of common stock. Upon completion of the IPO on October 4, 2016, 202,061 shares of common stock were issued upon the automatic net exercise of then outstanding warrants that would otherwise have expired upon the completion of the IPO, immediately prior to the closing of the IPO. (c) Preferred Stock Warrants Upon completion of the IPO on October 4, 2016, the then outstanding warrants to purchase preferred stock converted into warrants to purchase an aggregate of 463,589 shares of common stock. On October 12, 2016, 288,324 shares of common stock were issued upon the net exercise of 431,373 of these warrants. No preferred stock warrants were issued during the years ended December 31, 2017 and 2016. As of December 31, 2017, no warrants to purchase shares of preferred stock were outstanding. (d) Common Stock Repurchase On April 25, 2017 the Board authorized the Company to repurchase up to $5,000 of its common stock at prevailing market prices, from time to time, through open market, block and privately-negotiated transactions, at such times and in such amounts as management deems appropriate. The Company funds repurchases of its common stock through a combination of cash on hand, cash generated by operations or borrowings under the Amended and Restated 2015 Revolving Line. During the year ended December 31, 2017, the Company repurchased 73,466 shares at an average price of $13.05 per share for a total of $959. As of December 31, 2017, $4,041 of common stock remained available for repurchase. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | 14. Stock-Based Compensation On September 28, 2016, the Company adopted the 2016 Equity Compensation Plan (the “2016 Plan”) and merged the 2014 Equity Compensation Plan (“2014 Plan”) into the 2016 Plan. No additional grants were made thereafter under the 2014 Plan. Outstanding grants under the 2014 Plan will continue in effect according to their terms as in effect before the merger with the 2016 Plan, and the shares with respect to outstanding grants under the 2014 Equity Plan were issued or transferred under the 2016 Plan. The 2016 Plan authorizes the issuance or transfer of up to the sum of the following: (1) 800,000 new shares, plus (2) the number of shares of common stock subject to outstanding grants under the 2014 Equity Plan as of the effective date of the 2016 Plan; provided, however, that the aggregate number of shares of the Company’s common stock that may be issued or transferred under the 2016 Plan pursuant to incentive stock options may not exceed 800,000. During the term of the 2016 Plan, the share reserve will automatically increase on the first trading day in January of each calendar year, beginning in calendar year 2017, by an amount equal to the lesser of 5% of the total number of outstanding shares of common stock on the last trading day in December of the prior calendar year or such other number set by the Board. During 2017, the Board approved an increase of 831,423 shares to the share reserve. As of December 31, 2017, 460,441 shares were available for future grants under the 2016 Plan. The option price per share cannot be less than the fair market value of a share on the date the option was granted, and in the case of incentive stock options granted to an employee owning more than 10% of the total combined voting power of all classes of stock of the Company, the option price shall not be less than 110% of the fair market value of Company stock on the date of grant. Stock option grants under the 2016 Plan generally expire 10 years from the date of grant, other than incentive stock option grants to 10% shareholders, which have a 5 year term, 90 days after termination, or one year after the date of death or termination due to disability. Stock options generally vest over a period of four years, with 25% of the options becoming exercisable on the one-year anniversary of the commencement date and the remaining shares vesting monthly thereafter for 36 months in equal installments of 2.08% per month. Employee Restricted Common Stock On September 28, 2016, the Board granted 700,386 shares of restricted common stock to certain Company employees, including executive officers, under the 2014 Plan, prior to merging it with the 2016 Plan, pursuant to a special equity award pool previously approved by the Board which was made immediately prior to the effectiveness of the Company's registration statement filed in connection with the Company's IPO. All shares of restricted common stock were to vest in full on May 31, 2017. The value of the grants was based on the IPO price of $12.00 per share and the related non-cash compensation expense was recognized ratably over the vesting period from the date of grant through May 31, 2017, when the shares underlying the grant were scheduled to fully vest. For the years ended December 31, 2017, and 2016, $5,159 and $3,246 of expense was recognized related to this grant. As of December 31, 2017, there was no unrecognized compensation expense related to this grant. On June 12, 2017, the Company entered into an amendment with each recipient of this grant to amend the vesting date from May 31, 2017 to May 31, 2018. On August 3, 2017, the Board granted 20,000 shares of restricted common stock to a non-executive employee of the Company, pursuant to the 2016 Plan, which will vest in four substantially equal annual installments over the four years following the grant date. The value of the grant is based on the grant date fair value of the Company’s common stock of $14.56 per share. For the year ended December 31, 2017, $30 of expense was recognized related to this grant. As of December 31, 2017, there was unrecognized compensation expense of $261 related to this grant. Non-Employee Director Restricted Common Stock On September 28, 2016, the Company granted 22,260 shares of restricted common stock under the 2016 Plan to our non-employee directors, which represents both the initial and annual grants to such directors. The initial grant (“Initial Grant”) will vest in three substantially equal annual installments over three years following the grant date and the annual grant (“2016 Annual Grant”) of 7,420 shares vested in full on June 16, 2017, which was the date of the Company’s annual shareholder meeting. In addition, on September 28, 2017, 4,944 shares of the Initial Grant vested and were no longer subject to forfeiture. The value of the grants was based on the IPO price of $12.00. On March 8, 2017, the Company granted 5,212 shares of restricted common stock under the 2016 Plan to a newly appointed non-employee director, which represents such director’s initial grant and will vest in three substantially equal annual installments over three years following the grant date. The value of the grant is based on the grant date fair value of the Company’s common stock of $13.68 per share. On June 16, 2017, the Company granted 10,384 shares of restricted common stock (“2017 Annual Grant”) to its non-employee directors, which will vest in full on the earlier of the next annual shareholder meeting or the one year anniversary of the grant date. The value of the grant is based on the grant date fair value of the Company’s common stock of $13.54 per share. On October 30, 2017, the Company granted 7,788 shares of restricted common stock to a non-employee director, which represents both the initial and annual grants to such director. The initial grant will vest in three substantially equal annual installments over three years following the grant date and the annual grant will vest in full on the earlier of the next annual shareholder meeting or August 3, 2018. The value of the grant is based on the grant date fair value of the Company’s common stock of $26.39 per share. For the years ended December 31, 2017 and 2016, $245 and $39 of expense was recognized related to these non-employee director grants, respectively. As of December 31, 2017, there was unrecognized compensation expense of $401 related to these grants. Leadership Exit Bonus Plan On October 4, 2016, 20,372 shares of the Company’s common stock were surrendered to the Company by Radius Venture Partners III QP, L.P. and its affiliates (“Radius”), at the completion of the IPO pursuant to the Letter Agreement, as amended, the Company entered into with Radius. The Board approved the issuance of these shares, 13,362 shares of common stock, net of 7,010 shares of common stock withheld for tax withholding purposes, to certain executive officers pursuant to the Leadership Exit Bonus Plan and under the 2016 Plan. On October 4, 2016, these shares were issued. The value of this issuance was $244 based upon the IPO price of $12.00 per share and the non-cash compensation charge was recognized in the fourth quarter of 2016 as all shares issued were fully vested upon issuance. Stock Options The Company recorded $3,318, $721 and $565 of stock-based compensation expense related to the vesting of employee and non-employee stock options for the years ended December 31, 2017, 2016, and 2015, respectively. The estimated fair value of options granted was calculated using a Black- Scholes option-pricing model. The computation of expected life for employees was determined based on the simplified method. The risk-free rate is based on the U.S. Treasury security with terms equal to the expected time of exercise as of the grant date. The Company's common stock had not been publicly traded until the IPO commenced on September 29, 2016; therefore, expected volatility is based on the historical volatilities of selected public companies whose services are comparable to that of the Company. The table below sets forth the weighted average assumptions for employee grants during the years ended December 31, 2017, 2016, and 2015. Year Ended December 31, Valuation assumptions: 2017 2016 2015 Expected volatility 61.00 % 61.00 % 55.21 % Expected term (years) 6.03 5.69 6.05 Risk-free interest rate 2.21 % 1.37 % 1.75 % Dividend yield — — — The weighted average grant date fair value of employee options granted during the years ended December 31, 2017, 2016 and 2015 was $8.25, $7.74, and $3.34, respectively. The following table summarizes stock option activity for the years ended December 2017, 2016, and 2015: Weighted Weighted average average remaining Aggregate Number exercise contractual intrinsic of shares price term value Outstanding at January 1, 2015 2,845,226 $ 2.56 Granted 365,098 6.42 Exercised (406,683) 1.04 Forfeited (11,887) 6.24 Outstanding at December 31, 2015 2,791,754 $ 3.27 Granted 479,010 14.56 Exercised (203,991) 1.32 Forfeited (7,083) 9.02 Outstanding at December 31, 2016 3,059,690 $ 5.14 Granted 1,063,306 14.64 Exercised (1,162,579) 3.15 Forfeited (77,242) 11.61 Outstanding at December 31, 2017 2,883,175 $ 9.26 7.0 $ 54,180 Options vested and expected to vest at December 31, 2017 2,883,175 $ 9.26 7.0 $ 54,180 Exercisable at December 31, 2017 1,504,255 $ 4.85 5.6 $ 34,895 Included within the above table are 84,707 non-employee options outstanding as of December 31, 2017, of which 2,133 are unvested as of December 31, 2017 and therefore subject to remeasurement. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the Company’s closing stock price or estimated fair value on the last trading day of the fiscal year for those stock options that had exercise prices lower than the fair value of the Company's common stock. This amount changes based on the fair market value of the Company’s stock. The total intrinsic values of options exercised during the years ended December 31, 2017, 2016, and 2015 were $14,512, $2,785, and $2,304, respectively. As of December 31, 2017, there was $9,212 of unrecognized compensation cost related to nonvested stock options granted under the 2016 Plan, which is expected to be recognized over a weighted average period of 1.8 years. Cash received from option exercises for the years ended December 31, 2017, 2016, and 2015 was $480, $153, and $12, respectively. During the year ended December 31, 2017, 362,440 shares of common stock were delivered by option holders as payment for the exercise price and employee payroll taxes owed for the exercise of 956,327 stock options with a gross exercise value of $3,187. During the year ended December 31, 2016, 7,930 shares of common stock were delivered by option holders as payment for the exercise of 71,150 stock options with a gross exercise value of $104. The Company recorded total stock-based compensation expense for the years ended December 31, 2017, 2016 and 2015 in the following expense categories of its consolidated statement of operations: Year Ended December 31, 2017 2016 2015 Cost of revenue - product $ 502 $ 191 $ 102 Cost of revenue - service 293 46 23 Research and development 694 62 25 Sales and marketing 598 138 91 General and administrative 6,665 3,813 324 Total stock-based compensation expense $ 8,752 $ 4,250 $ 565 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 15. Fair Value Measurements The Company’s financial instruments consist of accounts receivable, accounts payable, accrued expenses, acquisition-related contingent consideration, and long-term debt. The carrying values of accounts receivable, accounts payable and accrued expenses are representative of their fair value due to the relatively short-term nature of those instruments. The carrying value of the Company’s long-term debt approximates fair value based on the terms of the debt. The Company has classified liabilities measured at fair value on a recurring basis at December 31, 2017 and 2016 as follows: Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 December 31, 2017 Liabilities Acquisition-related contingent consideration - short-term — — 1,640 1,640 Acquisition-related contingent consideration - long-term — — 31,789 $ — $ — $ $ 33,429 Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 December 31, 2016 Liabilities Acquisition-related contingent consideration - short-term $ — $ — $ 1,493 $ 1,493 Acquisition-related contingent consideration - long-term — — 1,515 1,515 $ — $ — $ 3,008 $ 3,008 Acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs, hence these instruments represent Level 3 measurements within the fair value hierarchy. The acquisition-related contingent consideration liability represents the estimated fair value of the additional cash consideration payable that is contingent upon the achievement of certain financial and performance milestones. During 2016, the Company made a $1,895 cash payment toward the Medliance acquisition-related contingent consideration. The Company also recorded a $338 reduction to the Aggregate Earn-Out Amount during 2016 based on a decrease in estimated future revenues. During 2017, the Company made a $1,498 cash payment toward the Medliance acquisition-related contingent consideration. The Company also recorded a $130 increase to the Aggregate Earn-Out Amount during 2017 based on an increase in estimated future revenues. The final Earn-Out amount was paid in February 2018. The fair value of the Medliance contingent consideration was calculated to be $1,640 and $3,008 at December 31, 2017 and 2016, respectively. The SRx acquisition-related contingent consideration was recorded at the estimated fair value at the acquisition date of September 6, 2017. The Company, with the assistance of a third-party appraiser, utilized a Monte Carlo simulation to derive acquisition date estimates of the contingent consideration payments. During 2017, the Company recorded a $6,303 adjustment to reduce the fair value of the SRx acquisition-related contingent consideration based on a decrease in estimated future operating results. The fair value of the SRx acquisition-related contingent consideration was calculated to be $31,789 as of December 31, 2017. The changes in fair value of the Company’s acquisition-related contingent consideration for the years ended December 31, 2017 and 2016 was as follows: Balance at January 1, 2016 $ 5,241 Fair value of cash consideration paid (1,895) Adjustments to fair value measurement (338) Balance at December 31, 2016 3,008 Acquisition date fair value of SinfoníaRx contingent consideration 38,092 Fair value of cash consideration paid (1,498) Adjustments to fair value measurement (6,173) Balance at December 31, 2017 $ 33,429 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 16. Commitments and Contingencies (a) Leases The Company has entered into various operating leases for office space expiring on various dates through 2027, which also contain renewal options and escalation clauses, and obligations to pay a pro rata share of operating expenses and taxes. On August 21, 2015, the Company entered into three operating lease agreements to expand its dispensary operations and corporate office space in Moorestown, NJ. Two of the three leases commenced on March 31, 2016 and the third lease commenced on October 1, 2016. All three leases expire on November 30, 2027. The Company will have the option to extend the leases for one additional period of ten years. In addition to the base rent payments, the Company will be obligated to pay a pro rata share of operating expenses and taxes. Future minimum lease payments under operating leases as of December 31, 2017 are as follows: December 31, 2017 2018 $ 2,648 2019 2,610 2020 2,644 2021 2,607 2022 2,548 Thereafter 10,264 Total minimum lease payments $ 23,321 Rent expense under these operating leases was $2,012, $1,342, and $627 for the years ended December 31, 2017, 2016, and 2015 respectively. (b) Employment Agreements The Company has employment agreements with certain non-executive officers and key employees that provide for, among other things, salary and performance bonuses. On April 25, 2017, the Company entered into employment agreements with each of the Company’s named executive officers. The employment agreements provide for, among other things, salary, incentive compensation, payments in the event of termination of the executives upon the occurrence of a change in control, and restrictive covenants pursuant to which the executives have agreed to refrain from competing with the Company or soliciting the Company’s employees or customers for a period following the executive’s termination of employment. Each employment agreement was effective as of April 1, 2017. On February 26, 2018, the Company entered into change in control and severance agreements with each of the Company’s named officers, which replace the existing employment agreements dated April 1, 2017. The agreements have an initial term of three years and will automatically renew annually. On April 25, 2017, the Company’s Board also adopted the Annual Incentive Plan, effective as of January 1, 2017, which formalizes the Company’s annual short-term incentive program and does not represent a new compensation program for the named executive officers. The Annual Incentive Plan provides pay for performance incentive compensation to the Company’s employees, including its named executive officers, rewarding them for their contributions to the Company with cash incentive compensation based on attainment of pre-determined corporate and individual performance goals, as applicable. On February 26, 2018, the Company’s Board approved an amendment to the Annual Incentive Plan effective January 1, 2018, to allow the payments of awards under the Annual Incentive Plan to be made in the form of cash, equity, or other consideration determined in the discretion of the Compensation Committee of the Board. (c) Legal Proceedings The Company is not currently involved in any significant claims or legal actions that, in the opinion of management, will have a material adverse impact on the Company. (d) Letter of Credit As of December 31, 2017 and 2016, the Company was contingently liable for $400 and $500, respectively, under an outstanding letter of credit related to the Company’s lease agreement for the office space in Moorestown, NJ (see Note 10). |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Plan | |
Retirement Plan | 17. Retirement Plan The Company has established a 401(k) plan that qualifies as a defined contribution plan under Section 401 of the Internal Revenue Code. The Company’s contributions to this plan are based on a percentage of eligible employees’ plan year earnings, as defined. The Company made matching contributions to participants’ accounts totaling $644, $347 and $475 during the years ended December 31, 2017, 2016 and 2015, respectively. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related-Party Transactions | |
Related-Party Transactions | 18. Related-Party Transactions During 2016, the Company engaged Tunstall Consulting, a corporate financial planning company, to provide professional services related to obtaining the ABC Credit Facility (Note 10(b)). Tunstall Consulting is owned and operated by a member of the Board. Costs incurred by the Company for professional services provided by the related party were $104 and were recorded as deferred financing costs during 2016, which were fully amortized when the ABC Credit Facility was repaid in full during the third quarter of 2016. On September 15, 2016, the Company acquired certain assets from an entity indirectly controlled by the Company’s former Chief Scientific Officer (see Note 4). |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Data (unaudited) | |
Selected Quarterly Financial Data (unaudited) | 19. Selected Quarterly Financial Data (unaudited) The following tables set forth selected unaudited quarterly statements of operations data for each of the eight quarters in the years ended December 31, 2017 and 2016. Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 December 31, 2017 Total revenue $ 27,689 $ 29,656 $ 33,268 $ 43,933 $ 134,546 Income (loss) from operations $ (2,710) $ (1,222) $ (236) $ 9,369 $ 5,201 Net income (loss) attributable to common stockholders: Basic $ (2,881) $ (1,464) $ 7,695 $ 10,946 $ 14,296 Diluted $ (2,881) $ (1,464) $ 7,695 $ 10,946 $ 14,296 Net income (loss) per share attributable to common stockholders: Basic $ (0.18) $ (0.09) $ 0.46 $ 0.63 $ 0.85 Diluted $ (0.18) $ (0.09) $ 0.41 $ 0.55 $ 0.76 Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 December 31, 2016 Total revenue $ 20,157 $ 22,418 $ 24,174 $ 27,313 $ 94,062 Income (loss) from operations $ 1,614 $ 1,479 $ 1,706 $ (248) $ 4,551 Net income (loss) attributable to common stockholders (1) : Basic $ 293 $ (890) $ 1,228 $ (6,031) $ (3,811) Diluted $ 94 $ (890) $ (803) $ (6,031) $ (6,889) Net income (loss) per share attributable to common stockholders (2) : Basic $ 0.06 $ (0.18) $ 0.25 $ (0.39) $ (0.51) Diluted $ 0.01 $ (0.18) $ (0.08) $ (0.39) $ (0.59) (1) Quarterly and year-to-date computations of net income (loss) attributable to common stockholders during the year ended December 31, 2016 are made independently using the two-class method. Therefore, the sum of the net income (loss) attributable to common stockholders for the quarters may not agree with the net income (loss) attributable to common stockholders for the year. See Notes 2 and 3 for the Company’s accounting policy on calculating net income (loss) attributable to common stockholders and net income (loss) per share. (2) Quarterly and year-to-date computations of per share amounts are made independently during the year ended December 31, 2016 using the two-class method. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. See Notes 2 and 3 for the Company’s accounting policy on calculating net income (loss) attributable to common stockholders and net income (loss) per share. The quarterly unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in this report and include all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of such information when read in conjunction with our annual audited consolidated financial statements and notes appearing in this report. The operating results for any quarter do not necessarily indicate the results for any subsequent period or for the entire fiscal year. |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule I Additions Balance at Charged to Beginning of Costs and Balance at End Description Period Expenses Deductions of Period Allowance for doubtful accounts: Year Ended December 31, 2017 $ 39 $ 24 $ — $ 63 Year Ended December 31, 2016 $ 49 $ (10) $ — $ 39 Year Ended December 31, 2015 $ 12 $ 43 $ (6) $ 49 Allowance Release of Balance at Recorded on Allowance on Beginning of Current Year Losses Expired Balance at End Description Period Losses or Revalued of Period Deferred tax asset valuation allowance: Year Ended December 31, 2017 $ 7,389 $ (265) $ (5,786) $ 1,338 Year Ended December 31, 2016 $ 4,489 $ 2,900 $ — $ 7,389 Year Ended December 31, 2015 $ 4,626 $ (137) $ — $ 4,489 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding annual financial reporting. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation . |
Liquidity | (b) Liquidity The Company's audited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. Management believes that the Company's cash on hand of $10,430 as of December 31, 2017, cash flows from operations and borrowing availability under the Amended and Restated 2015 Revolving Line (Note 10) are sufficient to fund the Company's planned operations through at least March 31, 2019. |
Use of Estimates | (c) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates or assumptions. On an ongoing basis, management evaluates its estimates and assumptions, including, but not limited to, those related to: (i) the fair value of assets acquired and liabilities assumed for business combinations, (ii) the recognition and disclosure of contingent liabilities, (iii) the useful lives of long-lived assets (including definite-lived intangible assets), (iv) the evaluation of revenue recognition criteria, and (v) the realizability of long-lived assets, including goodwill and intangible assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company has engaged and may, in the future, engage third-party valuation specialists to assist with estimates related to the valuation of assets and liabilities acquired. Such estimates often require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions or circumstances. |
Revenue Recognition | (d) Revenue Recognition The Company recognizes revenue from product sales or services rendered when (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to its client is fixed or determinable and (iv) collectability is reasonably assured. When the Company enters into arrangements with multiple deliverables, it applies the accounting guidance for revenue arrangements with multiple deliverables and evaluates each deliverable to determine whether it represents a separate unit of accounting based on the following criteria: (i) whether the delivered item has value to the customer on a standalone basis, and (ii) if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Revenue is allocated to each element in an arrangement based on a selling price hierarchy. The selling price for a deliverable is based on estimated selling prices ("ESP") as vendor specific objective evidence or third party evidence is not available. The Company establishes ESP for the elements of its arrangements based upon its pricing practices and class of customers. The stated prices for the various deliverables of the Company's contracts are consistent across classes of customers. The Company evaluates its contractual arrangements to determine the performance obligations and transaction prices. Revenue is allocated to each performance obligation and recognized when the related performance obligations are satisfied . Product Revenue The Company enters into multiple-element arrangements with healthcare organizations to provide software enabled medication risk management solutions. Under these contracts, revenue is generated through the components listed below. Prescription medication revenue The Company sells prescription medications directly to healthcare organizations through its prescription fulfillment pharmacies. Prescription medication fees are based upon the prices stated in customer contracts for the prescription and include a dispensing fee. Prescription medication revenue, including dispensing fees, is recognized when the product is shipped to the customer. Prescription medications are considered a separate unit of accounting. Per member per month fees — medication risk management services The Company receives a fixed monthly administrative fee for each member in the program contracted for medication risk management services. This fee, which is included in Product Revenue in the consolidated statement of operations, is recognized on a monthly basis as medication risk management services are provided. The services associated with the per member per month fees are considered a separate unit of accounting. Service Revenue The Company provides medication risk management services utilizing the Medication Risk Mitigation Matrix (“MRM Matrix”) technology alone, without the related fulfillment services, which are referred to as MRM Service Contracts. The Company began entering into these MRM Service Contracts in the third quarter of 2016. The Company’s MRM Service Contracts also include services provided by the SinfoníaRx business, which was acquired on September 6, 2017. The SinfoníaRx business provides Medication Therapy Management (“MTM”) technology and services for Medicare, Medicaid, commercial health plans, and pharmacies, which are referred to as MTM Contracts. See Note 4 for additional information about the acquisition of the SinfoníaRx business. The Company also enters into contracts with healthcare organizations to provide (i) risk adjustment and (ii) pharmacy cost management services, which include training client staff and providers about documentation and diagnosis coding, analyzing clients' data collection and submission processes, and delivering meaningful analytics for understanding reimbursement complexities. Under the MRM Service Contracts, MTM Contracts and risk adjustment contracts, there are generally four revenue generating components: Set up fees: The Company's contracts for Medication Risk Mitigation (“MRM”) and risk adjustment services often require customers to pay non-refundable set up fees, which are deferred and recognized over the estimated term of the contract. These fees are charged at the beginning of the customer relationship as compensation for the Company's efforts to prepare the customer and configure its system for the data collection process. The set up activities do not represent a separate unit of accounting as they do not have value apart from the broader MRM Service Contracts, MTM Contracts and risk adjustment contracts. Incremental direct costs associated with such set up activities are also deferred and amortized over the shorter of the estimated customer life or stated contract period. Per member per month fees The Company receives a fixed monthly fee for each member in the respective programs. These services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized each month as the services are performed. Per member per month fees on MTM contracts are recognized as comprehensive medication reviews are completed. Per transaction fee The Company also receives transactional fees based on a fixed fee per comprehensive medication review under several of its MTM contracts. Revenue is recognized as comprehensive medication reviews are completed. Hourly consulting fees The Company sometimes contracts with customers to perform various other services. Such services are billed on a time and materials basis, at agreed hourly rates. Consulting services represent a separate unit of accounting and are offered independently from any other services. Revenue for these services is recognized as time is incurred on the project. The Company's pharmacy cost management services include subscription revenue from customers and revenues from drug manufacturers for the sale of drug utilization data. Subscription revenue is recognized monthly as either a flat fee or as a percentage of monthly transactions incurred. Data and statistics fees from drug manufacturers are recognized as revenue when received due to the unpredictable nature of the payments and because fees are not fixed and determinable until received. In addition, the Company receives hosting fees for SRx’s cloud-based platform used to deliver MTM services and data analytics support to pharmacies managing their value-based contracts. These hosting fees are recognized monthly as either a flat fee or on a fixed monthly fee per user basis. |
Cost of Product Revenue | (e) Cost of Product Revenue Cost of product revenue includes all costs directly related to the product revenue, including costs relating to the Company's pharmacists' collaboration on a patient's medication management, clinical analysis of the results and, when necessary, offering guidance to the prescriber based upon the review of the medication risk mitigation matrix and the individual patient's medical history, as well as the fulfillment and distribution of prescription drugs. Costs consist primarily of the purchase price of the prescription drugs the Company dispenses, expenses to package, dispense and distribute prescription drugs, expenses associated with the Company's medication care plan support centers and prescription fulfillment centers, including employment costs and stock-based compensation, and expenses related to the hosting of the Company's technology platform. Such costs also include direct overhead expenses, as well as allocated miscellaneous overhead costs. The Company allocates miscellaneous overhead costs among functions based on employee headcount. |
Cost of Service Revenue | (f) Cost of Service Revenue Cost of service revenue includes all labor costs, including stock-based compensation expense, directly related to the risk adjustment and pharmacy cost management services and expenses for claims processing, technology services and overhead costs. In addition, service costs include all costs directly related to servicing the Company’s MRM Service Contracts and MTM Contracts, which primarily consist of labor costs, consultant fees, technology services and overhead costs. |
Research and Development | (g) Research and Development Research and development expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in the Company's research and development functions, which include software developers and other employees engaged in scientific education and research. Research and development expenses also include costs relating to the design and development of new software and technology and new service offerings, as well as enhancement of existing software and technology and new service offerings, including fees paid to third-party consultants, costs relating to quality assurance and testing, and other allocated facility-related overhead and expenses. Costs incurred in research and development are charged to expense as incurred. |
Stock-Based Compensation | (h) Stock-Based Compensation The Company accounts for stock-based awards granted to employees and directors in accordance with ASC Topic 718, Compensation — Stock Compensation , which requires that compensation cost be recognized for awards based on the grant-date fair value of the award. That cost is recognized on a straight-line basis over the period during which an employee or director is required to provide service in exchange for the award — the requisite service period ("vesting period"). The grant-date fair value of employee and director stock-based awards is determined using the Black-Scholes option-pricing model. Compensation expense for options granted to non-employees is determined based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. Compensation expense is recognized over the period during which services are rendered by such non-employees until completed on a straight-line basis over the vesting period on each separate vesting tranche of the award, or the accelerated attribution method. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company's common stock and updated assumption inputs in the Black-Scholes option-pricing model. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient's payroll costs or recipient’s service payments are classified. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The Company was a private company until its common stock commenced public trading on September 29, 2016, and therefore lacks company-specific historical and implied volatility information. Therefore, the Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company's stock options has been determined utilizing the "simplified" method. The expected term of the stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. |
Income Taxes | (i) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. |
Accretion (Decretion) of Redeemable Convertible Preferred Stock | (j) Accretion (Decretion) of Redeemable Convertible Preferred Stock Historically, accretion (decretion) of redeemable convertible preferred stock included the accretion of accruing dividends on and issuance costs of the Company's Series A, Series A-1 and Series B redeemable convertible preferred stock. The carrying values of Series A and Series A-1 redeemable convertible preferred stock were being accreted to their respective redemption values at each reporting period using the effective interest method, from the date of issuance to the earliest date the holders could demand redemption. The carrying value of Series B redeemable convertible preferred stock was being accreted (decreted) to redemption value at each reporting period at the greater of (i) the original issuance price plus unpaid accrued dividends or (ii) the fair value of the redeemable convertible preferred stock. Upon the completion of the IPO on October 4, 2016, the preferred stock automatically converted into shares of common stock. |
Net Income (Loss) per Share Attributable to Common Stockholders | (k) Net Income (Loss) per Share Attributable to Common Stockholders The Company computed net income per share of common stock using the treasury stock method for the year ended December 31, 2017. For the years ended December 31, 2016 and 2015, the Company used the two-class method to compute net loss attributable to common stockholders because the Company had issued securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings of the Company. The two-class method requires net loss applicable to common stockholders for the period, after an allocation of earnings to participating securities, to be allocated between common and participating securities based upon their respective rights to receive distributed and undistributed earnings. The Company's preferred stockholders were entitled to receive annual cumulative dividends payable prior and in preference to dividends paid to holders of common stock when, as and if declared by the Company's Board. In the event a dividend was paid on common stock, holders of preferred stock were entitled to a proportionate share of any such dividend as if they were holders of common shares (on an as-if converted basis). Immediately prior to the closing of the IPO on October 4, 2016, all accumulated dividends were forfeited upon conversion of preferred stock into shares of common stock. |
Cash | (l) Cash Cash at December 31, 2017 and 2016 consists of cash on deposit with banks. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2017 or 2016. |
Accounts Receivable, net | (m) Accounts Receivable, net Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and its clients' financial condition, the amount of receivables in dispute and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts monthly. The allowance for doubtful accounts was $63 and $39 as of December 31, 2017 and 2016, respectively. |
Inventories | (n) Inventories Inventories consist of prescription medications and are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. |
Property and Equipment, net | (o) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Additions or improvements that increase the useful life of existing assets are capitalized, while expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer hardware and purchased software over a life of three years and office furniture and equipment over a life of five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Property and equipment under capital leases are amortized over the shorter of the lease term or the estimated useful life of the asset. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations. |
Software Development Costs, net | (p) Software Development Costs, net Certain development costs of the Company's internal-use software are capitalized in accordance with ASC Topic 350, Intangibles — Goodwill and Other ("ASC 350"), which outlines the stages of computer software development and specifies when capitalization of costs is required. The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software, including external direct costs of material and services and payroll costs for employees directly involved with the software development. Projects that are determined to be in the development stage are capitalized. Subsequent additions, modifications, or upgrades to internal-use software are capitalized to the extent that they allow the software to perform tasks it previously did not perform. Capitalized software costs are amortized beginning when the software project is substantially complete and the asset is ready for its intended use. Capitalized internal-use software costs are amortized using the straight-line method over the remaining estimated useful life of the assets, which is generally three years. Costs incurred in the preliminary project stage and post-implementation stage, as well as maintenance and training costs, are expensed as incurred as part of research and development expense. |
Goodwill | (q) Goodwill Goodwill consists of the excess purchase price over fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but instead tested for impairment annually. Goodwill is assessed for impairment on October 1 st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. ASU 2011-08, Testing Goodwill for Impairment , provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the two-step goodwill impairment test. If this is the case, the two-step goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. If the two-step goodwill impairment test is required, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying amount, step two does not need to be performed. The Company has one reporting unit. For the years ended December 31, 2017 and 2016, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair values of its reporting unit is less than the carrying amount. Accordingly, no impairment loss was recorded for the years ended December 31, 2017 or 2016. |
Impairment of Long-Lived Assets Including Other Intangible Assets | (r) Impairment of Long-Lived Assets Including Other Intangible Assets Long-lived assets consist of property and equipment, software development costs and definite-lived intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets. |
Deferred Debt Financing Costs | (s) Deferred Debt Financing Costs Costs related to obtaining debt financing are capitalized and amortized to interest expense over the term of the related debt using the effective-interest method. If debt is prepaid or retired early, the related unamortized deferred financing costs are written off in the period the debt is retired. Deferred financing costs of $219 and $59, net of accumulated amortization, are included in other assets on the accompanying consolidated balance sheets as of December 31, 2017 and 2016, respectively. |
Deferred Rent | (t) Deferred Rent Rent expense is recorded on a straight-line basis over the term of the lease. Lease incentives, including tenant improvement allowances, are recorded to deferred rent and amortized on a straight-line basis over the lease term. Approximately $163 and $13 of deferred rent are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets as of December 31, 2017 and 2016, respectively. Approximately $2,615 and $2,205 of deferred rent is included in long-term liabilities in the accompanying balance sheets as of December 31, 2017 and 2016, respectively. |
Contingencies | (u) Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal fees and other expenses related to litigation are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations. |
Shipping and Handling Costs | (v) Shipping and Handling Costs Shipping and handling costs are charged to cost of product revenue when incurred. Shipping and handling costs totaled $3,652, $2,673, and $1,876 for the years ended December 31, 2017, 2016, and 2015, respectively. |
Advertising Costs | (w) Advertising Costs Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $117, $117, and $43 for the years ended December 31, 2017, 2016, and 2015, respectively, which is included in sales and marketing expense. |
Business Combinations | (x) Business Combinations The costs of business combinations are allocated to the assets acquired and liabilities assumed, in each case based on estimates of their respective fair values at the acquisition dates, using the purchase method of accounting. Fair values of intangible assets are estimated by valuation models prepared by management and third-party specialists. The assets purchased and liabilities assumed have been reflected in the Company's consolidated balance sheets, and the results are included in the consolidated statements of operations and consolidated statements of cash flows from the date of acquisition. Acquisition-related contingent consideration is classified as a liability and measured at fair value at the acquisition date with changes in fair value after the acquisition date affecting earnings in the period of the estimated fair value change. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in general and administrative expenses in the consolidated statements of operations. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. |
Segment Data | (y) Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company's chief operating decision maker allocates resources and assesses performance based upon financial information at the consolidated level. The Company's chief operating decision maker is the Chief Executive Officer. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. All revenues are generated and all tangible assets are held in the United States. |
Concentration of Credit Risk | (z) Concentration of Credit Risk The Company's medication risk management and risk adjustment clients consist primarily of healthcare organizations, which are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) and dual funded by Medicaid and Medicare and, therefore, subject to the reporting requirements established by the Centers for Medicaid and Medicare Services ("CMS"). Under CMS guidelines, Medicare Part D sponsors are required to remit payment for claims within 14 calendar days of the date on which an electronic claim is received and within 30 calendar days of the date on which non-electronically submitted claims are received. The Company extends credit to clients based upon such terms, as well as management's evaluation of creditworthiness, and generally collateral is not required. The Company’s MTM clients consistent primarily of healthcare organizations, commercial health plans, and pharmacies. The Company’s pharmacy cost management clients consist primarily of post-acute care facilities. Credit associated with these accounts is extended based upon management’s evaluation of creditworthiness and is monitored on an on-going basis. As of December 31, 2017, two clients represented 15% and 12% of net accounts receivable, respectively. As of December 31, 2016, two clients represented 12% and 10% of net accounts receivable, respectively. During 2017, the Company signed a master agreement with a healthcare organization covering 11 PACE facilities, which represented 18% of total revenue for the year ended December 31, 2017. Prior to signing this master agreement, each of these PACE facilities had separate contracts with the Company and were considered separate, individual, clients. For the year ended December 31, 2016 no single client accounted for greater than 10% of revenue. For the year ended December 31, 2015, one client accounted for 10% of total revenue. On a combined basis, the 11 PACE facilities represented 17% and 15% of total revenue for the years ended December 31, 2016, and 2015, respectively. |
Fair Value of Financial Instruments | (aa) Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities or other inputs that are observable or can be corroborated by observable market. Level 3 — Unobservable inputs which are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Recent Accounting Pronouncements | (bb) R ecent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") and has subsequently issued a number of amendments to ASU 2014-09. ASU 2014-09, as amended, represents a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services. ASU 2014-09 sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed. For public companies, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017 and interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company will adopt ASU-2014-09 as of January 1, 2018 using the full retrospective method and continues to assess the impact of ASU 2014-09 on its results of operations, financial position, cash flows, and disclosures . The Company will finalize its calculation of the financial impact of the adoption of this accounting standard on its consolidated financial statements in the first quarter of 2018 . The Company analyzed substantially of its all contracts with customers to determine the impact of the adoption of ASU 2014-09 on the Company’s consolidated financial statements and disclosures. While the Company is still analyzing the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures, the adoption of ASU 2014-09 is expected to affect the revenue recognition for certain of the Company’s contracts, as follows: · Certain contracts for the Company’s risk adjustment services include fees based on the gains recognized by customers as a result of services provided. Revenue for these contracts was historically recognized when billed because the price was not fixed or determinable. Under ASU 2014-09, revenue from these contracts will be recognized earlier as the risk adjustment services are provided. · Data and statistics fees from drug manufacturers were historically recognized as revenue when received due to the unpredictable nature of the payment amounts and because fees were not fixed and determinable until received. Under ASU 2014-09, these fees will be recognized earlier when the data is submitted to the drug manufacturers based on the fair value of the data. · The allocation between services and product revenue from PACE contracts will be based on stand-alone selling price, which will have no impact on the timing of revenue recognition. In addition, the adoption of this ASU will result in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"), which simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost and net realizable value test. ASU 2015-11 is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted ASU 2015-11 effective January 1, 2017. The adoption of this standard did not have any impact on the Company's consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"). The standard requires that adjustments made to provisional amounts recognized in a business combination be recorded in the period such adjustments are determined, rather than retrospectively adjusting previously reported amounts. ASU 2015-16 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company adopted ASU 2015-16 for the year ended December 31, 2017. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the potential impact of the adoption of this standard and anticipates that this standard will have a material impact on the Company’s consolidated financial statements, as all long-term leases will be capitalized on the consolidated balance sheet. In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). The amendments in this update simplify certain aspects related to how share-based payments are accounted for and presented in the financial statements. The new guidance requires excess tax benefits and tax deficiencies be recorded as an income tax benefit or expense in the statement of operations when the awards vest or are settled and as operating cash flows when realized. The excess tax benefits are recognized regardless of whether the benefit reduces income taxes payable in the current period. It also allows an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted ASU 2016-09 effective January 1, 2017. The Company elected to record forfeitures as they occur. There was no impact of this election because prior to the adoption the Company’s historical forfeitures were de minimus. The adoption of this new standard resulted in the recognition of a tax benefit in the amount of $2,594 in the consolidated statement of operations related to tax windfall benefits generated during the year ended December 31, 2017. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 provides new guidance to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the potential impact of ASU 2016-15 on the Company's consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (“ASU 2017-01”). ASU 2017-01 provides guidance for evaluating whether a set of transferred assets and activities (the “set”) should be accounted for as an acquisition of a business or group of assets. The guidance provides a screen to determine when a set does not qualify to be a business. When substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in an identifiable asset or a group of similar assets, the set is not a business. Also to be considered a business, the set would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. ASU 2017-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company believes the adoption of ASU 2016-15 will not have a material effect on the Company's consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 simplifies the accounting for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill to measure an impairment charge. Instead, entities will be required to record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. ASU 2017-04 is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company believes the adoption of ASU 2016-15 will not have a material effect on the Company's consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements. The guidance requires modification accounting only if the fair value, vesting conditions, or the classification of the award (as equity or liability) changes as a result of a change in terms or conditions. ASU 2017-09 is effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company is currently evaluating the potential impact of the adoption of ASU 2017-09 on the Company's consolidated financial statements. |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Net Income (Loss) per Share | |
Schedule of calculation of basic and diluted net income (loss) per share | Year Ended December 31, 2017 2016 2015 Numerator: Net income (loss) $ 14,296 $ (6,250) $ (2,864) Decretion (accretion) of redeemable convertible preferred stock — 2,439 (9,966) Net income (loss) attributable to common stockholders, basic $ 14,296 $ (3,811) $ (12,830) Decretion of redeemable convertible preferred stock — (2,439) — Revaluation of warrant liability, net of tax — (639) — Net income (loss) attributable to common stockholders, diluted $ 14,296 $ (6,889) $ (12,830) Denominator (basic): Weighted average shares of common stock outstanding, basic 7,486,131 4,318,779 Denominator (diluted): Weighted average shares of common stock outstanding 7,486,131 4,318,779 Effect of potential dilutive securities: Weighted average dilutive effect of stock options 1,395,687 — — Weighted average dilutive effect of restricted shares 638,938 Weighted average dilutive effect of common shares from warrants 9,331 — — Dilutive effect from preferred stock and preferred stock warrants assuming conversion — 4,105,079 — Weighted average shares of common stock outstanding, diluted 4,318,779 Net income (loss) per share attributable to common stockholders, basic $ 0.85 $ (0.51) $ (2.97) Net income (loss) per share attributable to common stockholders, diluted $ 0.76 $ (0.59) $ (2.97) |
Schedule of shares excluded from the calculation of diluted net loss per share attributable to common stockholders | Year Ended December 31, 2017 2016 2015 Stock options to purchase common stock — 3,059,690 2,791,754 Restricted stock — 722,646 — Common stock warrants — 32,216 446,593 Preferred stock warrants (as converted to common stock) — — 463,589 Redeemable convertible preferred stock (as converted to common stock) — — 5,089,436 — 3,814,552 8,791,372 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of proforma results | Year Ended December 31, 2017 2016 2015 Revenue $ 156,012 $ 121,157 $ 91,122 Net income (loss) 116 (7,668) (6,143) Net income (loss) per share attributable to common stockholders, basic 0.01 (0.63) (3.08) Net income (loss) per share attributable to common stockholders, diluted 0.01 (0.67) (3.08) |
SinfoniaRx | |
Schedule of purchase price consideration | Cash consideration at closing, net of post-closing adjustments $ 34,492 Stock consideration at closing 11,541 Estimated fair value of contingent consideration 38,092 Total fair value of acquisition consideration $ 84,125 |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Cash $ 218 Accounts receivable 8,309 Prepaid expenses and other current assets 1,056 Property and equipment 1,419 Other assets 127 Trade name 4,776 Developed technology 13,291 Client relationships 20,265 Non-competition agreement 4,752 Goodwill 52,927 Total assets acquired $ 107,140 Accrued expenses and other liabilities (3,848) Trade accounts payable (8,868) Debt assumed (675) Deferred income tax liability, net (9,624) Total purchase price, including contingent consideration of $38,092 $ 84,125 |
Quebec Inc. | |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Developed technology $ 10,100 Trade name 220 Goodwill 80 Total assets acquired $ 10,400 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Schedule of property plant and equipment | Estimated December 31, useful life 2017 2016 Computer hardware and purchased software 3 years $ 2,565 $ 1,789 Office furniture and equipment 5 years 7,275 5,671 Leasehold improvements 5-15 years 5,366 3,744 11,204 Less: accumulated depreciation (5,963) (4,795) Property and equipment, net $ 9,243 $ 6,409 |
Software Development Costs (Tab
Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Software Development Costs | |
Schedule of capitalized software costs | December 31, 2017 December 31, 2016 Software development costs $ 9,873 $ 6,501 Less: accumulated amortization (4,872) (3,151) Software development costs, net $ 5,001 $ 3,350 Capitalized software costs not yet subject to amortization $ 1,021 $ 911 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets | |
Schedule of goodwill | Balance at January 1, 2016 $ 21,606 Goodwill from 2016 acquisition 80 Balance at December 31, 2016 21,686 Goodwill from 2017 acquisition 52,927 Balance at December 31, 2017 $ 74,613 |
Schedule of intangible assets | Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2017 Trade names 8.56 $ 6,716 $ (1,320) $ 5,396 Client relationships 8.48 34,949 (5,652) 29,297 Non-competition agreements 4.96 5,404 (739) 4,665 Developed technology 7.38 26,791 (3,438) 23,353 Domain name 10.00 29 (4) 25 Total intangible assets $ 73,889 $ (11,153) $ 62,736 Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2016 Trade names 5.00 $ 1,940 $ (791) $ 1,149 Client relationships 10.02 14,684 (3,289) 11,395 Non-competition agreements 4.64 652 (326) 326 Developed technology 7.76 13,500 (1,101) 12,399 Domain name 10.00 29 (1) 28 Total intangible assets $ 30,805 $ (5,508) $ 25,297 |
Schedule of estimated amortization expense | Years Ending December 31, 2018 $ 10,079 2019 9,636 2020 9,296 2021 9,283 2022 8,975 Thereafter 15,467 Total estimated amortization expense $ 62,736 |
Accrued Expenses and Other Li34
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | December 31, 2017 December 31, 2016 Employee related expenses $ 4,572 $ 1,174 Deferred revenue 1,350 851 Accrued payables due to customers 1,200 — Contract labor 463 — Interest 13 16 Deferred rent 163 13 Professional fees 288 — Income taxes payable 20 27 Other expenses 919 78 Total accrued expenses and other liabilities $ 8,988 $ 2,159 |
Lines of Credit and Long-Term35
Lines of Credit and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Lines of Credit and Long-Term Debt | |
Schedule of capital lease obligations | December 31, 2017 December 31, 2016 Capital leases $ 1,705 $ 1,746 Less current portion, net (921) (674) Total capital leases, less current portion, net $ 784 $ 1,072 |
Schedule of long-term debt maturities | As of December 31, 2017, the Company's long-term debt consisted of capital lease obligations and is payable as follows: Total long-term debt 2018 1,065 2019 725 2020 102 2021 4 1,896 Less amount representing interest (191) Present value of payments 1,705 Less current portion (921) Total long-term debt, net of current portion $ 784 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of expense (benefit) for income taxes | Years Ended December 31, 2017 2016 2015 Current: US federal $ 20 $ (4) $ 3 State and local 108 47 35 Total current income tax expense 128 43 38 Deferred: US federal (9,335) 440 278 State and local (576) 58 12 Total deferred income tax (benefit) expense (9,911) 498 290 Total income tax expense (benefit) $ (9,783) $ 541 $ 328 |
Schedule of principal components of deferred tax assets (liabilities) | December 31, 2017 2016 Deferred tax assets: Net federal operating loss carry forward $ 6,269 $ 4,748 Net state operating loss carry forward 1,662 599 Accruals 305 256 Intangibles — 536 Stock options 2,837 1,557 Deferred rent 765 862 Other 177 182 Deferred tax assets 12,015 8,740 Less: valuation allowances (1,338) (7,389) Deferred tax assets after valuation allowance 10,677 1,351 Deferred tax liabilities: Fixed assets (1,043) (1,351) Amortizable intangible assets (9,295) — Indefinite-lived intangibles (772) (832) Other (112) — Deferred tax liabilities (11,222) (2,183) Net deferred tax liabilities $ (545) $ (832) |
Schedule of change in valuation allowance | Year-Ended December 31, 2017 2016 Balance at beginning of the period $ 7,389 $ 4,489 (Decrease) increase due to NOLs and temporary differences (265) 2,900 Deferred benefit recognized (5,786) — Balance at end of the period $ 1,338 $ 7,389 |
Schedule of reconciliation of income tax (expense) benefit | December 31, 2017 2016 2015 Federal statutory rate 34.0 % 34.0 % 34.0 % State income taxes, net of federal income tax (16.5) (1.6) (1.4) Change in tax rate (2.3) — — Change in fair value of warrant liabilities — 3.8 (37.4) Change in valuation allowance (133.1) (42.1) (1.1) Non-deductible stock compensation and tax windfall benefits, net (60.7) (2.7) (6.0) Change in fair value of contingent consideration (47.5) — — Non-deductible expenses and other 9.3 (0.9) (1.0) Effective income tax rate (216.8) % (9.5) % (12.9) % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation | |
Schedule of weighted average assumptions for employee grants | Year Ended December 31, Valuation assumptions: 2017 2016 2015 Expected volatility 61.00 % 61.00 % 55.21 % Expected term (years) 6.03 5.69 6.05 Risk-free interest rate 2.21 % 1.37 % 1.75 % Dividend yield — — — |
Summary of stock option activity | Weighted Weighted average average remaining Aggregate Number exercise contractual intrinsic of shares price term value Outstanding at January 1, 2015 2,845,226 $ 2.56 Granted 365,098 6.42 Exercised (406,683) 1.04 Forfeited (11,887) 6.24 Outstanding at December 31, 2015 2,791,754 $ 3.27 Granted 479,010 14.56 Exercised (203,991) 1.32 Forfeited (7,083) 9.02 Outstanding at December 31, 2016 3,059,690 $ 5.14 Granted 1,063,306 14.64 Exercised (1,162,579) 3.15 Forfeited (77,242) 11.61 Outstanding at December 31, 2017 2,883,175 $ 9.26 7.0 $ 54,180 Options vested and expected to vest at December 31, 2017 2,883,175 $ 9.26 7.0 $ 54,180 Exercisable at December 31, 2017 1,504,255 $ 4.85 5.6 $ 34,895 |
Schedule of recorded stock-based compensation expense related to stock options | Year Ended December 31, 2017 2016 2015 Cost of revenue - product $ 502 $ 191 $ 102 Cost of revenue - service 293 46 23 Research and development 694 62 25 Sales and marketing 598 138 91 General and administrative 6,665 3,813 324 Total stock-based compensation expense $ 8,752 $ 4,250 $ 565 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Change in fair value | |
Schedule of classified liabilities measured at fair value on recurring basis | Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 December 31, 2017 Liabilities Acquisition-related contingent consideration - short-term — — 1,640 1,640 Acquisition-related contingent consideration - long-term — — 31,789 $ — $ — $ $ 33,429 Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 December 31, 2016 Liabilities Acquisition-related contingent consideration - short-term $ — $ — $ 1,493 $ 1,493 Acquisition-related contingent consideration - long-term — — 1,515 1,515 $ — $ — $ 3,008 $ 3,008 |
Acquisition related contingent consideration | |
Change in fair value | |
Schedule of reconciliation of liability measured at fair value on recurring basis using significant unobservable inputs (Level 3) | Balance at January 1, 2016 $ 5,241 Fair value of cash consideration paid (1,895) Adjustments to fair value measurement (338) Balance at December 31, 2016 3,008 Acquisition date fair value of SinfoníaRx contingent consideration 38,092 Fair value of cash consideration paid (1,498) Adjustments to fair value measurement (6,173) Balance at December 31, 2017 $ 33,429 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of Operating Lease for Future Minimum Lease Payments | December 31, 2017 2018 $ 2,648 2019 2,610 2020 2,644 2021 2,607 2022 2,548 Thereafter 10,264 Total minimum lease payments $ 23,321 |
Selected Quarterly Financial 40
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Data (unaudited) | |
Schedule of Quarterly Financial Statements of Operations | Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 December 31, 2017 Total revenue $ 27,689 $ 29,656 $ 33,268 $ 43,933 $ 134,546 Income (loss) from operations $ (2,710) $ (1,222) $ (236) $ 9,369 $ 5,201 Net income (loss) attributable to common stockholders: Basic $ (2,881) $ (1,464) $ 7,695 $ 10,946 $ 14,296 Diluted $ (2,881) $ (1,464) $ 7,695 $ 10,946 $ 14,296 Net income (loss) per share attributable to common stockholders: Basic $ (0.18) $ (0.09) $ 0.46 $ 0.63 $ 0.85 Diluted $ (0.18) $ (0.09) $ 0.41 $ 0.55 $ 0.76 Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 December 31, 2016 Total revenue $ 20,157 $ 22,418 $ 24,174 $ 27,313 $ 94,062 Income (loss) from operations $ 1,614 $ 1,479 $ 1,706 $ (248) $ 4,551 Net income (loss) attributable to common stockholders (1) : Basic $ 293 $ (890) $ 1,228 $ (6,031) $ (3,811) Diluted $ 94 $ (890) $ (803) $ (6,031) $ (6,889) Net income (loss) per share attributable to common stockholders (2) : Basic $ 0.06 $ (0.18) $ 0.25 $ (0.39) $ (0.51) Diluted $ 0.01 $ (0.18) $ (0.08) $ (0.39) $ (0.59) (1) Quarterly and year-to-date computations of net income (loss) attributable to common stockholders during the year ended December 31, 2016 are made independently using the two-class method. Therefore, the sum of the net income (loss) attributable to common stockholders for the quarters may not agree with the net income (loss) attributable to common stockholders for the year. See Notes 2 and 3 for the Company’s accounting policy on calculating net income (loss) attributable to common stockholders and net income (loss) per share. (2) Quarterly and year-to-date computations of per share amounts are made independently during the year ended December 31, 2016 using the two-class method. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. See Notes 2 and 3 for the Company’s accounting policy on calculating net income (loss) attributable to common stockholders and net income (loss) per share. |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Liquidity, Revenue and AR (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Summary of Significant Accounting Policies | ||||
Cash on hand | $ 10,430 | $ 4,345 | $ 2,026 | $ 4,122 |
Revenue Recognition | ||||
Number of revenue generating components | item | 4 | |||
Accounts Receivable, net | ||||
Allowance for doubtful accounts | $ 63 | $ 39 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Property and Equipment and Software Development Costs, net (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer hardware and purchased software | |
Property and Equipment | |
Useful life | 3 years |
Office furniture and equipment | |
Property and Equipment | |
Useful life | 5 years |
Software development | |
Property and Equipment | |
Useful life | 3 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Goodwill (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | |
Goodwill | ||
Number of reporting units | segment | 1 | |
Goodwill impairment | $ | $ 0 | $ 0 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Deferred Debt Financing Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Debt Issuance Costs | ||
Deferred financing costs | $ 219 | $ 59 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Additional Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies | |||
Deferred rent included in accrued expenses and other liabilities | $ 163 | $ 13 | |
Deferred rent included in long-term liabilities | 2,615 | 2,205 | |
Shipping and handling costs | 3,652 | 2,673 | $ 1,876 |
Advertising costs | $ 117 | $ 117 | $ 43 |
Number of operating segments | segment | 1 | ||
Electronic payment term of claims | 14 days | ||
Nonelectronic payment term of claims | 30 days |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2017facilitycustomer | Dec. 31, 2016customer | Dec. 31, 2015 | |
Accounts Receivable | Credit risk | |||
Concentration of Credit Risk | |||
Number of clients meeting concentration threshold | customer | 2 | 2 | |
Accounts Receivable | Client One | Credit risk | |||
Concentration of Credit Risk | |||
Concentration risk (as a percent) | 15.00% | 12.00% | |
Accounts Receivable | Client Two | Credit risk | |||
Concentration of Credit Risk | |||
Concentration risk (as a percent) | 12.00% | 10.00% | |
Revenue | Healthcare organization covering PACE facilities | Customer risk | |||
Concentration of Credit Risk | |||
Concentration risk (as a percent) | 18.00% | ||
Number of facilities | facility | 11 | ||
Revenue | Client Three | Customer risk | |||
Concentration of Credit Risk | |||
Concentration risk (as a percent) | 10.00% | ||
Revenue | PACE facilities, separate contracts | Customer risk | |||
Concentration of Credit Risk | |||
Concentration risk (as a percent) | 17.00% | 15.00% |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Policies | |
Income tax benefit, Tax windfall | $ 2,594 |
Net Income (Loss) per Share - E
Net Income (Loss) per Share - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator | |||||||||||
Net income (loss) | $ 14,296 | $ (6,250) | $ (2,864) | ||||||||
Decretion (accretion) of redeemable convertible preferred stock | 2,439 | (9,966) | |||||||||
Net income (loss) attributable to common stockholders, basic | $ 10,946 | $ 7,695 | $ (1,464) | $ (2,881) | $ (6,031) | $ 1,228 | $ (890) | $ 293 | 14,296 | (3,811) | (12,830) |
Decretion of redeemable convertible preferred stock | (2,439) | ||||||||||
Revaluation of warrant liability, net of tax | (639) | ||||||||||
Net income (loss) attributable to common stockholders, diluted | $ 10,946 | $ 7,695 | $ (1,464) | $ (2,881) | $ (6,031) | $ (803) | $ (890) | $ 94 | $ 14,296 | $ (6,889) | $ (12,830) |
Denominator (basic): | |||||||||||
Weighted average shares of common stock outstanding, basic | 16,730,418 | 7,486,131 | 4,318,779 | ||||||||
Denominator (diluted): | |||||||||||
Weighted average shares of common stock outstanding, basic | 16,730,418 | 7,486,131 | 4,318,779 | ||||||||
Effect of potential dilutive securities: | |||||||||||
Weighted average dilutive effect of common shares from warrants | 9,331 | ||||||||||
Dilutive effect from preferred stock and preferred stock warrants assuming conversion | 4,105,079 | ||||||||||
Weighted average shares of common stock outstanding, diluted | 18,774,374 | 11,591,210 | 4,318,779 | ||||||||
Net income (loss) per share attributable to common stockholders, basic (in dollars per share) | $ 0.63 | $ 0.46 | $ (0.09) | $ (0.18) | $ (0.39) | $ 0.25 | $ (0.18) | $ 0.06 | $ 0.85 | $ (0.51) | $ (2.97) |
Net income (loss) per share attributable to common stockholders, diluted (in dollars per share) | $ 0.55 | $ 0.41 | $ (0.09) | $ (0.18) | $ (0.39) | $ (0.08) | $ (0.18) | $ 0.01 | $ 0.76 | $ (0.59) | $ (2.97) |
Stock options | |||||||||||
Effect of potential dilutive securities: | |||||||||||
Weighted average dilutive effect of share-based awards | 1,395,687 | ||||||||||
Restricted stock | |||||||||||
Effect of potential dilutive securities: | |||||||||||
Weighted average dilutive effect of share-based awards | 638,938 |
Net Income (Loss) per Share - A
Net Income (Loss) per Share - Anti-dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 3,814,552 | 8,791,372 |
Employee stock options | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 3,059,690 | 2,791,754 |
Restricted stock | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 722,646 | |
Common stock warrants | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 32,216 | 446,593 |
Preferred stock warrants | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 463,589 | |
Redeemable convertible preferred stock | ||
Securities excluded from the calculation of diluted net loss per share attributable to common stockholders | ||
Amount of antidilutive securities excluded from computation of earnings per share | 5,089,436 |
Acquisitions - SinfoniaRx (Deta
Acquisitions - SinfoniaRx (Details) $ / shares in Units, $ in Thousands | Sep. 06, 2017USD ($)D$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Goodwill | $ 74,613 | $ 21,686 | $ 21,606 | |
Service revenue | 36,023 | 14,616 | 9,979 | |
Net income (loss) | $ 14,296 | $ (6,250) | $ (2,864) | |
Trade names | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Weighted average amortization period | 8 years 6 months 22 days | 5 years | ||
Developed technology | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Weighted average amortization period | 7 years 4 months 17 days | 7 years 9 months 4 days | ||
Non-competition agreement | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Weighted average amortization period | 4 years 11 months 16 days | 4 years 7 months 21 days | ||
SinfoniaRx | ||||
Acquisition | ||||
Cash consideration | $ 35,000 | |||
Percentage of contingent consideration payable in cash | 50.00% | |||
Percentage of contingent consideration payable in stock | 50.00% | |||
Aggregate value of contingent consideration | $ 130,000 | |||
Issuance of common stock (in shares) | shares | 520,821 | |||
Issuance price (in dollars per share) | $ / shares | $ 19.20 | |||
Number of trading days | D | 20 | |||
Direct acquisition costs | $ 1,015 | |||
Purchase price consideration | ||||
Cash consideration at closing, net of post-closing adjustments | 34,492 | |||
Stock consideration at closing | 11,541 | |||
Estimated fair value of contingent consideration | 38,092 | |||
Total fair value of acquisition consideration | 84,125 | |||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Cash | 218 | |||
Accounts receivable | 8,309 | |||
Prepaid expenses and other current assets | 1,056 | |||
Property and equipment | 1,419 | |||
Other assets | 127 | |||
Goodwill | 52,927 | |||
Total assets acquired | 107,140 | |||
Accrued expenses and other liabilities | (3,848) | |||
Trade accounts payable | (8,868) | |||
Debt assumed | (675) | |||
Deferred income tax liability, net | (9,624) | |||
Total purchase price, including contingent consideration of $38,092 | 84,125 | |||
Contingent consideration | $ 38,092 | |||
Weighted average amortization period | 7 years 3 months 29 days | |||
Service revenue | $ 12,119 | |||
Net income (loss) | $ 3,736 | |||
SinfoniaRx | Maximum | ||||
Acquisition | ||||
Cash consideration | $ 35,000 | |||
SinfoniaRx | Trade names | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Intangible assets | $ 4,776 | |||
Weighted average amortization period | 10 years | |||
SinfoniaRx | Developed technology | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Intangible assets | $ 13,291 | |||
Weighted average amortization period | 7 years | |||
SinfoniaRx | Client relationships intangible asset | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Intangible assets | $ 20,265 | |||
Weighted average amortization period | 7 years 5 months 16 days | |||
SinfoniaRx | Non-competition agreement | ||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||
Intangible assets | $ 4,752 | |||
Weighted average amortization period | 5 years |
Acquisitions - Quebec Inc. (Det
Acquisitions - Quebec Inc. (Details) - USD ($) $ in Thousands | Oct. 13, 2017 | Sep. 15, 2017 | Dec. 29, 2016 | Dec. 09, 2016 | Nov. 15, 2016 | Nov. 02, 2016 | Sep. 15, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Allocation of purchase price | ||||||||||
Goodwill | $ 74,613 | $ 21,686 | $ 21,606 | |||||||
Trade names | ||||||||||
Allocation of purchase price | ||||||||||
Weighted average amortization period | 8 years 6 months 22 days | 5 years | ||||||||
Client relationships | ||||||||||
Allocation of purchase price | ||||||||||
Weighted average amortization period | 8 years 5 months 23 days | 10 years 7 days | ||||||||
Developed technology | ||||||||||
Allocation of purchase price | ||||||||||
Weighted average amortization period | 7 years 4 months 17 days | 7 years 9 months 4 days | ||||||||
Quebec Inc. | ||||||||||
Acquisition | ||||||||||
Cash consideration, high end of range | $ 6,000 | |||||||||
Cash consideration | $ 50 | $ 550 | $ 2,200 | $ 2,200 | 1,000 | |||||
Deferred stock consideration | $ 5,000 | |||||||||
Equity consideration (in dollars) | $ 2,500 | $ 2,500 | ||||||||
Equity consideration (in shares) | 194,054 | 201,353 | ||||||||
Threshold number of specified business days for calculating stock consideration to be paid on specified days following the IPO | 30 days | |||||||||
Deferred acquisition cash consideration | $ 5,000 | |||||||||
Acquisition-date fair value of deferred cash consideration | $ 4,955 | |||||||||
Cost of debt (as a percent) | 7.80% | |||||||||
Discount | $ 45 | |||||||||
Amortization of discount | $ 32 | $ 13 | ||||||||
Acquisition-date fair value of deferred stock consideration | 4,445 | |||||||||
Payment-date fair value of deferred stock consideration | $ 4,500 | |||||||||
Discount of stock issuances (as a percent) | 10.00% | |||||||||
Allocation of purchase price | ||||||||||
Goodwill | $ 80 | |||||||||
Total assets acquired | $ 10,400 | |||||||||
Weighted average amortization period | 6 years 11 months 16 days | |||||||||
Quebec Inc. | Trade names | ||||||||||
Allocation of purchase price | ||||||||||
Intangible assets | $ 220 | |||||||||
Useful life of intangible asset | 5 years | |||||||||
Quebec Inc. | Developed technology | ||||||||||
Allocation of purchase price | ||||||||||
Intangible assets | $ 10,100 | |||||||||
Useful life of intangible asset | 7 years |
Acquisitions - Medliance LLC (D
Acquisitions - Medliance LLC (Details) - Medliance $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Dec. 31, 2014USD ($)item | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Acquisition | ||||||
Estimated fair value of contingent consideration | $ 16,385 | |||||
Fair value of promissory notes | 14,347 | $ 14,347 | ||||
Cash consideration, high end of range | 12,000 | 12,000 | ||||
Fair value of contingent consideration | $ 1,640 | $ 3,008 | ||||
Cash consideration | $ 2,403 | 9,597 | ||||
Earnout | ||||||
Acquisition | ||||||
Fair value of contingent consideration | $ 7,300 | $ 7,300 | ||||
Closing date anniversary period for first contingent payment | 12 months | |||||
Closing date anniversary period for second contingent payment | 24 months | |||||
Closing date anniversary period for final contingent payment | 36 months | |||||
Multiplier to determine Aggregate Earn-Out Amount | 4.5 | |||||
Amount subtracted to determine Aggregate Earn-Out Amount | $ 26,000 | |||||
Number of payment intervals | item | 3 | |||||
Percentage of aggregate earn-out amount paid at first payment interval | 33.00% | |||||
Percentage of aggregate earn-out amount paid at second payment interval. | 33.00% | |||||
Measurement period | 12 months |
Acquisitions - Capstone (Detail
Acquisitions - Capstone (Details) - Capstone - USD ($) $ in Thousands | Apr. 22, 2014 | Dec. 31, 2014 | Dec. 31, 2015 |
Acquisition | |||
Cash consideration | $ 3,000 | $ 500 | $ 2,000 |
Deferred acquisition cash consideration | 2,500 | ||
Acquisition-date fair value of deferred cash consideration paid in 2014 | 487 | ||
Discount of 2014 deferred cash payment | 13 | ||
Acquisition-date fair value of deferred cash consideration paid in 2015 | 1,895 | ||
Discount of 2015 deferred cash payment | $ 105 | ||
Amortization of discount of 2015 deferred cash payment | 33 | ||
Payments of acquisition-related consideration | $ 577 | ||
Equity consideration (in shares) | 18,418 | ||
Stock consideration at closing | $ 107 |
Acquisitions - St. Mary Prescri
Acquisitions - St. Mary Prescription Pharmacy (Details) - USD ($) $ in Thousands | Jan. 07, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Acquisition | |||||||
Change in fair value of acquisition-related contingent consideration | $ (6,173) | $ (338) | $ (2,059) | ||||
St. Mary Prescription Pharmacy | |||||||
Acquisition | |||||||
Cash consideration, high end of range | $ 2,000 | ||||||
Equity consideration, high end of range (in shares) | 108,247 | ||||||
Cash consideration | $ 1,500 | $ 185 | |||||
Equity consideration (in shares) | 81,186 | 10,824 | 16,237 | ||||
Payments of acquisition-related consideration | $ 300 | ||||||
Stock consideration at closing | $ 35 | $ 94 | $ 291 | ||||
Change in fair value of acquisition-related contingent consideration | $ (15) | ||||||
St. Mary Prescription Pharmacy | Minimum | |||||||
Acquisition | |||||||
Period acquired entity provided services before business acquisition | 30 years |
Acquisitions - Pro forma (unaud
Acquisitions - Pro forma (unaudited) (Details) - Quebec Inc and SinfoniaRx - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisition | ||||
Revenue | $ 156,012 | $ 121,157 | $ 91,122 | |
Net income (loss) | $ 116 | $ (7,668) | $ (6,143) | |
Net income (loss) per share attributable to common stockholders, basic (in dollars per share) | $ 0.01 | $ (0.63) | $ (3.08) | |
Net income (loss) per share attributable to common stockholders, diluted (in dollars per share) | $ 0.01 | $ (0.67) | $ (3.08) | |
Pro forma adjustment | ||||
Acquisition | ||||
Direct acquisition costs excluded | $ 1,015 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment | |||
Property and equipment, gross | $ 15,206 | $ 11,204 | |
Less: accumulated depreciation | (5,963) | (4,795) | |
Property and equipment, net | 9,243 | 6,409 | |
Depreciation and amortization expense | $ 9,512 | 5,115 | $ 3,933 |
Computer hardware and purchased software | |||
Property and Equipment | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Property and equipment, gross | $ 2,565 | 1,789 | |
Office furniture and equipment | |||
Property and Equipment | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Property and equipment, gross | $ 7,275 | 5,671 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 5,366 | 3,744 | |
Property and equipment. | |||
Property and Equipment | |||
Depreciation and amortization expense | $ 2,146 | $ 1,267 | $ 969 |
Minimum | Leasehold improvements | |||
Property and Equipment | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Maximum | Leasehold improvements | |||
Property and Equipment | |||
Property, Plant and Equipment, Useful Life | 15 years |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Software Development Costs | |||
Software development costs | $ 9,873 | $ 6,501 | |
Less: accumulated amortization | (4,872) | (3,151) | |
Software development costs, net | 5,001 | 3,350 | |
Capitalized software costs not yet subject to amortization | 1,021 | 911 | |
Amortization expense | $ 1,721 | $ 1,106 | $ 655 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and related changes | ||
Goodwill at beginning of period | $ 21,686 | $ 21,606 |
Goodwill from acquisition | 52,927 | 80 |
Goodwill at end of period | 74,613 | 21,686 |
Goodwill impairment | 0 | 0 |
Goodwill accumulated impairment loss | $ 0 | $ 0 |
Goodwill and Intangible Asset59
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets | |||
Gross Value | $ 73,889 | $ 30,805 | |
Accumulated Amortization | (11,153) | (5,508) | |
Intangible Assets, net | 62,736 | 25,297 | |
Amortization expense | $ 5,645 | $ 2,739 | $ 2,306 |
Trade names | |||
Intangible Assets | |||
Weighted Average Amortization Period | 8 years 6 months 22 days | 5 years | |
Gross Value | $ 6,716 | $ 1,940 | |
Accumulated Amortization | (1,320) | (791) | |
Intangible Assets, net | $ 5,396 | $ 1,149 | |
Client relationships | |||
Intangible Assets | |||
Weighted Average Amortization Period | 8 years 5 months 23 days | 10 years 7 days | |
Gross Value | $ 34,949 | $ 14,684 | |
Accumulated Amortization | (5,652) | (3,289) | |
Intangible Assets, net | $ 29,297 | $ 11,395 | |
Non-competition agreement | |||
Intangible Assets | |||
Weighted Average Amortization Period | 4 years 11 months 16 days | 4 years 7 months 21 days | |
Gross Value | $ 5,404 | $ 652 | |
Accumulated Amortization | (739) | (326) | |
Intangible Assets, net | $ 4,665 | $ 326 | |
Developed technology | |||
Intangible Assets | |||
Weighted Average Amortization Period | 7 years 4 months 17 days | 7 years 9 months 4 days | |
Gross Value | $ 26,791 | $ 13,500 | |
Accumulated Amortization | (3,438) | (1,101) | |
Intangible Assets, net | $ 23,353 | $ 12,399 | |
Domain name | |||
Intangible Assets | |||
Weighted Average Amortization Period | 10 years | 10 years | |
Gross Value | $ 29 | $ 29 | |
Accumulated Amortization | (4) | (1) | |
Intangible Assets, net | $ 25 | $ 28 |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Estimated amortization expense | ||
2,018 | $ 10,079 | |
2,019 | 9,636 | |
2,020 | 9,296 | |
2,021 | 9,283 | |
2,022 | 8,975 | |
Thereafter | 15,467 | |
Total estimated amortization expense | $ 62,736 | $ 25,297 |
Accrued Expenses and Other Li61
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Expenses and Other Liabilities | ||
Employee related expenses | $ 4,572 | $ 1,174 |
Deferred revenue | 1,350 | 851 |
Accrued payables due to customers | 1,200 | |
Contract labor | 463 | |
Interest | 13 | 16 |
Deferred rent | 163 | 13 |
Professional fees | 288 | |
Income taxes payable | 20 | 27 |
Other expenses | 919 | 78 |
Total accrued expenses and other liabilities | $ 8,988 | $ 2,159 |
Notes Payable Related to Acqu62
Notes Payable Related to Acquisition (Details) - Medliance - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Notes Payable Related to Acquisition | |||
Fair value of promissory notes | $ 14,347 | ||
Subordinated convertible promissory notes | |||
Notes Payable Related to Acquisition | |||
Aggregate borrowings | $ 16,385 | ||
Interest rate (as a percent) | 8.00% | ||
Interest expense | $ 709 | $ 1,310 | |
Fair value of promissory notes | $ 14,347 | ||
Term of debt | 18 months | ||
Amortization of discount to interest expense | $ 755 | $ 1,280 |
Lines of Credit and Long-Term63
Lines of Credit and Long-Term Debt - Lines of Credit (Details) - 2015 Revolving Line $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 06, 2017USD ($) | Jul. 01, 2016USD ($) | Sep. 30, 2015USD ($) | Apr. 29, 2015USD ($) | |
Lines of Credit | |||||||
Maximum borrowing capacity | $ 40,000 | $ 25,000 | $ 15,000 | ||||
Sublimit of loan | 1,000 | ||||||
Additional borrowing capacity | $ 10,000 | ||||||
Unrestricted cash and unused availability balance | $ 3,000 | ||||||
Number of trailing months | item | 12 | ||||||
Trailing period | 12 months | ||||||
Letter of credit outstanding | $ 400 | $ 500 | $ 500 | ||||
Aggregate borrowings outstanding | 0 | $ 0 | |||||
Amounts available for borrowings | $ 39,600 | ||||||
Interest rate (as a percent) | 4.31% | 4.06% | 4.56% | ||||
Interest expense | $ 389 | $ 570 | $ 290 | ||||
Deferred financing costs | 361 | ||||||
Amortization of deferred financing costs to interest expense | $ 60 | $ 46 | $ 35 | ||||
Prime Rate | |||||||
Lines of Credit | |||||||
Floor rate (as a percent) | 3.50% | ||||||
Minimum | |||||||
Lines of Credit | |||||||
Minimum EBITDA (as a percent) | 75.00% | ||||||
Minimum | Prime Rate | |||||||
Lines of Credit | |||||||
Spread on variable rate (as a percent) | (0.25%) | ||||||
Maximum | |||||||
Lines of Credit | |||||||
Leverage ratio | 2.50 | ||||||
Maximum capital expenditure | $ 5,000 | ||||||
Maximum | Prime Rate | |||||||
Lines of Credit | |||||||
Spread on variable rate (as a percent) | 0.25% |
Lines of Credit and Long-Term64
Lines of Credit and Long-Term Debt - Term Loans (Details) - USD ($) $ in Thousands | Oct. 04, 2016 | Jul. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2014 |
Term loan | |||||
Proceeds of initial term loan advance | $ 30,000 | ||||
Loss on extinguishment of debt | 6,411 | ||||
ABC Credit Facility | |||||
Term loan | |||||
Proceeds of initial term loan advance | $ 30,000 | ||||
Loss on extinguishment of debt | $ 5,015 | ||||
Prepayment penalty | $ 3,597 | ||||
April 2014 Eastward Loan And December 2014 Eastward Loan | |||||
Term loan | |||||
Original principal balance | $ 15,000 | ||||
Loss on extinguishment of debt | $ 1,396 |
Lines of Credit and Long-Term65
Lines of Credit and Long-Term Debt - Capital Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Lease Obligations | ||
Capital leases | $ 1,705 | $ 1,746 |
Less current portion | (921) | (674) |
Total long-term debt, net of current portion | $ 784 | $ 1,072 |
Lines of Credit and Long-Term66
Lines of Credit and Long-Term Debt - Capital Leases (Details) - Capital Lease Obligation - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capital Lease Obligations | |||
Interest expense, capital lease | $ 209 | $ 200 | $ 181 |
Net book value of assets under capital leases | $ 1,918 | $ 2,364 | |
Minimum | |||
Capital Lease Obligations | |||
Lease interest rates (as a percent) | 6.00% | ||
Maximum | |||
Capital Lease Obligations | |||
Lease interest rates (as a percent) | 19.00% |
Lines of Credit and Long-Term67
Lines of Credit and Long-Term Debt - Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capital lease obligations | ||
2,018 | $ 1,065 | |
2,019 | 725 | |
2,020 | 102 | |
2,021 | 4 | |
Total | 1,896 | |
Less amount representing interest | (191) | |
Present value of payments | 1,705 | |
Less current portion | (921) | $ (674) |
Total long-term debt, net of current portion | $ 784 | $ 1,072 |
Lines of Credit and Long-Term68
Lines of Credit and Long-Term Debt - Other Financing (Details) - AmerisourceBergen Drug Corporation - USD ($) $ in Thousands | 1 Months Ended | ||
May 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Financing | |||
Monthly minimum purchase obligation | $ 1,750 | ||
Purchase obligation, period | 3 years | ||
Amount due as a result of prescription drug purchases | $ 4,055 | $ 3,327 |
Income Taxes - Tax Reform Act (
Income Taxes - Tax Reform Act (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes | ||||
Federal statutory rate | 34.00% | 34.00% | 34.00% | |
Net deferred tax liabilities, revalued amount | $ 105 | |||
Maximum | ||||
Income Taxes | ||||
Federal statutory rate | 35.00% | |||
Forecast | ||||
Income Taxes | ||||
Federal statutory rate | 21.00% |
Income Taxes - Expense (Benefit
Income Taxes - Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||
Income (loss) before income taxes | $ 4,513 | $ (5,709) | $ (2,536) |
Income or loss from foreign sources | 0 | ||
Current: | |||
US federal | 20 | (4) | 3 |
State and local | 108 | 47 | 35 |
Total current income tax expense | 128 | 43 | 38 |
Deferred: | |||
US federal | (9,335) | 440 | 278 |
State and local | (576) | 58 | 12 |
Total deferred income tax (benefit) expense | (9,911) | 498 | 290 |
Total income tax expense (benefit) | $ (9,783) | $ 541 | $ 328 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes | |||||
Effective tax rate (as a percent) | (216.80%) | (9.50%) | (12.90%) | ||
Net deferred tax liability recognized | $ (9,911) | $ 498 | $ 290 | ||
Deferred benefit recognized | |||||
Income Taxes | |||||
(Decrease) increase in valuation allowance | $ (5,786) | $ (5,786) | |||
SinfoniaRx | |||||
Income Taxes | |||||
Net deferred tax liability recognized | $ 9,624 |
Income Taxes - NOLs (Details)
Income Taxes - NOLs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
NOL carryforwards | |
Unrecognized tax benefits or related interest and penalties accrued | $ 0 |
Federal | |
NOL carryforwards | |
Net operating loss carryforwards | 29,821 |
State | |
NOL carryforwards | |
Net operating loss carryforwards | $ 17,053 |
Income Taxes - Deferred taxes (
Income Taxes - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | |||
Net federal operating loss carry forward | $ 6,269 | $ 4,748 | |
Net state operating loss carry forward | 1,662 | 599 | |
Accruals | 305 | 256 | |
Intangibles | 536 | ||
Stock options | 2,837 | 1,557 | |
Deferred rent | 765 | 862 | |
Other | 177 | 182 | |
Deferred tax assets | 12,015 | 8,740 | |
Less: valuation allowances | (1,338) | (7,389) | $ (4,489) |
Deferred tax assets after valuation allowance | 10,677 | 1,351 | |
Deferred tax liabilities: | |||
Fixed assets | (1,043) | (1,351) | |
Amortizable intangible assets | (9,295) | ||
Indefinite-lived intangibles | (772) | (832) | |
Other | (112) | ||
Deferred tax liabilities | (11,222) | (2,183) | |
Net deferred tax liabilities | $ (545) | $ (832) |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in valuation allowance: | |||
Balance at beginning of the period | $ 7,389 | $ 7,389 | $ 4,489 |
Balance at end of the period | 1,338 | 7,389 | |
NOLs and temporary differences | |||
Change in valuation allowance: | |||
(Decrease) increase in valuation allowance | (265) | $ 2,900 | |
Deferred benefit recognized | |||
Change in valuation allowance: | |||
(Decrease) increase in valuation allowance | $ (5,786) | $ (5,786) |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of income tax (expense) benefit: | |||
Federal statutory rate | 34.00% | 34.00% | 34.00% |
State income taxes, net of federal income tax | (16.50%) | (1.60%) | (1.40%) |
Change in tax rate | (2.30%) | ||
Change in fair value of warrant liabilities | 3.80% | (37.40%) | |
Change in valuation allowance | (133.10%) | (42.10%) | (1.10%) |
Non-deductible stock compensation and tax windfall benefits, net | (60.70%) | (2.70%) | (6.00%) |
Change in fair value of contingent consideration | (47.50%) | ||
Non-deductible expenses and other | 9.30% | (0.90%) | (1.00%) |
Effective income tax rate | (216.80%) | (9.50%) | (12.90%) |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Long-term Liabilities | ||
Long-term portion of deferred rent | $ 2,615 | $ 2,205 |
Other Long-term Liabilities. | ||
Other Long-term Liabilities | ||
Long-term portion of deferred rent | $ 2,615 | $ 2,205 |
Stockholders' Equity - Capitali
Stockholders' Equity - Capitalization and IPO (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 08, 2017 | Oct. 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Capitalization and Initial Public Offering | ||||
Common stock authorized shares | 100,000,000 | 100,000,000 | 100,000,000 | |
Shares of common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Shares of undesignated preferred stock, authorized | 10,000,000 | 10,000,000 | 10,000,000 | |
Shares of undesignated preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Proceeds from issuance of common stock, net of underwriting costs | $ 34,897 | $ 34,897 | $ 55,186 | |
Underwriting discounts and commission | $ 2,228 | |||
IPO | ||||
Capitalization and Initial Public Offering | ||||
Issuance of common stock upon public offering, net of issuance costs (in shares) | 4,300,000 | |||
Proceeds from issuance of common stock under initial public offering, net of underwriting costs | $ 55,186 | |||
Underwriting discounts and commissions | $ 4,154 | |||
Share price (in dollars per share) | $ 12 | |||
Underwriter option | ||||
Capitalization and Initial Public Offering | ||||
Issuance of common stock upon public offering, net of issuance costs (in shares) | 645,000 | |||
Common Stock | ||||
Capitalization and Initial Public Offering | ||||
Issuance of common stock upon public offering, net of issuance costs (in shares) | 4,945,000 | |||
Redesignation of Class A and Class B common stock upon initial public offering (in shares) | 5,583,405 | 5,583,405 | ||
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | 5,089,436 | 5,089,436 | ||
Underwritten public offering (n shares) | 1,350,000 | 1,350,000 | ||
Share price (in dollars per share) | $ 27.50 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants (Details) - $ / shares | Oct. 12, 2016 | Oct. 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock warrants | ||||
Warrants | ||||
Warrants exercised (in shares) | 32,216 | |||
Exercise Price (in dollars per share) | $ 1.55 | |||
Number of warrants outstanding | 0 | |||
Number of shares called by warrant issued | 463,589 | 232,787 | ||
Common Stock | ||||
Warrants | ||||
Shares issued upon exercise of warrants (in shares) | 288,324 | 202,061 | 28,431 | 490,385 |
Common Stock | Class B | ||||
Warrants | ||||
Shares issued upon exercise of warrants (in shares) | 210,817 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock Warrants (Details) - shares | Oct. 12, 2016 | Oct. 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock warrants | ||||
Warrants | ||||
Warrants issued (in shares) | 0 | 0 | ||
Common stock warrants | ||||
Warrants | ||||
Number of shares called by warrant issued | 463,589 | 232,787 | ||
Warrant to purchase | 0 | |||
Number of warrants exercised (in shares) | 431,373 | |||
Common Stock | ||||
Warrants | ||||
Shares issued upon exercise of warrants (in shares) | 288,324 | 202,061 | 28,431 | 490,385 |
Stockholders' Equity - Common80
Stockholders' Equity - Common Stock Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Apr. 25, 2017 | |
Common Stock Repurchase | ||
Shares repurchased (in dollars) | $ 959 | |
Treasury Stock | ||
Common Stock Repurchase | ||
Shares repurchased (in shares) | 73,466 | |
Average price per share (in dollars per share) | $ 13.05 | |
Shares repurchased (in dollars) | $ 959 | |
Common Stock | ||
Common Stock Repurchase | ||
Number of shares authorized to be repurchased | $ 5,000 | |
Common stock available for repurchase | $ 4,041 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plans (Details) - shares | Sep. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock-Based Compensation | ||||
Options granted (in shares) | 1,063,306 | 479,010 | 365,098 | |
Stock options | ||||
Stock-Based Compensation | ||||
Expiration term | 10 years | |||
Vesting period | 4 years | |||
Stock options | Vesting, Tranche 1 | ||||
Stock-Based Compensation | ||||
Vesting period | 1 year | |||
Vesting (as a percent) | 25.00% | |||
Stock options | Vesting, Tranche 2 | ||||
Stock-Based Compensation | ||||
Period of monthly vesting | 36 months | |||
Monthly vesting (as a percent) | 2.08% | |||
Stock options | Employee owning more than 10% of voting power | ||||
Stock-Based Compensation | ||||
Expiration term | 5 years | |||
Expiration term after termination | 90 days | |||
Expiration term after death or termination due to disability | 1 year | |||
Stock options | Minimum | Employee owning more than 10% of voting power | ||||
Stock-Based Compensation | ||||
Ownership (as a percent) | 10.00% | |||
Option price as percentage of fair market value of common stock on the date of grant | 110.00% | |||
2016 Plan | ||||
Stock-Based Compensation | ||||
Threshold limit to issue or transfer authorized shares (in shares) | 800,000 | |||
Automatic increase on share reserve (as a percent) | 5.00% | |||
Additional shares authorized | 831,423 | |||
Available for future grant (in shares) | 460,441 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Restricted Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 03, 2017 | Sep. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock-Based Compensation | |||||
Stock-based compensation expense (in dollars) | $ 8,752 | $ 4,250 | $ 565 | ||
Restricted stock | Employees | Award Date of September 28, 2016 | |||||
Stock-Based Compensation | |||||
Awards, other than options, granted (in shares) | 700,386 | ||||
Share price (in dollars per share) | $ 12 | ||||
Stock-based compensation expense (in dollars) | 5,159 | $ 3,246 | |||
Unrecognized compensation expense (in dollars) | 0 | ||||
Restricted stock | Employees | Award Date August 3, 2017 | |||||
Stock-Based Compensation | |||||
Awards, other than options, granted (in shares) | 20,000 | ||||
Annual vesting (as a percent) | 25.00% | ||||
Vesting period | 4 years | ||||
Share price (in dollars per share) | $ 14.56 | ||||
Stock-based compensation expense (in dollars) | 30 | ||||
Unrecognized compensation expense (in dollars) | $ 261 |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-Employee Director Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 30, 2017 | Sep. 28, 2017 | Jun. 16, 2017 | Mar. 08, 2017 | Sep. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock-Based Compensation | ||||||||
Stock-based compensation expense (in dollars) | $ 8,752 | $ 4,250 | $ 565 | |||||
Restricted stock | Non-employee directors | ||||||||
Stock-Based Compensation | ||||||||
Stock-based compensation expense (in dollars) | 245 | $ 39 | ||||||
Unrecognized compensation expense (in dollars) | $ 401 | |||||||
Restricted stock | Non-employee directors | Award Date of September 28, 2016 | ||||||||
Stock-Based Compensation | ||||||||
Awards, other than options, granted (in shares) | 22,260 | |||||||
Share price (in dollars per share) | $ 12 | |||||||
Restricted stock | Non-employee directors | Award Date of March 8, 2017 | ||||||||
Stock-Based Compensation | ||||||||
Awards, other than options, granted (in shares) | 5,212 | |||||||
Annual vesting (as a percent) | 33.33% | |||||||
Vesting period | 3 years | |||||||
Share price (in dollars per share) | $ 13.68 | |||||||
Restricted stock | Non-employee directors | Award Date October 30, 2017 | ||||||||
Stock-Based Compensation | ||||||||
Awards, other than options, granted (in shares) | 7,788 | |||||||
Share price (in dollars per share) | $ 26.39 | |||||||
Restricted Stock, Annual grant | Non-employee directors | Award Date of September 28, 2016 | ||||||||
Stock-Based Compensation | ||||||||
Vested (in shares) | 7,420 | |||||||
Restricted Stock, Annual grant | Non-employee directors | Award Date June 16, 2017 | ||||||||
Stock-Based Compensation | ||||||||
Awards, other than options, granted (in shares) | 10,384 | |||||||
Share price (in dollars per share) | $ 13.54 | |||||||
Restricted Stock, Annual grant | Maximum | Non-employee directors | Award Date June 16, 2017 | ||||||||
Stock-Based Compensation | ||||||||
Vesting period | 1 year | |||||||
Restricted Stock, Initial grant | Non-employee directors | Award Date of September 28, 2016 | ||||||||
Stock-Based Compensation | ||||||||
Annual vesting (as a percent) | 33.33% | |||||||
Vesting period | 3 years | |||||||
Vested (in shares) | 4,944 | |||||||
Restricted Stock, Initial grant | Non-employee directors | Award Date October 30, 2017 | ||||||||
Stock-Based Compensation | ||||||||
Annual vesting (as a percent) | 33.33% | |||||||
Vesting period | 3 years |
Stock-Based Compensation - Lead
Stock-Based Compensation - Leadership Exit Bonus Plan (Details) - Leadership Exit Bonus Plan $ / shares in Units, $ in Thousands | Oct. 04, 2016USD ($)$ / sharesshares |
Stock-Based Compensation | |
Surrender of common stock (in shares) | 20,372 |
Issuance of common stock (in shares) | 13,362 |
Shares paid for tax withholding (in shares) | 7,010 |
Issuance of common stock (in dollars) | $ | $ 244 |
Issuance price (in dollars per share) | $ / shares | $ 12 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Valuation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-Based Compensation | |||
Stock-based compensation expense (in dollars) | $ 8,752 | $ 4,250 | $ 565 |
Stock options | |||
Stock-Based Compensation | |||
Stock-based compensation expense (in dollars) | $ 3,318 | $ 721 | $ 565 |
Employee stock options | |||
Valuation assumptions: | |||
Expected volatility (as a percent) | 61.00% | 61.00% | 55.21% |
Expected life | 6 years 11 days | 5 years 8 months 9 days | 6 years 18 days |
Risk-free interest rate (as a percent) | 2.21% | 1.37% | 1.75% |
Weighted average grant-date fair value (in dollars per share) | $ 8.25 | $ 7.74 | $ 3.34 |
Stock-Based Compensation - Op86
Stock-Based Compensation - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of shares | |||
Outstanding at beginning of period (in shares) | 3,059,690 | 2,791,754 | 2,845,226 |
Granted (in shares) | 1,063,306 | 479,010 | 365,098 |
Exercised (in shares) | (1,162,579) | (203,991) | (406,683) |
Forfeited (in shares) | (77,242) | (7,083) | (11,887) |
Outstanding at end of the period (in shares) | 2,883,175 | 3,059,690 | 2,791,754 |
Options vested and expected to vest at end of the period (in shares) | 2,883,175 | ||
Exercisable at end of period (in shares) | 1,504,255 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 5.14 | $ 3.27 | $ 2.56 |
Granted (in dollars per share) | 14.64 | 14.56 | 6.42 |
Exercised (in dollars per share) | 3.15 | 1.32 | 1.04 |
Forfeited (in dollars per share) | 11.61 | 9.02 | 6.24 |
Outstanding at end of period (in dollars per share) | 9.26 | $ 5.14 | $ 3.27 |
Options vested and expected to vest at end of period (in dollars per share) | 9.26 | ||
Exercisable at end of period (in dollars per share) | $ 4.85 | ||
Weighted average remaining contractual term | |||
Outstanding | 7 years | ||
Options vested and expected to vest at of the period | 7 years | ||
Exercisable | 5 years 7 months 6 days | ||
Aggregate intrinsic value | |||
Outstanding (in dollars) | $ 54,180 | ||
Options vested and expected to vest at end of period (in dollars) | 54,180 | ||
Exercisable (in dollars) | 34,895 | ||
Additional disclosures | |||
Intrinsic value of options exercised (in dollars) | 14,512 | $ 2,785 | $ 2,304 |
Proceeds from stock options exercised (in dollars) | $ 480 | $ 153 | $ 12 |
Shares delivered as payment for exercise | 362,440 | 7,930 | |
Stock options exercised in cashless transaction | 956,327 | 71,150 | |
Gross cashless exercise value | $ 3,187 | $ 104 | |
Stock options | |||
Additional disclosures | |||
Total unrecognized compensation cost (in dollars) | $ 9,212 | ||
Weighted average period expected to be recognized | 1 year 9 months 18 days | ||
Non-employee options | |||
Number of shares | |||
Outstanding at end of the period (in shares) | 84,707 | ||
Additional disclosures | |||
Unvested options (in shares) | 2,133 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense | |||
Stock-based compensation expense (in dollars) | $ 8,752 | $ 4,250 | $ 565 |
Cost of revenue - product | |||
Stock-based compensation expense | |||
Stock-based compensation expense (in dollars) | 502 | 191 | 102 |
Cost of revenue - service | |||
Stock-based compensation expense | |||
Stock-based compensation expense (in dollars) | 293 | 46 | 23 |
Research and development | |||
Stock-based compensation expense | |||
Stock-based compensation expense (in dollars) | 694 | 62 | 25 |
Sales and marketing | |||
Stock-based compensation expense | |||
Stock-based compensation expense (in dollars) | 598 | 138 | 91 |
General and administrative | |||
Stock-based compensation expense | |||
Stock-based compensation expense (in dollars) | $ 6,665 | $ 3,813 | $ 324 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Acquisition-related contingent consideration - short-term | $ 1,640 | $ 1,493 |
Acquisition-related contingent consideration - long-term | 31,789 | 1,515 |
Liabilities | 33,429 | 3,008 |
Level 3 | ||
Fair Value Measurements | ||
Acquisition-related contingent consideration - short-term | 1,640 | 1,493 |
Acquisition-related contingent consideration - long-term | 31,789 | 1,515 |
Liabilities | $ 33,429 | $ 3,008 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in fair value | |||
Change in fair value of acquisition-related contingent consideration expense (income) | $ (6,173) | $ (338) | $ (2,059) |
Medliance | |||
Change in fair value | |||
Payments of acquisition-related consideration | 1,498 | 1,895 | |
Change in fair value of acquisition-related contingent consideration expense (income) | 130 | (338) | |
Acquisition-related contingent consideration outstanding | $ 1,640 | $ 3,008 |
Fair Value Measurements - Con90
Fair Value Measurements - Contingent consideration Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Acquisition related contingent consideration | ||
Change in fair value using significant unobservable inputs (Level 3): | ||
Balance at beginning of period | $ 3,008 | $ 5,241 |
Acquisition date fair value of SinfoniaRx contingent consideration | 38,092 | |
Fair value of cash consideration paid | (1,498) | (1,895) |
Adjustments to fair value measurement | (6,173) | (338) |
Balance at end of period | 33,429 | 3,008 |
SinfoniaRx | Acquisition related contingent consideration | ||
Change in fair value | ||
Fair value of contingent consideration | 31,789 | |
Change in fair value using significant unobservable inputs (Level 3): | ||
Adjustments to fair value measurement | 6,303 | |
Medliance | ||
Change in fair value | ||
Fair value of contingent consideration | $ 1,640 | $ 3,008 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) - August 2015 Leases, New Jersey | Mar. 31, 2016lease | Aug. 21, 2015leaseitem | Oct. 31, 2016lease |
Operating leases | |||
Number of operating lease agreements | 3 | ||
Number of operating leases commenced | 2 | 1 | |
Number of extensions | item | 1 | ||
Additional lease period | 10 years |
Commitments and Contingencies92
Commitments and Contingencies - Future minimum lease payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Future minimum lease payments under operating leases | |||
2,018 | $ 2,648 | ||
2,019 | 2,610 | ||
2,020 | 2,644 | ||
2,021 | 2,607 | ||
2,022 | 2,548 | ||
Thereafter | 10,264 | ||
Total minimum lease payments | 23,321 | ||
Rent expense under the operating leases | $ 2,012 | $ 1,342 | $ 627 |
Commitments and Contingencies93
Commitments and Contingencies - Agreements (Details) | Feb. 26, 2018 |
Employment agreements, Named executive officers, April 25, 2017 | |
Commitments | |
Term of Agreement | 3 years |
Commitments and Contingencies94
Commitments and Contingencies - Letter of Credit (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2015 |
2015 Revolving Line | |||
Letter of Credit | |||
Letter of credit outstanding | $ 400 | $ 500 | $ 500 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Plan | |||
Contributions by employer | $ 644 | $ 347 | $ 475 |
Related-Party Transactions (Det
Related-Party Transactions (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Tunstall Consulting | |
Related-Party Transactions | |
Cost incurred | $ 104 |
Selected Quarterly Financial 97
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selected Quarterly Financial Data (unaudited) | |||||||||||
Total revenue | $ 43,933 | $ 33,268 | $ 29,656 | $ 27,689 | $ 27,313 | $ 24,174 | $ 22,418 | $ 20,157 | $ 134,546 | $ 94,062 | $ 70,039 |
Income (loss) from operations | 9,369 | (236) | (1,222) | (2,710) | (248) | 1,706 | 1,479 | 1,614 | 5,201 | 4,551 | 6,165 |
Net income (loss) attributable to common stockholders: | |||||||||||
Basic | 10,946 | 7,695 | (1,464) | (2,881) | (6,031) | 1,228 | (890) | 293 | 14,296 | (3,811) | (12,830) |
Diluted | $ 10,946 | $ 7,695 | $ (1,464) | $ (2,881) | $ (6,031) | $ (803) | $ (890) | $ 94 | $ 14,296 | $ (6,889) | $ (12,830) |
Net income (loss) per share attributable to common stockholders: | |||||||||||
Basic (in dollars per share) | $ 0.63 | $ 0.46 | $ (0.09) | $ (0.18) | $ (0.39) | $ 0.25 | $ (0.18) | $ 0.06 | $ 0.85 | $ (0.51) | $ (2.97) |
Diluted (in dollars per share) | $ 0.55 | $ 0.41 | $ (0.09) | $ (0.18) | $ (0.39) | $ (0.08) | $ (0.18) | $ 0.01 | $ 0.76 | $ (0.59) | $ (2.97) |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 39 | $ 49 | $ 12 |
Additions Charged to Costs and Expenses | 24 | (10) | 43 |
Deductions | (6) | ||
Balance at End of Period | 63 | 39 | 49 |
Deferred tax asset valuation allowance | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 7,389 | 4,489 | 4,626 |
Additions Charged to Costs and Expenses | (265) | 2,900 | (137) |
Deductions | (5,786) | ||
Balance at End of Period | $ 1,338 | $ 7,389 | $ 4,489 |