Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 25, 2019 | Jun. 30, 2018 | |
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, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,021,059,000 | ||
Entity Common Stock, Shares Outstanding | 21,128,632 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 20,278 | $ 10,430 |
Restricted cash | 4,751 | |
Accounts receivable, net | 27,950 | 17,087 |
Inventories | 3,594 | 2,795 |
Prepaid expenses | 2,573 | 2,253 |
Other current assets | 4,165 | 2,886 |
Total current assets | 63,311 | 35,451 |
Property and equipment, net | 11,865 | 9,243 |
Software development costs, net | 8,248 | 5,001 |
Goodwill | 108,213 | 74,613 |
Intangible assets, net | 77,206 | 62,736 |
Deferred income tax assets | 75 | |
Note receivable | 1,000 | |
Other assets | 1,039 | 788 |
Total assets | 270,957 | 187,832 |
Current liabilities: | ||
Current portion of long-term debt | 945 | 921 |
Acquisition-related contingent consideration | 43,397 | 1,640 |
Accounts payable | 14,830 | 16,218 |
Accrued expenses and other liabilities | 16,556 | 8,988 |
Total current liabilities | 75,728 | 27,767 |
Line of credit | 45,000 | |
Long-term debt | 152 | 784 |
Long-term acquisition-related contingent consideration | 7,800 | 31,789 |
Deferred income tax liability | 989 | |
Other long-term liabilities | 3,268 | 2,615 |
Total liabilities | 131,948 | 63,944 |
Commitments and contingencies (Note 19) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2018 and December 31, 2017 | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, 20,719,297 and 19,371,005 shares issued and 20,557,537 and 19,297,539 shares outstanding at December 31, 2018 and December 31, 2017, respectively | 2 | 2 |
Additional paid-in capital | 209,330 | 144,074 |
Treasury stock, at cost; 161,760 and 73,466 at December 31, 2018 and December 31, 2017, respectively | (3,825) | (959) |
Accumulated deficit | (66,498) | (19,229) |
Total stockholders' equity | 139,009 | 123,888 |
Total liabilities and stockholders' equity | $ 270,957 | $ 187,832 |
CONSOLIDATED BALANCE SHEETS (pa
CONSOLIDATED BALANCE SHEETS (parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 20,719,297 | 19,371,005 |
Common stock, shares outstanding | 20,557,537 | 19,297,539 |
Treasury stock (in shares) | 161,760 | 73,466 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Revenue | $ 204,270 | $ 133,485 | $ 94,791 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Cost of revenue, exclusive of depreciation and amortization | 137,669 | 93,655 | 65,177 |
Operating expenses: | |||
Research and development | 12,222 | 5,628 | 3,811 |
Sales and marketing | 9,667 | 5,542 | 3,860 |
General and administrative | 28,181 | 21,181 | 11,886 |
Change in fair value of acquisition-related contingent consideration expense (income) | 49,468 | (6,173) | (338) |
Depreciation and amortization | 16,802 | 9,512 | 5,115 |
Total operating expenses | 116,340 | 35,690 | 24,334 |
(Loss) income from operations | (49,739) | 4,140 | 5,280 |
Other expense: | |||
Change in fair value of warrant liability | (639) | ||
Interest expense, net | 906 | 688 | 4,488 |
Loss on extinguishment of debt | 6,411 | ||
Total other expense | 906 | 688 | 10,260 |
(Loss) income before income taxes | (50,645) | 3,452 | (4,980) |
Income tax (benefit) expense | (3,376) | (9,339) | 541 |
Net (loss) income | (47,269) | 12,791 | (5,521) |
Decretion of redeemable convertible preferred stock | 2,439 | ||
Net (loss) income attributable to common stockholders: | |||
Basic | (47,269) | 12,791 | (3,082) |
Diluted | $ (47,269) | $ 12,791 | $ (6,160) |
Net (loss) income per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ (2.48) | $ 0.76 | $ (0.41) |
Diluted (in dollars per share) | $ (2.48) | $ 0.68 | $ (0.53) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 19,098,294 | 16,730,418 | 7,486,131 |
Diluted (in shares) | 19,098,294 | 18,774,374 | 11,591,210 |
Product | |||
Revenue: | |||
Revenue | $ 112,760 | $ 95,238 | $ 76,779 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Cost of revenue, exclusive of depreciation and amortization | 84,935 | 72,778 | 57,724 |
Service | |||
Revenue: | |||
Revenue | 91,510 | 38,247 | 18,012 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Cost of revenue, exclusive of depreciation and amortization | $ 52,734 | $ 20,877 | $ 7,453 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)shares | |
Increase (Decrease) in Temporary Equity | |
Balance at beginning of period | $ 28,973 |
Accretion of redeemable convertible preferred stock | (2,439) |
Conversion of redeemable convertible preferred stock upon initial public offering | (26,534) |
Series A redeemable convertible preferred stock | |
Increase (Decrease) in Temporary Equity | |
Balance at beginning of period | $ 4,019 |
Balance at beginning of period (in shares) | shares | 4,411,766 |
Accretion of redeemable convertible preferred stock | $ 188 |
Conversion of redeemable convertible preferred stock upon initial public offering | $ (4,207) |
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | shares | (4,411,766) |
Series A-1 redeemable convertible preferred stock | |
Increase (Decrease) in Temporary Equity | |
Balance at beginning of period | $ 2,534 |
Balance at beginning of period (in shares) | shares | 2,500,000 |
Accretion of redeemable convertible preferred stock | $ 118 |
Conversion of redeemable convertible preferred stock upon initial public offering | $ (2,652) |
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | shares | (2,500,000) |
Series B redeemable convertible preferred stock | |
Increase (Decrease) in Temporary Equity | |
Balance at beginning of period | $ 22,420 |
Balance at beginning of period (in shares) | shares | 2,961,745 |
Accretion of redeemable convertible preferred stock | $ (2,745) |
Conversion of redeemable convertible preferred stock upon initial public offering | $ (19,675) |
Conversion of redeemable convertible preferred stock upon initial public offering (in shares) | shares | (2,961,745) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common StockSt. Mary Prescription PharmacyClass A | Common StockQuebec Inc. | Common StockClass A | Common StockClass B | Common Stock | Treasury Stock | Additional Paid-in CapitalSt. Mary Prescription Pharmacy | Additional Paid-in CapitalQuebec Inc. | Additional Paid-in Capital | Accumulated Deficit | St. Mary Prescription Pharmacy | Quebec Inc. | Total |
Balance at beginning of period at Dec. 31, 2015 | $ (29,454) | $ (29,454) | |||||||||||
Balance at beginning 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 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 (loss) income | (5,521) | (5,521) | |||||||||||
Balance at end of period at Dec. 31, 2016 | $ 2 | 91,027 | (32,020) | 59,009 | |||||||||
Balance at end of period (in shares) at Dec. 31, 2016 | 16,628,476 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
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 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 restricted stock (in shares) | 43,384 | ||||||||||||
Shares surrendered by stockholder (in shares) | (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 (loss) income | 12,791 | 12,791 | |||||||||||
Balance at end of period at Dec. 31, 2017 | $ 2 | $ (959) | 144,074 | (19,229) | 123,888 | ||||||||
Balance at end of period (in shares) at Dec. 31, 2017 | 19,371,005 | (73,466) | |||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Common stock offering issuance costs | (9) | (9) | |||||||||||
Issuance of common stock in connection with acquisition | 11,471 | 11,471 | |||||||||||
Issuance of common stock relating to acquisition (in shares) | 139,140 | ||||||||||||
Issuance of restricted stock (in shares) | 445,659 | ||||||||||||
Forfeitures of restricted shares (in shares) | (8,294) | ||||||||||||
Shares repurchased | $ (2,866) | (2,866) | |||||||||||
Shares repurchased (in shares) | (80,000) | ||||||||||||
Net exercise of stock options | (20) | (20) | |||||||||||
Net exercise of stock options (in shares) | 262,861 | ||||||||||||
Exercise of stock options | 3,523 | 3,523 | |||||||||||
Exercise of stock options (in shares) | 500,632 | ||||||||||||
Reclassification of contingent consideration liability to be settled with common stock | 39,774 | 39,774 | |||||||||||
Disgorgement of short swing profits | 156 | 156 | |||||||||||
Stock based compensation expense | 10,361 | 10,361 | |||||||||||
Net (loss) income | (47,269) | (47,269) | |||||||||||
Balance at end of period at Dec. 31, 2018 | $ 2 | $ (3,825) | $ 209,330 | $ (66,498) | $ 139,009 | ||||||||
Balance at end of period (in shares) at Dec. 31, 2018 | 20,719,297 | (161,760) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (47,269) | $ 12,791 | $ (5,521) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 16,802 | 9,512 | 5,115 |
Amortization of deferred financing costs and debt discount | 103 | 92 | 1,279 |
Payment of imputed interest on debt | (3,893) | ||
Deferred taxes | (3,648) | (9,467) | 498 |
Stock-based compensation | 10,361 | 8,752 | 4,250 |
Change in fair value of warrant liability | (639) | ||
Change in fair value of acquisition-related contingent consideration | 49,468 | (6,173) | (338) |
Change in fair value of acquisition-related consideration | 55 | ||
Loss on extinguishment of debt | 6,411 | ||
Other noncash items | 51 | 18 | |
Changes in operating assets and liabilities, net of effect from acquisitions | |||
Accounts receivable, net | (9,456) | (1,765) | (756) |
Inventories | (799) | 116 | (607) |
Prepaid expenses and other current assets | (1,651) | 295 | (783) |
Other assets | (460) | (187) | 1 |
Accounts payable | (778) | 1,288 | 665 |
Accrued expenses and other liabilities | 2,599 | 2,626 | (1,168) |
Other long-term liabilities | 507 | 410 | 2,205 |
Net cash provided by operating activities | 15,830 | 18,308 | 6,774 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (4,988) | (3,303) | (3,813) |
Software development costs | (5,558) | (3,314) | (1,854) |
Purchases of intangible assets | (30) | (29) | |
Issuance of note receivable | (1,000) | ||
Acquisition of business, net of cash acquired | (32,232) | (34,451) | (5,400) |
Net cash used in investing activities | (43,808) | (41,068) | (11,096) |
Cash flows from financing activities: | |||
Payments for repurchase of common stock | (2,866) | (959) | |
Proceeds from exercise of stock options | 3,523 | 480 | 153 |
Proceeds from disgorgement of short swing profits | 156 | ||
Payments for employee taxes for shares withheld | (2,123) | ||
Payments for debt financing costs | (175) | (221) | (1,521) |
Repayments of notes payable to related parties | (250) | ||
Borrowings on line of credit | 45,000 | 35,342 | 6,000 |
Repayments of line of credit | (35,342) | (16,000) | |
Payments of acquisition-related consideration | (600) | (180) | |
Repayment of note payable related to acquisition | (14,337) | ||
Payments of equity offering costs | (364) | (365) | (3,346) |
Payments of contingent consideration | (1,646) | (1,498) | (1,895) |
Proceeds from long-term debt | 30,000 | ||
Repayments of long-term debt | (1,051) | (766) | (47,369) |
Proceeds from issuance of common stock, net of underwriting costs | 34,897 | 55,186 | |
Net cash provided by financing activities | 42,577 | 28,845 | 6,441 |
Net increase in cash and restricted cash | 14,599 | 6,085 | 2,119 |
Cash and restricted cash, beginning of period | 10,430 | 4,345 | 2,226 |
Cash and restricted cash, end of period | 25,029 | 10,430 | 4,345 |
Supplemental disclosure of cash flow information: | |||
Acquisition of equipment under capital leases | 442 | 50 | 1,605 |
Additions to property, equipment, and software development purchases included in accounts payable and accrued expenses | 175 | 540 | 373 |
Deferred offering costs included in accounts payable | 355 | 132 | |
Cash paid for interest | 720 | $ 599 | 8,457 |
Decretion of redeemable convertible preferred stock to redemption value | $ (2,439) | ||
Employee payroll taxes on exercise of stock options included in accrued expenses | $ 420 | ||
Stock issued in connection with acquisitions | 11,471 | 11,541 | 4,500 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2018 | |
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 technology enabled products and services for medication risk management (“MRM”) and to support health plan management. The Company serves healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements. The Company's cloud-based software solutions provides prescribers, pharmacists, pharmacies 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, 2018 | |
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) 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, (v) assumptions used in the Black-Scholes option-pricing model to determine the fair value of equity and liability classified warrants and stock-based compensation instruments and (vi) 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. (c) Revenue Recognition 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. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenue. See Note 3 for additional information about the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). See Note 4 for additional detail about the Company’s products and service lines. (d) Cost of Product Revenue Cost of product revenue includes all costs directly related to the fulfillment and distribution of prescription drugs as part of the Company’s MRM offerings. Costs consist primarily of the purchase price of the prescription drugs the Company dispenses, expenses to package, dispense and distribute prescription drugs, and expenses associated with the Company's 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. (e) Cost of Service Revenue Cost of service revenue includes all costs directly related to servicing the Company’s MRM service contracts, which primarily consist of labor costs, outside contractors, technology services, hosting fees and overhead costs. In addition, service costs include all labor costs, including stock-based compensation expense, directly related to the health plan management services, pharmacy cost management services and software services and expenses for claims processing, technology services and overhead costs. (f) Research and Development Research and development expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in our research and development functions, which include software developers, project managers and other employees engaged in scientific education and research, and the development and enhancement of our service offerings. Research and development expenses also include costs for design and development of new software and technology and new service offerings, including fees paid to third-party consultants, costs related 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. (g) 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, director or non-employee 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. 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, as such company-specific historical and implied volatility information is limited. 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. (h) 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. (i) 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. (j) Net Income (Loss) per Share Attributable to Common Stockholders The Company computed net income (loss) per share of common stock using the treasury stock method for the year ended December 31, 2018 and 2017. For the year ended December 31, 2016, 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 of Directors (the “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. (k) Cash Cash at December 31, 2018 and 2017 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, 2018 or 2017. (l) Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under certain contractual agreements are recorded in restricted cash on the Company’s consolidated balance sheet. The Company holds funds on behalf of its clients as part of the Company’s third party administrative services, which falls under the Company’s health plan management services. These amounts are recorded as restricted cash as of December 31, 2018, with an offsetting liability recorded in accrued expenses and other liabilities on the Company’s consolidated balance sheet. The Company follows guidance in ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18") for presentation of restricted cash in the statement of cash flows, which states that changes and transfers in restricted cash should not be presented as cash flow activities in the statement of cash flows. ASU 2016-18 was effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 effective January 1, 2018 and retroactively adjusted a $200 change in restricted cash, which was previously presented as cash flows from investing activities in the consolidated statements of cash flows for the year ended December 31, 2016, to conform with the current year presentation. The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total cash and restricted cash as reported in the consolidated statements of cash flows. December 31, 2018 2017 Cash $ 20,278 $ 10,430 Restricted cash 4,751 — Total cash and restricted cash as presented in the consolidated statement of cash flows $ 25,029 $ 10,430 (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 the Company’s 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 $528 and $63 as of December 31, 2018 and 2017, 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, 2018, 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, 2018, 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 for the years ended December 31, 2018, 2017 or 2016. (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 $291 and $219, net of accumulated amortization, are included in other assets on the accompanying consolidated balance sheets as of December 31, 2018 and 2017, 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 $134 and $163 of deferred rent are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets as of December 31, 2018 and 2017, respectively. Approximately $3,115 and $2,615 of deferred rent is included in long-term liabilities in the accompanying consolidated balance sheets as of December 31, 2018 and 2017, 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 $4,708, $3,652, and $2,673 for the years ended December 31, 2018, 2017, and 2016, respectively. (w) Advertising Costs Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $184, $117, and $117 for the years ended December 31, 2018, 2017, and 2016, 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 that is classified as a liability is 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 MRM prescription fulfillment services clients, which are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) 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 MRM services clients, health plan management clients, and pharmacy cost management clients consist primarily of healthcare organizations, including payors, providers, and pharmacies. 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, 2018, two clients each represented 12% of net accounts receivable. As of December 31, 2017, two clients represented 15% and 12% of net accounts receivable, respectively. For the years ended December 31, 2018 and 2017, one client accounted for 14% and 18% of total revenue, respectively. For the year ended December 31, 2016, one client accounted for 10% of total revenue. During 2017, the Company signed a master agreement with a healthcare organization covering 11 PACE facilities, which the Company now considers a single client, which represented 14% and 18% of total revenue for the year ended December 31, 2018 and 2017, respectively. Prior to signing this master agreement, each of these PACE facilities had separate contracts with the Company and were considered separate, individual, clients. On a combined basis, the 11 PACE facilities represented 17% of total revenue for the years ended December 31, 2016. (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. (bb) R ecent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , 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 was effective for annual reporting periods beginning after December 15, 2017 and interim reporting periods within that reporting period. The Company adopted ASU-2014-09 as of January 1, 2018 using the full retrospective method. As a result, the Company revised the consolidated balance sheets as of December 31, 2017, and the consolidated statements of operations and cash flows for the years ended December 31, 2017 and 2016, and related notes to the audited consolidated financial statements for the effects of adoption. See Note 3 for additional information. 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. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which provides an additional modified transition method by which entities may elect to initially apply the transition requirements in ASU 2016-02 at the effective date with the effects of initial application recognized as a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, and without retrospective application to any comparative prior periods presented. The Company is adopting this standard on January 1, 2019. ASU 2016-02 provides certain practical expedients for adoption. The Company expects to elect the package of practical expedients which permit it to carry forward its prior conclusions about lease identification, lease classification, and initial direct costs, but does not expect to elect the hindsight practical expedient. The Company is in the process of assessing any potential impacts on its internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance, with the new standard. The Company anticipates that this standard will have a material impact on its consolidated financial statements, as right-of-use assets and lease liabilities will be recognized on the consolidated balance sheet for all long-term operating leases. The Company does not expect the standard to materially affect its consolidated net earnings or liquidity, or to impact its debt-covenant compliance under its current agreements. 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 guidance to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 was effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has adopted ASU 2016-15 effective January 1, 2018. The adoption of this standard did not have a material impact 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 was effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company has adopted ASU 2017-01 effective January 1, 2018. The adoption of this standard did not have a material impact 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. Instea |
Adoption of New Accounting Poli
Adoption of New Accounting Policy | 12 Months Ended |
Dec. 31, 2018 | |
Adoption of New Accounting Policy | |
Adoption of New Accounting Policy | 3. Adoption of New Accounting Policy As described in Note 2, t he Company adopted ASU 2014-09 on January 1, 2018 using the full retrospective method and applying the practical expedient in paragraph 606-10-65-1(f)(2) of the FASB ASC, under which the Company used the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods for those completed contracts with variable consideration . The following is a summary of the changes in accounting policies and presentation resulting from the adoption of ASU 2014-09 on the Company’s consolidated financial statements. MRM services Per member per month fees bundled with prescription fulfillment services fees in the Company’s MRM contracts were previously classified as product revenue. Under ASU 2014-09, the per member per month fees are classified as service revenue and based on relative stand-alone selling prices. The Company continues to recognize the per member per month fees as the services are provided. Health plan management services Certain contracts for the Company’s health plan management services include fees based on the gains recognized by clients 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 is recognized monthly as the health plan management services are provided. The revenue includes the contractual per member per month rate and an estimated gain earned during each reporting period. Pharmacy cost management services Data and statistics fees from drug manufacturers were previously 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 are recognized when the data is submitted to the drug manufacturers. The fees recognized are estimated using historical data, and adjusted as necessary to reflect new information. The estimated fees are recorded as data analytics related contract assets and are included in other current assets on the consolidated balance sheets. As of December 31, 2018 and 2017, the balance of the data analytics contract asset was $2,913 and $1,842, respectively. Impact on financial statements The following tables summarize the impact of the adoption of ASU 2014-09 on the previously reported consolidated balance sheets as of December 31, 2017 and consolidated statements of operations for the years ended December 31, 2017 and 2016. Financial statement line items that were not materially affected by the adoption of ASU 2014-09 are excluded. The adoption of ASU 2014-09 had no impact on cash provided by or used in operating, investing or financing activities in the consolidated statements of cash flows for the years ended December 31, 2017 and 2016. December 31, 2017 As Previously Reported Adjustment for ASU on Revenue Recognition As Adjusted Assets Current assets: Other current assets $ 1,044 $ 1,842 $ 2,886 Total current assets 33,609 1,842 35,451 Total assets $ 185,990 $ 1,842 $ 187,832 Liabilities and stockholders’ equity Deferred income tax liability $ 545 $ 444 $ 989 Total liabilities 63,500 444 63,944 Stockholders' equity: Accumulated deficit (20,627) 1,398 (19,229) Total stockholders’ equity 122,490 1,398 123,888 Total liabilities and stockholders’ equity $ 185,990 $ 1,842 $ 187,832 Year Ended Year Ended December 31, December 31, 2017 2016 As Previously Reported Adjustment for ASU on Revenue Recognition As Adjusted As Previously Reported Adjustment for ASU on Revenue Recognition As Adjusted Revenue: Product revenue $ 98,523 $ (3,285) $ 95,238 $ 79,446 $ (2,667) $ 76,779 Service revenue 36,023 2,224 38,247 14,616 3,396 18,012 Total revenue 134,546 (1,061) 133,485 94,062 729 94,791 Cost of revenue, exclusive of depreciation and amortization shown below: Product cost 75,123 (2,345) 72,778 59,901 (2,177) 57,724 Service cost 18,532 2,345 20,877 5,276 2,177 7,453 Total cost of revenue, exclusive of depreciation and amortization 93,655 — 93,655 65,177 — 65,177 Income (loss) from operations 5,201 (1,061) 4,140 4,551 729 5,280 Net income (loss) $ 14,296 $ (1,505) $ 12,791 $ (6,250) $ 729 $ (5,521) Net income (loss) attributable to common stockholders, basic $ 14,296 $ (1,505) $ 12,791 $ (3,811) $ 729 $ (3,082) Net income (loss) attributable to common stockholders, diluted $ 14,296 $ (1,505) $ 12,791 $ (6,889) $ 729 $ (6,160) Net income (loss) per share attributable to common stockholders, basic $ 0.85 $ (0.09) $ 0.76 $ (0.51) $ 0.10 $ (0.41) Net income (loss) per share attributable to common stockholders, diluted $ 0.76 $ (0.08) $ 0.68 $ (0.59) $ 0.06 $ (0.53) |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue | 4. Revenue The Company provides technology-enabled solutions tailored toward the specific needs of the healthcare organizations and health plans it serves. These solutions can be integrated or provided on a standalone basis. Contracts generally have a term of one to five years and in some cases automatically renew at the end of the initial term. In most cases, clients may terminate their contracts with a notice period ranging from 0 to 180 days without cause, thereby limiting the term in which the Company has enforceable rights and obligations. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the goods or services. The Company uses the practical expedient not to account for significant financing components because the period between recognition and collection does not exceed one year for most of the Company’s contracts. Product Revenue MRM prescription fulfillment services. The Company has a stand ready obligation to provide prescription fulfillment pharmacy services, including dispensing and delivery of an unknown mix and quantity of medications, directly to healthcare organizations. Revenue from MRM prescription fulfillment services is recognized when medications are shipped and control has generally passed to the client and is generally billed monthly. At the time of shipment, the Company has performed substantially all of its performance obligations under its client contracts and does not experience a significant level of returns or reshipments. Service Revenue MRM services . The Company provides an array of MRM services. These services include enrollment, medication regimen reviews, and software to identify high risk members and provide medication risk alerts and intervention tracking that enable pharmacists to optimize medication therapy. R evenue related to these performance obligations primarily consists of per member per month fees, monthly subscription fees, and per comprehensive medication review fees. MRM p er member per month fees and monthly subscription fees are recognized based on their relative stand-alone selling prices as the services are provided. Additionally, certain of the Company’s MRM service contracts include a performance guarantee based on the number of comprehensive medication reviews completed and guarantees by the Company for specific service level performance. For these contracts, revenue is recognized as comprehensive medication reviews are completed at their relative stand-alone selling price which is estimated based on the Company’s assessment of the total transaction price under each contract. The stand-alone selling price and amount of variable consideration recognized are adjusted as necessary at the end of each reporting period. If client performance guarantees are not being realized, the Company records, as a reduction to revenue, an estimate of the amount that will be due at the end of the respective client’s contractual period. Fees for these services are generally billed monthly. Health plan management services. The Company has a stand ready obligation to provide risk adjustment services, electronic health records solutions, and third party administration services, which the Company collectively refers to as health plan management services. The performance obligations are a series of distinct services that are substantially the same and have the same pattern of transfer. Revenue related to these performance obligations primarily consists of setup fees, per member per month fees, and in certain contracts a gain-share component. Revenue from these contracts is recognized monthly as the health plan management services are provided. The revenue includes the contractual per member per month rate and an estimated gain earned during each reporting period. Set-up fees related to health plan management contracts represent an upfront fee from the client to compensate the Company for its efforts to prepare the client and configure its system for the data collection process. Set-up activities that do not have value apart from the broader health plan management services provided to the client and that do not represent a separate performance obligation are recognized over the contract term as services are provided. Set-up activities that have value apart from the services provided to the client represent a separate performance obligation and as such, are recognized as performed. Fees for these services are generally billed monthly . Pharmacy cost management services. The Company has a stand ready obligation to provide monthly pharmacy cost management services which includes adjudication, pricing validation, utilization analysis and pharmacy transaction review services. The performance obligation is a series of distinct services that are substantially the same and have the same pattern of transfer. Revenue related to this performance obligation primarily consists of subscription fees based on a monthly flat fee or as a percentage of monthly transactions incurred and revenue generated from drug manufacturers for the sale of drug utilization data. Revenue from these services is recognized monthly as the pharmacy cost management services are provided at the contractual subscription fee rate and when the data is submitted to the drug manufacturers based on the estimated fair value of the data. The drug utilization fees recognized are estimated using historical data, and are adjusted as necessary to reflect new information. Drug utilization data is generally submitted monthly and collected 180 days after submission. Disaggregation of revenue In the following table, revenue is disaggregated by major service line. The Company manages its operations and allocates its resources as a single reportable segment. All of the Company’s revenue is recognized in the United States and all of the Company’s assets are located in the United States for the years ended December 31, 2018, 2017, and 2016. The Company's MRM and health plan management clients consist primarily of healthcare payors, providers, and pharmacies. The Company’s pharmacy cost management clients consist primarily of post-acute care facilities. Year Ended December 31, 2018 2017 2016 Major service lines: MRM prescription fulfillment services $ 112,760 $ 95,238 $ 76,779 MRM services 62,558 26,583 7,292 Health plan management services 18,977 6,019 4,547 Pharmacy cost management services 9,698 5,419 6,173 Other services 277 226 — $ 204,270 $ 133,485 $ 94,791 Contract balances Assets and liabilities related to the Company’s contracts are reported on a contract-by-contract basis at the end of each reporting period. The following table provides information about the Company’s contract assets and contract liabilities from contracts with clients as of December 31, 2018 and December 31, 2017. December 31, December 31, 2018 2017 Contract assets $ 3,075 $ 1,842 Contract liabilities 1,733 1,350 Contract assets as of December 31, 2018 consisted of $2,913 related to data analytics contract assets and $162 related to the gain-share component of completed health plan management services contracts. Contract assets as of December 31, 2017 consisted of $1,842 related to data analytics contract assets. Contract assets are included in other current assets on the Company’s consolidated balance sheets. The contract assets are transferred to receivables when the rights to the additional consideration becomes unconditional. The contract liabilities primarily relate to advanced billings for prescription medications not yet fulfilled or dispensed, acquired performance obligations related to software maintenance contracts associated with our Mediture and Cognify acquisitions (see Note 6), and unamortized setup fees on health plan management contracts. Contract liabilities are included in accrued expenses and other current liabilities and in other long-term liabilities on the Company’s consolidated balance sheets. The Company anticipates that it will satisfy most of its performance obligations associated with its contract liabilities within a year. Significant changes in the contract assets and the contract liabilities balances during the period are as follows: December 31, December 31, 2018 2017 Contract asset: Contract asset, beginning of year $ 1,842 $ 2,537 Decreases due to cash received (1,949) (2,537) Increases, net of reclassifications to receivables 3,182 1,842 Contract asset, end of year $ 3,075 $ 1,842 Contract liability: Contract liability, beginning of year $ 1,350 $ 851 Revenue recognized that was included in the contract liability balance at the beginning of the year (1,295) (808) Increases due to cash received, excluding amounts recognized as revenue during the year 978 1,307 Increases due to business combination 1,211 — Revenue recognized from business combinations that was included in the contract liability balance on the acquisition date (511) — Contract liability, end of year $ 1,733 $ 1,350 |
Net Income (Loss) per Share
Net Income (Loss) per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Income (Loss) per Share | |
Net Loss per Share | 5. 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 years ended December 31, 2018 and 2017 and using the two-class method required for participating securities for the year ended December 31, 2016. 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, 2018 2017 2016 Numerator: Net (loss) income $ (47,269) $ 12,791 $ (5,521) Decretion of redeemable convertible preferred stock — — 2,439 Net (loss) income attributable to common stockholders, basic $ (47,269) $ 12,791 $ (3,082) Decretion of redeemable convertible preferred stock — — (2,439) Revaluation of warrant liability, net of tax — — (639) Net (loss) income attributable to common stockholders, diluted $ (47,269) $ 12,791 $ (6,160) Denominator: Weighted average shares of common stock outstanding, basic 7,486,131 Denominator (diluted): Weighted average shares of common stock outstanding 7,486,131 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 contingently issuable shares — 9,331 — Weighted average dilutive effect of common shares from warrants — — 4,105,079 Weighted average shares of common stock outstanding, diluted Net (loss) income per share attributable to common stockholders, basic $ (2.48) $ 0.76 $ (0.41) Net (loss) income per share attributable to common stockholders, diluted $ (2.48) $ 0.68 $ (0.53) 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, 2018 2017 2016 Stock options to purchase common stock 2,490,114 — 3,059,690 Unvested restricted stock 1,070,061 — 722,646 Common stock warrants — — 32,216 3,560,175 — 3,814,552 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Acquisitions | |
Acquisitions | 6. Acquisitions Cognify On October 19, 2018, the Company entered into and consummated the transactions contemplated by a Stock Purchase Agreement with each stockholder of Cognify, Inc., (“Cognify”), and Mace Wolf, solely in his capacity as the Sellers’ Representative, to acquire all of the issued and outstanding capital stock of Cognify. Cognify is a provider of electronic health record solutions in the PACE market and to managed long-term care and medical home providers. The consideration for the acquisition was comprised of (i) $10,823 in cash paid upon closing, subject to certain customary post-closing adjustments, upon the terms and subject to the conditions contained in the purchase agreement; (ii) the issuance of 93,579 shares of the Company’s common stock; and (iii) contingent purchase price consideration with an acquisition-date estimated fair value of $8,100 to be paid 50% in cash and 50% in the Company’s common stock, subject to adjustments as set forth in the purchase agreement, based on the achievement of certain performance goals for the twelve-month period ending December 31, 2021. The stock consideration issued at the closing of the acquisition had an acquisition-date fair value of $7,477 based on the closing trading price on October 19, 2018. In no event is the Company obligated to pay more than $14,000 for the aggregate contingent consideration. A portion of the cash consideration paid at closing is being held in escrow to secure potential claims by the Company for indemnification under the agreement and in respect of adjustments to the purchase price. In connection with the acquisition of Cognify, the Company incurred direct acquisition and integration costs of $346 during the year ended December 31, 2018, which were 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 $8,100. 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 18 for additional information. 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 $ 10,231 Stock consideration at closing 7,477 Estimated fair value of contingent consideration 8,100 Total fair value of acquisition consideration $ 25,808 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: Accounts receivable $ 520 Prepaid expenses and other current assets 12 Property and equipment 153 Trade name 130 Developed technology 2,100 Client relationships 9,400 Goodwill 16,984 Total assets acquired $ 29,299 Accrued expenses and other liabilities (517) Deferred income tax liability, net (2,974) Total purchase price, including contingent consideration of $8,100 $ 25,808 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, and client relationships, all of which are subject to amortization on a straight-line basis and are being amortized over a weighted average of 3, 9, and 12.25 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 11.56 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets of Cognify. The fair values of the trade name and developed technology were estimated using the relief from royalty method. The Company derived the hypothetical royalty income from the projected revenues of Cognify. The fair value of client relationships was estimated using a multi period excess earnings method. To calculate fair value, the Company used cash flows discounted at a rate considered appropriate given the inherent risks associated with each client grouping. The useful lives of the intangible assets were estimated based on the expected future economic benefit of the assets and are 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 a complementary service offering that will enable the Company to leverage its services with existing and new clients. The goodwill is not deductible for income tax purposes. Revenue from Cognify is primarily comprised of per member per month fees and annual subscription fees for electronic health record solutions. Revenue for these services and the related costs is recognized each month as performance obligations are satisfied and costs are incurred, and is included in service revenue and cost of revenue – service cost, respectively, in the Company’s consolidated statements of operations. For the year ended December 31, 2018, service revenue of $620 and net loss of $160 from Cognify were included in the Company’s consolidated statement of operations. The Company continues to evaluate the fair value of certain assets acquired and liabilities assumed, including the fair valuation of deferred tax assets acquired and income tax liabilities assumed, related to the acquisition. 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. Mediture On August 31, 2018, the Company entered into a membership interest purchase agreement with each member of Mediture LLC and eClusive L.L.C. (collectively, “Mediture”) and Kelley Business Law, PLLC, solely in its capacity as the seller representative, pursuant to which the Company acquired all of the issued and outstanding membership and/or economic interests of Mediture. Mediture is a provider of electronic health record solutions and third party administrator services in the PACE market and also services several managed long-term care organizations in the State of New York. The consideration for the acquisition was comprised of (i) $18,500 cash consideration paid upon closing, subject to certain customary post-closing adjustments, upon the terms and subject to the conditions contained in the purchase agreement and (ii) the issuance of 45,561 shares of the Company’s common stock. The stock consideration issued at the closing of the acquisition had an acquisition-date fair value of $3,994 based on the closing trading price on August 31, 2018. A portion of the cash consideration paid at closing is being held in escrow to secure potential claims by the Company for indemnification under the agreement and in respect of adjustments to the purchase price . In connection with the acquisition of Mediture, the Company incurred direct acquisition and integration costs of $494 during the year ended December 31, 2018, which were recorded in general and administrative expenses in the consolidated statements of operations. 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 $ 17,471 Stock consideration at closing 3,994 Total fair value of acquisition consideration $ 21,465 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 $ 2,427 Accounts receivable 887 Prepaid expenses and other current assets 146 Property and equipment 219 Trade name 300 Developed technology 2,300 Client relationships 4,500 Non-competition agreement 1,300 Goodwill 13,477 Total assets acquired $ 25,556 Accrued expenses and other liabilities (3,833) Trade accounts payable (112) Other long-term liabilities (146) Total purchase price $ 21,465 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 non-competition agreements, all of which are subject to amortization on a straight-line basis and are being amortized over a weighted average of 3, 3.25, 11.9, and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 8.12 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets of Mediture. The fair value of the trade name and developed technology was estimated using the relief from royalty method. The Company derived the hypothetical royalty income from the projected revenues of Mediture. The fair value of client relationships was estimated using a multi period excess earnings method. To calculate fair value, the Company 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 agreements was estimated using the discounted earnings method by estimating the potential loss of earnings absent the non-competition agreements, assuming the covenantor competes at different time periods during the life of the agreements. The useful lives of the intangible assets were estimated based on the expected future economic benefit of the assets and are 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 deductible for income tax purposes. The Company believes the goodwill related to the acquisition was a result of providing the Company a complementary service offering that will enable the Company to leverage its services with existing and new clients. The goodwill is deductible for income tax purposes. Revenue from Mediture is primarily comprised of per member per month fees and annual subscription fees for electronic health record solutions and third party administration services. Revenue for these services and the related costs are recognized each month as performance obligations are satisfied and costs are incurred, and are included in service revenue and cost of revenue – service cost, respectively, in the Company’s consolidated statements of operations. For the year ended December 31, 2018, service revenue of $4,528 and net income of $1,291 from Mediture were included in the Company’s consolidated statements of operations. The Company continues to evaluate the fair value of certain assets acquired and liabilities assumed related to the acquisition. 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 Peak PACE Solutions On May 1, 2018, the Company entered into an asset purchase agreement with Peak PACE Solutions, LLC (“Peak PACE”) and certain other parties thereto pursuant to which such subsidiary acquired substantially all of the assets, and assumed certain enumerated liabilities, of Peak PACE, an organization that helps PACE organizations manage the business functions that drive the major sources of reimbursement revenue and utilization costs. The acquisition consideration was comprised of cash consideration consisting of (i) $7,719 payable upon the closing of the acquisition, subject to certain customary post-closing adjustments, upon the terms and subject to the conditions contained in the asset purchase agreement, and (ii) contingent purchase price with a preliminary estimated acquisition-date fair value of $1,620 to be paid in cash based on the achievement of certain performance goals for the twelve-month period ending December 31, 2018. In no event is the Company obligated to pay more than $10,000 in cash purchase price for the entire transaction and a portion of the cash consideration paid at closing is being held in escrow to secure potential claims by the Company for indemnification under the agreement. In connection with the acquisition of Peak PACE, the Company incurred direct acquisition and integration costs of $271 during the year ended December 31, 2018, which were 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 $1,620. 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 18 for additional information. 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 $ 7,563 Estimated fair value of contingent consideration 1,620 Total fair value of acquisition consideration $ 9,183 The following table summarizes the final allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 606 Property and equipment 84 Trade name 290 Client relationships 5,220 Non-competition agreement 50 Goodwill 3,559 Total assets acquired $ 9,809 Accrued expenses and other liabilities (626) Total purchase price, including contingent consideration of $1,620 $ 9,183 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, client relationships, and non-competition agreements, all of which are subject to amortization on a straight-line basis and are being amortized over a weighted average of 1.5, 10, and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 9.51 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets of Peak PACE. The fair value of the trade name was estimated using the relief from royalty method. The Company derived the hypothetical royalty income from the projected revenues of Peak PACE. The fair value of client relationships was estimated using a multi period excess earnings method. To calculate fair value, the Company 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 agreements was estimated using the differential approach which involves valuing the business under two different scenarios. The first valuation assumes the non-competition agreements are in place and the second valuation assumes that they are not. The difference in the value of the business under each approach is attributed to the non-competition agreements. The useful lives of the intangible assets were estimated based on the expected future economic benefit of the assets and are 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 deductible for income tax purposes. The Company believes the goodwill related to the acquisition was a result of providing the Company a complementary service offering that will enable the Company to leverage its services with existing and new clients. The goodwill is deductible for income tax purposes. Revenue from Peak PACE is primarily comprised of per member per month fees for third party administration services. Revenue for these services and the related costs are recognized each month as performance obligations are satisfied 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, 2018, service revenue of $5,801 and net income of $524 from Peak PACE were included in the Company’s consolidated statements of operations. 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 medication therapy management technology and services for Medicare, Medicaid, commercial health plans and pharmacies. These service offerings fall under the Company’s MRM services. 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 including 520,821 shares of the Company’s common stock issued upon closing with an acquisition-date fair value of $11,541; and (iii) contingent purchase price consideration with an acquisition-date estimated 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. No contingent purchase price consideration was earned or paid with respect to the twelve-month period ended December 31, 2017 as a result of the applicable performance goals not being achieved. The final contingent consideration liability payable was calculated to be $85,000 as of December 31, 2018, of which $42,500 is payable in cash and the remaining portion is payable in stock, and is expected to be paid during the first quarter of 2019. As of December 31, 2018, the SRx acquisition-related contingent consideration had a fair value of $81,692, of which $39,774 is equity-classified and payable in stock. See Note 18 for additional information. In connection with the acquisition of SRx, the Company incurred direct acquisition and integration costs of $1,015 during the 2017 fiscal year, which were recorded in general and administrative expenses in the consolidated statements of operations. During year ended December 31, 2018, the Company incurred an additional $77 of acquisition and integration costs related to the SRx acquisition, which were recorded in general and administrative expenses in the Company’s 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. See Note 18 for additional information. The following table summarizes the final 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 final 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 52,507 Total assets acquired $ 106,720 Accrued expenses and other liabilities (3,819) Trade accounts payable (8,868) Debt assumed (675) Deferred income tax liability, net (9,233) 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 non-competition agreements, all of which are subject to amortization on a straight-line basis and are 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 trade name and technology were estimated using the relief from royalty method. The Company 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 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 agreements was estimated using the differential approach which involves valuing the business under two different scenarios. The first valuation assumes the non-competition agreements are in place and the second valuation assumes that they are not. The difference in the value of the business under each approach is attributed to the non-competition agreements. The useful lives of the intangible assets were estimated based on the expected future economic benefit of the assets and are 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 client 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 per member per month fees, monthly subscription fees, and per comprehensive medication review fees. Revenue for these services and the related costs are recognized each month as performance obligations are satisfied and costs are incurred, and are included in service revenue and cost of revenue – service cost, respectively, in the consolidated statements. 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. 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 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 was 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. The acquisition-related consideration balance was fully paid during 2017. 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. Proforma (unaudited) The unaudited pro forma results presented below include the results of the SRx, Peak PACE, Mediture, Cognify and 9176-1916 Quebec Inc. acquisitions as if they had been consummated as of January 1, 2016. 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 equity awards granted to certain employees of SRx, Peak PACE and Mediture at the closing of the relevant acquisition, and the estimated tax effect of adjustments to income before income taxes. Material nonrecurring charges, including direct acquisition costs, directly attributable to the transactions are excluded. 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, 2016. Year Ended December 31, 2018 2017 2016 Revenue $ 217,725 $ 176,290 $ 139,485 Net loss (48,451) (2,908) (8,979) Net loss per share attributable to common stockholders, basic (2.52) (0.17) (0.78) Net loss per share attributable to common stockholders, diluted (2.52) (0.17) (0.78) |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Note Receivable | |
Note Receivable | 7. Note Receivable On October 1, 2018, the Company issued a note receivable to DoseMe Holdings Pty Ltd in the principal amount of $1,000 with simple annual interest rate of 10.0%. The note receivable was payable on the one-year anniversary, October 1, 2019. The note receivable was satisfied in conjunction with the completion of the acquisition of DoseMe Holdings Pty Ltd on January 2, 2019. See note 23 for additional information. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment. | |
Property and Equipment | 8. Property and Equipment As of December 31, 2018 and 2017, property and equipment consisted of the following: Estimated December 31, useful life 2018 2017 Computer hardware and purchased software 3 years $ $ Office furniture and equipment 5 years Leasehold improvements 5-15 years Less: accumulated depreciation (9,363) (5,963) Property and equipment, net $ $ 9,243 Depreciation and amortization expense on property and equipment for the years ended December 31, 2018, 2017 and 2016 was $3,493, $2,146 and $1,267, respectively. |
Software Development Costs
Software Development Costs | 12 Months Ended |
Dec. 31, 2018 | |
Software Development Costs | |
Software Development Costs | 9. 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, 2018 and 2017, capitalized software costs consisted of the following: December 31, 2018 December 31, 2017 Software development costs $ 15,278 $ 9,873 Less: accumulated amortization (7,030) (4,872) Software development costs, net $ 8,248 $ 5,001 Capitalized software development costs included above not yet subject to amortization $ 3,500 $ 1,021 Amortization expense for the years ended December 31, 2018, 2017 and 2016 was $2,158, $1,721 and $1,106, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 10. Goodwill and Intangible Assets The Company’s goodwill and related changes during the years ended December 31, 2018 and 2017 are as follows: Balance at January 1, 2017 $ 21,686 Goodwill from 2017 acquisition 52,927 Balance at December 31, 2017 74,613 Goodwill from 2018 acquisitions 34,020 Adjustments to Goodwill (420) Balance at December 31, 2018 $ 108,213 There were no indicators of impairment during the years ended December 31, 2018, 2017 or 2016 and there are no accumulated impairment charges as of December 31, 2018, 2017 or 2016. Intangible assets consisted of the following as of December 31, 2018 and 2017: Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2018 Trade names 7.96 $ 7,436 $ (2,357) $ 5,079 Client relationships 9.56 54,069 (10,757) 43,312 Non-competition agreements 5.00 6,754 (1,885) 4,869 Developed technology 7.19 31,191 (7,296) 23,895 Domain name 10.00 59 (8) 51 Total intangible assets $ 99,509 $ (22,303) $ 77,206 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 Amortization expense for intangible assets for the years ended December 31, 2018, 2017 and 2016 was $11,150, $5,645 and $2,739 respectively. The estimated amortization expense for each of the next five years and thereafter is as follows: Years Ending December 31, 2019 $ 12,860 2020 12,360 2021 12,243 2022 11,151 2023 9,964 Thereafter 18,628 Total estimated amortization expense $ 77,206 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 11. Accrued Expenses and Other Liabilities At December 31, 2018 and 2017, accrued expenses and other liabilities consisted of the following: December 31, 2018 December 31, 2017 Employee related expenses $ 6,357 $ 4,572 Contract liability 1,580 1,350 Accrued payables due to customers — 1,200 Client funds obligations* 4,751 — Contract labor 1,563 463 Interest 121 13 Deferred rent 134 163 Professional fees 442 288 Income taxes payable — 20 Other expenses 1,608 919 Total accrued expenses and other liabilities $ 16,556 $ 8,988 * This amount represents client funds held by the Company, with an offsetting amount included in restricted cash. |
Notes Payable Related to Acquis
Notes Payable Related to Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable Related to Acquisition | |
Notes Payable Related to Acquisition | 12. Notes Payable Related to Acquisition In December 2014, as part of the acquisition-related consideration of the acquisition of Medliance LLC (“Medliance”), 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 13). Interest expense was $709 for the year ended December 31, 2016. 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 year ended December 31, 2016, the Company amortized $755 of the discount to interest expense. |
Lines of Credit and Long-Term D
Lines of Credit and Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Lines of Credit and Long-Term Debt | |
Lines of Credit and Long-Term Debt | 13 Lines of Credit and Long-Term Debt (a) Lines of Credit On September 6, 2017, the Company entered into an Amended and Restated Loan and Security Agreement (the “Amended and Restated 2015 Line of Credit”), whereby the Company amended and restated its revolving line of credit, originally entered into with Bridge Bank (now Western Alliance Bank) in 2015, and subsequently amended on May 1, 2018, August 31, 2018, October 19, 2018, December 31, 2018 and February 7, 2019. The Amended and Restated 2015 Line of Credit provides for borrowing availability in an aggregate amount up to $60,000 to be used for general corporate purposes, with a $1,000 sublimit for cash management services, letters of credit and foreign exchange transactions. The Amended and Restated 2015 Line of Credit matures on September 6, 2020. Interest on the Amended and Restated 2015 Line of Credit 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 Line of Credit require that the Company (i) maintain an unrestricted cash and unused availability balance under the Amended and Restated 2015 Revolving Line of at least $1,500 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. 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, 2018, the Company was in compliance with all of the financial covenants related to the Amended and Restated 2015 Line of Credit, 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 19). The letter of credit was issued under the Amended 2015 Line of Credit. During the fourth quarter of 2017, the letter of credit was amended and reduced to $400. During the fourth quarter of 2018, the letter of credit was further amended and reduced to $300. The letter of credit renews annually and expires in September 2027 and reduces amounts available on the line of credit. As of December 31, 2018, $45,000 was outstanding under the Amended and Restated 2015 Line of Credit. As of December 31, 2017, there were no aggregate borrowings outstanding under the Amended and Restated 2015 Line of Credit. As of December 31, 2018, amounts available for borrowings under the Amended and Restated 2015 Line of Credit were $14,700. As of December 31, 2018, 2017 and 2016, the interest rate on the Amended and Restated 2015 Line of Credit was 5.58% , 4.31% and 4.06%, respectively. Interest expense was $712, $389 and $570 for the years ended December 31, 2018, 2017 and 2016, respectively. In connection with the Amended and Restated 2015 Line of Credit (and all predecessor agreements prior to the amendment or the amendment and restatement thereof), the Company recorded deferred financing costs of $535. The Company is amortizing the deferred financing costs associated with the Amended and Restated 2015 Line of Credit to interest expense using the effective-interest method over the term of the Amended and Restated 2015 Line of Credit and amortized $103, $60 and $46 to interest expense for the years ended December 31, 2018, 2017 and 2016, 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. 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, 2018 and 2017: December 31, 2018 December 31, 2017 Capital leases $ 1,097 $ 1,705 Less current portion, net (945) (921) Total capital leases, less current portion, net $ 152 $ 784 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 4% to 14%. Interest expense related to the capital leases was $115, $209 and $200 and for the years ended December 31, 2018, 2017 and 2016, 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 $1,077 and $1,918 as of December 31, 2018 and 2017, respectively, and are reflected in property and equipment on the consolidated balance sheets. (d) Long-Term Debt Maturities As of December 31, 2018, the Company's long-term debt consisted of capital lease obligations and is payable as follows: Total long-term debt 2019 $ 987 2020 150 2021 4 1,141 Less amount representing interest (44) Present value of payments 1,097 Less current portion (945) Total long-term debt, net of current portion $ 152 (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, 2018 and 2017, the Company had $5,340 and $4,055, 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, 2018 | |
Income Taxes | |
Income Taxes | 14. 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. The Company's income (loss) before income taxes was $(50,645), $3,452 and $(4,980) for the years ended December 31, 2018, 2017 and 2016, respectively, and the Company has no foreign sources of income or loss. The (benefit) expense for income taxes consists of the following: Years Ended December 31, 2018 2017 2016 Current: US federal $ 1 $ 20 $ (4) State and local 271 108 47 Total current income tax expense 272 128 43 Deferred: US federal (3,150) (8,948) 440 State and local (498) (519) 58 Total deferred income tax (benefit) expense (3,648) (9,467) 498 Total income tax (benefit) expense $ (3,376) $ (9,339) $ 541 For the years ended December 31, 2018, 2017 and 2016 the Company had an effective tax rate of 6.7% , (270.5%) and (10.9%) 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 in 2017. For the year ended December 31, 2016, 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, 2018, the Company had federal net operating loss ("NOL") carryforwards of $32,933 and state NOL carry forwards of $38,446, 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 2022 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, 2018, 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, 2018 2017 Deferred tax assets: Net federal operating loss carry forward $ 6,937 $ 6,269 Net state operating loss carry forward 2,096 1,662 Accruals 411 305 Stock options 4,056 2,837 Deferred rent 882 765 Other 347 177 Deferred tax assets 14,729 12,015 Less: valuation allowances (1,436) (1,338) Deferred tax assets after valuation allowance 13,293 10,677 Deferred tax liabilities: Fixed assets (1,599) (1,043) Amortizable intangible assets (10,555) (9,295) Indefinite-lived intangibles (933) (772) Other (131) (556) Deferred tax liabilities (13,218) (11,666) Net deferred tax asset (liabilities) $ 75 $ (989) 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. During 2018, additional jurisdictions announced they will require consolidated returns to be filed beginning in 2019. The Company determined that its deferred tax liabilities provide sufficient sources of recoverability to realize the Company’s deferred tax assets in those jurisdictions, and as a result, the Company released $561 of its deferred tax asset valuation allowance as of December 31, 2018. The changes in valuation allowance were as follows: Year-Ended December 31, 2018 2017 Balance at beginning of the year $ 1,338 $ 7,389 Increase (decrease) due to NOLs and temporary differences 659 (265) Deferred benefit recognized (561) (5,786) Balance at end of the year $ 1,436 $ 1,338 A reconciliation of income tax benefit (expense) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: December 31, 2018 2017 2016 Federal statutory rate 21.0 % 34.0 % 34.0 % State income taxes, net of federal income tax 0.5 (21.6) (1.6) Change in tax rate — (9.7) — Change in fair value of warrant liabilities — — 3.8 Change in valuation allowance (0.2) (42.1) Non-deductible stock compensation and tax windfall benefits, net 6.4 (79.4) (2.7) Change in fair value of contingent consideration — Non-deductible expenses and other (0.4) 12.2 (2.3) Effective income tax rate 6.7 % % (10.9) % 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, 2018, the Company's tax years beginning in 2015 remain open for examination by taxing authorities. |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Long-term Liabilities | |
Other Long-term Liabilities | 15. Other Long-term Liabilities Other long term liabilities as of December 31, 2018 and 2017 consisted of $3,268 and $2,615, respectively, which primarily represents the long-term portion of deferred rent related to the Company's property leases. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 16. 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 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, 2018, 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, 2018 and 2017. As of December 31, 2018, 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 Line of Credit. During the year ended December 31, 2018, the Company repurchased 80,000 shares at an average price of $35.82 per share for a total of $2,866. 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, 2018, $1,175 of common stock remained available for repurchase. e) Disgorgement of Short Swing Profits During the fourth quarter of 2018, the Company received $156 of proceeds from an officer of the Company representing the disgorgement of a short swing profit on the officer’s sale of the Company’s stock during the fourth quarter of 2018. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 17. 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 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 2018, the Board approved an increase of 964,876 shares to the share reserve. As of December 31, 2018, 567,520 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. Restricted Common Stock The Company began issuing restricted stock awards pursuant to the 2016 Plan to certain employees, including executive officers, and non-employee directors in fiscal year 2016. Restricted stock awards vest over a one to four year period and the unvested portion of the restricted stock award is forfeited if the employee or non-employee director leaves the Company before the vesting period is completed. The grant date fair value of restricted stock awards is determined using the Company’s closing stock price at grant date. The following table summarizes the restricted stock award activity under the 2016 Plan for the years ended December 31, 2018, 2017 and 2016: Weighted average Number grant-date of shares fair value Outstanding at January 1, 2016 — Granted 722,646 $ 12.00 Outstanding at December 31, 2016 722,646 12.00 Granted 43,384 16.33 Vested (12,364) 12.00 Outstanding at December 31, 2017 753,666 12.25 Granted 445,659 32.83 Vested (120,970) 12.78 Forfeited (8,294) 31.27 Outstanding at December 31, 2018 1,070,061 $ 20.61 For the years ended December 31, 2018, 2017 and 2016, $3,809, $5,434 and $3,285 of expense was recognized related to restricted stock awards, respectively. As of December 31, 2018, there was unrecognized compensation expense of $11,225 related to non-vested restricted stock awards under the 2016 Plan, which is expected to be recognized over a weighted average period of 2.28 years. Performance-Based Stock Award On August 6, 2018, the Board approved the grant of a performance-based stock award to a consultant pursuant to the 2016 Plan. The award provides that 50,000 shares of common stock will be issued based on the achievement of certain milestones. The award has a grant-date fair value of $61.85 per share based on the Company’s closing stock price on the grant date. Compensation cost is being recognized over the service period based on management’s determination that it is probable that the milestones will be achieved. For the year ended December 31, 2018, the Company recorded $1,385 of expense related to performance-based stock awards. As of December 31, 2018, there was unrecognized compensation expense of $1,708 related to the performance-based stock award. 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 $5,167, $3,318 and $721 of stock-based compensation expense related to the vesting of employee and non-employee stock options for the years ended December 31, 2018, 2017 and 2016, respectively. The table below sets forth the weighted average assumptions for employee grants during the years ended December 31, 2018, 2017 and 2016. Year Ended December 31, Valuation assumptions: 2018 2017 2016 Expected volatility 58.50 % 61.00 % 61.00 % Expected term (years) 6.07 6.03 5.69 Risk-free interest rate 2.46 % 2.21 % 1.37 % Dividend yield — — — The weighted average grant date fair value of employee options granted during the years ended December 31, 2018, 2017 and 2016 was $22.01, $8.25 and $7.74, respectively. The following table summarizes stock option activity for the years ended December 2018, 2017, and 2016: Weighted Weighted average average remaining Aggregate Number exercise contractual intrinsic of shares price term value Outstanding at January 1, 2016 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 Granted 512,515 Exercised (797,207) Forfeited (108,369) Outstanding at December 31, 2018 2,490,114 $ $ 119,669 Options vested and expected to vest at December 31, 2018 2,490,114 $ $ Exercisable at December 31, 2018 1,345,049 $ $ 74,738 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 value of options exercised during the years ended December 31, 2018, 2017 and 2016 were $33,937, $14,512 and $2,785, respectively. As of December 31, 2018, there was $13,901 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 2.4 years. Cash received from option exercises for the years ended December 31, 2018, 2017 and 2016 was $3,523, $480 and $153, respectively. During the year ended December 31, 2018, 33,714 shares of common stock were delivered by option holders as payment for the exercise price and employee payroll taxes owed for the exercise of 296,575 stock options with a gross exercise value of $1,378. 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, 2018, 2017 and 2016 in the following expense categories of its consolidated statement of operations: Year Ended December 31, 2018 2017 2016 Cost of revenue - product $ 692 $ 502 $ 191 Cost of revenue - service 1,590 293 46 Research and development 2,566 694 62 Sales and marketing 1,580 598 138 General and administrative 3,933 6,665 Total stock-based compensation expense $ $ 8,752 $ |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 18. 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, 2018 and 2017 as follows: Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 December 31, 2018 Liabilities Acquisition-related contingent consideration - short-term $ — $ — $ $ 43,397 Acquisition-related contingent consideration - long-term — — 7,800 7,800 $ — $ — $ $ 51,197 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 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 and equity consideration payable that is contingent upon the achievement of certain financial and performance milestones. In accordance with ASC 802, Business Combinations, all changes in liability-classified contingent consideration subsequent to the initial acquisition-date measurement are recorded in net income or loss. 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 Medliance acquisition-related contingent consideration 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 acquisition-related contingent consideration during 2017 based on an increase in estimated future revenues. During 2018, the Company recorded a $6 adjustment to the fair value of the acquisition-related contingent consideration associated with the acquisition of Medliance in 2014 and made the final $1,646 cash payment toward the Medliance acquisition-related contingent consideration. As of December 31, 2018, the Medliance contingent consideration was paid in full and no amounts are outstanding. The fair value of the Medliance contingent consideration was calculated to be $1,640 at December 31, 2017. The SRx acquisition-related contingent consideration, which was liability-classified, was recorded at the estimated fair value at the acquisition date of September 6, 2017. The contingent consideration payable is based on SRx’s EBITDA, as defined in the Merger Agreement, multiplied by a variable EBITDA multiple, which is based on a formula as set forth in the Merger Agreement. The Company, with the assistance of a third-party appraiser, utilizes a Monte Carlo simulation to derive estimates of the contingent consideration payments as of the acquisition date and at each subsequent period. For the year ended December 31, 2018, the Company recorded a $49,903 charge for the change in the fair value of the SRx acquisition-related contingent consideration based on an increase in the EBITDA multiple used in the contingent consideration payment calculation as a result of an increase in the Company’s market capitalization and an increase in SRx’s EBITDA for the year. For the year ended December 31, 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. As of December 31, 2017, the fair value of the SRx acquisition-related contingent consideration was $31,789. The final amount of the SRx acquisition-related contingent consideration liability was calculated to be $85,000, of which $42,500 is payable in cash and the remaining portion is payable in stock and is equity-classified at December 31, 2018, and is expected to be paid during the first quarter of 2019. As of December 31, 2018, the fair value of the SRx acquisition-related contingent consideration was calculated to be $81,692, of which $39,774 is equity-classified. The Peak PACE acquisition-related contingent consideration, which is liability-classified, was recorded at the estimated fair value at the acquisition date of May 1, 2018. The contingent consideration payable is based on Peak PACE’s EBITDA, as defined in the asset purchase agreement, multiplied by an EBITDA multiple . The Company, with the assistance of a third-party appraiser, utilizes a Monte Carlo simulation to derive estimates of the contingent consideration payments as of the acquisition date and at each subsequent period. During the year ended December 31, 2018, the Company recorded a $141 gain for the change in the fair value of the Peak PACE acquisition-related contingent consideration primarily based on a decrease in the EBITDA used in the contingent consideration payment calculation. The final amount of the Peak PACE acquisition-related contingent consideration was calculated to be $1,500 as of December 31, 2018 and is expected to be paid during the first quarter of 2019. The fair value of the Peak PACE acquisition-related contingent consideration was calculated to be $1,479 as of December 31, 2018. The Cognify acquisition-related contingent consideration, which is liability-classified, was recorded at the estimated fair value at the acquisition date of October 19, 2018. The contingent consideration payable is based a multiple of the excess of Cognify’s 2021 revenues and EBITDA over its 2018 revenues and EBITDA, as defined in the stock purchase agreement. The Company, with the assistance of a third-party appraiser, utilizes a Monte Carlo simulation to derive estimates of the contingent consideration payments as of the acquisition date and at each subsequent period. During the year ended December 31, 2018, the Company recorded a $300 gain for the change in the fair value of Cognify acquisition-related contingent consideration primarily due to an increase in the 2018 results. The fair value of the Cognify acquisition-related contingent consideration was calculated to be $7,800 as of December 31, 2018 and the final amount of the contingent consideration liability will be fixed as of December 31, 2021. The changes in fair value of the Company’s acquisition-related contingent consideration liability for the years ended December 31, 2018 and 2017 was as follows: Balance at January 1, 2017 $ 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 Acquisition date fair value of Peak PACE contingent consideration 1,620 Acquisition date fair value of Cognify contingent consideration 8,100 Fair value of cash consideration paid (1,646) Adjustments to fair value measurement 49,468 Reclassification of amounts to be settled in common stock to equity Balance at December 31, 2018 $ 51,197 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 19. Commitments and Contingencies (a) Operating Leases The Company has entered into various operating leases for office space expiring on various dates through 2030, 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 were originally scheduled to expire on November 30, 2027. The Company has the option to extend the leases for one additional period of ten years. On June 25, 2018, the Company entered into an amendment to these lease agreements to extend the maturity date to January 31, 2030. The Company also entered into a new operating agreement to expand its corporate office space in Moorestown, NJ. The lease is expected to commence in the first quarter of 2019 and expires January 31, 2030. 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, 2018 are as follows: December 31, 2018 2019 $ 3,793 2020 3,717 2021 3,466 2022 3,165 2023 2,949 Thereafter 15,277 Total minimum lease payments $ 32,367 Rent expense under these operating leases was $3,016, $2,012 and $1,342 for the years ended December 31, 2018, 2017 and 2016 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, which were effective as of April 1, 2017. On February 26, 2018, the Company entered into new employment agreements that replaced and superseded the previous agreements between the named executive officers and the Company entered into in April 2017. 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 clients for a period following the executive’s termination of employment. The agreements have an initial term of three years and will automatically renew annually. On April 25, 2017, the 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 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, 2018 and 2017, the Company was contingently liable for $300 and $400, respectively, under an outstanding letter of credit (see Note 13) related to the Company’s lease agreement for the office space in Moorestown, NJ. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Plan | |
Retirement Plan | 20. 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 $1,643, $644 and $347 during the years ended December 31, 2018, 2017 and 2016, respectively. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related-Party Transactions | |
Related-Party Transactions | 21. 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 13(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 Chief Scientific Officer (see Note 6). |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data (unaudited) | |
Selected Quarterly Financial Data (unaudited) | 22. 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, 2018 and 2017. Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 December 31, 2018 Total revenue $ 43,944 $ 48,598 $ 54,418 $ 57,310 $ 204,270 (Loss) income from operations $ (15,381) $ (34,825) $ 9,810 $ (9,343) $ (49,739) Net (loss) income attributable to common stockholders, basic and diluted $ (18,094) $ (29,026) $ 10,416 $ (10,565) $ (47,269) Net (loss) income per share attributable to common stockholders: Basic $ (0.96) $ (1.53) $ 0.54 $ (0.54) $ (2.48) Diluted $ (0.96) $ (1.53) $ 0.47 $ (0.54) $ (2.48) 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 $ 27,977 $ 29,437 $ 32,731 $ 43,340 $ 133,485 (Loss) income from operations $ (2,422) $ (1,441) $ (773) $ 8,776 $ 4,140 Net (loss) income attributable to common stockholders, basic and diluted $ (2,593) $ (1,683) $ 6,165 $ 10,902 $ 12,791 Net (loss) income per share attributable to common stockholders: Basic $ (0.16) $ (0.10) $ 0.37 $ 0.62 $ 0.76 Diluted $ (0.16) $ (0.10) $ 0.33 $ 0.55 $ 0.68 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | 23 . Subsequent Events On January 2, 2019, the Company completed the acquisition of all of the outstanding share capital and options to purchase share capital of DoseMe Holdings Pty Ltd, a proprietary company limited by shares organized under the Laws of Australia (“DoseMe”). DoseMe is the developer of DoseMeRx, an advanced precision dosing tool to help physicians and pharmacists accurately dose patients’ high-risk parenteral medications based on individual needs. The acquisition was made pursuant to a Share Purchase Deed, made and entered into as of November 30, 2018. The consideration for the acquisition was comprised of (i) cash consideration of up to $10,000 paid upon closing, subject to certain customary post-closing adjustments, (ii) the issuance of 149,053 shares of the Company’s common stock and (iii) the potential for a contingent earn out payment of up to $10,000, to be paid in 50% cash and 50% of the Company’s common stock, based on the financial performance of DoseMe. A portion of the cash consideration paid at closing is being held in escrow to secure potential claims by the Company for indemnification under the agreement and in respect of adjustments to the purchase price. Initial accounting for the acquisition is incomplete as of March 1, 2019 due to the complexity of the transaction. Pro forma financial information has not been provided herein due to a lack of sufficient information at the time of filing . On February 12, 2019, the Company issued and sold an aggregate principal amount of $325,000 of 1.75% convertible senior subordinated notes in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes will bear interest at a rate of 1.75% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2019. The notes will mature on February 15, 2026, unless earlier converted or repurchased. The initial conversion rate for the notes is 14.2966 shares of the Company’s common stock per $1,000 principal amount of notes. This conversion rate is equal to an initial conversion price of approximately $69.95 per share of the Company’s common stock. Upon conversion, the Company will pay or deliver, as the case may be, shares of the Company’s common stock, cash or a combination thereof at the Company’s option. In connection with the offering of the notes, the Company also entered into convertible note hedge transactions with affiliates of certain of the initial purchasers (the “option counterparties”) of the notes pursuant to the terms of call option confirmations. The Company also entered into warrant transactions with the option counterparties. The convertible note hedge transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. The warrant transactions could separately have a dilutive effect on the Company’s common stock to the extent that the market price per share of its common stock exceeds the strike price of the warrants. |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, 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 Acquisition of Period Allowance for doubtful accounts: Year Ended December 31, 2018 $ 63 $ 362 $ — $ 103 $ 528 Year Ended December 31, 2017 $ 39 $ 24 $ — $ — $ 63 Year Ended December 31, 2016 $ 49 $ (10) $ — $ — $ 39 Allowance Release of Balance at Recorded on Allowance on Beginning of Current Year Losses Expired Balance at End Description Period Losses or Revalued Other of Period Deferred tax asset valuation allowance: Year Ended December 31, 2018 $ 1,338 $ 659 $ (561) $ — $ 1,436 Year Ended December 31, 2017 $ 7,389 $ (265) $ (5,786) $ — $ 1,338 Year Ended December 31, 2016 $ 4,489 $ 2,900 $ — $ — $ 7,389 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 . |
Use of Estimates | (b) 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, (v) assumptions used in the Black-Scholes option-pricing model to determine the fair value of equity and liability classified warrants and stock-based compensation instruments and (vi) 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 | (c) Revenue Recognition 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. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenue. See Note 3 for additional information about the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). See Note 4 for additional detail about the Company’s products and service lines. |
Research and Development | (f) Research and Development Research and development expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in our research and development functions, which include software developers, project managers and other employees engaged in scientific education and research, and the development and enhancement of our service offerings. Research and development expenses also include costs for design and development of new software and technology and new service offerings, including fees paid to third-party consultants, costs related 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 | (g) 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, director or non-employee 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. 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, as such company-specific historical and implied volatility information is limited. 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 | (h) 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 | (i) 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 | (j) Net Income (Loss) per Share Attributable to Common Stockholders The Company computed net income (loss) per share of common stock using the treasury stock method for the year ended December 31, 2018 and 2017. For the year ended December 31, 2016, 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 of Directors (the “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 | (k) Cash Cash at December 31, 2018 and 2017 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, 2018 or 2017. |
Restricted cash | (l) Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under certain contractual agreements are recorded in restricted cash on the Company’s consolidated balance sheet. The Company holds funds on behalf of its clients as part of the Company’s third party administrative services, which falls under the Company’s health plan management services. These amounts are recorded as restricted cash as of December 31, 2018, with an offsetting liability recorded in accrued expenses and other liabilities on the Company’s consolidated balance sheet. The Company follows guidance in ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18") for presentation of restricted cash in the statement of cash flows, which states that changes and transfers in restricted cash should not be presented as cash flow activities in the statement of cash flows. ASU 2016-18 was effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 effective January 1, 2018 and retroactively adjusted a $200 change in restricted cash, which was previously presented as cash flows from investing activities in the consolidated statements of cash flows for the year ended December 31, 2016, to conform with the current year presentation. The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total cash and restricted cash as reported in the consolidated statements of cash flows. December 31, 2018 2017 Cash $ 20,278 $ 10,430 Restricted cash 4,751 — Total cash and restricted cash as presented in the consolidated statement of cash flows $ 25,029 $ 10,430 |
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 the Company’s 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 $528 and $63 as of December 31, 2018 and 2017, 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, 2018, 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, 2018, 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 for the years ended December 31, 2018, 2017 or 2016. |
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 $291 and $219, net of accumulated amortization, are included in other assets on the accompanying consolidated balance sheets as of December 31, 2018 and 2017, 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 $134 and $163 of deferred rent are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets as of December 31, 2018 and 2017, respectively. Approximately $3,115 and $2,615 of deferred rent is included in long-term liabilities in the accompanying consolidated balance sheets as of December 31, 2018 and 2017, 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. |
Advertising Costs | (w) Advertising Costs Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $184, $117, and $117 for the years ended December 31, 2018, 2017, and 2016, 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 that is classified as a liability is 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 MRM prescription fulfillment services clients, which are sponsors of the federal Medicare Part D plan (prescription drug coverage plan) 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 MRM services clients, health plan management clients, and pharmacy cost management clients consist primarily of healthcare organizations, including payors, providers, and pharmacies. 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, 2018, two clients each represented 12% of net accounts receivable. As of December 31, 2017, two clients represented 15% and 12% of net accounts receivable, respectively. For the years ended December 31, 2018 and 2017, one client accounted for 14% and 18% of total revenue, respectively. For the year ended December 31, 2016, one client accounted for 10% of total revenue. During 2017, the Company signed a master agreement with a healthcare organization covering 11 PACE facilities, which the Company now considers a single client, which represented 14% and 18% of total revenue for the year ended December 31, 2018 and 2017, respectively. Prior to signing this master agreement, each of these PACE facilities had separate contracts with the Company and were considered separate, individual, clients. On a combined basis, the 11 PACE facilities represented 17% of total revenue for the years ended December 31, 2016. |
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 , 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 was effective for annual reporting periods beginning after December 15, 2017 and interim reporting periods within that reporting period. The Company adopted ASU-2014-09 as of January 1, 2018 using the full retrospective method. As a result, the Company revised the consolidated balance sheets as of December 31, 2017, and the consolidated statements of operations and cash flows for the years ended December 31, 2017 and 2016, and related notes to the audited consolidated financial statements for the effects of adoption. See Note 3 for additional information. 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. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which provides an additional modified transition method by which entities may elect to initially apply the transition requirements in ASU 2016-02 at the effective date with the effects of initial application recognized as a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, and without retrospective application to any comparative prior periods presented. The Company is adopting this standard on January 1, 2019. ASU 2016-02 provides certain practical expedients for adoption. The Company expects to elect the package of practical expedients which permit it to carry forward its prior conclusions about lease identification, lease classification, and initial direct costs, but does not expect to elect the hindsight practical expedient. The Company is in the process of assessing any potential impacts on its internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance, with the new standard. The Company anticipates that this standard will have a material impact on its consolidated financial statements, as right-of-use assets and lease liabilities will be recognized on the consolidated balance sheet for all long-term operating leases. The Company does not expect the standard to materially affect its consolidated net earnings or liquidity, or to impact its debt-covenant compliance under its current agreements. 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 guidance to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 was effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has adopted ASU 2016-15 effective January 1, 2018. The adoption of this standard did not have a material impact 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 was effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company has adopted ASU 2017-01 effective January 1, 2018. The adoption of this standard did not have a material impact 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 2017-04 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 was effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company has adopted ASU 2017-09 effective January 1, 2018. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounts (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns such payments to nonemployees with the current accounting requirements for share-based payments to employees. ASU 2018-07 is effective for financial statements issued for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company has elected to early adopt ASU 2018-07 for the year ended December 31, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 updates the disclosure requirements for fair value measurements and is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company is currently evaluating the potential impact of the adoption of this standard on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalization implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. ASU 2018-15 is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company is currently evaluating the potential impact of the adoption of this standard on the Company’s consolidated financial statements. |
Product | |
Accounting policies | |
Cost of Revenue | (d) Cost of Product Revenue Cost of product revenue includes all costs directly related to the fulfillment and distribution of prescription drugs as part of the Company’s MRM offerings. Costs consist primarily of the purchase price of the prescription drugs the Company dispenses, expenses to package, dispense and distribute prescription drugs, and expenses associated with the Company's 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. |
Service | |
Accounting policies | |
Cost of Revenue | (e) Cost of Service Revenue Cost of service revenue includes all costs directly related to servicing the Company’s MRM service contracts, which primarily consist of labor costs, outside contractors, technology services, hosting fees and overhead costs. In addition, service costs include all labor costs, including stock-based compensation expense, directly related to the health plan management services, pharmacy cost management services and software services and expenses for claims processing, technology services and overhead costs. |
Shipping and Handling | |
Accounting policies | |
Cost of Revenue | (v) Shipping and Handling Costs Shipping and handling costs are charged to cost of product revenue when incurred. Shipping and handling costs totaled $4,708, $3,652, and $2,673 for the years ended December 31, 2018, 2017, and 2016, respectively. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of reconciliation of cash and restricted cash | December 31, 2018 2017 Cash $ 20,278 $ 10,430 Restricted cash 4,751 — Total cash and restricted cash as presented in the consolidated statement of cash flows $ 25,029 $ 10,430 |
Adoption of New Accounting Po_2
Adoption of New Accounting Policy (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Adoption of New Accounting Policy | |
Schedule of impact on financial statements | December 31, 2017 As Previously Reported Adjustment for ASU on Revenue Recognition As Adjusted Assets Current assets: Other current assets $ 1,044 $ 1,842 $ 2,886 Total current assets 33,609 1,842 35,451 Total assets $ 185,990 $ 1,842 $ 187,832 Liabilities and stockholders’ equity Deferred income tax liability $ 545 $ 444 $ 989 Total liabilities 63,500 444 63,944 Stockholders' equity: Accumulated deficit (20,627) 1,398 (19,229) Total stockholders’ equity 122,490 1,398 123,888 Total liabilities and stockholders’ equity $ 185,990 $ 1,842 $ 187,832 Year Ended Year Ended December 31, December 31, 2017 2016 As Previously Reported Adjustment for ASU on Revenue Recognition As Adjusted As Previously Reported Adjustment for ASU on Revenue Recognition As Adjusted Revenue: Product revenue $ 98,523 $ (3,285) $ 95,238 $ 79,446 $ (2,667) $ 76,779 Service revenue 36,023 2,224 38,247 14,616 3,396 18,012 Total revenue 134,546 (1,061) 133,485 94,062 729 94,791 Cost of revenue, exclusive of depreciation and amortization shown below: Product cost 75,123 (2,345) 72,778 59,901 (2,177) 57,724 Service cost 18,532 2,345 20,877 5,276 2,177 7,453 Total cost of revenue, exclusive of depreciation and amortization 93,655 — 93,655 65,177 — 65,177 Income (loss) from operations 5,201 (1,061) 4,140 4,551 729 5,280 Net income (loss) $ 14,296 $ (1,505) $ 12,791 $ (6,250) $ 729 $ (5,521) Net income (loss) attributable to common stockholders, basic $ 14,296 $ (1,505) $ 12,791 $ (3,811) $ 729 $ (3,082) Net income (loss) attributable to common stockholders, diluted $ 14,296 $ (1,505) $ 12,791 $ (6,889) $ 729 $ (6,160) Net income (loss) per share attributable to common stockholders, basic $ 0.85 $ (0.09) $ 0.76 $ (0.51) $ 0.10 $ (0.41) Net income (loss) per share attributable to common stockholders, diluted $ 0.76 $ (0.08) $ 0.68 $ (0.59) $ 0.06 $ (0.53) |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Schedule of disaggregation of revenue | Year Ended December 31, 2018 2017 2016 Major service lines: MRM prescription fulfillment services $ 112,760 $ 95,238 $ 76,779 MRM services 62,558 26,583 7,292 Health plan management services 18,977 6,019 4,547 Pharmacy cost management services 9,698 5,419 6,173 Other services 277 226 — $ 204,270 $ 133,485 $ 94,791 |
Schedule of contract assets and contract liabilities from contracts with customers | December 31, December 31, 2018 2017 Contract assets $ 3,075 $ 1,842 Contract liabilities 1,733 1,350 |
Schedule of significant changes in the contract assets and the contract liabilities balances | December 31, December 31, 2018 2017 Contract asset: Contract asset, beginning of year $ 1,842 $ 2,537 Decreases due to cash received (1,949) (2,537) Increases, net of reclassifications to receivables 3,182 1,842 Contract asset, end of year $ 3,075 $ 1,842 Contract liability: Contract liability, beginning of year $ 1,350 $ 851 Revenue recognized that was included in the contract liability balance at the beginning of the year (1,295) (808) Increases due to cash received, excluding amounts recognized as revenue during the year 978 1,307 Increases due to business combination 1,211 — Revenue recognized from business combinations that was included in the contract liability balance on the acquisition date (511) — Contract liability, end of year $ 1,733 $ 1,350 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Income (Loss) per Share | |
Schedule of calculation of basic and diluted net loss per share | Year Ended December 31, 2018 2017 2016 Numerator: Net (loss) income $ (47,269) $ 12,791 $ (5,521) Decretion of redeemable convertible preferred stock — — 2,439 Net (loss) income attributable to common stockholders, basic $ (47,269) $ 12,791 $ (3,082) Decretion of redeemable convertible preferred stock — — (2,439) Revaluation of warrant liability, net of tax — — (639) Net (loss) income attributable to common stockholders, diluted $ (47,269) $ 12,791 $ (6,160) Denominator: Weighted average shares of common stock outstanding, basic 7,486,131 Denominator (diluted): Weighted average shares of common stock outstanding 7,486,131 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 contingently issuable shares — 9,331 — Weighted average dilutive effect of common shares from warrants — — 4,105,079 Weighted average shares of common stock outstanding, diluted Net (loss) income per share attributable to common stockholders, basic $ (2.48) $ 0.76 $ (0.41) Net (loss) income per share attributable to common stockholders, diluted $ (2.48) $ 0.68 $ (0.53) |
Schedule of shares excluded from the calculation of diluted net loss per share attributable to common stockholders | Year Ended December 31, 2018 2017 2016 Stock options to purchase common stock 2,490,114 — 3,059,690 Unvested restricted stock 1,070,061 — 722,646 Common stock warrants — — 32,216 3,560,175 — 3,814,552 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of proforma results | Year Ended December 31, 2018 2017 2016 Revenue $ 217,725 $ 176,290 $ 139,485 Net loss (48,451) (2,908) (8,979) Net loss per share attributable to common stockholders, basic (2.52) (0.17) (0.78) Net loss per share attributable to common stockholders, diluted (2.52) (0.17) (0.78) |
Cognify, Inc | |
Schedule of purchase price consideration | Cash consideration at closing, net of post-closing adjustments $ 10,231 Stock consideration at closing 7,477 Estimated fair value of contingent consideration 8,100 Total fair value of acquisition consideration $ 25,808 |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Accounts receivable $ 520 Prepaid expenses and other current assets 12 Property and equipment 153 Trade name 130 Developed technology 2,100 Client relationships 9,400 Goodwill 16,984 Total assets acquired $ 29,299 Accrued expenses and other liabilities (517) Deferred income tax liability, net (2,974) Total purchase price, including contingent consideration of $8,100 $ 25,808 |
Mediture | |
Schedule of purchase price consideration | Cash consideration at closing, net of post-closing adjustments $ 17,471 Stock consideration at closing 3,994 Total fair value of acquisition consideration $ 21,465 |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Cash $ 2,427 Accounts receivable 887 Prepaid expenses and other current assets 146 Property and equipment 219 Trade name 300 Developed technology 2,300 Client relationships 4,500 Non-competition agreement 1,300 Goodwill 13,477 Total assets acquired $ 25,556 Accrued expenses and other liabilities (3,833) Trade accounts payable (112) Other long-term liabilities (146) Total purchase price $ 21,465 |
Peak PACE Solutions | |
Schedule of purchase price consideration | Cash consideration at closing, net of post-closing adjustments $ 7,563 Estimated fair value of contingent consideration 1,620 Total fair value of acquisition consideration $ 9,183 |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Cash $ 606 Property and equipment 84 Trade name 290 Client relationships 5,220 Non-competition agreement 50 Goodwill 3,559 Total assets acquired $ 9,809 Accrued expenses and other liabilities (626) Total purchase price, including contingent consideration of $1,620 $ 9,183 |
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 52,507 Total assets acquired $ 106,720 Accrued expenses and other liabilities (3,819) Trade accounts payable (8,868) Debt assumed (675) Deferred income tax liability, net (9,233) 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, 2018 | |
Property and Equipment. | |
Schedule of property plant and equipment | Estimated December 31, useful life 2018 2017 Computer hardware and purchased software 3 years $ $ Office furniture and equipment 5 years Leasehold improvements 5-15 years Less: accumulated depreciation (9,363) (5,963) Property and equipment, net $ $ 9,243 |
Software Development Costs (Tab
Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Software Development Costs | |
Schedule of capitalized software costs | December 31, 2018 December 31, 2017 Software development costs $ 15,278 $ 9,873 Less: accumulated amortization (7,030) (4,872) Software development costs, net $ 8,248 $ 5,001 Capitalized software development costs included above not yet subject to amortization $ 3,500 $ 1,021 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of goodwill | Balance at January 1, 2017 $ 21,686 Goodwill from 2017 acquisition 52,927 Balance at December 31, 2017 74,613 Goodwill from 2018 acquisitions 34,020 Adjustments to Goodwill (420) Balance at December 31, 2018 $ 108,213 |
Schedule of intangible assets | Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2018 Trade names 7.96 $ 7,436 $ (2,357) $ 5,079 Client relationships 9.56 54,069 (10,757) 43,312 Non-competition agreements 5.00 6,754 (1,885) 4,869 Developed technology 7.19 31,191 (7,296) 23,895 Domain name 10.00 59 (8) 51 Total intangible assets $ 99,509 $ (22,303) $ 77,206 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 |
Schedule of estimated amortization expense | Years Ending December 31, 2019 $ 12,860 2020 12,360 2021 12,243 2022 11,151 2023 9,964 Thereafter 18,628 Total estimated amortization expense $ 77,206 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | December 31, 2018 December 31, 2017 Employee related expenses $ 6,357 $ 4,572 Contract liability 1,580 1,350 Accrued payables due to customers — 1,200 Client funds obligations* 4,751 — Contract labor 1,563 463 Interest 121 13 Deferred rent 134 163 Professional fees 442 288 Income taxes payable — 20 Other expenses 1,608 919 Total accrued expenses and other liabilities $ 16,556 $ 8,988 * This amount represents client funds held by the Company, with an offsetting amount included in restricted cash. |
Lines of Credit and Long-Term_2
Lines of Credit and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Lines of Credit and Long-Term Debt | |
Schedule of capital lease obligations | December 31, 2018 December 31, 2017 Capital leases $ 1,097 $ 1,705 Less current portion, net (945) (921) Total capital leases, less current portion, net $ 152 $ 784 |
Schedule of long-term debt maturities | Total long-term debt 2019 $ 987 2020 150 2021 4 1,141 Less amount representing interest (44) Present value of payments 1,097 Less current portion (945) Total long-term debt, net of current portion $ 152 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of (benefit) expense for income taxes | Years Ended December 31, 2018 2017 2016 Current: US federal $ 1 $ 20 $ (4) State and local 271 108 47 Total current income tax expense 272 128 43 Deferred: US federal (3,150) (8,948) 440 State and local (498) (519) 58 Total deferred income tax (benefit) expense (3,648) (9,467) 498 Total income tax (benefit) expense $ (3,376) $ (9,339) $ 541 |
Schedule of principal components of deferred tax assets (liabilities) | December 31, 2018 2017 Deferred tax assets: Net federal operating loss carry forward $ 6,937 $ 6,269 Net state operating loss carry forward 2,096 1,662 Accruals 411 305 Stock options 4,056 2,837 Deferred rent 882 765 Other 347 177 Deferred tax assets 14,729 12,015 Less: valuation allowances (1,436) (1,338) Deferred tax assets after valuation allowance 13,293 10,677 Deferred tax liabilities: Fixed assets (1,599) (1,043) Amortizable intangible assets (10,555) (9,295) Indefinite-lived intangibles (933) (772) Other (131) (556) Deferred tax liabilities (13,218) (11,666) Net deferred tax asset (liabilities) $ 75 $ (989) |
Schedule of change in valuation allowance | Year-Ended December 31, 2018 2017 Balance at beginning of the year $ 1,338 $ 7,389 Increase (decrease) due to NOLs and temporary differences 659 (265) Deferred benefit recognized (561) (5,786) Balance at end of the year $ 1,436 $ 1,338 |
Schedule of reconciliation of income tax benefit (expense) | December 31, 2018 2017 2016 Federal statutory rate 21.0 % 34.0 % 34.0 % State income taxes, net of federal income tax 0.5 (21.6) (1.6) Change in tax rate — (9.7) — Change in fair value of warrant liabilities — — 3.8 Change in valuation allowance (0.2) (42.1) Non-deductible stock compensation and tax windfall benefits, net 6.4 (79.4) (2.7) Change in fair value of contingent consideration — Non-deductible expenses and other (0.4) 12.2 (2.3) Effective income tax rate 6.7 % % (10.9) % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation | |
Summary of restricted stock award activity | Weighted average Number grant-date of shares fair value Outstanding at January 1, 2016 — Granted 722,646 $ 12.00 Outstanding at December 31, 2016 722,646 12.00 Granted 43,384 16.33 Vested (12,364) 12.00 Outstanding at December 31, 2017 753,666 12.25 Granted 445,659 32.83 Vested (120,970) 12.78 Forfeited (8,294) 31.27 Outstanding at December 31, 2018 1,070,061 $ 20.61 |
Schedule of weighted average assumptions for employee grants | Year Ended December 31, Valuation assumptions: 2018 2017 2016 Expected volatility 58.50 % 61.00 % 61.00 % Expected term (years) 6.07 6.03 5.69 Risk-free interest rate 2.46 % 2.21 % 1.37 % 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, 2016 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 Granted 512,515 Exercised (797,207) Forfeited (108,369) Outstanding at December 31, 2018 2,490,114 $ $ 119,669 Options vested and expected to vest at December 31, 2018 2,490,114 $ $ Exercisable at December 31, 2018 1,345,049 $ $ 74,738 |
Schedule of recorded stock-based compensation expense related to stock options | Year Ended December 31, 2018 2017 2016 Cost of revenue - product $ 692 $ 502 $ 191 Cost of revenue - service 1,590 293 46 Research and development 2,566 694 62 Sales and marketing 1,580 598 138 General and administrative 3,933 6,665 Total stock-based compensation expense $ $ 8,752 $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 Liabilities Acquisition-related contingent consideration - short-term $ — $ — $ $ 43,397 Acquisition-related contingent consideration - long-term — — 7,800 7,800 $ — $ — $ $ 51,197 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 |
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, 2017 $ 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 Acquisition date fair value of Peak PACE contingent consideration 1,620 Acquisition date fair value of Cognify contingent consideration 8,100 Fair value of cash consideration paid (1,646) Adjustments to fair value measurement 49,468 Reclassification of amounts to be settled in common stock to equity Balance at December 31, 2018 $ 51,197 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Schedule of Operating Lease for Future Minimum Lease Payments | December 31, 2018 2019 $ 3,793 2020 3,717 2021 3,466 2022 3,165 2023 2,949 Thereafter 15,277 Total minimum lease payments $ 32,367 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 June 30, 2018 September 30, 2018 December 31, 2018 December 31, 2018 Total revenue $ 43,944 $ 48,598 $ 54,418 $ 57,310 $ 204,270 (Loss) income from operations $ (15,381) $ (34,825) $ 9,810 $ (9,343) $ (49,739) Net (loss) income attributable to common stockholders, basic and diluted $ (18,094) $ (29,026) $ 10,416 $ (10,565) $ (47,269) Net (loss) income per share attributable to common stockholders: Basic $ (0.96) $ (1.53) $ 0.54 $ (0.54) $ (2.48) Diluted $ (0.96) $ (1.53) $ 0.47 $ (0.54) $ (2.48) 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 $ 27,977 $ 29,437 $ 32,731 $ 43,340 $ 133,485 (Loss) income from operations $ (2,422) $ (1,441) $ (773) $ 8,776 $ 4,140 Net (loss) income attributable to common stockholders, basic and diluted $ (2,593) $ (1,683) $ 6,165 $ 10,902 $ 12,791 Net (loss) income per share attributable to common stockholders: Basic $ (0.16) $ (0.10) $ 0.37 $ 0.62 $ 0.76 Diluted $ (0.16) $ (0.10) $ 0.33 $ 0.55 $ 0.68 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Recent Accounting Pronouncements | ||||
Net increase in cash and restricted cash | $ 14,599 | $ 6,085 | $ 2,119 | |
Cash | 20,278 | 10,430 | ||
Restricted cash | 4,751 | |||
Total cash and restricted cash as presented in the consolidated statement of cash flows | $ 25,029 | $ 10,430 | 4,345 | $ 2,226 |
ASU 2016-18 | Adjustment | ||||
Recent Accounting Pronouncements | ||||
Change in restricted cash | (200) | |||
Net increase in cash and restricted cash | $ (200) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable, net | ||
Allowance for doubtful accounts | $ 528 | $ 63 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment and Software Development Costs, net (Details) | 12 Months Ended |
Dec. 31, 2018 | |
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 Accoun_7
Summary of Significant Accounting Policies - Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Goodwill | |||
Number of reporting units | segment | 1 | ||
Goodwill impairment | $ | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Deferred Debt Financing Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Debt Issuance Costs | ||
Deferred financing costs | $ 291 | $ 219 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Deferred Rent (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of Significant Accounting Policies | ||
Deferred rent included in accrued expenses and other liabilities | $ 134 | $ 163 |
Deferred rent included in long-term liabilities | $ 3,115 | $ 2,615 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Shipping and Handling (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of revenue | |||
Cost of revenue | $ 137,669 | $ 93,655 | $ 65,177 |
Shipping and Handling | |||
Disaggregation of revenue | |||
Cost of revenue | $ 4,708 | $ 3,652 | $ 2,673 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Additional Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Summary of Significant Accounting Policies | |||
Advertising costs | $ | $ 184 | $ 117 | $ 117 |
Number of operating segments | segment | 1 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2018customer | Dec. 31, 2017facilitycustomer | Dec. 31, 2016facilitycustomer | |
Concentration Risk | |||
Electronic payment term of claims | 14 days | ||
Nonelectronic payment term of claims | 30 days | ||
Accounts Receivable | Credit risk | |||
Concentration Risk | |||
Number of customers meeting concentration threshold | customer | 2 | 2 | |
Accounts Receivable | Client One | Credit risk | |||
Concentration Risk | |||
Concentration risk (as a percent) | 12.00% | 15.00% | |
Accounts Receivable | Client Two | Credit risk | |||
Concentration Risk | |||
Concentration risk (as a percent) | 12.00% | 12.00% | |
Revenue. | Healthcare organization covering PACE facilities | Customer risk | |||
Concentration Risk | |||
Concentration risk (as a percent) | 14.00% | 18.00% | |
Number of facilities | facility | 11 | ||
Revenue. | Client Three | Customer risk | |||
Concentration Risk | |||
Number of customers meeting concentration threshold | customer | 1 | ||
Concentration risk (as a percent) | 14.00% | 18.00% | 10.00% |
Revenue. | PACE facilities, separate contracts | Customer risk | |||
Concentration Risk | |||
Concentration risk (as a percent) | 17.00% | ||
Number of facilities | facility | 11 |
Adoption of New Accounting Po_3
Adoption of New Accounting Policy - ASU-2014-09 (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue contracts | ||||
Revenue, Practical Expedient, Initial Application and Transition, Completed Contract, Use of Transaction Price at Contract Completion Date | true | |||
Contract assets | $ 3,075 | $ 1,842 | $ 2,537 | |
Data analysis | ||||
Revenue contracts | ||||
Contract assets | $ 2,913 | $ 1,842 |
Adoption of New Accounting Po_4
Adoption of New Accounting Policy - Impact on Balance Sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flow | ||||
Cash provided by or used in operating, investing or financing activities | $ 14,599 | $ 6,085 | $ 2,119 | |
Current assets: | ||||
Other current assets | 4,165 | 2,886 | ||
Total current assets | 63,311 | 35,451 | ||
Total assets | 270,957 | 187,832 | ||
Liabilities and stockholders' equity | ||||
Deferred income tax liability | 989 | |||
Total liabilities | 131,948 | 63,944 | ||
Stockholders' equity: | ||||
Accumulated deficit | (66,498) | (19,229) | ||
Total stockholders' equity | 139,009 | 123,888 | 59,009 | $ (29,454) |
Total liabilities and stockholders' equity | $ 270,957 | 187,832 | ||
As Previously Reported | ASU 2014-09 | ||||
Current assets: | ||||
Other current assets | 1,044 | |||
Total current assets | 33,609 | |||
Total assets | 185,990 | |||
Liabilities and stockholders' equity | ||||
Deferred income tax liability | 545 | |||
Total liabilities | 63,500 | |||
Stockholders' equity: | ||||
Accumulated deficit | (20,627) | |||
Total stockholders' equity | 122,490 | |||
Total liabilities and stockholders' equity | 185,990 | |||
Adjustment for ASU on Revenue Recognition | ASU 2014-09 | ||||
Cash flow | ||||
Cash provided by or used in operating, investing or financing activities | 0 | $ 0 | ||
Current assets: | ||||
Other current assets | 1,842 | |||
Total current assets | 1,842 | |||
Total assets | 1,842 | |||
Liabilities and stockholders' equity | ||||
Deferred income tax liability | 444 | |||
Total liabilities | 444 | |||
Stockholders' equity: | ||||
Accumulated deficit | 1,398 | |||
Total stockholders' equity | 1,398 | |||
Total liabilities and stockholders' equity | $ 1,842 |
Adoption of New Accounting Po_5
Adoption of New Accounting Policy - Impact on Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||||||||||
Revenue | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | $ 204,270 | $ 133,485 | $ 94,791 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | 137,669 | 93,655 | 65,177 | ||||||||
Income (loss) from operations | (9,343) | 9,810 | (34,825) | (15,381) | 8,776 | (773) | (1,441) | (2,422) | (49,739) | 4,140 | 5,280 |
Net income (loss) | (47,269) | 12,791 | (5,521) | ||||||||
Net income attributable to common stockholders: | |||||||||||
Net income (loss) attributable to common stockholders, basic | (10,565) | 10,416 | (29,026) | (18,094) | 10,902 | 6,165 | (1,683) | (2,593) | (47,269) | 12,791 | (3,082) |
Net income (loss) attributable to common stockholders, diluted | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ 10,902 | $ 6,165 | $ (1,683) | $ (2,593) | $ (47,269) | $ 12,791 | $ (6,160) |
Net (loss) income per share attributable to common stockholders, basic (in dollars per share) | $ (0.54) | $ 0.54 | $ (1.53) | $ (0.96) | $ 0.62 | $ 0.37 | $ (0.10) | $ (0.16) | $ (2.48) | $ 0.76 | $ (0.41) |
Net (loss) income per share attributable to common stockholders, diluted (in dollars per share) | $ (0.54) | $ 0.47 | $ (1.53) | $ (0.96) | $ 0.55 | $ 0.33 | $ (0.10) | $ (0.16) | $ (2.48) | $ 0.68 | $ (0.53) |
As Previously Reported | ASU 2014-09 | |||||||||||
Revenue: | |||||||||||
Revenue | $ 134,546 | $ 94,062 | |||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | 93,655 | 65,177 | |||||||||
Income (loss) from operations | 5,201 | 4,551 | |||||||||
Net income (loss) | 14,296 | (6,250) | |||||||||
Net income attributable to common stockholders: | |||||||||||
Net income (loss) attributable to common stockholders, basic | 14,296 | (3,811) | |||||||||
Net income (loss) attributable to common stockholders, diluted | $ 14,296 | $ (6,889) | |||||||||
Net (loss) income per share attributable to common stockholders, basic (in dollars per share) | $ 0.85 | $ (0.51) | |||||||||
Net (loss) income per share attributable to common stockholders, diluted (in dollars per share) | $ 0.76 | $ (0.59) | |||||||||
Adjustment for ASU on Revenue Recognition | ASU 2014-09 | |||||||||||
Revenue: | |||||||||||
Revenue | $ (1,061) | $ 729 | |||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Income (loss) from operations | (1,061) | 729 | |||||||||
Net income (loss) | (1,505) | 729 | |||||||||
Net income attributable to common stockholders: | |||||||||||
Net income (loss) attributable to common stockholders, basic | (1,505) | 729 | |||||||||
Net income (loss) attributable to common stockholders, diluted | $ (1,505) | $ 729 | |||||||||
Net (loss) income per share attributable to common stockholders, basic (in dollars per share) | $ (0.09) | $ 0.10 | |||||||||
Net (loss) income per share attributable to common stockholders, diluted (in dollars per share) | $ (0.08) | $ 0.06 | |||||||||
Product | |||||||||||
Revenue: | |||||||||||
Revenue | $ 112,760 | $ 95,238 | $ 76,779 | ||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | 84,935 | 72,778 | 57,724 | ||||||||
Product | As Previously Reported | ASU 2014-09 | |||||||||||
Revenue: | |||||||||||
Revenue | 98,523 | 79,446 | |||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | 75,123 | 59,901 | |||||||||
Product | Adjustment for ASU on Revenue Recognition | ASU 2014-09 | |||||||||||
Revenue: | |||||||||||
Revenue | (3,285) | (2,667) | |||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | (2,345) | (2,177) | |||||||||
Service | |||||||||||
Revenue: | |||||||||||
Revenue | 91,510 | 38,247 | 18,012 | ||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | $ 52,734 | 20,877 | 7,453 | ||||||||
Service | As Previously Reported | ASU 2014-09 | |||||||||||
Revenue: | |||||||||||
Revenue | 36,023 | 14,616 | |||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | 18,532 | 5,276 | |||||||||
Service | Adjustment for ASU on Revenue Recognition | ASU 2014-09 | |||||||||||
Revenue: | |||||||||||
Revenue | 2,224 | 3,396 | |||||||||
Cost of revenue, exclusive of depreciation and amortization shown below: | |||||||||||
Cost of revenue, exclusive of depreciation and amortization | $ 2,345 | $ 2,177 |
Revenue - General (Details)
Revenue - General (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Contract with customer | |
Revenue, Practical Expedient, Financing Component | true |
Minimum | |
Contract with customer | |
Contract term | 1 year |
Termination notice period | 0 days |
Maximum | |
Contract with customer | |
Contract term | 5 years |
Termination notice period | 180 days |
Pharmacy cost management services | |
Contract with customer | |
Collection period after data submission | 180 days |
Revenue - Disaggregation (Detai
Revenue - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of revenue | |||||||||||
Revenue | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | $ 204,270 | $ 133,485 | $ 94,791 |
MRM prescription fulfillment services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 112,760 | 95,238 | 76,779 | ||||||||
MRM services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 62,558 | 26,583 | 7,292 | ||||||||
Health plan management services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 18,977 | 6,019 | 4,547 | ||||||||
Pharmacy cost management services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 9,698 | 5,419 | $ 6,173 | ||||||||
Other services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | $ 277 | $ 226 |
Revenue - Contract balances (De
Revenue - Contract balances (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Contract balances | |||
Contract assets | $ 3,075 | $ 1,842 | $ 2,537 |
Contract liabilities | 1,733 | 1,350 | $ 851 |
Data analysis | |||
Contract balances | |||
Contract assets | 2,913 | $ 1,842 | |
Health plan management services | |||
Contract balances | |||
Contract assets | $ 162 |
Revenue - Change in contract ba
Revenue - Change in contract balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Contract asset: | ||
Contract asset, beginning of period | $ 1,842 | $ 2,537 |
Decreases due to cash received | (1,949) | (2,537) |
Increases, net of reclassifications to receivables | 3,182 | 1,842 |
Contract asset, end of period | 3,075 | 1,842 |
Contract liability | ||
Contract liability, beginning of period | 1,350 | 851 |
Revenue recognized that was included in the contract liability balance at the beginning of the period | (1,295) | (808) |
Increases due to cash received, excluding amounts recognized as revenue during the period | 978 | 1,307 |
Increases due to business combination | 1,211 | |
Revenue recognized from business combinations that was included in the contract liability balance on the acquisition date | (511) | |
Contract liability end of period | $ 1,733 | $ 1,350 |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator | |||||||||||
Net (loss) income | $ (47,269) | $ 12,791 | $ (5,521) | ||||||||
Decretion of redeemable convertible preferred stock | 2,439 | ||||||||||
Net (loss) income attributable to common stockholders, basic | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ 10,902 | $ 6,165 | $ (1,683) | $ (2,593) | (47,269) | 12,791 | (3,082) |
Decretion of redeemable convertible preferred stock | (2,439) | ||||||||||
Revaluation of warrant liability, net of tax | (639) | ||||||||||
Net (loss) income attributable to common stockholders, diluted | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ 10,902 | $ 6,165 | $ (1,683) | $ (2,593) | $ (47,269) | $ 12,791 | $ (6,160) |
Denominator | |||||||||||
Weighted average shares of common stock outstanding | 19,098,294 | 16,730,418 | 7,486,131 | ||||||||
Denominator (diluted): | |||||||||||
Weighted average shares of common stock outstanding | 19,098,294 | 16,730,418 | 7,486,131 | ||||||||
Effect of potential dilutive securities: | |||||||||||
Weighted average dilutive effect of contingently issuable shares | 9,331 | ||||||||||
Weighted average dilutive effect of common shares from warrants | 4,105,079 | ||||||||||
Weighted average shares of common stock outstanding, diluted | 19,098,294 | 18,774,374 | 11,591,210 | ||||||||
Net (loss) income per share attributable to common stockholders, basic (in dollars per share) | $ (0.54) | $ 0.54 | $ (1.53) | $ (0.96) | $ 0.62 | $ 0.37 | $ (0.10) | $ (0.16) | $ (2.48) | $ 0.76 | $ (0.41) |
Net (loss) income per share attributable to common stockholders, diluted (in dollars per share) | $ (0.54) | $ 0.47 | $ (1.53) | $ (0.96) | $ 0.55 | $ 0.33 | $ (0.10) | $ (0.16) | $ (2.48) | $ 0.68 | $ (0.53) |
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, 2018 | Dec. 31, 2016 | |
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 | 3,560,175 | 3,814,552 |
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 | 2,490,114 | 3,059,690 |
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 | 1,070,061 | 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 |
Acquisitions - Cognify (Details
Acquisitions - Cognify (Details) - USD ($) $ in Thousands | Oct. 19, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 108,213 | $ 74,613 | $ 108,213 | $ 74,613 | $ 21,686 | |||||||
Revenue | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | 204,270 | 133,485 | 94,791 | |
Net income (loss) | $ (47,269) | $ 12,791 | $ (5,521) | |||||||||
Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 7 years 11 months 16 days | 8 years 6 months 22 days | ||||||||||
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 2 months 9 days | 7 years 4 months 17 days | ||||||||||
Cognify, Inc | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 10,823 | |||||||||||
Issuance of common stock (in shares) | 93,579 | |||||||||||
Percentage of contingent consideration payable in cash | 50.00% | |||||||||||
Percentage of contingent consideration payable in stock | 50.00% | |||||||||||
Acquisition and integration costs | $ 346 | |||||||||||
Acquisition-related contingent consideration | $ 8,100 | |||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of post-closing adjustments | 10,231 | |||||||||||
Stock consideration at closing | 7,477 | |||||||||||
Estimated fair value of contingent consideration | 8,100 | |||||||||||
Total fair value of acquisition consideration | 25,808 | |||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Accounts receivable | 520 | |||||||||||
Prepaid expenses and other current assets | 12 | |||||||||||
Property and equipment | 153 | |||||||||||
Goodwill | 16,984 | |||||||||||
Total assets acquired | 29,299 | |||||||||||
Accrued expenses and other liabilities | (517) | |||||||||||
Deferred income tax liability, net | (2,974) | |||||||||||
Total purchase price | $ 25,808 | |||||||||||
Weighted average amortization period | 11 years 6 months 22 days | |||||||||||
Revenue | $ 620 | |||||||||||
Type of Revenue | us-gaap:ServiceMember | |||||||||||
Net income (loss) | $ 160 | |||||||||||
Cognify, Inc | Maximum | ||||||||||||
Purchase price consideration | ||||||||||||
Estimated fair value of contingent consideration | $ 14,000 | |||||||||||
Cognify, Inc | Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 130 | |||||||||||
Weighted average amortization period | 3 years | |||||||||||
Cognify, Inc | Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 2,100 | |||||||||||
Weighted average amortization period | 9 years | |||||||||||
Cognify, Inc | Client relationships intangible asset | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 9,400 | |||||||||||
Weighted average amortization period | 12 years 3 months |
Acquisitions - Mediture (Detail
Acquisitions - Mediture (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 108,213 | $ 74,613 | $ 108,213 | $ 74,613 | $ 21,686 | |||||||
Revenue | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | 204,270 | 133,485 | 94,791 | |
Net income (loss) | $ (47,269) | $ 12,791 | $ (5,521) | |||||||||
Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 7 years 11 months 16 days | 8 years 6 months 22 days | ||||||||||
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 2 months 9 days | 7 years 4 months 17 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 | 5 years | 4 years 11 months 16 days | ||||||||||
Mediture | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 18,500 | |||||||||||
Issuance of common stock (in shares) | 45,561 | |||||||||||
Acquisition and integration costs | $ 494 | |||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of post-closing adjustments | $ 17,471 | |||||||||||
Stock consideration at closing | 3,994 | |||||||||||
Total fair value of acquisition consideration | 21,465 | |||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Cash | 2,427 | |||||||||||
Accounts receivable | 887 | |||||||||||
Prepaid expenses and other current assets | 146 | |||||||||||
Property and equipment | 219 | |||||||||||
Goodwill | 13,477 | |||||||||||
Total assets acquired | 25,556 | |||||||||||
Accrued expenses and other liabilities | (3,833) | |||||||||||
Trade accounts payable | (112) | |||||||||||
Other long-term liabilities | (146) | |||||||||||
Total purchase price | $ 21,465 | |||||||||||
Weighted average amortization period | 8 years 1 month 13 days | |||||||||||
Revenue | $ 4,528 | |||||||||||
Type of Revenue [Extensible List] | Service [Member] | |||||||||||
Net income (loss) | $ 1,291 | |||||||||||
Mediture | Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 300 | |||||||||||
Weighted average amortization period | 3 years | |||||||||||
Mediture | Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 2,300 | |||||||||||
Weighted average amortization period | 3 years 3 months | |||||||||||
Mediture | Client relationships intangible asset | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 4,500 | |||||||||||
Weighted average amortization period | 11 years 10 months 24 days | |||||||||||
Mediture | Non-competition agreement | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 1,300 | |||||||||||
Weighted average amortization period | 5 years |
Acquisitions - Peak PACE Soluti
Acquisitions - Peak PACE Solutions (Details) - USD ($) $ in Thousands | May 01, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 108,213 | $ 74,613 | $ 108,213 | $ 74,613 | $ 21,686 | |||||||
Revenue | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | 204,270 | 133,485 | 94,791 | |
Net income (loss) | $ (47,269) | $ 12,791 | $ (5,521) | |||||||||
Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 7 years 11 months 16 days | 8 years 6 months 22 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 | 5 years | 4 years 11 months 16 days | ||||||||||
Peak PACE Solutions | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 7,719 | |||||||||||
Acquisition and integration costs | $ 271 | |||||||||||
Acquisition-related contingent consideration | 1,620 | |||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of post-closing adjustments | 7,563 | |||||||||||
Estimated fair value of contingent consideration | 1,620 | |||||||||||
Total fair value of acquisition consideration | 9,183 | |||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Cash | 606 | |||||||||||
Property and equipment | 84 | |||||||||||
Goodwill | 3,559 | |||||||||||
Total assets acquired | 9,809 | |||||||||||
Accrued expenses and other liabilities | (626) | |||||||||||
Total purchase price | $ 9,183 | |||||||||||
Weighted average amortization period | 9 years 6 months 4 days | |||||||||||
Revenue | $ 5,801 | |||||||||||
Type of Revenue [Extensible List] | Service [Member] | |||||||||||
Net income (loss) | $ 524 | |||||||||||
Peak PACE Solutions | Maximum | ||||||||||||
Purchase price consideration | ||||||||||||
Total fair value of acquisition consideration | $ 10,000 | |||||||||||
Peak PACE Solutions | Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 290 | |||||||||||
Weighted average amortization period | 1 year 6 months | |||||||||||
Peak PACE Solutions | Client relationships intangible asset | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 5,220 | |||||||||||
Weighted average amortization period | 10 years | |||||||||||
Peak PACE Solutions | Non-competition agreement | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 50 | |||||||||||
Weighted average amortization period | 5 years |
Acquisitions - SinfoniaRx (Deta
Acquisitions - SinfoniaRx (Details) - USD ($) $ in Thousands | Sep. 06, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 108,213 | $ 74,613 | $ 108,213 | $ 74,613 | $ 21,686 | |||||||
Revenue | 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | 204,270 | 133,485 | 94,791 | |
Net (loss) income | $ (47,269) | $ 12,791 | $ (5,521) | |||||||||
Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 7 years 11 months 16 days | 8 years 6 months 22 days | ||||||||||
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 2 months 9 days | 7 years 4 months 17 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 | 5 years | 4 years 11 months 16 days | ||||||||||
SinfoniaRx | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 35,000 | |||||||||||
Issuance of common stock (in shares) | 520,821 | |||||||||||
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 | |||||||||||
Contingent purchase price consideration earned or paid | $ 0 | |||||||||||
Final amount of acquisition-related contingent consideration | 85,000 | $ 85,000 | ||||||||||
Amount of contingent consideration payable in cash | 42,500 | |||||||||||
Contingent consideration | 81,692 | 81,692 | ||||||||||
Contingent consideration equity-classified | $ 39,774 | 39,774 | ||||||||||
Acquisition and integration costs | 77 | 1,015 | ||||||||||
Acquisition-related contingent consideration | 38,092 | |||||||||||
Fair value of contingent consideration | $ 31,789 | $ 31,789 | ||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of 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 | 52,507 | |||||||||||
Total assets acquired | 106,720 | |||||||||||
Accrued expenses and other liabilities | (3,819) | |||||||||||
Trade accounts payable | (8,868) | |||||||||||
Debt assumed | (675) | |||||||||||
Deferred income tax liability, net | (9,233) | |||||||||||
Total purchase price | $ 84,125 | |||||||||||
Weighted average amortization period | 7 years 3 months 29 days | |||||||||||
Revenue | $ 12,119 | |||||||||||
Type of Revenue [Extensible List] | Service [Member] | |||||||||||
Net (loss) income | $ 3,736 | |||||||||||
SinfoniaRx | Maximum | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 35,000 | |||||||||||
SinfoniaRx | Trade name | ||||||||||||
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 | Sep. 15, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allocation of purchase price | |||||||||||
Goodwill | $ 108,213 | $ 74,613 | $ 21,686 | ||||||||
Developed technology | |||||||||||
Allocation of purchase price | |||||||||||
Weighted average amortization period | 7 years 2 months 9 days | 7 years 4 months 17 days | |||||||||
Trade name | |||||||||||
Allocation of purchase price | |||||||||||
Weighted average amortization period | 7 years 11 months 16 days | 8 years 6 months 22 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. | Developed technology | |||||||||||
Allocation of purchase price | |||||||||||
Intangible assets | $ 10,100 | ||||||||||
Useful life of intangible asset | 7 years | ||||||||||
Quebec Inc. | Trade name | |||||||||||
Allocation of purchase price | |||||||||||
Intangible assets | $ 220 | ||||||||||
Useful life of intangible asset | 5 years |
Acquisitions - Pro forma (unaud
Acquisitions - Pro forma (unaudited) (Details) - SRx, Peak PACE, Mediture, Cognify and Intermed - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Acquisition | |||
Revenue | $ 217,725 | $ 176,290 | $ 139,485 |
Net income (loss) | $ (48,451) | $ (2,908) | $ (8,979) |
Net income (loss) per share attributable to common stockholders, basic (in dollars per share) | $ (2.52) | $ (0.17) | $ (0.78) |
Net income (loss) per share attributable to common stockholders, diluted (in dollars per share) | $ (2.52) | $ (0.17) | $ (0.78) |
Notes Receivable (Details)
Notes Receivable (Details) $ in Thousands | Oct. 01, 2018USD ($) |
Note Receivable | |
Principal amount | $ 1,000 |
Simple annual interest rate | 10.00% |
Notes receivable term | 1 year |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and Equipment | |||
Property and equipment, gross | $ 21,228 | $ 15,206 | |
Less: accumulated depreciation | (9,363) | (5,963) | |
Property and equipment, net | 11,865 | 9,243 | |
Depreciation, Amortization and Accretion, Net | $ 16,802 | 9,512 | $ 5,115 |
Computer hardware and purchased software | |||
Property and Equipment | |||
Useful life | 3 years | ||
Property and equipment, gross | $ 5,641 | 2,565 | |
Office furniture and equipment | |||
Property and Equipment | |||
Useful life | 5 years | ||
Property and equipment, gross | $ 8,569 | 7,275 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 7,018 | 5,366 | |
Property and equipment | |||
Property and Equipment | |||
Depreciation, Amortization and Accretion, Net | $ 3,493 | $ 2,146 | $ 1,267 |
Minimum | Leasehold improvements | |||
Property and Equipment | |||
Useful life | 5 years | ||
Maximum | Leasehold improvements | |||
Property and Equipment | |||
Useful life | 15 years |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Software Development Costs | |||
Software development costs | $ 15,278 | $ 9,873 | |
Less: accumulated amortization | (7,030) | (4,872) | |
Software development costs, net | 8,248 | 5,001 | |
Capitalized software costs not yet subject to amortization | 3,500 | 1,021 | |
Amortization expense | $ 2,158 | $ 1,721 | $ 1,106 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and related changes | |||
Goodwill at beginning of period | $ 74,613 | $ 21,686 | |
Goodwill from acquisitions | 34,020 | 52,927 | |
Adjustments to Goodwill | (420) | ||
Goodwill at end of period | 108,213 | 74,613 | $ 21,686 |
Goodwill impairment | 0 | 0 | 0 |
Goodwill accumulated impairment loss | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets | |||
Gross Value | $ 99,509 | $ 73,889 | |
Accumulated Amortization | (22,303) | (11,153) | |
Intangible Assets, net | 77,206 | 62,736 | |
Amortization expense | $ 11,150 | $ 5,645 | $ 2,739 |
Trade name | |||
Intangible Assets | |||
Weighted Average Amortization Period | 7 years 11 months 16 days | 8 years 6 months 22 days | |
Gross Value | $ 7,436 | $ 6,716 | |
Accumulated Amortization | (2,357) | (1,320) | |
Intangible Assets, net | $ 5,079 | $ 5,396 | |
Client relationships | |||
Intangible Assets | |||
Weighted Average Amortization Period | 9 years 6 months 22 days | 8 years 5 months 23 days | |
Gross Value | $ 54,069 | $ 34,949 | |
Accumulated Amortization | (10,757) | (5,652) | |
Intangible Assets, net | $ 43,312 | $ 29,297 | |
Non-competition agreement | |||
Intangible Assets | |||
Weighted Average Amortization Period | 5 years | 4 years 11 months 16 days | |
Gross Value | $ 6,754 | $ 5,404 | |
Accumulated Amortization | (1,885) | (739) | |
Intangible Assets, net | $ 4,869 | $ 4,665 | |
Developed technology | |||
Intangible Assets | |||
Weighted Average Amortization Period | 7 years 2 months 9 days | 7 years 4 months 17 days | |
Gross Value | $ 31,191 | $ 26,791 | |
Accumulated Amortization | (7,296) | (3,438) | |
Intangible Assets, net | $ 23,895 | $ 23,353 | |
Domain name | |||
Intangible Assets | |||
Weighted Average Amortization Period | 10 years | 10 years | |
Gross Value | $ 59 | $ 29 | |
Accumulated Amortization | (8) | (4) | |
Intangible Assets, net | $ 51 | $ 25 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Estimated amortization expense | ||
2,019 | $ 12,860 | |
2,020 | 12,360 | |
2,021 | 12,243 | |
2,022 | 11,151 | |
2,023 | 9,964 | |
Thereafter | 18,628 | |
Total estimated amortization expense | $ 77,206 | $ 62,736 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Expenses and Other Liabilities | ||
Employee related expenses | $ 6,357 | $ 4,572 |
Contract liability | 1,580 | 1,350 |
Accrued payables due to customers | 1,200 | |
Client funds obligations | 4,751 | |
Contract labor | 1,563 | 463 |
Interest | 121 | 13 |
Deferred rent | 134 | 163 |
Professional fees | 442 | 288 |
Income taxes payable | 20 | |
Other expenses | 1,608 | 919 |
Total accrued expenses and other liabilities | $ 16,556 | $ 8,988 |
Notes Payable Related to Acqu_2
Notes Payable Related to Acquisition (Details) - Medliance - Subordinated convertible promissory notes - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2016 | |
Notes Payable Related to Acquisition | ||
Aggregate borrowings | $ 16,385 | |
Interest rate (as a percent) | 8.00% | |
Interest expense | $ 709 | |
Fair value of promissory notes | $ 14,347 | |
Term of debt | 18 months | |
Amortization of discount to interest expense | $ 755 |
Lines of Credit and Long-Term_3
Lines of Credit and Long-Term Debt - Lines of Credit (Details) - 2015 Revolving Line $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 06, 2017USD ($) | Sep. 30, 2015USD ($) | |
Lines of Credit | |||||
Maximum borrowing capacity | $ 60,000 | ||||
Sublimit of loan | $ 1,000 | ||||
Unrestricted cash and unused availability balance | $ 1,500 | ||||
Number of trailing months | item | 12 | ||||
Trailing period | 12 months | ||||
Letter of credit outstanding | $ 300 | $ 400 | $ 500 | ||
Aggregate borrowings outstanding | 45,000 | $ 0 | |||
Amounts available for borrowings | $ 14,700 | ||||
Interest rate (as a percent) | 5.58% | 4.31% | 4.06% | ||
Interest expense | $ 712 | $ 389 | $ 570 | ||
Deferred financing costs | 535 | ||||
Amortization of deferred financing costs to interest expense | $ 103 | $ 60 | $ 46 | ||
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-Term_4
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-Term_5
Lines of Credit and Long-Term Debt - Capital Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Capital Lease Obligations | ||
Capital leases | $ 1,097 | $ 1,705 |
Less current portion | (945) | (921) |
Total long-term debt, net of current portion | $ 152 | $ 784 |
Lines of Credit and Long-Term_6
Lines of Credit and Long-Term Debt - Capital Leases (Details) - Capital Lease Obligation - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Capital Lease Obligations | |||
Interest expense, capital lease | $ 115 | $ 209 | $ 200 |
Net book value of assets under capital leases | $ 1,077 | $ 1,918 | |
Minimum | |||
Capital Lease Obligations | |||
Lease interest rates (as a percent) | 4.00% | ||
Maximum | |||
Capital Lease Obligations | |||
Lease interest rates (as a percent) | 14.00% |
Lines of Credit and Long-Term_7
Lines of Credit and Long-Term Debt - Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Capital lease obligations | ||
2,019 | $ 987 | |
2,020 | 150 | |
2,021 | 4 | |
Total | 1,141 | |
Less amount representing interest | (44) | |
Present value of payments | 1,097 | |
Less current portion | (945) | $ (921) |
Total long-term debt, net of current portion | $ 152 | $ 784 |
Lines of Credit and Long-Term_8
Lines of Credit and Long-Term Debt - Other Financing (Details) - AmerisourceBergen Drug Corporation - USD ($) $ in Thousands | 1 Months Ended | ||
May 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Financing | |||
Monthly minimum purchase obligation | $ 1,750 | ||
Purchase obligation, period | 3 years | ||
Amount due as a result of prescription drug purchases | $ 5,340 | $ 4,055 |
Income Taxes - Tax Reform Act (
Income Taxes - Tax Reform Act (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes | |||
Federal statutory rate | 21.00% | 34.00% | 34.00% |
Income Taxes - (Benefit) Expens
Income Taxes - (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes | |||
Income (loss) before income taxes | $ (50,645) | $ 3,452 | $ (4,980) |
Income or loss from foreign sources | 0 | 0 | 0 |
Current: | |||
US federal | 1 | 20 | (4) |
State and local | 271 | 108 | 47 |
Total current income tax expense | 272 | 128 | 43 |
Deferred: | |||
US federal | (3,150) | (8,948) | 440 |
State and local | (498) | (519) | 58 |
Total deferred income tax (benefit) expense | (3,648) | (9,467) | 498 |
Total income tax expense (benefit) | $ (3,376) | $ (9,339) | $ 541 |
Income Taxes - Effective tax ra
Income Taxes - Effective tax rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 6.70% | (270.50%) | (10.90%) | |
Net deferred tax liability recognized | $ (3,648) | $ (9,467) | $ 498 | |
Deferred benefit recognized | ||||
Income Taxes | ||||
Release of deferred tax asset valuation allowance | $ (561) | $ (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, 2018USD ($) | |
NOL carryforwards | |
Unrecognized tax benefits or related interest and penalties accrued | $ 0 |
Federal | |
NOL carryforwards | |
Net operating loss carryforwards | 32,933 |
State | |
NOL carryforwards | |
Net operating loss carryforwards | $ 38,446 |
Income Taxes - Deferred taxes (
Income Taxes - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | |||
Net federal operating loss carry forward | $ 6,937 | $ 6,269 | |
Net state operating loss carry forward | 2,096 | 1,662 | |
Accruals | 411 | 305 | |
Stock options | 4,056 | 2,837 | |
Deferred rent | 882 | 765 | |
Other | 347 | 177 | |
Deferred tax assets | 14,729 | 12,015 | |
Less: valuation allowances | (1,436) | (1,338) | $ (7,389) |
Deferred tax assets after valuation allowance | 13,293 | 10,677 | |
Deferred tax liabilities: | |||
Fixed assets | (1,599) | (1,043) | |
Amortizable intangible assets | (10,555) | (9,295) | |
Indefinite-lived intangibles | (933) | (772) | |
Other | (131) | (556) | |
Deferred tax liabilities | (13,218) | (11,666) | |
Net deferred tax asset | $ 75 | ||
Net deferred tax liabilities | $ (989) |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Change in valuation allowance: | ||
Balance at beginning of the period | $ 1,338 | $ 7,389 |
Balance at end of the period | 1,436 | 1,338 |
NOLs and temporary differences | ||
Change in valuation allowance: | ||
Increase (decrease) in valuation allowance | 659 | (265) |
Deferred benefit recognized | ||
Change in valuation allowance: | ||
Increase (decrease) in valuation allowance | $ (561) | $ (5,786) |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of income tax benefit (expense): | |||
Federal statutory rate | 21.00% | 34.00% | 34.00% |
State income taxes, net of federal income tax | 0.50% | (21.60%) | (1.60%) |
Change in tax rate | (9.70%) | ||
Change in fair value of warrant liabilities | 3.80% | ||
Change in valuation allowance | (0.20%) | (144.00%) | (42.10%) |
Non-deductible stock compensation and tax windfall benefits, net | 6.40% | (79.40%) | (2.70%) |
Change in fair value of contingent consideration | (20.60%) | (62.00%) | |
Non-deductible expenses and other | (0.40%) | 12.20% | (2.30%) |
Effective income tax rate | 6.70% | (270.50%) | (10.90%) |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Long-term Liabilities | ||
Deferred rent included in long-term liabilities | $ 3,115 | $ 2,615 |
Other Long-term Liability | ||
Other Long-term Liabilities | ||
Deferred rent included in long-term liabilities | $ 3,268 | $ 2,615 |
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 | Dec. 31, 2018 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock warrants | |||||
Warrants | |||||
Number of warrants outstanding | 0 | ||||
Warrants exercised (in shares) | 32,216 | ||||
Exercise Price (in dollars per share) | $ 1.55 | ||||
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, 2018 | 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 - Common_2
Stockholders' Equity - Common Stock Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 25, 2017 | |
Common Stock Repurchase | ||||
Shares repurchased (in dollars) | $ 2,866 | $ 959 | ||
Proceeds from disgorgement of short swing profits | $ 156 | $ 156 | ||
Treasury Stock | ||||
Common Stock Repurchase | ||||
Shares repurchased (in shares) | 80,000 | 73,466 | ||
Average price per share (in dollars per share) | $ 35.82 | $ 13.05 | ||
Shares repurchased (in dollars) | $ 2,866 | $ 959 | ||
Common Stock | ||||
Common Stock Repurchase | ||||
Number of shares authorized to be repurchased | $ 5,000 | |||
Common stock available for repurchase | $ 1,175 | $ 1,175 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plans (Details) - shares | Sep. 28, 2016 | Dec. 31, 2018 |
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 | 964,876 | |
Available for future grant (in shares) | 567,520 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average grant date fair value | |||
Total stock-based compensation expense (in dollars) | $ 10,361 | $ 8,752 | $ 4,250 |
Restricted stock | |||
Number of shares | |||
Outstanding at beginning of period (in shares) | 753,666 | 722,646 | |
Granted (in shares) | 445,659 | 43,384 | 722,646 |
Vested (in shares) | (120,970) | (12,364) | |
Forfeited (in shares) | (8,294) | ||
Outstanding at end of period (in shares) | 1,070,061 | 753,666 | 722,646 |
Weighted average grant date fair value | |||
Outstanding at beginning of period (in dollars per share) | $ 12.25 | $ 12 | |
Granted (in dollars per share) | 32.83 | 16.33 | $ 12 |
Vested to common stock (in dollars per share) | 12.78 | 12 | |
Forfeited (in dollars per share) | 31.27 | ||
Outstanding at end of period (in dollars per share | $ 20.61 | $ 12.25 | $ 12 |
Total stock-based compensation expense (in dollars) | $ 3,809 | $ 5,434 | $ 3,285 |
Unrecognized compensation expense (in dollars) | $ 11,225 | ||
Weighted average period expected to be recognized | 2 years 3 months 11 days | ||
Restricted stock | Minimum | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
Restricted stock | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 4 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Based Stock Award (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock-Based Compensation | ||||
Stock- based stock awards expense | $ 10,361 | $ 8,752 | $ 4,250 | |
Performance Based Stock Award | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 50,000 | |||
Grant-date fair value (in dollars per share) | $ 61.85 | |||
Stock- based stock awards expense | 1,385 | |||
Unrecognized compensation expense (in dollars) | $ 1,708 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-Based Compensation | |||
Total stock-based compensation expense (in dollars) | $ 10,361 | $ 8,752 | $ 4,250 |
Stock options | |||
Stock-Based Compensation | |||
Total stock-based compensation expense (in dollars) | $ 5,167 | $ 3,318 | $ 721 |
Employee stock options | |||
Valuation assumptions: | |||
Expected volatility (as a percent) | 58.50% | 61.00% | 61.00% |
Expected life | 6 years 26 days | 6 years 11 days | 5 years 8 months 9 days |
Risk-free interest rate (as a percent) | 2.46% | 2.21% | 1.37% |
Weighted average grant-date fair value (in dollars per share) | $ 22.01 | $ 8.25 | $ 7.74 |
Stock-Based Compensation - Op_2
Stock-Based Compensation - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of shares | |||
Outstanding at beginning of period (in shares) | 2,883,175 | 3,059,690 | 2,791,754 |
Granted (in shares) | 512,515 | 1,063,306 | 479,010 |
Exercised (in shares) | (797,207) | (1,162,579) | (203,991) |
Forfeited (in shares) | (108,369) | (77,242) | (7,083) |
Outstanding at end of the period (in shares) | 2,490,114 | 2,883,175 | 3,059,690 |
Options vested and expected to vest at end of the period (in shares) | 2,490,114 | ||
Exercisable at end of period (in shares) | 1,345,049 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 9.26 | $ 5.14 | $ 3.27 |
Granted (in dollars per share) | 38.77 | 14.64 | 14.56 |
Exercised (in dollars per share) | 6.15 | 3.15 | 1.32 |
Forfeited (in dollars per share) | 23.63 | 11.61 | 9.02 |
Outstanding at end of period (in dollars per share) | 15.70 | $ 9.26 | $ 5.14 |
Options vested and expected to vest at end of period (in dollars per share) | 15.70 | ||
Exercisable at end of period (in dollars per share) | $ 8.19 | ||
Weighted average remaining contractual term | |||
Outstanding | 7 years | ||
Options vested and expected to vest at of the period | 7 years | ||
Exercisable | 5 years 6 months | ||
Aggregate intrinsic value | |||
Outstanding (in dollars) | $ 119,669 | ||
Options vested and expected to vest at end of period (in dollars) | 119,669 | ||
Exercisable (in dollars) | 74,738 | ||
Additional disclosures | |||
Intrinsic value of options exercised (in dollars) | 33,937 | $ 14,512 | $ 2,785 |
Proceeds from stock options exercised (in dollars) | $ 3,523 | $ 480 | $ 153 |
Shares delivered as payment for exercise (in shares) | 33,714 | 362,440 | 7,930 |
Stock options exercised in cashless transaction (in shares) | 296,575 | 956,327 | 71,150 |
Gross cashless exercise value (in dollars) | $ 1,378 | $ 3,187 | $ 104 |
Stock options | |||
Additional disclosures | |||
Total unrecognized compensation cost (in dollars) | $ 13,901 | ||
Weighted average period expected to be recognized | 2 years 4 months 24 days |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | $ 10,361 | $ 8,752 | $ 4,250 |
Cost of revenue - product | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 692 | 502 | 191 |
Cost of revenue - service | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 1,590 | 293 | 46 |
Research and development | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 2,566 | 694 | 62 |
Sales and marketing | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 1,580 | 598 | 138 |
General and administrative | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | $ 3,933 | $ 6,665 | $ 3,813 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurements | ||
Acquisition-related contingent consideration - short-term | $ 43,397 | $ 1,640 |
Acquisition-related contingent consideration - long-term | 7,800 | 31,789 |
Liabilities | 51,197 | 33,429 |
Level 3 | ||
Fair Value Measurements | ||
Acquisition-related contingent consideration - short-term | 43,397 | 1,640 |
Acquisition-related contingent consideration - long-term | 7,800 | 31,789 |
Liabilities | $ 51,197 | $ 33,429 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in fair value | |||
Change in fair value of acquisition-related contingent consideration expense (income) | $ 49,468 | $ (6,173) | $ (338) |
Medliance | |||
Change in fair value | |||
Payments of acquisition-related consideration | 1,646 | 1,498 | 1,895 |
Change in fair value of acquisition-related contingent consideration expense (income) | 6 | 130 | $ (338) |
Contingent consideration liability | 0 | 1,640 | |
SinfoniaRx | |||
Change in fair value | |||
Change in fair value of acquisition-related contingent consideration expense (income) | 49,903 | (6,303) | |
Final amount of acquisition-related contingent consideration | 85,000 | ||
Amount of contingent consideration payable in cash | 42,500 | ||
Contingent consideration liability | $ 31,789 | ||
Contingent consideration | 81,692 | ||
Contingent consideration equity-classified | 39,774 | ||
Peak PACE Solutions | |||
Change in fair value | |||
Change in fair value of acquisition-related contingent consideration expense (income) | (141) | ||
Final amount of acquisition-related contingent consideration | 1,500 | ||
Contingent consideration liability | 1,479 | ||
Cognify, Inc | |||
Change in fair value | |||
Change in fair value of acquisition-related contingent consideration expense (income) | (300) | ||
Contingent consideration liability | $ 7,800 |
Fair Value Measurements - Con_2
Fair Value Measurements - Contingent consideration rollforward (Details) - Acquisition related contingent consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Change in fair value using significant unobservable inputs (Level 3): | ||
Balance at beginning of period | $ 33,429 | $ 3,008 |
Fair value of cash consideration paid | (1,646) | (1,498) |
Adjustments to fair value measurement | 49,468 | (6,173) |
Reclassification of amounts to be settled in common stock to equity | (39,774) | |
Balance at end of period | 51,197 | 33,429 |
SinfoniaRx | ||
Change in fair value using significant unobservable inputs (Level 3): | ||
Acquisition date fair value of contingent consideration | $ 38,092 | |
Peak PACE Solutions | ||
Change in fair value using significant unobservable inputs (Level 3): | ||
Acquisition date fair value of contingent consideration | 1,620 | |
Cognify, Inc | ||
Change in fair value using significant unobservable inputs (Level 3): | ||
Acquisition date fair value of contingent consideration | $ 8,100 |
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 Contingencies_2
Commitments and Contingencies - Future minimum lease payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments under operating leases | |||
2,019 | $ 3,793 | ||
2,020 | 3,717 | ||
2,021 | 3,466 | ||
2,022 | 3,165 | ||
2,023 | 2,949 | ||
Thereafter | 15,277 | ||
Total minimum lease payments | 32,367 | ||
Rent expense under the operating leases | $ 3,016 | $ 2,012 | $ 1,342 |
Commitments and Contingencies_3
Commitments and Contingencies - Agreements (Details) | Feb. 26, 2018 |
Employment agreements, Named executive officers, April 25, 2017 | |
Commitments | |
Term of Agreement | 3 years |
Commitments and Contingencies_4
Commitments and Contingencies - Letter of Credit (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2015 |
2015 Revolving Line | |||
Letter of Credit | |||
Letter of credit outstanding | $ 300 | $ 400 | $ 500 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Plan | |||
Contributions by employer | $ 1,643 | $ 644 | $ 347 |
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 _3
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selected Quarterly Financial Data (unaudited) | |||||||||||
Total revenue | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 43,340 | $ 32,731 | $ 29,437 | $ 27,977 | $ 204,270 | $ 133,485 | $ 94,791 |
(Loss) income from operations | (9,343) | 9,810 | (34,825) | (15,381) | 8,776 | (773) | (1,441) | (2,422) | (49,739) | 4,140 | 5,280 |
Net (loss) income attributable to common stockholders: | |||||||||||
Basic | (10,565) | 10,416 | (29,026) | (18,094) | 10,902 | 6,165 | (1,683) | (2,593) | (47,269) | 12,791 | (3,082) |
Diluted | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ 10,902 | $ 6,165 | $ (1,683) | $ (2,593) | $ (47,269) | $ 12,791 | $ (6,160) |
Net (loss) income per share attributable to common stockholders: | |||||||||||
Basic (in dollars per share) | $ (0.54) | $ 0.54 | $ (1.53) | $ (0.96) | $ 0.62 | $ 0.37 | $ (0.10) | $ (0.16) | $ (2.48) | $ 0.76 | $ (0.41) |
Diluted (in dollars per share) | $ (0.54) | $ 0.47 | $ (1.53) | $ (0.96) | $ 0.55 | $ 0.33 | $ (0.10) | $ (0.16) | $ (2.48) | $ 0.68 | $ (0.53) |
Subsequent Events (Details)
Subsequent Events (Details) | Feb. 12, 2019USD ($)$ / shares | Jan. 02, 2019USD ($)shares | Oct. 01, 2018USD ($) |
Subsequent Event | |||
Receivable with Imputed Interest, Face Amount | $ 1,000,000 | ||
Subsequent Event | Convertible Senior Subordinated Notes | |||
Subsequent Event | |||
Aggregate borrowings | $ 325,000 | ||
Interest rate (as a percent) | 1.75% | ||
Initial conversion rate | 0.0142966 | ||
Receivable with Imputed Interest, Face Amount | $ 1,000 | ||
Initial conversion price | $ / shares | $ 69.95 | ||
Subsequent Event | DoseMe Holdings Pty Ltd | |||
Subsequent Event | |||
Cash consideration | $ 10,000 | ||
Issuance of common stock (in shares) | shares | 149,053 | ||
Contingent earn out payment | $ 10,000 | ||
Percentage of contingent consideration payable in cash | 50.00% | ||
Percentage of contingent consideration payable in stock | 50.00% |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 63 | $ 39 | $ 49 |
Additions Charged to Costs and Expenses/Allowance Recorded on Current Year Losses | 362 | 24 | (10) |
Acquisitions | 103 | ||
Balance at End of Period | 528 | 63 | 39 |
Deferred tax asset valuation allowance | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 1,338 | 7,389 | 4,489 |
Additions Charged to Costs and Expenses/Allowance Recorded on Current Year Losses | 659 | (265) | 2,900 |
Deductions/Release of Allowance on Losses Expired or Revalued | (561) | (5,786) | |
Balance at End of Period | $ 1,436 | $ 1,338 | $ 7,389 |