Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 15, 2020 | Jun. 28, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-37888 | ||
Entity Registrant Name | Tabula Rasa HealthCare, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-5726437 | ||
Entity Address, Address Line One | 228 Strawbridge Drive, Suite 100 | ||
Entity Address, City or Town | Moorestown | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 08057 | ||
City Area Code | 866 | ||
Local Phone Number | 648-2767 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | TRHC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 817,904,000 | ||
Entity Common Stock, Shares Outstanding | 22,381,554 | ||
Entity Central Index Key | 0001651561 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 42,478 | $ 20,278 |
Restricted cash | 4,103 | 4,751 |
Accounts receivable, net | 29,123 | 27,950 |
Inventories | 3,700 | 3,594 |
Prepaid expenses | 4,299 | 2,573 |
Other current assets | 10,835 | 4,165 |
Total current assets | 94,538 | 63,311 |
Property and equipment, net | 15,798 | 11,865 |
Operating lease right-of-use assets | 22,100 | |
Software development costs, net | 18,501 | 8,248 |
Goodwill | 150,760 | 108,213 |
Intangible assets, net | 189,413 | 77,206 |
Deferred income tax assets | 75 | |
Note receivable | 1,000 | |
Other assets | 1,281 | 1,039 |
Total assets | 492,391 | 270,957 |
Current liabilities: | ||
Current portion of long-term debt and finance leases, net | 125 | 945 |
Current operating lease liabilities | 4,350 | |
Acquisition-related contingent consideration | 43,397 | |
Accounts payable | 8,622 | 14,830 |
Accrued expenses and other liabilities | 26,906 | 16,556 |
Total current liabilities | 40,003 | 75,728 |
Line of credit | 45,000 | |
Long-term debt and finance leases, net | 226,294 | 152 |
Noncurrent operating lease liabilities | 21,017 | |
Long-term acquisition-related contingent consideration | 10,800 | 7,800 |
Deferred income tax liability | 8,656 | |
Other long-term liabilities | 73 | 3,268 |
Total liabilities | 306,843 | 131,948 |
Commitments and contingencies (Note 18) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2019 and December 31, 2018 | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized, 22,496,999 and 20,719,297 shares issued and 22,321,310 and 20,557,537 shares outstanding at December 31, 2019 and December 31, 2018, respectively | 2 | 2 |
Treasury stock, at cost; 175,689 and 161,760 shares at December 31, 2019 and December 31, 2018, respectively | (3,865) | (3,825) |
Additional paid-in capital | 288,345 | 209,330 |
Accumulated deficit | (98,934) | (66,498) |
Total stockholders' equity | 185,548 | 139,009 |
Total liabilities and stockholders' equity | $ 492,391 | $ 270,957 |
CONSOLIDATED BALANCE SHEETS (pa
CONSOLIDATED BALANCE SHEETS (parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 22,496,999 | 20,719,297 |
Common stock, shares outstanding | 22,321,310 | 20,557,537 |
Treasury stock (in shares) | 175,689 | 161,760 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Revenue | $ 284,707 | $ 204,270 | $ 133,485 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Total cost of revenue, exclusive of depreciation and amortization | 181,355 | 137,669 | 93,655 |
Operating expenses: | |||
Research and development | 21,739 | 12,222 | 5,628 |
Sales and marketing | 25,273 | 9,667 | 5,542 |
General and administrative | 50,897 | 28,181 | 21,181 |
Change in fair value of acquisition-related contingent consideration expense (income) | 3,816 | 49,468 | (6,173) |
Depreciation and amortization | 34,276 | 16,802 | 9,512 |
Total operating expenses | 136,001 | 116,340 | 35,690 |
(Loss) income from operations | (32,649) | (49,739) | 4,140 |
Interest expense, net | 15,986 | 906 | 688 |
(Loss) income before income taxes | (48,635) | (50,645) | 3,452 |
Income tax benefit | (16,199) | (3,376) | (9,339) |
Net (loss) income | $ (32,436) | $ (47,269) | $ 12,791 |
Net (loss) income per share: | |||
Basic (in dollars per share) | $ (1.57) | $ (2.48) | $ 0.76 |
Diluted (in dollars per share) | $ (1.57) | $ (2.48) | $ 0.68 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 20,622,258 | 19,098,294 | 16,730,418 |
Diluted (in shares) | 20,622,258 | 19,098,294 | 18,774,374 |
Product | |||
Revenue: | |||
Revenue | $ 137,130 | $ 112,760 | $ 95,238 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Total cost of revenue, exclusive of depreciation and amortization | 102,351 | 84,935 | 72,778 |
Service | |||
Revenue: | |||
Revenue | 147,577 | 91,510 | 38,247 |
Cost of revenue, exclusive of depreciation and amortization shown below: | |||
Total cost of revenue, exclusive of depreciation and amortization | $ 79,004 | $ 52,734 | $ 20,877 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2016 | $ 2 | $ 91,027 | $ (32,020) | $ 59,009 | |
Balance at beginning of period (in shares) at Dec. 31, 2016 | 16,628,476 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock, net of issuance costs | 34,309 | 34,309 | |||
Issuance of common stock, net of issuance costs (in shares) | 1,350,000 | ||||
Issuance of common stock in connection with acquisition | 11,541 | 11,541 | |||
Issuance of common stock in connection with acquisition (in shares) | 520,821 | ||||
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 | ||||
Exercise of stock options | (1,555) | (1,555) | |||
Exercise of stock options (in shares) | 800,139 | ||||
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 in connection with 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) | ||||
Exercise of stock options | 3,503 | 3,503 | |||
Exercise of stock options (in shares) | 763,493 | ||||
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) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock in connection with acquisition | 9,504 | 9,504 | |||
Issuance of common stock in connection with acquisition (in shares) | 149,053 | ||||
Issuance of common stock awards (in shares) | 83,808 | ||||
Issuance of restricted stock (in shares) | 591,402 | ||||
Forfeitures of restricted shares (in shares) | (13,239) | ||||
Exercise of stock options | $ (40) | 3,742 | 3,702 | ||
Exercise of stock options (in shares) | 339,214 | (690) | |||
Issuance of common stock in connection with the settlement of acquisition-related contingent consideration | (609) | (609) | |||
Issuance of common stock in connection with the settlement of acquisition-related contingent consideration (in shares) | 614,225 | ||||
Conversion feature of convertible senior subordinated notes, net of allocated debt issuance costs, net of tax effect | 74,850 | 74,850 | |||
Purchase of convertible note hedges | (101,660) | (101,660) | |||
Sale of warrants in connection with convertible senior subordinated notes | 65,910 | 65,910 | |||
Stock-based compensation expense | 27,278 | 27,278 | |||
Net (loss) income | (32,436) | (32,436) | |||
Balance at end of period at Dec. 31, 2019 | $ 2 | $ (3,865) | $ 288,345 | $ (98,934) | $ 185,548 |
Balance at end of period (in shares) at Dec. 31, 2019 | 22,496,999 | (175,689) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (32,436) | $ (47,269) | $ 12,791 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 34,276 | 16,802 | 9,512 |
Amortization of deferred financing costs and debt discount | 10,877 | 103 | 92 |
Deferred taxes | (16,353) | (3,648) | (9,467) |
Stock-based compensation | 27,278 | 10,361 | 8,752 |
Change in fair value of acquisition-related contingent consideration | 3,816 | 49,468 | (6,173) |
Acquisition-related contingent consideration paid | (24,480) | ||
Other noncash items | 20 | 51 | 18 |
Changes in operating assets and liabilities, net of effect from acquisitions: | |||
Accounts receivable, net | 1,444 | (9,456) | (1,765) |
Inventories | (106) | (799) | 116 |
Prepaid expenses and other current assets | (7,705) | (1,651) | 295 |
Other assets | (269) | (460) | (187) |
Accounts payable | (7,809) | (778) | 1,288 |
Accrued expenses and other liabilities | 5,712 | 2,599 | 2,626 |
Other long-term liabilities | (80) | 507 | 410 |
Net cash (used in) provided by operating activities | (5,815) | 15,830 | 18,308 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (7,474) | (4,988) | (3,303) |
Software development costs | (14,487) | (5,558) | (3,314) |
Purchases of intangible assets | (1,202) | (30) | |
Issuance of note receivable | (1,000) | ||
Proceeds from repayment of note receivable | 1,000 | ||
Acquisitions of businesses, net of cash acquired | (158,762) | (32,232) | (34,451) |
Net cash used in investing activities | (180,925) | (43,808) | (41,068) |
Cash flows from financing activities: | |||
Payments for repurchase of common stock | (2,866) | (959) | |
Proceeds from exercise of stock options | 3,702 | 3,523 | 480 |
Proceeds from disgorgement of short swing profits | 156 | ||
Payments for employee taxes for shares withheld | (2,123) | ||
Payments for debt financing costs | (9,630) | (175) | (221) |
Borrowings on line of credit | 45,000 | 35,342 | |
Repayments of line of credit | (45,000) | (35,342) | |
Payments of equity offering costs | (364) | (365) | |
Payments of acquisition-related contingent consideration | (29,062) | (1,646) | (2,098) |
Repayments of long-term debt and finance leases | (968) | (1,051) | (766) |
Proceeds from issuance of convertible senior subordinated notes | 325,000 | ||
Proceeds from sale of warrants | 65,910 | ||
Purchase of convertible note hedges | (101,660) | ||
Proceeds from issuance of common stock, net of underwriting costs | 34,897 | ||
Net cash provided by financing activities | 208,292 | 42,577 | 28,845 |
Net increase in cash and restricted cash | 21,552 | 14,599 | 6,085 |
Cash and restricted cash, beginning of period | 25,029 | 10,430 | 4,345 |
Cash and restricted cash, end of period | 46,581 | 25,029 | 10,430 |
Supplemental disclosure of cash flow information: | |||
Acquisition of equipment under capital leases | 442 | 50 | |
Additions to property, equipment, and software development purchases included in accounts payable and accrued expenses | 19 | 175 | 540 |
Deferred offering costs included in accounts payable | 355 | ||
Cash paid for interest | 3,181 | $ 720 | $ 599 |
Cash paid for taxes | 381 | ||
Interest costs capitalized to property and equipment and software development costs, net of depreciation and amortization | $ 321 | ||
Stock issued in connection with acquisitions | 9,504 | 11,471 | 11,541 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Nature of Business | |
Nature of Business | 1. Nature of Busines s 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 provide 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, 2019 | |
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 stock-based compensation instruments, (vi) the realizability of long-lived assets including goodwill and intangible assets, (vii) the assumptions used to determine the fair value of right-of-use assets and liabilities for the Company’s leases, and (viii) the assumptions used to determine the fair value of convertible debt instruments and related equity-classified conversion option. 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 obligation is 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 detail about the Company’s products and service lines. (d) Cost of Product Revenue (exclusive of depreciation and amortization) 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 (exclusive of depreciation and amortization) 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, data acquisition costs, 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 and pharmacy cost management 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 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 grant date 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 combination of the historical volatility of a publicly traded set of peer companies and the historical volatility of its own traded stock price, and expects to continue to do so until such time that 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) Net (Loss) Income per Share Basic net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of shares of common stock of the Company outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period plus the impact of dilutive securities using the treasury stock method, to the extent that they are not anti-dilutive. (j) Cash Cash at December 31, 2019 and 2018 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, 2019 and 2018. (k) 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 sheets. As part of the Company’s third party administrative services, which fall under the Company’s health plan management services, the Company holds funds on behalf of its clients. These amounts are recorded as restricted cash with an offsetting liability recorded in accrued expenses and other liabilities on the Company’s consolidated balance sheets. 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, 2019 2018 Cash $ 42,478 $ 20,278 Restricted cash 4,103 4,751 Total cash and restricted cash as presented in the consolidated statements of cash flows $ 46,581 $ 25,029 (l) 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 $386 and $528 as of December 31, 2019 and 2018, respectively. (m) 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. (n) Leases The Company determines if an arrangement is a lease at inception. As of January 1, 2019, operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the consolidated balance sheets. Finance leases are included in property and equipment, net, current portion of long-term debt and finance leases, and long-term debt and finance leases in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated net present value of lease payments over the lease term. As the rate implicit in the lease is not readily determinable for most leases, the Company uses its incremental borrowing rate in determining the net present value of lease payments. The Company estimates its incremental borrowing rate for each lease as of the measurement date with consideration of the risk-free rate for varying maturities corresponding to the remaining lease term, the risk premium attributed to the Company’s credit rating for a secured or collateralized instrument, and comparable borrowings of similarly-rated companies. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expense for short-term leases is recognized on a straight-line basis over the lease term. Many leases include options to renew, with the exercise of lease renewal options at the Company’s sole discretion. The lease terms that include options to renew the lease require such renewal to be included when it is reasonably certain that the Company will exercise such option. The depreciable life of finance lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any residual value guarantees. The Company has elected to include both lease and nonlease components as a single lease component for its operating leases. (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 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. (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 at least annually. Goodwill is assessed for impairment on October 1 st Testing Goodwill for Impairment 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 unit’s 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, 2019, 2018, and 2017, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair value of its reporting unit is less than the carrying amount. Accordingly, no impairment loss was recorded for the years ended December 31, 2019, 2018, or 2017. (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. The Company has not recorded any impairment losses on long-lived assets for the years ended December 31, 2019, 2018, or 2017. (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. (t) 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. (u) Shipping and Handling Costs Shipping and handling costs are charged to cost of product revenue when incurred. Shipping and handling costs totaled $6,342, $4,708, and $3,652 for the years ended December 31, 2019, 2018, and 2017, respectively. (v) Advertising Costs Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $469, $184, and $117 for the years ended December 31, 2019, 2018, and 2017, respectively, which is included in sales and marketing expense. (w) 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. (x) 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. Substantially all revenues are generated and substantially all tangible assets are held in the United States. (y) Concentration of Credit Risk The Company's MRM prescription fulfillment services clients 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 payers, 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, 2019, one client represented 15% of net accounts receivable. As of December 31, 2018, two clients each represented of 12% of net accounts receivable For the years ended December 31, 2019, 2018 and 2017, one client accounted for 13%, 14% and 18% of total revenue, respectively. (z) 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. (aa) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements The Company elected the package of practical expedients permitted under the transition guidance, which permits the Company to carry forward its prior conclusions about lease identification, lease classification, and initial direct costs, but did not elect the hindsight practical expedient. ROU assets and liabilities for the Company’s existing leases were recognized on January 1, 2019 based on the estimated net present value of lease payments over the remaining lease term. The adoption of ASU 2016-02 resulted in the recording of lease assets and lease liabilities of $18,469 and $21,173, respectively, as of January 1, 2019. The standard had no impact on the Company’s opening balance of accumulated deficit, consolidated net operations or cash flows. See Note 8 for additional information on the Company’s leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments The Company expects the implementation of this guidance to change the Company’s processes for determining its reserves but does not anticipate the impact to be material upon adoption to the trade receivables and contract assets recorded in 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 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 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 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ). |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Revenue | 3. Revenue The Company provides technology-enabled solutions tailored toward the specific needs of the healthcare organizations that it serves. These solutions can be integrated or provided on a standalone basis. Contracts generally have a term of one Product Revenue MRM prescription fulfillment services. Service Revenue MRM services Health plan management services. Pharmacy cost management services. 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. The Company's MRM and health plan management clients consist primarily of healthcare payers, providers, and pharmacies. The Company’s pharmacy cost management clients consist primarily of post-acute care facilities. Substantially all of the Company’s revenue is recognized in the United States (“U.S.”) and substantially all of the Company’s assets are located in the U.S. for the years ended December 31, 2019, 2018, and 2017. Year Ended December 31, 2019 2018 2017 Major service lines: MRM prescription fulfillment services $ 137,130 $ 112,760 $ 95,238 MRM services 98,410 62,558 26,583 Health plan management services 37,019 18,977 6,019 Pharmacy cost management services 11,969 9,698 5,419 Other services 179 277 226 $ 284,707 $ 204,270 $ 133,485 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, 2019 and 2018. December 31, December 31, 2019 2018 Contract assets $ 6,165 $ 3,075 Contract liabilities 4,930 1,733 Contract assets as of December 31, 2019 consisted of $3,992 related to data analytics contract assets, $1,479 related to the gain-share component of completed health plan management services contracts, and $694 related to consideration for performance obligations completed related to MRM service contracts but for which the Company does not have an unconditional right to the consideration. 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 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 as of December 31, 2019 consisted of $2,029 related to acquired performance obligations for software services contracts associated with the Company’s acquisitions of DoseMe and PrescribeWellness in the first quarter of 2019 (see Note 5), $986 related to advanced billings for prescription medications not yet fulfilled or dispensed, $930 related to obligations on a pharmacy cost management contract, $743 related to performance obligations with respect to software maintenance contracts for electronic health records solutions, and $242 related to unamortized setup fees on health plan management contracts. The contract liabilities as of December 31, 2018 consisted of $858 related to advanced billings for prescription medications not yet fulfilled or dispensed, $730 related to performance obligations with respect to software maintenance contracts for electronic health records solutions, and $145 related to 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, 2019 2018 Contract assets: Contract assets, beginning of year $ 3,075 $ 1,842 Decreases due to cash received (4,958) (1,949) Changes to the contract assets at the beginning of the year as a result of changes in estimates 1,613 — Increases, net of reclassifications to receivables 6,435 3,182 Contract assets, end of year $ 6,165 $ 3,075 Contract liabilities: Contract liabilities, beginning of year $ 1,733 $ 1,350 Revenue recognized that was included in the contract liabilities balance at the beginning of the year (1,533) (1,295) Increases due to cash received, excluding amounts recognized as revenue during the year 2,969 978 Increases due to business combinations, excluding amounts recognized as revenue during the year 1,761 700 Contract liabilities, end of year $ 4,930 $ 1,733 |
Net (Loss) Income per Share
Net (Loss) Income per Share | 12 Months Ended |
Dec. 31, 2019 | |
Net (Loss) Income per Share | |
Net (Loss) Income per Share | 4. Net (Loss) Income per Share Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock of the Company outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during the period plus the impact of dilutive securities using the treasury stock method, to the extent that they are not anti-dilutive. The following table presents the calculation of basic and diluted net (loss) income per share for the Company’s common stock: Year Ended December 31, 2019 2018 2017 Numerator (basic and diluted): Net (loss) income $ (32,436) $ (47,269) $ 12,791 Denominator (basic): Weighted average shares of common stock outstanding, basic 20,622,258 19,098,294 16,730,418 Denominator (diluted): Weighted average shares of common stock outstanding, basic 20,622,258 19,098,294 16,730,418 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 shares of common stock outstanding, diluted 20,622,258 19,098,294 18,774,374 Net (loss) income per share, basic $ (1.57) $ (2.48) $ 0.76 Net (loss) income per share, diluted $ (1.57) $ (2.48) $ 0.68 The following potential common shares, presented based on amounts outstanding as of December 31, 2019 and 2018, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2019 and 2018 because including them would have had an anti-dilutive effect: Year Ended December 31, 2019 2018 Stock options to purchase common stock 2,755,343 2,490,114 Unvested restricted stock 1,213,581 1,070,061 Common stock warrants 4,646,393 — Contingently issuable shares 57,651 — 8,672,968 3,560,175 Shares of common stock associated with the potential conversion of the Company’s convertible senior subordinated notes have been excluded in the table above. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions | |
Acquisitions | 5. Acquisitions 2019 Acquisitions PrescribeWellness On March 5, 2019, the Company entered into, and consummated the transactions contemplated by, a Merger Agreement (“Merger Agreement”) with Prescribe Wellness, LLC, a Nevada limited liability company (“PrescribeWellness”) and Fortis Advisors LLC, a Delaware limited liability company, solely in its capacity as the initial Holder Representative. PrescribeWellness is a leading cloud-based patient engagement solutions company that facilitates collaboration between more than 12,000 pharmacies with patients, payers, providers, and pharmaceutical companies. The Company paid $150,000 in cash consideration upon closing, subject to certain customary adjustments as set forth in the Merger Agreement. A portion of the closing consideration is being held in escrow to secure potential claims for indemnification under the Merger Agreement and in respect of adjustments to the consideration under the Merger Agreement. In connection with the acquisition of PrescribeWellness, the Company incurred direct acquisition costs of $3,243 during the year ended December 31, 2019, which were recorded in general and administrative expenses in the consolidated statement of operations. The fair value of the acquisition consideration, net of post-closing adjustments, was $148,626 paid in cash. 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 $ 2,608 Prepaid expenses and other current assets 1,345 Property and equipment 1,155 Operating lease right-of-use-assets 1,515 Trade name 4,100 Developed technology 20,000 Patient database 21,700 Client relationships 74,100 Goodwill 30,714 Total assets acquired $ 157,237 Operating lease liabilities (1,515) Trade accounts payable (1,733) Accrued expenses and other liabilities (5,363) Total purchase price $ 148,626 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, patient database, and client relationships, all of which are subject to amortization on a straight-line basis and are being amortized over a weighted average life of 5, 10, 5, and 14 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 11.4 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets of PrescribeWellness. 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 PrescribeWellness. The fair value of the patient database was estimated using a cost to replace method. 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 deductible for U.S. income tax purposes. The Company believes the goodwill related to the acquisition of PrescribeWellness resulted from the establishment of new market opportunities while at the same time expanding its service offering to its existing customer base. The goodwill is deductible for income tax purposes. Revenue from PrescribeWellness is primarily comprised of subscription fees for its cloud-based patient engagement 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, 2019, service revenue 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. DoseMe On January 2, 2019, the Company completed the acquisition of all of the outstanding share capital and options to purchase the 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 more accurately dose patients’ high-risk parenteral (intravenous) medications. 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 at closing, subject to certain customary post-closing adjustments as set forth in the Share Purchase Deed, (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, based on the financial performance of DoseMe. During the third quarter of 2019, the Company elected to accelerate the final payment of the contingent earn out payment and paid $8,750 in cash in full satisfaction of the contingent purchase price 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 DoseMe, the Company incurred direct acquisition costs of $104 and $689 during the years ended December 31, 2019 and 2018, respectively, 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 $ 10,136 Stock consideration at closing 9,504 Estimated fair value of contingent consideration 8,720 Total fair value of acquisition consideration $ 28,360 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: Accounts receivable $ 9 Prepaid expenses and other current assets 110 Trade name 89 Developed technology 16,200 Non-competition agreements 500 Goodwill 11,835 Total assets acquired $ 28,743 Trade accounts payable (17) Accrued expenses and other liabilities (366) Total purchase price, including contingent consideration of $8,720 $ 28,360 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 non-competition agreements, all of which are subject to amortization on a straight-line basis and are being amortized over a weighted average life of 4, 7.5 and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 7.4 years. The Company, with the assistance of a third-party appraiser, assessed the fair value of the assets of DoseMe. 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 DoseMe. The fair value of the developed technology 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 the economic return on contributory assets and estimated revenues generated. 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. See Note 17 for additional discussion of the fair value assessment of the acquisition-related contingent consideration. 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 U.S. income tax purposes. The Company believes the goodwill related to the acquisition of DoseMe resulted from gaining a complementary capability that, when combined with the Company’s existing platform, will create significant market opportunity. The goodwill is deductible for U.S. income tax purposes. Revenue from DoseMe is primarily comprised of subscription and license fees for use of DoseMe’s advanced precision dosing software tool. 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, 2019, service revenue 2018 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 17 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 final 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 16,982 Total assets acquired $ 29,297 Accrued expenses and other liabilities (515) 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 life of 3, 9, and 12.3 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 11.6 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 2018, service revenue of $620 and net loss of $160 from Cognify were included in the Company’s consolidated statement of operations. 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 Programs of All-Inclusive Care for the Elderly (“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 statement 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 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 $ 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 life of 3, 3.3, 11.9, and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 8.1 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 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 to be paid in cash based on the achievement of certain performance goals for the twelve-month period ending December 31, 2018. During the second quarter of 2019, the Company made a cash payment of $1,642 in full satisfaction of the Peak PACE acquisition-related contingent consideration payable. 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 statement 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 $ 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 life of 1.5, 10, and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 9.5 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 2017 Acquisitions SinfoníaRx On September 6, 2017, the Company, TRCRD, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub I”), and TRSHC Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Merger Sub II,” and together with Merger Sub I, the “Merger Subs”), entered into, and consummated the transactions contemplated by, an Agreement and Plan of Merger (the “SRx 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 SRx 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 SRx 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 based on the achievement of certain performance goals for each of the twelve-month periods ended December 31, 2017 and December 31, 2018. During the first quarter of 2019, the Company made the final cash payment of $43,150 and issued 614,225 shares of its common stock, with a fair value of $39,166, in full satisfaction of the SRx acquisition-related contingent consideration payable. In connection with the acquisition of SRx, the Company incurred direct acquisition and integration costs of $1,015 during the year ended December 31, 2017, which were recorded in general and administrative expenses in the consolidated statement 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 statement of operations. 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, 7.5 and 5 years, respectively. The weighted average amortization period for acquired intangible assets as of the date of acquisition is 7.3 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 Pro forma (unaudited) The unaudited pro forma results presented below include the results of the aforementioned acquisitions as if the PrescribeWellness and DoseMe acquisitions had been consummated as of January 1, 2018. The unaudited pro forma results presented below also include the results of the 2018 acquisitions of Cognify, Mediture, and Peak PACE as if these acquisitions had been consummated as of January 1, 2017, and the results of the SRx acquisition as if the acquisition 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 employees of the acquired companies, adjustments to revenue for the purchase accounting effects of recording deferred revenue at fair value, and the estimated tax effect of adjustments to income (loss) 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, 2018, 2017 and 2016. Year Ended December 31, 2019 2018 2017 Revenue $ 290,454 $ 249,628 $ 176,290 Net loss (33,023) (62,285) (2,908) |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Note Receivable | |
Note Receivable | 6. Note Receivable |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment. | |
Property and Equipment | 7. Property and Equipment As of December 31, 2019 and 2018, property and equipment consisted of the following: Estimated December 31, useful life 2019 2018 Computer hardware and purchased software 3 years $ 7,970 $ 5,641 Office furniture and equipment 5 years 10,237 8,569 Leasehold improvements 5-15 years 11,319 7,018 29,526 21,228 Less: accumulated depreciation (13,728) (9,363) Property and equipment, net $ 15,798 $ 11,865 Depreciation and amortization expense on property and equipment for the years ended December 31, 2019, 2018 and 2017 was $4,409, $3,493 and $2,146, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 8. Leases The Company has entered into various operating and finance leases for office space and equipment. The operating leases expire on various dates through 2031, and certain of such leases also contain renewal options and escalation clauses. In addition to the base rent payments, the Company will be obligated to pay a pro rata share of operating expenses and taxes. The components of lease expense were as follows: Year Ended December 31, 2019 Operating lease cost $ 3,981 Finance lease cost: Amortization of leased assets 580 Interest on lease liabilities 46 Total finance lease costs 626 Variable lease costs 918 Short-term lease costs 247 Total lease cost $ 5,772 Supplemental balance sheet information related to leases was as follows: December 31, 2019 Operating leases: Operating lease right-of-use assets $ 22,100 Current operating lease liabilities $ 4,350 Noncurrent operating lease liabilities 21,017 Total operating lease liabilities $ 25,367 Finance leases: Property and equipment $ 2,130 Accumulated amortization (1,907) Property and equipment, net $ 223 Current obligations of finance leases $ 125 Finance leases, net of current obligations 3 Total finance lease liabilities $ 128 Weighted average remaining lease term (in years): Operating leases 8.4 Finance leases 0.3 Weighted average discount rate: Operating leases 4.43 % Finance leases 5.92 % Supplemental cash flow information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,138 Operating cash flows for finance leases 42 Financing cash flows for finance leases 968 Leased assets obtained in exchange for lease liabilities: Operating leases* $ 4,926 Finance leases — *Excludes operating lease assets acquired in connection with the acquisitions of DoseMe and PrescribeWellness. Maturities of lease liabilities as of December 31, 2019 were as follows: Operating leases Finance leases 2020 $ 4,439 $ 126 2021 3,976 4 2022 3,489 — 2023 3,266 — 2024 3,127 — Thereafter 12,228 — Total minimum lease payments 30,525 130 Less imputed interest (5,158) (2) Present value of lease liabilities 25,367 128 Less current portion (4,350) (125) Total long-term lease liabilities $ 21,017 $ 3 As of December 31, 2019, the Company has additional operating lease commitments that have not yet commenced of approximately $3,104 for two office spaces in Tucson, Arizona, which are expected to be occupied during the first and second quarters of 2020, and have lease terms of six As previously disclosed in the 2018 Annual Report on Form 10-K under the previous lease accounting standard, rent expense related to operating leases and interest expense related to capital leases were as follows: Year Ended December 31, 2018 2017 Operating lease rent expense $ 3,016 $ 2,012 Interest expense related to capital leases $ 115 $ 209 The net book value of equipment and software acquired under capital lease was $1,077 as of December 31, 2018. As previously disclosed in the 2018 Annual Report on Form 10-K under the previous lease accounting standard, future minimum lease payments for operating and capital leases having initial or remaining noncancelable lease terms in excess of one year would have been as follows as of December 31, 2018: Payments due by period Less More than 1 than 5 Total year 1-3 years 3-5 years years Capital leases $ 1,141 $ 987 $ 154 $ — $ — Operating leases 32,367 3,793 7,183 6,114 15,277 Total $ 33,508 $ 4,780 $ 7,337 $ 6,114 $ 15,277 |
Software Development Costs
Software Development Costs | 12 Months Ended |
Dec. 31, 2019 | |
Software Development Costs | |
Software Development Costs | 9. Software Development Costs The Company capitalizes certain costs incurred in connection with obtaining or developing its proprietary software platforms, which are used to support its service contracts, including external direct costs of material and services, payroll costs for employees directly involved with the software development, and interest expense related to the borrowings attributable to software development. As of December 31, 2019 and 2018, capitalized software costs consisted of the following: December 31, 2019 December 31, 2018 Software development costs $ 29,714 $ 15,278 Less: accumulated amortization (11,213) (7,030) Software development costs, net $ 18,501 $ 8,248 Capitalized software development costs included above not yet subject to amortization $ 3,294 $ 3,500 Amortization expense for the years ended December 31, 2019, 2018, and 2017 was $4,183, $2,158, and $1,721, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018 are as follows: Balance at January 1, 2018 $ 74,613 Goodwill from 2018 acquisition 34,020 Adjustments to Goodwill (420) Balance at January 1, 2019 108,213 Goodwill from 2019 acquisitions 42,549 Adjustments to goodwill related to prior year acquisitions (2) Balance at December 31, 2019 $ 150,760 There were no indicators of impairment during the years ended December 31, 2019, 2018, or 2017 and there are no accumulated impairment charges as of December 31, 2019, 2018, or 2017. Intangible assets consisted of the following as of December 31, 2019 and 2018: Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2019 Trade names 7.1 $ 11,255 $ (3,845) $ 7,410 Client relationships 12.2 128,169 (20,977) 107,192 Non-competition agreements 5.0 6,602 (2,641) 3,961 Developed technology 8.0 68,593 (15,870) 52,723 Patient database 5.0 21,700 (3,617) 18,083 Domain name 10.0 59 (15) 44 Total intangible assets $ 236,378 $ (46,965) $ 189,413 Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2018 Trade names 8.0 $ 7,436 $ (2,357) $ 5,079 Client relationships 9.6 54,069 (10,757) 43,312 Non-competition agreements 5.0 6,754 (1,885) 4,869 Developed technology 7.2 31,191 (7,296) 23,895 Domain name 10.0 59 (8) 51 Total intangible assets $ 99,509 $ (22,303) $ 77,206 Amortization expense for intangible assets for the years ended December 31, 2019, 2018, and 2017 was $25,684, $11,150, and $5,645, respectively. The estimated amortization expense for each of the next five years and thereafter is as follows: Years Ending December 31, 2020 27,287 2021 27,183 2022 26,123 2023 24,913 2024 17,912 Thereafter 65,995 Total estimated amortization expense $ 189,413 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 11. Accrued Expenses and Other Liabilities At December 31, 2019 and 2018, accrued expenses and other liabilities consisted of the following: December 31, 2019 December 31, 2018 Employee related expenses $ 12,582 $ 6,357 Contract liability 4,857 1,580 Client funds obligations* 4,106 4,751 Contract labor 329 1,563 Interest 2,133 121 Deferred rent — 134 Professional fees 337 442 Royalties expense 17 588 Non-income taxes payable 898 56 Other expenses 1,647 964 Total accrued expenses and other liabilities $ 26,906 $ 16,556 *This amount represents client funds held by the Company, with an offsetting amount included in restricted cash. |
Lines of Credit and Long-Term D
Lines of Credit and Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Lines of Credit and Long-Term Debt | |
Lines of Credit and Long-Term Debt | 12. 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 has subsequently amended. The Amended and Restated 2015 Line of Credit provides for borrowing availability in an aggregate amount up to 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 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, 2019, 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. As of December 31, 2019, the Company has an outstanding letter of credit of $200 issued pursuant to the Amended and Restated 2015 Line of Credit in connection with the Company’s lease agreement for its office space in Moorestown, NJ. The letter of credit renews annually and expires in September 2027 and reduces amounts available under the Amended and Restated 2015 Revolving Line of Credit. As of December 31, 2019, there were no amounts outstanding under the Amended and Restated 2015 Revolving 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, 2019, amounts available for borrowings under the Amended and Restated 2015 Line of Credit were $59,800. As of December 31, 2019 and 2018, the interest rate on the Amended and Restated 2015 Line of Credit was 5.58% and 5.58%, respectively. Interest expense was $351, $712, and $389 for the years ended December 31, 2019, 2018, and 2017, 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 $793. 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 $282, $103, and $60 to interest expense for the years ended December 31, 2019, 2018, and 2017, respectively. Deferred financing costs of $266 and $291, net of accumulated amortization, are included in other assets on the accompanying consolidated balance sheets as of December 31, 2019 and 2018, respectively. (b) Convertible senior subordinated notes On February 12, 2019, the Company issued and sold an aggregate principal amount of $325,000 of 1.75% convertible senior subordinated notes (“2026 Notes”) in a private placement pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2026 Notes 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 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. Net proceeds from the 2026 Notes were used to pay the cost of convertible note hedge transactions (described below), repay amounts outstanding under the Amended and Restated 2015 Revolving Line of Credit, fund the PrescribeWellness acquisition (as described in Note 5), fund the payment of the acquisition-related contingent consideration for SRx (as described in Note 17), and for general corporate purposes. Holders may convert all or any portion of their 2026 Notes at any time prior to the close of business on the business day immediately preceding August 15, 2025 only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2026 Notes) per $1 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change or make-whole fundamental change (as defined in the indenture governing the 2026 Notes) or a transaction resulting in the Company’s common stock converting into other securities or property or assets. On or after August 15, 2025 until the close of business on the first scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2026 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver shares of our common stock, cash or a combination thereof at the Company’s option. As of December 31, 2019, none of the conditions allowing holders of the 2026 Notes to convert had been met. In accounting for the issuance of the 2026 Notes, the Company separated the 2026 Notes into liability and equity components. With the assistance of a third party valuation specialist, the carrying amount of the liability component was calculated by utilizing a discounted cash flow model of the contractual cash flows that were discounted at a risk-adjusted interest rate in order to estimate the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $102,900 and was determined by deducting the fair value of the liability component from the par value of the 2026 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The initial associated deferred tax effect of $25,884 was recorded as a reduction of additional paid-in capital because the equity component is not currently expected to be deductible for income tax purposes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the 2026 Notes using the effective interest rate method. The effective interest rate over the contractual term of the 2026 Notes was 8.05%. Debt issuance costs related to the 2026 Notes are comprised of discounts and commissions payable to the initial purchasers of $8,937 and third party offering costs of $435. The Company allocated the total amount incurred to the liability and equity components of the 2026 Notes based on their relative values. Issuance costs attributable to the liability component were $6,405 and are being amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. During the year ended December 31, 2019, the Company recognized $15,619 of interest expense related to the 2026 Notes, of which $5,024 was accrued and $10,595 was non-cash accretion of the debt discounts recorded. The 2026 Notes have been, and will be, classified as long-term debt on the Company’s consolidated balance sheets until such Notes are within one year of maturity. The 2026 Notes have a carrying value of $226,291 as of December 31, 2019. Accrued interest payable on the 2026 Notes of $2,133 as of December 31, 2019 is included in accrued expenses and other liabilities on the consolidated balance sheets. (c) Convertible Note Hedge and Warrant Transaction In connection with the offering of the 2026 Notes, the Company entered into convertible note hedge transactions with affiliates of certain of the initial purchasers (the “option counterparties”) of the 2026 Notes pursuant to the terms of call option confirmations. The Company has the option to purchase a total of 4,646,393 shares of its common stock at a price of approximately $69.95 per share. The total premiums paid for the note hedges were $101,660. The Company also entered into warrant transactions with the option counterparties whereby they have the option to purchase 4,646,393 shares of the Company’s common stock at a price of $105.58 per share. The Company received $65,910 in cash proceeds from the sale of the warrants. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the convertible note hedges and warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the convertible note hedge and warrant transactions were recorded as a reduction to additional paid-in capital on the Company’s consolidated balance sheets. The convertible note hedge transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the 2026 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2026 Notes. 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 the Company’s common stock exceeds the strike price of the warrants. (d) Long-Term Debt Maturities The following table represents the total long-term debt obligations of the Company at December 31, 2019 and December 31, 2018: December 31, 2019 December 31, 2018 Convertible senior subordinated notes $ 325,000 $ — Unamortized discount, including debt issuance costs, on convertible senior subordinated notes (98,709) — Convertible senior subordinated notes, net 226,291 — Finance leases 128 1,097 Total long-term debt and finance leases, net 226,419 1,097 Less current portion, net (125) (945) Total long-term debt and finance leases, less current portion, net $ 226,294 $ 152 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 13. Income Taxes The Company accounts for income taxes under ASC Topic 740 — Income Taxes The components of the Company’s (loss) income before income taxes are as follows: Years Ended December 31, 2019 2018 2017 United States $ (45,821) $ (50,645) $ 3,452 International (2,814) — — $ (48,635) $ (50,645) $ 3,452 The benefit from income taxes consists of the following: Years Ended December 31, 2019 2018 2017 Current: US federal $ — $ 1 $ 20 State and local 154 271 108 Total current income tax expense 154 272 128 Deferred: US federal (13,356) (3,150) (8,948) State and local (2,997) (498) (519) Total deferred income tax benefit (16,353) (3,648) (9,467) Total income tax benefit $ (16,199) $ (3,376) $ (9,339) The Company had no current or deferred For the year ended December 31, 2019, the Company had an effective tax rate of 33.3%. The tax benefit primarily consists of the benefit generated by the Company's U.S. federal and state and local losses, the benefit from windfall tax benefits generated from the vesting of restricted stock, disqualifying dispositions, and exercising of nonqualified stock options during the period, offset by other tax expense due to the increase in the Company's valuation allowance. For the year ended December 31, 2018, the Company had an effective tax rate of 6.7%. The effective tax rate was primarily from windfall tax benefits generated from the vesting of restricted stock, disqualifying dispositions, and exercising of nonqualified stock options during the period, offset by a tax expense generated from the fair value adjustment of the Company's contingent consideration liabilities. For the year ended December 31, 2017, the Company had an effective tax rate of (270.5)%. 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. The principal components of the Company's deferred tax assets and liabilities are as follows: December 31, 2019 2018 Deferred tax assets: Net federal operating loss carryforward $ 17,218 $ 6,937 Net state operating loss carryforward 4,536 2,096 Net international operating loss carryforward 1,723 — Interest expense limitation carryforward 1,339 — Accruals 916 411 Stock options 5,362 4,056 Operating lease liabilities 6,389 882 Other 502 347 Deferred tax assets 37,985 14,729 Less: valuation allowances (3,161) (1,436) Deferred tax assets after valuation allowance 34,824 13,293 Deferred tax liabilities: Unamortized debt discount (23,597) — Fixed assets (4,175) (1,599) Operating lease right-of-use assets (5,533) — Amortizable intangible assets (7,760) (10,555) Indefinite-lived intangibles (1,685) (933) Other (730) (131) Deferred tax liabilities (43,480) (13,218) Net deferred tax (liabilities) assets $ (8,656) $ 75 As of December 31, 2019, the Company had federal net operating loss ("NOL") carryforwards of $81,892, state NOL carry forwards of $85,142, and international NOL carryforwards of $5,743, 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 international NOLs do not expire. 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. 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. At December 31, 2019, based on the Company’s future reversals of existing taxable temporary differences, management determined it was more likely than not that the Company will be able to realize the benefits of the majority of its deferred tax assets. At December 31, 2019, the Company has recorded a valuation allowance only on deferred tax assets in certain state and international jurisdictions. The changes in valuation allowance were as follows: Year-Ended December 31, 2019 2018 Balance at beginning of the year $ 1,436 $ 1,338 Increase due to NOLs and temporary differences 1,424 659 Increase due to acquired NOLs 301 — Deferred benefit recognized — (561) Balance at end of the year $ 3,161 $ 1,436 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, 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 34.0 % State income taxes, net of federal benefit 5.6 0.5 (21.6) Change in tax rate — — (9.7) Change in valuation allowance (2.9) (0.2) (144.0) Non-deductible stock compensation and tax windfall benefits, net 7.2 6.4 (79.4) Change in fair value of contingent consideration (1.6) (20.6) (62.0) Non-deductible expenses and other 4.0 (0.4) 12.2 Effective income tax rate 33.3 % 6.7 % (270.5) % 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, 2019, the Company had no unrecognized tax benefits or related interest and penalties accrued. In the normal course of business, the Company is subject to examination by taxing authorities from federal, state, and international governments. As of December 31, 2019, the Company's tax years beginning in 2016 remain open for examination by taxing authorities. |
Other Long-term Liabilities
Other Long-term Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Long-term Liabilities | |
Other Long-term Liabilities | 14. Other Long-term Liabilities Other long term liabilities as of December 31, 2019 were $73 and represented the long-term portion of contract liabilities for performance obligations related to software maintenance contracts for electronic health records solutions. Other long term liabilities as of December 31, 2018 were $3,268 and primarily represented the long-term portion of deferred rent related to the Company's property leases. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | 15. Stockholders' Equity 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, 2019, the Company did not repurchase any shares of its common stock. 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. The repurchase program expired on March 15, 2019. 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. 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. In connection with the offering of the 2026 Notes, the Company issued warrants to purchase 4,646,393 shares of the Company’s common stock at a price of $105.58 per share. As of December 31, 2019, no warrants have been exercised and all warrants to purchase shares of the Company’s common stock were outstanding. See Note 12 for additional information related to the 2026 Notes. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 16. Stock-Based Compensation In September 2016, the Company adopted the 2016 Equity Compensation Plan (“2016 Plan”) and merged its 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 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 will be issued or transferred under the 2016 Plan. During the term of the 2016 Plan, the share reserve will automatically increase on the first trading day in January of each calendar year 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. In accordance with the terms of the 2016 Plan, the share reserve increased by 1,027,876 shares on January 2, 2019. As of December 31, 2019, 374,672 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 issues restricted stock awards pursuant to the 2016 Plan to certain employees, including executive officers, and non-employee directors. Restricted stock awards vest over a one The following table summarizes the restricted stock award activity under the 2016 Plan for the years ended December 31, 2019, 2018 and 2017: Weighted average Number grant-date of shares fair value Outstanding at January 1, 2017 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 Granted 591,402 54.91 Vested (434,643) 18.54 Forfeited (13,239) 55.05 Outstanding at December 31, 2019 1,213,581 $ 37.69 For the years ended December 31, 2019, 2018 and 2017, $12,984, $3,809 and $5,434 of expense was recognized related to restricted stock awards, respectively. As of December 31, 2019, there was unrecognized compensation expense of $29,987 related to non-vested restricted stock awards under the 2016 Plan, which is expected to be recognized over a weighted average period of 2.8 years. Performance-Based Stock Award Other Stock Awards During the year ended December 31, 2019, the Board approved the grant of stock awards to select employees and a non-employee director pursuant to the 2016 Plan. The awards provide for the issuance of 38,808 shares of the Company’s common stock, which immediately vested on the grant date. These grants had a weighted average grant-date fair value of $52.31 per share. For the year ended December 31, 2019, the Company recorded expense of $2,030 related to these stock awards. Stock Options The table below sets forth the weighted average assumptions for employee grants during the years ended December 31, 2019, 2018 and 2017. Year Ended December 31, Valuation assumptions: 2019 2018 2017 Expected volatility 68.00 % 58.50 % 61.00 % Expected term (years) 6.03 6.07 6.03 Risk-free interest rate 2.41 % 2.46 % 2.21 % Dividend yield — — — The weighted average grant date fair value of employee options granted during the years ended December 31, 2019, 2018 and 2017 was $34.14, $22.01 and $8.25, respectively. The following table summarizes stock option activity for the years ended December 2019, 2018, and 2017: Weighted Weighted average average remaining Aggregate Number exercise contractual intrinsic of shares price term value Outstanding at January 1, 2017 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 38.77 Exercised (797,207) 6.15 Forfeited (108,369) 23.63 Outstanding at December 31, 2018 2,490,114 $ 15.70 Granted 745,525 54.66 Exercised (345,893) 11.73 Forfeited (134,403) 49.45 Outstanding at December 31, 2019 2,755,343 $ 25.10 6.9 $ 70,855 Options vested and expected to vest at December 31, 2019 2,755,343 $ 25.10 6.9 $ 70,855 Exercisable at December 31, 2019 1,573,677 $ 12.46 5.7 $ 57,622 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, 2019, 2018 and 2017 was $14,316, $33,937 and $14,512, respectively. As of December 31, 2019, there was $24,756 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 2.7 years. Cash received from option exercises for the years ended December 31, 2019, 2018 and 2017 was $3,702, $3,523 and $480, respectively. The Company recorded total stock-based compensation expense for the years ended December 31, 2019, 2018, and 2017 in the following expense categories of its consolidated statement of operations: Year Ended December 31, 2019 2018 2017 Cost of revenue - product $ 1,196 $ 692 $ 502 Cost of revenue - service 3,780 1,590 293 Research and development 7,499 2,566 694 Sales and marketing 4,282 1,580 598 General and administrative 10,521 3,933 6,665 Total stock-based compensation expense $ 27,278 $ 10,361 $ 8,752 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 17. Fair Value Measurements The Company’s financial instruments consist of accounts receivable, accounts payable, contract liabilities, accrued expenses, acquisition-related contingent consideration, and long-term debt, which includes the Company’s convertible senior subordinated notes and finance leases. The carrying values of accounts receivable, accounts payable, contract liabilities and accrued expenses are representative of their fair value due to the relatively short-term nature of those instruments. See Note 8 for additional information on the Company’s finance leases. See below for additional information on the Company’s convertible senior subordinated notes. The Company has classified liabilities measured at fair value on a recurring basis at December 31, 2019 and 2018 as follows: Fair Value Measurement at Reporting Date Using Balance as of Level 1 Level 2 Level 3 December 31, 2019 Liabilities Acquisition-related contingent consideration - long-term $ — $ — $ 10,800 $ 10,800 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 $ 43,397 Acquisition-related contingent consideration - long-term — — 7,800 7,800 $ — $ — $ 51,197 $ 51,197 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, In connection with the acquisition of the SRx business, additional contingent consideration was payable by the Company based on SRx’s EBITDA, as defined in the merger agreement, multiplied by a variable EBITDA multiple, which was based on a formula as set forth in the merger agreement. 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 Company, with the assistance of a third-party appraiser, utilized 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. 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 was equity-classified. During the year ended December 31, 2019, the Company recorded a $624 charge for the change in fair value of the final SRx acquisition-related contingent consideration amount. During the first quarter of 2019, the Company made the final cash payment of $43,150 and issued 614,225 shares of its common stock, with a fair value of $39,166, in full satisfaction of the SRx acquisition-related contingent consideration payable. The Peak PACE acquisition-related contingent consideration, which was liability-classified, was recorded at the estimated fair value at the acquisition date of May 1, 2018. The contingent consideration payable was 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, utilized 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 fair value of the Peak PACE acquisition-related contingent consideration was calculated to be $1,479 as of December 31, 2018. During the year ended December 31, 2019, the Company recorded a $163 charge for the change in the fair value of the final Peak PACE acquisition-related contingent consideration amount. The Company made the final cash payment of $1,642 in full satisfaction of the Peak PACE acquisition-related contingent consideration payable during the second quarter of 2019. 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. During the year ended December 31, 2019, the Company recorded a $3,000 charge for the change in the fair value of Cognify acquisition-related contingent consideration primarily due to an amendment of certain definitions used in the calculation of the contingent consideration set forth in the stock purchase agreement and the decreased discount period to the final measurement date. The fair value of the Cognify acquisition-related contingent consideration was calculated to be $10,800 as of December 31, 2019. The final amount of the contingent consideration liability will be fixed as of December 31, 2021. The maximum contingent consideration amount that could be earned under the stock purchase agreement is $14,000. The DoseMe acquisition-related contingent consideration, which was liability-classified, was recorded at the estimated fair value at the acquisition date of January 2, 2019. The contingent consideration payable was based on a multiple of DoseMe’s revenues associated with signed contracts during the twelve-month period ending November 30, 2019, as defined in the share purchase deed. The Company, with the assistance of a third-party appraiser, utilized 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, 2019, the Company recorded a $30 charge for the change in fair value of the final DoseMe acquisition-related contingent consideration amount. During the third quarter of 2019, the Company elected to accelerate the payment of the contingent consideration and made a final cash payment of $8,750 in full satisfaction of the DoseMe acquisition-related contingent consideration payable. The changes in fair value of the Company’s acquisition-related contingent consideration liability for the years ended December 31, 2019 and 2018 was as follows: Balance at January 1, 2018 $ 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 (39,774) Balance at December 31, 2018 $ 51,197 Acquisition date fair value of the DoseMe contingent consideration 8,720 Cash consideration paid (53,542) Adjustments to fair value measurement 3,816 Adjustment to reclassify amounts settled in cash (previously reflected in equity) 609 Balance at December 31, 2019 $ 10,800 The following table presents the financial instruments that are not carried at fair value but require fair value disclosure as of December 31, 2019: Face Value Carrying Value Fair Value 1.75% Convertible Senior Subordinated Notes due 2026 (the "2026 Notes") $ 325,000 $ 226,291 $ 324,675 The fair value of the 2026 Notes at each balance sheet date is determined based on recent quoted market prices for these notes which is a level 2 measurement. As discussed in Note 12, the 2026 Notes are carried at their aggregate face value of $325,000, less any unaccreted debt discount and unamortized debt issuance costs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 18. Commitments and Contingencies (a) Employment Agreements The Company has employment agreements with each of the Company’s named executive officers and certain non-executive officers and key employees that provide for, among other things, salary and performance bonuses or other incentive compensation. Certain employment agreements may also provide for payments in the event of termination of the executives upon the occurrence of a change in control, and restrictive covenants pursuant to which the employees have agreed to refrain from competing with the Company or soliciting the Company’s employees or clients for a period following the employee’s termination of employment. (b) 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. (c) Vendor Purchase Agreements In May 2016, the Company signed a prime vendor agreement with AmerisourceBergen Drug Corporation (“AmerisourceBergen”), which was effective March 2016 and required a monthly minimum purchase obligation of approximately $1,750. This agreement was amended and restated effective May 1, 2016 with a three-year term expiring April 2019. The agreement was not renewed upon expiration in April 2019, but the Company continues to purchase from AmerisourceBergen from time-to-time on a purchase order basis. Pursuant to the terms of a security agreement entered into in connection with the prime vendor agreement, which still remains in place, AmerisourceBergen also holds a subordinated security interest in all of the Company’s assets. On March 29, 2019, the Company entered into an Affiliated Pharmacy Agreement and Pharmaceutical Program Supply Agreement with Thrifty Drug Stores, Inc. (“Thrifty Drug Agreements”) to replace the prime vendor agreement with AmerisourceBergen. Pursuant to the terms of the Thrifty Drug Agreements, which are in effect through September 30, 2020, the Company has agreed to purchase not less than 98% of the Company’s total prescription product requirements from Thrifty Drug Stores, Inc. The Company commenced purchasing prescription products under the Thrifty Drug Agreements in May 2019. The Thrifty Drug Agreements authorize Thrifty Drug Stores, Inc. to hold a security interest in all of the products purchased by the Company under the Thrifty Drug Agreements. As of December 31, 2019, the Company had $2,465 due to AmerisourceBergen and Thrifty Drug Stores as a result of prescription drug purchases. As of December 31, 2018, the Company had $5,340 due to AmerisourceBergen as a result of prescription drug purchases. In December 2019, the Company entered into an updated agreement with its data aggregation partner related to the Company’s pharmacy cost management services. The agreement is effective January 1, 2020 with a three-year term expiring December 31, 2022 and commits the Company to a monthly minimum purchase obligation of $30. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Plan | |
Retirement Plan | 19. 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 $2,242, $1,643, and $644 during the years ended December 31, 2019, 2018, and 2017, respectively. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Data (unaudited) | |
Selected Quarterly Financial Data (unaudited) | 20. 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, 2019 and 2018. Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 December 31, 2019 Total revenue $ 60,959 $ 76,255 $ 74,270 $ 73,223 $ 284,707 Loss from operations $ (12,327) $ (4,760) $ (7,764) $ (7,798) $ (32,649) Net loss, basic and diluted $ (10,979) $ (6,529) $ (8,104) $ (6,824) $ (32,436) Net loss per share, basic and diluted $ (0.54) $ (0.32) $ (0.39) $ (0.33) $ (1.57) 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, basic and diluted $ (18,094) $ (29,026) $ 10,416 $ (10,565) $ (47,269) Net (loss) income per share: Basic $ (0.96) $ (1.53) $ 0.54 $ (0.54) $ (2.48) Diluted $ (0.96) $ (1.53) $ 0.47 $ (0.54) $ (2.48) The quarterly unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in this report and include all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of such information when read in conjunction with our annual audited consolidated financial statements and notes appearing in this report. The operating results for any quarter do not necessarily indicate the results for any subsequent period or for the entire fiscal year. |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II-Valuation and Qualifying Accounts | Schedule I I—Valuation and Qualifying Accounts (in thousands) 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, 2019 $ 528 $ 745 $ (916) $ 29 $ 386 Year Ended December 31, 2018 $ 63 $ 362 $ — $ 103 $ 528 Year Ended December 31, 2017 $ 39 $ 24 $ — $ — $ 63 Allowance Release of Balance at Recorded on Allowance on Beginning of Current Year Losses Expired Balance at End Description Period Losses or Revalued Acquisition of Period Deferred tax asset valuation allowance: Year Ended December 31, 2019 $ 1,436 $ 1,424 $ — $ 301 $ 3,161 Year Ended December 31, 2018 $ 1,338 $ 659 $ (561) $ — $ 1,436 Year Ended December 31, 2017 $ 7,389 $ (265) $ (5,786) $ — $ 1,338 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 stock-based compensation instruments, (vi) the realizability of long-lived assets including goodwill and intangible assets, (vii) the assumptions used to determine the fair value of right-of-use assets and liabilities for the Company’s leases, and (viii) the assumptions used to determine the fair value of convertible debt instruments and related equity-classified conversion option. 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 obligation is 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 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 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 grant date 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 combination of the historical volatility of a publicly traded set of peer companies and the historical volatility of its own traded stock price, and expects to continue to do so until such time that 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. |
Net (Loss) Income per Share | (i) Net (Loss) Income per Share Basic net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of shares of common stock of the Company outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period plus the impact of dilutive securities using the treasury stock method, to the extent that they are not anti-dilutive. |
Cash | (j) Cash Cash at December 31, 2019 and 2018 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, 2019 and 2018. |
Restricted Cash | (k) 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 sheets. As part of the Company’s third party administrative services, which fall under the Company’s health plan management services, the Company holds funds on behalf of its clients. These amounts are recorded as restricted cash with an offsetting liability recorded in accrued expenses and other liabilities on the Company’s consolidated balance sheets. 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, 2019 2018 Cash $ 42,478 $ 20,278 Restricted cash 4,103 4,751 Total cash and restricted cash as presented in the consolidated statements of cash flows $ 46,581 $ 25,029 |
Accounts Receivable, net | (l) 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 $386 and $528 as of December 31, 2019 and 2018, respectively. |
Inventories | (m) 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. |
Leases | (n) Leases The Company determines if an arrangement is a lease at inception. As of January 1, 2019, operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the consolidated balance sheets. Finance leases are included in property and equipment, net, current portion of long-term debt and finance leases, and long-term debt and finance leases in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated net present value of lease payments over the lease term. As the rate implicit in the lease is not readily determinable for most leases, the Company uses its incremental borrowing rate in determining the net present value of lease payments. The Company estimates its incremental borrowing rate for each lease as of the measurement date with consideration of the risk-free rate for varying maturities corresponding to the remaining lease term, the risk premium attributed to the Company’s credit rating for a secured or collateralized instrument, and comparable borrowings of similarly-rated companies. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expense for short-term leases is recognized on a straight-line basis over the lease term. Many leases include options to renew, with the exercise of lease renewal options at the Company’s sole discretion. The lease terms that include options to renew the lease require such renewal to be included when it is reasonably certain that the Company will exercise such option. The depreciable life of finance lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any residual value guarantees. The Company has elected to include both lease and nonlease components as a single lease component for its operating leases. |
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 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. |
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 at least annually. Goodwill is assessed for impairment on October 1 st Testing Goodwill for Impairment 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 unit’s 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, 2019, 2018, and 2017, the Company performed a qualitative assessment of goodwill and determined that it is not more-likely-than-not that the fair value of its reporting unit is less than the carrying amount. Accordingly, no impairment loss was recorded for the years ended December 31, 2019, 2018, or 2017. |
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. The Company has not recorded any impairment losses on long-lived assets for the years ended December 31, 2019, 2018, or 2017. |
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. |
Contingencies | (t) 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 | (v) Advertising Costs Advertising costs are charged to operations when the advertising first takes place. The Company incurred advertising expense of $469, $184, and $117 for the years ended December 31, 2019, 2018, and 2017, respectively, which is included in sales and marketing expense. |
Business Combinations | (w) 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 | (x) 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. Substantially all revenues are generated and substantially all tangible assets are held in the United States. |
Concentration of Credit Risk | (y) Concentration of Credit Risk The Company's MRM prescription fulfillment services clients 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 payers, 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, 2019, one client represented 15% of net accounts receivable. As of December 31, 2018, two clients each represented of 12% of net accounts receivable For the years ended December 31, 2019, 2018 and 2017, one client accounted for 13%, 14% and 18% of total revenue, respectively. |
Fair Value of Financial Instruments | (z) 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 | (aa) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements The Company elected the package of practical expedients permitted under the transition guidance, which permits the Company to carry forward its prior conclusions about lease identification, lease classification, and initial direct costs, but did not elect the hindsight practical expedient. ROU assets and liabilities for the Company’s existing leases were recognized on January 1, 2019 based on the estimated net present value of lease payments over the remaining lease term. The adoption of ASU 2016-02 resulted in the recording of lease assets and lease liabilities of $18,469 and $21,173, respectively, as of January 1, 2019. The standard had no impact on the Company’s opening balance of accumulated deficit, consolidated net operations or cash flows. See Note 8 for additional information on the Company’s leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments The Company expects the implementation of this guidance to change the Company’s processes for determining its reserves but does not anticipate the impact to be material upon adoption to the trade receivables and contract assets recorded in 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 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 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 In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ). |
Product | |
Accounting policies | |
Cost of Revenue | (d) Cost of Product Revenue (exclusive of depreciation and amortization) 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 (exclusive of depreciation and amortization) 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, data acquisition costs, 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 and pharmacy cost management services and expenses for claims processing, technology services and overhead costs. |
Shipping and Handling | |
Accounting policies | |
Cost of Revenue | (u) Shipping and Handling Costs Shipping and handling costs are charged to cost of product revenue when incurred. Shipping and handling costs totaled $6,342, $4,708, and $3,652 for the years ended December 31, 2019, 2018, and 2017, respectively. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of reconciliation of cash and restricted cash | December 31, 2019 2018 Cash $ 42,478 $ 20,278 Restricted cash 4,103 4,751 Total cash and restricted cash as presented in the consolidated statements of cash flows $ 46,581 $ 25,029 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue | |
Schedule of disaggregation of revenue | Year Ended December 31, 2019 2018 2017 Major service lines: MRM prescription fulfillment services $ 137,130 $ 112,760 $ 95,238 MRM services 98,410 62,558 26,583 Health plan management services 37,019 18,977 6,019 Pharmacy cost management services 11,969 9,698 5,419 Other services 179 277 226 $ 284,707 $ 204,270 $ 133,485 |
Schedule of contract assets and contract liabilities from contracts with customers | December 31, December 31, 2019 2018 Contract assets $ 6,165 $ 3,075 Contract liabilities 4,930 1,733 |
Schedule of significant changes in the contract assets and the contract liabilities balances | December 31, December 31, 2019 2018 Contract assets: Contract assets, beginning of year $ 3,075 $ 1,842 Decreases due to cash received (4,958) (1,949) Changes to the contract assets at the beginning of the year as a result of changes in estimates 1,613 — Increases, net of reclassifications to receivables 6,435 3,182 Contract assets, end of year $ 6,165 $ 3,075 Contract liabilities: Contract liabilities, beginning of year $ 1,733 $ 1,350 Revenue recognized that was included in the contract liabilities balance at the beginning of the year (1,533) (1,295) Increases due to cash received, excluding amounts recognized as revenue during the year 2,969 978 Increases due to business combinations, excluding amounts recognized as revenue during the year 1,761 700 Contract liabilities, end of year $ 4,930 $ 1,733 |
Net (Loss) Income per Share (Ta
Net (Loss) Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net (Loss) Income per Share | |
Schedule of calculation of basic and diluted net (loss) income per share | Year Ended December 31, 2019 2018 2017 Numerator (basic and diluted): Net (loss) income $ (32,436) $ (47,269) $ 12,791 Denominator (basic): Weighted average shares of common stock outstanding, basic 20,622,258 19,098,294 16,730,418 Denominator (diluted): Weighted average shares of common stock outstanding, basic 20,622,258 19,098,294 16,730,418 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 shares of common stock outstanding, diluted 20,622,258 19,098,294 18,774,374 Net (loss) income per share, basic $ (1.57) $ (2.48) $ 0.76 Net (loss) income per share, diluted $ (1.57) $ (2.48) $ 0.68 |
Schedule of shares excluded from the calculation of diluted net loss per share attributable to common stockholders | Year Ended December 31, 2019 2018 Stock options to purchase common stock 2,755,343 2,490,114 Unvested restricted stock 1,213,581 1,070,061 Common stock warrants 4,646,393 — Contingently issuable shares 57,651 — 8,672,968 3,560,175 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of proforma results | Year Ended December 31, 2019 2018 2017 Revenue $ 290,454 $ 249,628 $ 176,290 Net loss (33,023) (62,285) (2,908) |
Prescribe Wellness | |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Accounts receivable $ 2,608 Prepaid expenses and other current assets 1,345 Property and equipment 1,155 Operating lease right-of-use-assets 1,515 Trade name 4,100 Developed technology 20,000 Patient database 21,700 Client relationships 74,100 Goodwill 30,714 Total assets acquired $ 157,237 Operating lease liabilities (1,515) Trade accounts payable (1,733) Accrued expenses and other liabilities (5,363) Total purchase price $ 148,626 |
DoseMe | |
Schedule of purchase price consideration | Cash consideration at closing, net of post-closing adjustments $ 10,136 Stock consideration at closing 9,504 Estimated fair value of contingent consideration 8,720 Total fair value of acquisition consideration $ 28,360 |
Schedule of allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities | Accounts receivable $ 9 Prepaid expenses and other current assets 110 Trade name 89 Developed technology 16,200 Non-competition agreements 500 Goodwill 11,835 Total assets acquired $ 28,743 Trade accounts payable (17) Accrued expenses and other liabilities (366) Total purchase price, including contingent consideration of $8,720 $ 28,360 |
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 16,982 Total assets acquired $ 29,297 Accrued expenses and other liabilities (515) 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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment. | |
Schedule of property plant and equipment | Estimated December 31, useful life 2019 2018 Computer hardware and purchased software 3 years $ 7,970 $ 5,641 Office furniture and equipment 5 years 10,237 8,569 Leasehold improvements 5-15 years 11,319 7,018 29,526 21,228 Less: accumulated depreciation (13,728) (9,363) Property and equipment, net $ 15,798 $ 11,865 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Summary of components of lease expense | Year Ended December 31, 2019 Operating lease cost $ 3,981 Finance lease cost: Amortization of leased assets 580 Interest on lease liabilities 46 Total finance lease costs 626 Variable lease costs 918 Short-term lease costs 247 Total lease cost $ 5,772 |
Summary of supplemental balance sheet information related to leases | December 31, 2019 Operating leases: Operating lease right-of-use assets $ 22,100 Current operating lease liabilities $ 4,350 Noncurrent operating lease liabilities 21,017 Total operating lease liabilities $ 25,367 Finance leases: Property and equipment $ 2,130 Accumulated amortization (1,907) Property and equipment, net $ 223 Current obligations of finance leases $ 125 Finance leases, net of current obligations 3 Total finance lease liabilities $ 128 Weighted average remaining lease term (in years): Operating leases 8.4 Finance leases 0.3 Weighted average discount rate: Operating leases 4.43 % Finance leases 5.92 % |
Summary of supplemental cash flow information related to leases | Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 4,138 Operating cash flows for finance leases 42 Financing cash flows for finance leases 968 Leased assets obtained in exchange for lease liabilities: Operating leases* $ 4,926 Finance leases — |
Summary of maturities of operating lease liabilities | Operating leases Finance leases 2020 $ 4,439 $ 126 2021 3,976 4 2022 3,489 — 2023 3,266 — 2024 3,127 — Thereafter 12,228 — Total minimum lease payments 30,525 130 Less imputed interest (5,158) (2) Present value of lease liabilities 25,367 128 Less current portion (4,350) (125) Total long-term lease liabilities $ 21,017 $ 3 |
Summary of maturities of finance lease liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows: Operating leases Finance leases 2020 $ 4,439 $ 126 2021 3,976 4 2022 3,489 — 2023 3,266 — 2024 3,127 — Thereafter 12,228 — Total minimum lease payments 30,525 130 Less imputed interest (5,158) (2) Present value of lease liabilities 25,367 128 Less current portion (4,350) (125) Total long-term lease liabilities $ 21,017 $ 3 |
Schedule of rent expense related to operating leases and interest expense related to capital leases | Year Ended December 31, 2018 2017 Operating lease rent expense $ 3,016 $ 2,012 Interest expense related to capital leases $ 115 $ 209 |
Summary of future minimum lease payments for finance leases | As previously disclosed in the 2018 Annual Report on Form 10-K under the previous lease accounting standard, future minimum lease payments for operating and capital leases having initial or remaining noncancelable lease terms in excess of one year would have been as follows as of December 31, 2018: Payments due by period Less More than 1 than 5 Total year 1-3 years 3-5 years years Capital leases $ 1,141 $ 987 $ 154 $ — $ — Operating leases 32,367 3,793 7,183 6,114 15,277 Total $ 33,508 $ 4,780 $ 7,337 $ 6,114 $ 15,277 |
Summary of future minimum lease payments for operating leases | As previously disclosed in the 2018 Annual Report on Form 10-K under the previous lease accounting standard, future minimum lease payments for operating and capital leases having initial or remaining noncancelable lease terms in excess of one year would have been as follows as of December 31, 2018: Payments due by period Less More than 1 than 5 Total year 1-3 years 3-5 years years Capital leases $ 1,141 $ 987 $ 154 $ — $ — Operating leases 32,367 3,793 7,183 6,114 15,277 Total $ 33,508 $ 4,780 $ 7,337 $ 6,114 $ 15,277 |
Software Development Costs (Tab
Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Software Development Costs | |
Schedule of capitalized software costs | December 31, 2019 December 31, 2018 Software development costs $ 29,714 $ 15,278 Less: accumulated amortization (11,213) (7,030) Software development costs, net $ 18,501 $ 8,248 Capitalized software development costs included above not yet subject to amortization $ 3,294 $ 3,500 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets | |
Schedule of goodwill | Balance at January 1, 2018 $ 74,613 Goodwill from 2018 acquisition 34,020 Adjustments to Goodwill (420) Balance at January 1, 2019 108,213 Goodwill from 2019 acquisitions 42,549 Adjustments to goodwill related to prior year acquisitions (2) Balance at December 31, 2019 $ 150,760 |
Schedule of intangible assets | Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2019 Trade names 7.1 $ 11,255 $ (3,845) $ 7,410 Client relationships 12.2 128,169 (20,977) 107,192 Non-competition agreements 5.0 6,602 (2,641) 3,961 Developed technology 8.0 68,593 (15,870) 52,723 Patient database 5.0 21,700 (3,617) 18,083 Domain name 10.0 59 (15) 44 Total intangible assets $ 236,378 $ (46,965) $ 189,413 Weighted Average Amortization Period Accumulated Intangible (in years) Gross Value Amortization Assets, net December 31, 2018 Trade names 8.0 $ 7,436 $ (2,357) $ 5,079 Client relationships 9.6 54,069 (10,757) 43,312 Non-competition agreements 5.0 6,754 (1,885) 4,869 Developed technology 7.2 31,191 (7,296) 23,895 Domain name 10.0 59 (8) 51 Total intangible assets $ 99,509 $ (22,303) $ 77,206 |
Schedule of estimated amortization expense | Years Ending December 31, 2020 27,287 2021 27,183 2022 26,123 2023 24,913 2024 17,912 Thereafter 65,995 Total estimated amortization expense $ 189,413 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | December 31, 2019 December 31, 2018 Employee related expenses $ 12,582 $ 6,357 Contract liability 4,857 1,580 Client funds obligations* 4,106 4,751 Contract labor 329 1,563 Interest 2,133 121 Deferred rent — 134 Professional fees 337 442 Royalties expense 17 588 Non-income taxes payable 898 56 Other expenses 1,647 964 Total accrued expenses and other liabilities $ 26,906 $ 16,556 *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, 2019 | |
Lines of Credit and Long-Term Debt | |
Schedule of long-term debt obligations | December 31, 2019 December 31, 2018 Convertible senior subordinated notes $ 325,000 $ — Unamortized discount, including debt issuance costs, on convertible senior subordinated notes (98,709) — Convertible senior subordinated notes, net 226,291 — Finance leases 128 1,097 Total long-term debt and finance leases, net 226,419 1,097 Less current portion, net (125) (945) Total long-term debt and finance leases, less current portion, net $ 226,294 $ 152 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of components of (loss) income | Years Ended December 31, 2019 2018 2017 United States $ (45,821) $ (50,645) $ 3,452 International (2,814) — — $ (48,635) $ (50,645) $ 3,452 |
Schedule of (benefit) expense for income taxes | Years Ended December 31, 2019 2018 2017 Current: US federal $ — $ 1 $ 20 State and local 154 271 108 Total current income tax expense 154 272 128 Deferred: US federal (13,356) (3,150) (8,948) State and local (2,997) (498) (519) Total deferred income tax benefit (16,353) (3,648) (9,467) Total income tax benefit $ (16,199) $ (3,376) $ (9,339) |
Schedule of principal components of deferred tax assets (liabilities) | December 31, 2019 2018 Deferred tax assets: Net federal operating loss carryforward $ 17,218 $ 6,937 Net state operating loss carryforward 4,536 2,096 Net international operating loss carryforward 1,723 — Interest expense limitation carryforward 1,339 — Accruals 916 411 Stock options 5,362 4,056 Operating lease liabilities 6,389 882 Other 502 347 Deferred tax assets 37,985 14,729 Less: valuation allowances (3,161) (1,436) Deferred tax assets after valuation allowance 34,824 13,293 Deferred tax liabilities: Unamortized debt discount (23,597) — Fixed assets (4,175) (1,599) Operating lease right-of-use assets (5,533) — Amortizable intangible assets (7,760) (10,555) Indefinite-lived intangibles (1,685) (933) Other (730) (131) Deferred tax liabilities (43,480) (13,218) Net deferred tax (liabilities) assets $ (8,656) $ 75 |
Schedule of change in valuation allowance | Year-Ended December 31, 2019 2018 Balance at beginning of the year $ 1,436 $ 1,338 Increase due to NOLs and temporary differences 1,424 659 Increase due to acquired NOLs 301 — Deferred benefit recognized — (561) Balance at end of the year $ 3,161 $ 1,436 |
Schedule of reconciliation of income tax benefit (expense) | December 31, 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 34.0 % State income taxes, net of federal benefit 5.6 0.5 (21.6) Change in tax rate — — (9.7) Change in valuation allowance (2.9) (0.2) (144.0) Non-deductible stock compensation and tax windfall benefits, net 7.2 6.4 (79.4) Change in fair value of contingent consideration (1.6) (20.6) (62.0) Non-deductible expenses and other 4.0 (0.4) 12.2 Effective income tax rate 33.3 % 6.7 % (270.5) % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Summary of restricted stock award activity | Weighted average Number grant-date of shares fair value Outstanding at January 1, 2017 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 Granted 591,402 54.91 Vested (434,643) 18.54 Forfeited (13,239) 55.05 Outstanding at December 31, 2019 1,213,581 $ 37.69 |
Schedule of weighted average assumptions for employee grants | Year Ended December 31, Valuation assumptions: 2019 2018 2017 Expected volatility 68.00 % 58.50 % 61.00 % Expected term (years) 6.03 6.07 6.03 Risk-free interest rate 2.41 % 2.46 % 2.21 % 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, 2017 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 38.77 Exercised (797,207) 6.15 Forfeited (108,369) 23.63 Outstanding at December 31, 2018 2,490,114 $ 15.70 Granted 745,525 54.66 Exercised (345,893) 11.73 Forfeited (134,403) 49.45 Outstanding at December 31, 2019 2,755,343 $ 25.10 6.9 $ 70,855 Options vested and expected to vest at December 31, 2019 2,755,343 $ 25.10 6.9 $ 70,855 Exercisable at December 31, 2019 1,573,677 $ 12.46 5.7 $ 57,622 |
Schedule of recorded stock-based compensation expense related to stock options | Year Ended December 31, 2019 2018 2017 Cost of revenue - product $ 1,196 $ 692 $ 502 Cost of revenue - service 3,780 1,590 293 Research and development 7,499 2,566 694 Sales and marketing 4,282 1,580 598 General and administrative 10,521 3,933 6,665 Total stock-based compensation expense $ 27,278 $ 10,361 $ 8,752 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
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, 2019 Liabilities Acquisition-related contingent consideration - long-term $ — $ — $ 10,800 $ 10,800 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 $ 43,397 Acquisition-related contingent consideration - long-term — — 7,800 7,800 $ — $ — $ 51,197 $ 51,197 |
Schedule of reconciliation of liability measured at fair value on recurring basis using significant unobservable inputs (Level 3) | Balance at January 1, 2018 $ 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 (39,774) Balance at December 31, 2018 $ 51,197 Acquisition date fair value of the DoseMe contingent consideration 8,720 Cash consideration paid (53,542) Adjustments to fair value measurement 3,816 Adjustment to reclassify amounts settled in cash (previously reflected in equity) 609 Balance at December 31, 2019 $ 10,800 |
Schedule of carrying value and fair value of financial instruments | Face Value Carrying Value Fair Value 1.75% Convertible Senior Subordinated Notes due 2026 (the "2026 Notes") $ 325,000 $ 226,291 $ 324,675 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 June 30, 2019 September 30, 2019 December 31, 2019 December 31, 2019 Total revenue $ 60,959 $ 76,255 $ 74,270 $ 73,223 $ 284,707 Loss from operations $ (12,327) $ (4,760) $ (7,764) $ (7,798) $ (32,649) Net loss, basic and diluted $ (10,979) $ (6,529) $ (8,104) $ (6,824) $ (32,436) Net loss per share, basic and diluted $ (0.54) $ (0.32) $ (0.39) $ (0.33) $ (1.57) 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, basic and diluted $ (18,094) $ (29,026) $ 10,416 $ (10,565) $ (47,269) Net (loss) income per share: Basic $ (0.96) $ (1.53) $ 0.54 $ (0.54) $ (2.48) Diluted $ (0.96) $ (1.53) $ 0.47 $ (0.54) $ (2.48) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of Significant Accounting Policies | ||||
Cash | $ 42,478 | $ 20,278 | ||
Restricted cash | 4,103 | 4,751 | ||
Total cash and restricted cash as presented in the consolidated statements of cash flows | $ 46,581 | $ 25,029 | $ 10,430 | $ 4,345 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, net | ||
Allowance for doubtful accounts | $ 386 | $ 528 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment and Software Development Costs, net (Details) | 12 Months Ended |
Dec. 31, 2019 | |
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) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Goodwill | |||
Number of reporting units | 1 | ||
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Shipping and Handling (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of revenue | |||
Cost of revenue | $ 181,355 | $ 137,669 | $ 93,655 |
Shipping and Handling | |||
Disaggregation of revenue | |||
Cost of revenue | $ 6,342 | $ 4,708 | $ 3,652 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Additional Policies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Summary of Significant Accounting Policies | |||
Advertising costs | $ | $ 469 | $ 184 | $ 117 |
Number of operating segments | segment | 1 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Concentrations (Details) - customer | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | 2 | ||
Accounts Receivable | Client One | Credit risk | |||
Concentration Risk | |||
Number of customers | 1 | ||
Concentration risk (as a percent) | 15.00% | 12.00% | |
Accounts Receivable | Client Two | Credit risk | |||
Concentration Risk | |||
Concentration risk (as a percent) | 12.00% | ||
Revenue | Client One | Customer risk | |||
Concentration Risk | |||
Number of customers | 1 | 1 | 1 |
Concentration risk (as a percent) | 13.00% | 14.00% | 18.00% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
Recent Accounting Pronouncements | ||
Lease, Practical Expedients, Package | true | |
Lease, Practical Expedient, Use of Hindsight | false | |
Net lease assets | $ 22,100 | |
Lease liabilities | $ 25,367 | |
ASU 2016-02 | ||
Recent Accounting Pronouncements | ||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | |
ASU 2016-02 | Restatement | ||
Recent Accounting Pronouncements | ||
Net lease assets | $ 18,469 | |
Lease liabilities | $ 21,173 |
Revenue - General (Details)
Revenue - General (Details) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of revenue | |||||||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 284,707 | $ 204,270 | $ 133,485 |
MRM prescription fulfillment services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 137,130 | 112,760 | 95,238 | ||||||||
MRM services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 98,410 | 62,558 | 26,583 | ||||||||
Health plan management services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 37,019 | 18,977 | 6,019 | ||||||||
Pharmacy cost management services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | 11,969 | 9,698 | 5,419 | ||||||||
Other services | |||||||||||
Disaggregation of revenue | |||||||||||
Revenue | $ 179 | $ 277 | $ 226 |
Revenue - Contract balances (De
Revenue - Contract balances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Contract balances | |||
Contract assets | $ 6,165 | $ 3,075 | $ 1,842 |
Contract liabilities | 4,930 | 1,733 | $ 1,350 |
Data analytics | |||
Contract balances | |||
Contract assets | 3,992 | 2,913 | |
Software services | |||
Contract balances | |||
Contract liabilities | 2,029 | ||
Prescription medications | |||
Contract balances | |||
Contract liabilities | 986 | 858 | |
Software maintenance | |||
Contract balances | |||
Contract liabilities | 743 | 730 | |
Pharmacy cost management services | |||
Contract balances | |||
Contract liabilities | 930 | ||
MRM services | |||
Contract balances | |||
Contract assets | 694 | ||
Health plan management services | |||
Contract balances | |||
Contract assets | 1,479 | 162 | |
Contract liabilities | $ 242 | $ 145 |
Revenue - Change in contract ba
Revenue - Change in contract balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contract assets: | ||
Contract assets, beginning of period | $ 3,075 | $ 1,842 |
Decreases due to cash received | (4,958) | (1,949) |
Changes to the contract assets at the beginning of the year as a result of changes in estimates | 1,613 | |
Increases, net of reclassifications to receivables | 6,435 | 3,182 |
Contract assets, end of period | 6,165 | 3,075 |
Contract liabilities: | ||
Contract liabilities, beginning of period | 1,733 | 1,350 |
Revenue recognized that was included in the contract liabilities balance at the beginning of the period | (1,533) | (1,295) |
Increases due to cash received, excluding amounts recognized as revenue during the period | 2,969 | 978 |
Increases due to business combinations, excluding amounts recognized as revenue during the period | 1,761 | 700 |
Contract liabilities, end of period | $ 4,930 | $ 1,733 |
Net (Loss) Income per Share - E
Net (Loss) Income per Share - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator (basic and diluted): | |||||||||||
Net (loss) income, basic | $ (6,824) | $ (8,104) | $ (6,529) | $ (10,979) | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ (32,436) | $ (47,269) | $ 12,791 |
Net (loss) income, diluted | $ (9,288) | $ (8,104) | $ (6,529) | $ (10,979) | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ (34,900) | $ (47,269) | $ 12,791 |
Denominator (basic): | |||||||||||
Weighted average shares of common stock outstanding, basic | 20,622,258 | 19,098,294 | 16,730,418 | ||||||||
Denominator (diluted): | |||||||||||
Weighted average shares of common stock outstanding, basic | 20,622,258 | 19,098,294 | 16,730,418 | ||||||||
Effect of potential dilutive securities: | |||||||||||
Weighted average dilutive effect of contingently issuable shares | 9,331 | ||||||||||
Weighted average shares of common stock outstanding, diluted | 20,622,258 | 19,098,294 | 18,774,374 | ||||||||
Net (loss) income per share, basic (in dollars per share) | $ (0.54) | $ 0.54 | $ (1.53) | $ (0.96) | $ (1.57) | $ (2.48) | $ 0.76 | ||||
Net (loss) income per share, diluted (in dollars per share) | $ (0.54) | $ 0.47 | $ (1.53) | $ (0.96) | $ (1.57) | $ (2.48) | $ 0.68 | ||||
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 (Loss) Income per Share - A
Net (Loss) Income per Share - Anti-dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | 8,672,968 | 3,560,175 |
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 | 2,755,343 | 2,490,114 |
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 | 1,213,581 | 1,070,061 |
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 | 4,646,393 | |
Contingently issuable shares | ||
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 | 57,651 |
Acquisitions - Prescribe Wellne
Acquisitions - Prescribe Wellness (Details) $ in Thousands | Mar. 05, 2019USD ($)company | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 150,760 | $ 108,213 | $ 150,760 | $ 108,213 | $ 74,613 | |||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 284,707 | 204,270 | 133,485 | |
Net income (loss) | (32,436) | (47,269) | 12,791 | |||||||||
Amortization expense | $ 25,684 | $ 11,150 | $ 5,645 | |||||||||
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 1 month 6 days | 8 years | ||||||||||
Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 8 years | 7 years 2 months 12 days | ||||||||||
Patient database | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 5 years | |||||||||||
Prescribe Wellness | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 150,000 | |||||||||||
Direct acquisition costs | $ 3,243 | |||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of post-closing adjustments | 148,626 | |||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Accounts receivable | 2,608 | |||||||||||
Prepaid expenses and other current assets | 1,345 | |||||||||||
Property and equipment | 1,155 | |||||||||||
Operating lease right-of-use-assets | 1,515 | |||||||||||
Goodwill | 30,714 | |||||||||||
Total assets acquired | 157,237 | |||||||||||
Operating lease liabilities | (1,515) | |||||||||||
Trade accounts payable | (1,733) | |||||||||||
Accrued expenses and other liabilities | (5,363) | |||||||||||
Total purchase price | $ 148,626 | |||||||||||
Weighted average amortization period | 11 years 4 months 24 days | |||||||||||
Revenue | $ 26,832 | |||||||||||
Revenue from Contract with Customer, Product and Service | us-gaap:ServiceMember | |||||||||||
Reduction to revenue recorded due to purchase accounting effects of recording deferred revenue at fair value | $ 1,656 | |||||||||||
Net income (loss) | (9,047) | |||||||||||
Amortization expense | $ 10,377 | |||||||||||
Prescribe Wellness | Minimum | ||||||||||||
Acquisition | ||||||||||||
Number of pharmacies with which acquiree facilitates collaboration | company | 12,000 | |||||||||||
Prescribe Wellness | Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 4,100 | |||||||||||
Weighted average amortization period | 5 years | |||||||||||
Prescribe Wellness | Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 20,000 | |||||||||||
Weighted average amortization period | 10 years | |||||||||||
Prescribe Wellness | Patient database | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 21,700 | |||||||||||
Weighted average amortization period | 5 years | |||||||||||
Prescribe Wellness | Client relationships intangible asset | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 74,100 | |||||||||||
Weighted average amortization period | 14 years |
Acquisitions - DoseMe (Details)
Acquisitions - DoseMe (Details) - USD ($) $ in Thousands | Jan. 02, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 150,760 | $ 108,213 | $ 150,760 | $ 108,213 | $ 74,613 | |||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 284,707 | 204,270 | 133,485 | |
Net income (loss) | (32,436) | (47,269) | 12,791 | |||||||||
Amortization expense | $ 25,684 | $ 11,150 | $ 5,645 | |||||||||
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 1 month 6 days | 8 years | ||||||||||
Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 8 years | 7 years 2 months 12 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 | 5 years | ||||||||||
DoseMe | ||||||||||||
Acquisition | ||||||||||||
Issuance of common stock (in shares) | 149,053 | |||||||||||
Cash payment for acquisition-related contingent consideration | $ 8,750 | |||||||||||
Direct acquisition costs | $ 104 | $ 689 | ||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of post-closing adjustments | $ 10,136 | |||||||||||
Stock consideration at closing | 9,504 | |||||||||||
Estimated fair value of contingent consideration | 8,720 | |||||||||||
Total fair value of acquisition consideration | 28,360 | |||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Accounts receivable | 9 | |||||||||||
Prepaid expenses and other current assets | 110 | |||||||||||
Goodwill | 11,835 | |||||||||||
Total assets acquired | 28,743 | |||||||||||
Trade accounts payable | (17) | |||||||||||
Accrued expenses and other liabilities | (366) | |||||||||||
Total purchase price | 28,360 | |||||||||||
Acquisition-related contingent consideration | $ 8,720 | |||||||||||
Weighted average amortization period | 7 years 4 months 24 days | |||||||||||
Revenue | $ 336 | |||||||||||
Revenue from Contract with Customer, Product and Service | us-gaap:ServiceMember | |||||||||||
Net income (loss) | $ (4,250) | |||||||||||
Amortization expense | $ 2,282 | |||||||||||
DoseMe | Maximum | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 10,000 | |||||||||||
Contingent earn out payment | 10,000 | |||||||||||
DoseMe | Trade name | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 89 | |||||||||||
Weighted average amortization period | 4 years | |||||||||||
DoseMe | Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 16,200 | |||||||||||
Weighted average amortization period | 7 years 6 months | |||||||||||
DoseMe | Non-competition agreement | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Intangible assets | $ 500 | |||||||||||
Weighted average amortization period | 5 years |
Acquisitions - Cognify (Details
Acquisitions - Cognify (Details) - USD ($) $ in Thousands | Oct. 19, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 150,760 | $ 108,213 | $ 150,760 | $ 108,213 | $ 74,613 | |||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 284,707 | 204,270 | 133,485 | |
Net income (loss) | $ (32,436) | $ (47,269) | $ 12,791 | |||||||||
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 1 month 6 days | 8 years | ||||||||||
Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 8 years | 7 years 2 months 12 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 | |||||||||||
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 | 16,982 | |||||||||||
Total assets acquired | 29,297 | |||||||||||
Accrued expenses and other liabilities | (515) | |||||||||||
Deferred income tax liability, net | (2,974) | |||||||||||
Total purchase price | 25,808 | |||||||||||
Acquisition-related contingent consideration | $ 8,100 | |||||||||||
Weighted average amortization period | 11 years 7 months 6 days | |||||||||||
Revenue | $ 620 | |||||||||||
Revenue from Contract with Customer, Product and Service | 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 18 days |
Acquisitions - Mediture (Detail
Acquisitions - Mediture (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 150,760 | $ 108,213 | $ 150,760 | $ 108,213 | $ 74,613 | |||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 284,707 | 204,270 | 133,485 | |
Net income (loss) | $ (32,436) | $ (47,269) | $ 12,791 | |||||||||
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 1 month 6 days | 8 years | ||||||||||
Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 8 years | 7 years 2 months 12 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 | 5 years | ||||||||||
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 6 days | |||||||||||
Revenue | $ 4,528 | |||||||||||
Revenue from Contract with Customer, Product and Service | us-gaap:ServiceMember | |||||||||||
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 18 days | |||||||||||
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 150,760 | $ 108,213 | $ 150,760 | $ 108,213 | $ 74,613 | |||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 284,707 | 204,270 | 133,485 | |
Net income (loss) | $ (32,436) | $ (47,269) | $ 12,791 | |||||||||
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 1 month 6 days | 8 years | ||||||||||
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 | 5 years | ||||||||||
Peak PACE Solutions | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 7,719 | |||||||||||
Acquisition and integration costs | $ 271 | |||||||||||
Purchase price consideration | ||||||||||||
Cash consideration at closing, net of post-closing adjustments | 7,563 | |||||||||||
Cash payment for acquisition-related contingent consideration | $ 1,642 | |||||||||||
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 | |||||||||||
Acquisition-related contingent consideration | $ 1,620 | |||||||||||
Weighted average amortization period | 9 years 6 months | |||||||||||
Revenue | $ 5,801 | |||||||||||
Revenue from Contract with Customer, Product and Service | us-gaap:ServiceMember | |||||||||||
Net income (loss) | $ 524 | |||||||||||
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 150,760 | $ 108,213 | $ 150,760 | $ 108,213 | $ 74,613 | |||||||
Revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | 284,707 | 204,270 | 133,485 | |
Net (loss) income | $ (32,436) | $ (47,269) | 12,791 | |||||||||
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 1 month 6 days | 8 years | ||||||||||
Developed technology | ||||||||||||
Allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed | ||||||||||||
Weighted average amortization period | 8 years | 7 years 2 months 12 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 | 5 years | ||||||||||
SinfoniaRx | ||||||||||||
Acquisition | ||||||||||||
Cash consideration | $ 35,000 | |||||||||||
Issuance of common stock (in shares) | 520,821 | 614,225 | ||||||||||
Cash payment for acquisition-related contingent consideration | $ 43,150 | |||||||||||
Acquisition and integration costs | $ 77 | 1,015 | ||||||||||
Acquisition-related contingent consideration | $ 38,092 | |||||||||||
Value of shares issued | $ 39,166 | |||||||||||
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 18 days | |||||||||||
Revenue | 12,119 | |||||||||||
Revenue from Contract with Customer, Product and Service [Extensible List] | Service [Member] | |||||||||||
Net (loss) income | $ 3,736 | |||||||||||
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 6 months | |||||||||||
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 - Pro forma (unaud
Acquisitions - Pro forma (unaudited) (Details) - 2018 and 2019 Acquisitions - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquisition | |||
Revenue | $ 290,454 | $ 249,628 | $ 176,290 |
Net loss | $ (33,023) | $ (62,285) | $ (2,908) |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment | |||
Property and equipment, gross | $ 29,526 | $ 21,228 | |
Less: accumulated depreciation | (13,728) | (9,363) | |
Property and equipment, net | 15,798 | 11,865 | |
Depreciation and amortization | $ 34,276 | 16,802 | $ 9,512 |
Computer hardware and purchased software | |||
Property and Equipment | |||
Useful life | 3 years | ||
Property and equipment, gross | $ 7,970 | 5,641 | |
Office furniture and equipment | |||
Property and Equipment | |||
Useful life | 5 years | ||
Property and equipment, gross | $ 10,237 | 8,569 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 11,319 | 7,018 | |
Property and equipment | |||
Property and Equipment | |||
Depreciation and amortization | $ 4,409 | $ 3,493 | $ 2,146 |
Minimum | Leasehold improvements | |||
Property and Equipment | |||
Useful life | 5 years | ||
Maximum | Leasehold improvements | |||
Property and Equipment | |||
Useful life | 15 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Components of lease expense | |
Operating lease cost | $ 3,981 |
Finance lease cost | |
Amortization of leased assets | 580 |
Interest on lease liabilities | 46 |
Total finance lease cost | 626 |
Variable lease costs | 918 |
Short-term lease costs | 247 |
Total lease cost | $ 5,772 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Operating leases | ||
Operating lease right-of-use assets | $ 22,100 | |
Current operating lease liabilities | 4,350 | |
Noncurrent operating lease liabilities | 21,017 | |
Total operating lease liabilities | 25,367 | |
Finance leases | ||
Property and equipment | 29,526 | $ 21,228 |
Accumulated amortization | (13,728) | (9,363) |
Property and equipment, net | 15,798 | $ 11,865 |
Current obligations of finance leases | 125 | |
Finance leases, net of current obligations | 3 | |
Total finance lease liabilities | $ 128 | |
Weighted average remaining lease term (in years): Operating leases | 8 years 4 months 24 days | |
Weighted average remaining lease term (in years): Finance leases | 3 months 18 days | |
Weighted average discount rate: Operating leases (as a percent) | 4.43% | |
Weighted average discount rate: Finance leases (as a percent) | 5.92% | |
Office space and equipment, Finance leases | ||
Finance leases | ||
Property and equipment | $ 2,130 | |
Accumulated amortization | (1,907) | |
Property and equipment, net | $ 223 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases | |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases | $ 4,138 |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases | 42 |
Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows for finance leases | 968 |
Office space and equipment, excluding lease assets acquired in DoseMe and PrescribeWellness acquisitions | |
Leases | |
Leased assets obtained in exchange for lease liabilities: Operating leases | $ 4,926 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
2020 | $ 4,439 |
2021 | 3,976 |
2022 | 3,489 |
2023 | 3,266 |
2024 | 3,127 |
Thereafter | 12,228 |
Total minimum lease payments | 30,525 |
Less: imputed interest | (5,158) |
Present value of lease liabilities | 25,367 |
Less current portion | (4,350) |
Total long-term lease liabilities | 21,017 |
Finance leases | |
2020 | 126 |
2021 | 4 |
Total minimum lease payments | 130 |
Less: imputed interest | (2) |
Present value of lease liabilities | 128 |
Less current portion | (125) |
Total long-term lease liabilities | $ 3 |
Leases - Additional Operating L
Leases - Additional Operating Lease Commitments (Details) - Arizona $ in Thousands | Dec. 31, 2019USD ($)item |
Leases | |
Additional operating lease commitments that have not yet commenced | $ | $ 3,104 |
Number of office spaces | item | 2 |
Minimum | |
Leases | |
Lease term for operating lease commitments that have not yet commenced | 6 years |
Maximum | |
Leases | |
Lease term for operating lease commitments that have not yet commenced | 7 years |
Leases - Components of Lease _2
Leases - Components of Lease Expense - PYs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Leases | ||
Operating lease cost | $ 3,016 | $ 2,012 |
Interest on lease liabilities | 115 | $ 209 |
Net book value of equipment and software acquired under capital lease | $ 1,077 |
Leases - Future minimum lease p
Leases - Future minimum lease payments - 2018 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future minimum lease payments for capital leases | |
Capital leases total | $ 1,141 |
Less than 1 year | 987 |
1 - 3 years | 154 |
Future minimum lease payments for operating leases | |
Operating leases total | 32,367 |
Less than 1 year | 3,793 |
1 - 3 years | 7,183 |
3 - 5 years | 6,114 |
Thereafter | 15,277 |
Future minimum lease payments for capital and operating leases | |
Leases total | 33,508 |
Less than 1 year | 4,780 |
1 - 3 years | 7,337 |
3 - 5 years | 6,114 |
More than 5 years | $ 15,277 |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Software Development Costs | |||
Software development costs | $ 29,714 | $ 15,278 | |
Less: accumulated amortization | (11,213) | (7,030) | |
Software development costs, net | 18,501 | 8,248 | |
Capitalized software development costs included above not yet subject to amortization | 3,294 | 3,500 | |
Amortization expense | $ 4,183 | $ 2,158 | $ 1,721 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and related changes | |||
Goodwill at beginning of period | $ 108,213 | $ 74,613 | |
Goodwill from acquisitions | 42,549 | 34,020 | |
Adjustments to Goodwill | (2) | (420) | |
Goodwill at end of period | 150,760 | 108,213 | $ 74,613 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets | |||
Gross Value | $ 236,378 | $ 99,509 | |
Accumulated Amortization | (46,965) | (22,303) | |
Intangible Assets, net | 189,413 | 77,206 | |
Amortization expense | $ 25,684 | $ 11,150 | $ 5,645 |
Trade name | |||
Intangible Assets | |||
Weighted Average Amortization Period | 7 years 1 month 6 days | 8 years | |
Gross Value | $ 11,255 | $ 7,436 | |
Accumulated Amortization | (3,845) | (2,357) | |
Intangible Assets, net | $ 7,410 | $ 5,079 | |
Client relationships | |||
Intangible Assets | |||
Weighted Average Amortization Period | 12 years 2 months 12 days | 9 years 7 months 6 days | |
Gross Value | $ 128,169 | $ 54,069 | |
Accumulated Amortization | (20,977) | (10,757) | |
Intangible Assets, net | $ 107,192 | $ 43,312 | |
Non-competition agreement | |||
Intangible Assets | |||
Weighted Average Amortization Period | 5 years | 5 years | |
Gross Value | $ 6,602 | $ 6,754 | |
Accumulated Amortization | (2,641) | (1,885) | |
Intangible Assets, net | $ 3,961 | $ 4,869 | |
Developed technology | |||
Intangible Assets | |||
Weighted Average Amortization Period | 8 years | 7 years 2 months 12 days | |
Gross Value | $ 68,593 | $ 31,191 | |
Accumulated Amortization | (15,870) | (7,296) | |
Intangible Assets, net | $ 52,723 | $ 23,895 | |
Patient database | |||
Intangible Assets | |||
Weighted Average Amortization Period | 5 years | ||
Gross Value | $ 21,700 | ||
Accumulated Amortization | (3,617) | ||
Intangible Assets, net | $ 18,083 | ||
Domain name | |||
Intangible Assets | |||
Weighted Average Amortization Period | 10 years | 10 years | |
Gross Value | $ 59 | $ 59 | |
Accumulated Amortization | (15) | (8) | |
Intangible Assets, net | $ 44 | $ 51 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Estimated amortization expense | ||
2020 | $ 27,287 | |
2021 | 27,183 | |
2022 | 26,123 | |
2023 | 24,913 | |
2024 | 17,912 | |
Thereafter | 65,995 | |
Total estimated amortization expense | $ 189,413 | $ 77,206 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses and Other Liabilities | ||
Employee related expenses | $ 12,582 | $ 6,357 |
Contract liability | 4,857 | 1,580 |
Client funds obligations | 4,106 | 4,751 |
Contract labor | 329 | 1,563 |
Interest | 2,133 | 121 |
Deferred rent | 134 | |
Professional fees | 337 | 442 |
Royalties expense | 17 | 588 |
Non-income taxes payable | 898 | 56 |
Other expenses | 1,647 | 964 |
Total accrued expenses and other liabilities | $ 26,906 | $ 16,556 |
Lines of Credit and Long-Term_3
Lines of Credit and Long-Term Debt - Lines of Credit (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 06, 2017USD ($) | |
Lines of Credit | ||||
Deferred financing costs | $ 266 | $ 291 | ||
2015 Revolving Line | ||||
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 | 12 months | ||
Letter of credit outstanding | $ 200 | |||
Aggregate borrowings outstanding | 0 | $ 45,000 | ||
Amounts available for borrowings | $ 59,800 | |||
Interest rate (as a percent) | 5.58% | 5.58% | ||
Interest expense | $ 351 | $ 712 | $ 389 | |
Deferred financing costs | 793 | |||
Amortization of deferred financing costs to interest expense | $ 282 | $ 103 | $ 60 | |
2015 Revolving Line | Prime Rate | ||||
Lines of Credit | ||||
Floor rate (as a percent) | 3.50% | |||
Minimum | 2015 Revolving Line | ||||
Lines of Credit | ||||
Minimum EBITDA (as a percent) | 75.00% | |||
Minimum | 2015 Revolving Line | Prime Rate | ||||
Lines of Credit | ||||
Spread on variable rate (as a percent) | (0.25%) | |||
Maximum | 2015 Revolving Line | ||||
Lines of Credit | ||||
Leverage ratio | 2.50 | |||
Maximum capital expenditure | $ 5,000 | |||
Maximum | 2015 Revolving Line | 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 - Convertible Senior Subordinated Notes (Details) $ / shares in Units, $ in Thousands | Feb. 12, 2019USD ($)$ / shares | Dec. 31, 2019USD ($)D | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Lines of Credit and Long-Term Debt | ||||
Cash paid for interest | $ 3,181 | $ 720 | $ 599 | |
Long term debt, net | 226,291 | |||
Accrued interest payable | 2,133 | $ 121 | ||
Convertible Senior Subordinated Notes | ||||
Lines of Credit and Long-Term Debt | ||||
Aggregate borrowings | $ 325,000 | $ 325,000 | ||
Interest rate (as a percent) | 1.75% | 1.75% | ||
Initial conversion rate | 14.2966 | |||
Initial conversion price | $ / shares | $ 69.95 | |||
Carrying amount of the equity component representing the conversion option | $ 102,900 | |||
Deferred tax effect | $ 25,884 | |||
Effective interest rate | 8.05% | |||
Debt issuance costs | $ 8,937 | |||
Third party offering costs | 435 | |||
Issuance costs attributable to the liability component | $ 6,405 | |||
Interest expense | $ 15,619 | |||
Increase in accrued interest | 5,024 | |||
Non-cash accretion of the debt discounts | 10,595 | |||
Long term debt, net | 226,291 | |||
Accrued interest payable | $ 2,133 | |||
Debt Conversion Scenario One | Convertible Senior Subordinated Notes | ||||
Lines of Credit and Long-Term Debt | ||||
Trading days | D | 20 | |||
Consecutive trading days | D | 30 | |||
Stock price trigger percentage (as a percent) | 130.00% | |||
Debt Conversion Scenario Two | Convertible Senior Subordinated Notes | ||||
Lines of Credit and Long-Term Debt | ||||
Trading days | D | 5 | |||
Consecutive trading days | D | 5 | |||
Principal amount | $ 1 | |||
Stock price trigger percentage (as a percent) | 98.00% |
Lines of Credit and Long-Term_5
Lines of Credit and Long-Term Debt - Convertible Note Hedge and Warrant Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 12, 2019 | Dec. 31, 2019 |
Lines of Credit and Long-Term Debt | ||
Proceeds from Issuance of Warrants | $ 65,910 | |
Convertible note warrant | ||
Lines of Credit and Long-Term Debt | ||
Option to purchase | 4,646,393 | |
Exercise price (in dollars per share) | $ 105.58 | |
Proceeds from Issuance of Warrants | $ 65,910 | |
Note hedges | ||
Lines of Credit and Long-Term Debt | ||
Option to purchase | 4,646,393 | |
Exercise price (in dollars per share) | $ 69.95 | |
Premiums paid for the note hedges | $ 101,660 |
Lines of Credit and Long-Term_6
Lines of Credit and Long-Term Debt - Long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Capital Lease Obligations | ||
Long term debt, gross | $ 325,000 | |
Unamortized discount, including debt issuance costs, on convertible senior subordinated notes | (98,709) | |
Long term debt, net | 226,291 | |
Finance leases | 128 | |
Capital leases | $ 1,097 | |
Total long-term debt and finance leases, net | 226,419 | 1,097 |
Less current portion, net | (125) | (945) |
Total long-term debt and finance leases, less current portion, net | $ 226,294 | $ 152 |
Income Taxes - Components (Deta
Income Taxes - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
Income (loss) before income taxes | $ (48,635) | $ (50,645) | $ 3,452 |
Current and deferred tax expense | |||
Current international income tax expense | 0 | 0 | 0 |
Deferred international income tax expense | 0 | 0 | 0 |
United States | |||
Income Taxes | |||
Income (loss) before income taxes | (45,821) | $ (50,645) | $ 3,452 |
International | |||
Income Taxes | |||
Income (loss) before income taxes | $ (2,814) |
Income Taxes - (Benefit) Expens
Income Taxes - (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
US federal | $ 1 | $ 20 | |
State and local | $ 154 | 271 | 108 |
Total current income tax expense | 154 | 272 | 128 |
Deferred: | |||
US federal | (13,356) | (3,150) | (8,948) |
State and local | (2,997) | (498) | (519) |
Total deferred income tax benefit | (16,353) | (3,648) | (9,467) |
Total income tax benefit | $ (16,199) | $ (3,376) | $ (9,339) |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 33.30% | 6.70% | (270.50%) | |
Net deferred tax liability recognized | $ (16,353) | $ (3,648) | $ (9,467) | |
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 - Deferred taxes (
Income Taxes - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | |||
Net federal operating loss carryforward | $ 17,218 | $ 6,937 | |
Net state operating loss carryforward | 4,536 | 2,096 | |
Net international operating loss carryforward | 1,723 | ||
Interest expense limitation carryforward | 1,339 | ||
Accruals | 916 | 411 | |
Stock options | 5,362 | 4,056 | |
Deferred rent | 6,389 | 882 | |
Other | 502 | 347 | |
Deferred tax assets | 37,985 | 14,729 | |
Less: valuation allowances | (3,161) | (1,436) | $ (1,338) |
Deferred tax assets after valuation allowance | 34,824 | 13,293 | |
Deferred tax liabilities: | |||
Unamortized debt discount | (23,597) | ||
Fixed assets | (4,175) | (1,599) | |
Operating lease right-of-use assets | (5,533) | ||
Amortizable intangible assets | (7,760) | (10,555) | |
Indefinite-lived intangibles | (1,685) | (933) | |
Other | (730) | (131) | |
Deferred tax liabilities | (43,480) | (13,218) | |
Net deferred tax asset | $ 75 | ||
Net deferred tax liabilities | $ (8,656) |
Income Taxes - NOLs (Details)
Income Taxes - NOLs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
NOL carryforwards | |
Unrecognized tax benefits or related interest and penalties accrued | $ 0 |
United States | |
NOL carryforwards | |
Net operating loss carryforwards | 81,892 |
State | |
NOL carryforwards | |
Net operating loss carryforwards | 85,142 |
International | |
NOL carryforwards | |
Net operating loss carryforwards | $ 5,743 |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Change in valuation allowance: | |||
Balance at beginning of the period | $ 1,436 | $ 1,338 | |
Balance at end of the period | 3,161 | 1,436 | $ 1,338 |
NOLs and temporary differences | |||
Change in valuation allowance: | |||
Increase due to NOLs and temporary differences | 1,424 | 659 | |
Acquired NOLs] | |||
Change in valuation allowance: | |||
Increase due to NOLs and temporary differences | $ 301 | ||
Deferred benefit recognized | |||
Change in valuation allowance: | |||
Increase due to NOLs and temporary differences | $ (561) | $ (5,786) |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of income tax benefit (expense): | |||
Federal statutory rate | 21.00% | 21.00% | 34.00% |
State income taxes, net of federal benefit | 5.60% | 0.50% | (21.60%) |
Change in tax rate | (9.70%) | ||
Change in valuation allowance | (2.90%) | (0.20%) | (144.00%) |
Non-deductible stock compensation and tax windfall benefits, net | 7.20% | 6.40% | (79.40%) |
Change in fair value of contingent consideration | (1.60%) | (20.60%) | (62.00%) |
Non-deductible expenses and other | 4.00% | (0.40%) | 12.20% |
Effective income tax rate | 33.30% | 6.70% | (270.50%) |
Other Long-term Liabilities (De
Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Long-term Liabilities | ||
Other long-term liabilities | $ 73 | $ 3,268 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Apr. 25, 2017 | |
Common Stock Repurchase | |||
Shares repurchased (in dollars) | $ 2,866 | $ 959 | |
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 |
Stockholders' Equity - Capitali
Stockholders' Equity - Capitalization and IPO (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 08, 2017 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Capitalization and Initial Public Offering | ||||
Proceeds from issuance of common stock, net of underwriting costs | $ 34,897 | $ 34,897 | ||
Underwriting discounts and commission | $ 2,228 | |||
Proceeds from disgorgement of short swing profits | $ 156 | $ 156 | ||
Common Stock | ||||
Capitalization and Initial Public Offering | ||||
Underwritten public offering (n shares) | 1,350,000 | 1,350,000 | ||
Share price (in dollars per share) | $ 27.50 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - Convertible note warrant - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Feb. 12, 2019 | |
Warrants | ||
Number of shares called by warrants issued | 4,646,393 | |
Exercise Price (in dollars per share) | $ 105.58 | |
Shares issued from exercise of warrants | 0 |
Stock-Based Compensation - Plan
Stock-Based Compensation - Plans (Details) - shares | Jan. 02, 2019 | Sep. 30, 2016 | Dec. 31, 2019 | Dec. 31, 2019 |
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 | Share-based Payment Arrangement, 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 | Share-based Payment Arrangement, Employee owning more than 10% of voting power | ||||
Stock-Based Compensation | ||||
Ownership (as a percent) | 10.00% | 10.00% | ||
Option price as percentage of fair market value of common stock on the date of grant | 110.00% | |||
2014 Plan | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 0 | |||
2016 Plan | ||||
Stock-Based Compensation | ||||
Automatic increase on share reserve (as a percent) | 5.00% | |||
Additional shares authorized | 1,027,876 | |||
Available for future grant (in shares) | 374,672 | 374,672 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average grant date fair value | |||
Total stock-based compensation expense (in dollars) | $ 27,278 | $ 10,361 | $ 8,752 |
Restricted stock | |||
Number of shares | |||
Outstanding at beginning of period (in shares) | 1,070,061 | 753,666 | 722,646 |
Granted (in shares) | 591,402 | 445,659 | 43,384 |
Vested (in shares) | (434,643) | (120,970) | (12,364) |
Forfeited (in shares) | (13,239) | (8,294) | |
Outstanding at end of period (in shares) | 1,213,581 | 1,070,061 | 753,666 |
Weighted average grant date fair value | |||
Outstanding at beginning of period (in dollars per share) | $ 20.61 | $ 12.25 | $ 12 |
Granted (in dollars per share) | 54.91 | 32.83 | 16.33 |
Vested (in dollars per share) | 18.54 | 12.78 | 12 |
Forfeited (in dollars per share) | 55.05 | 31.27 | |
Outstanding at end of period (in dollars per share | $ 37.69 | $ 20.61 | $ 12.25 |
Total stock-based compensation expense (in dollars) | $ 12,984 | $ 3,809 | $ 5,434 |
Unrecognized compensation expense (in dollars) | $ 29,987 | ||
Weighted average period expected to be recognized | 2 years 9 months 18 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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock-Based Compensation | ||||
Stock- based stock awards expense | $ 27,278 | $ 10,361 | $ 8,752 | |
Performance Based Stock Award | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 50,000 | 45,000 | ||
Weighted average grant-date fair value (in dollars per share) | $ 61.85 | |||
Stock- based stock awards expense | $ 1,708 | $ 1,385 | ||
Unrecognized compensation expense (in dollars) | $ 0 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Total stock-based compensation expense (in dollars) | $ 27,278 | $ 10,361 | $ 8,752 |
Other stock awards | |||
Stock-Based Compensation | |||
Granted (in shares) | 38,808 | ||
Weighted average grant-date fair value (in dollars per share) | $ 52.31 | ||
Total stock-based compensation expense (in dollars) | $ 2,030 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Valuation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Total stock-based compensation expense (in dollars) | $ 27,278 | $ 10,361 | $ 8,752 |
Stock options | |||
Stock-Based Compensation | |||
Total stock-based compensation expense (in dollars) | $ 10,556 | $ 5,167 | $ 3,318 |
Stock options | Share-based Payment Arrangement, Employee | |||
Valuation assumptions: | |||
Expected volatility (as a percent) | 68.00% | 58.50% | 61.00% |
Expected term (years) | 6 years 10 days | 6 years 25 days | 6 years 10 days |
Risk-free interest rate (as a percent) | 2.41% | 2.46% | 2.21% |
Weighted average grant-date fair value (in dollars per share) | $ 34.14 | $ 22.01 | $ 8.25 |
Stock-Based Compensation - Op_2
Stock-Based Compensation - Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares | |||
Outstanding at beginning of period (in shares) | 2,490,114 | 2,883,175 | 3,059,690 |
Granted (in shares) | 745,525 | 512,515 | 1,063,306 |
Exercised (in shares) | (345,893) | (797,207) | (1,162,579) |
Forfeited (in shares) | (134,403) | (108,369) | (77,242) |
Outstanding at end of the period (in shares) | 2,755,343 | 2,490,114 | 2,883,175 |
Options vested and expected to vest at end of the period (in shares) | 2,755,343 | ||
Exercisable at end of period (in shares) | 1,573,677 | ||
Weighted average exercise price | |||
Outstanding at beginning of period (in dollars per share) | $ 15.70 | $ 9.26 | $ 5.14 |
Granted (in dollars per share) | 54.66 | 38.77 | 14.64 |
Exercised (in dollars per share) | 11.73 | 6.15 | 3.15 |
Forfeited (in dollars per share) | 49.45 | 23.63 | 11.61 |
Outstanding at end of period (in dollars per share) | 25.10 | $ 15.70 | $ 9.26 |
Options vested and expected to vest at end of period (in dollars per share) | 25.10 | ||
Exercisable at end of period (in dollars per share) | $ 12.46 | ||
Weighted average remaining contractual term | |||
Outstanding | 6 years 10 months 24 days | ||
Options vested and expected to vest at of the period | 6 years 10 months 24 days | ||
Exercisable | 5 years 8 months 12 days | ||
Aggregate intrinsic value | |||
Outstanding (in dollars) | $ 70,855 | ||
Options vested and expected to vest at end of period (in dollars) | 70,855 | ||
Exercisable (in dollars) | 57,622 | ||
Additional disclosures | |||
Intrinsic value of options exercised (in dollars) | 14,316 | $ 33,937 | $ 14,512 |
Proceeds from stock options exercised (in dollars) | 3,702 | $ 3,523 | $ 480 |
Stock options | |||
Additional disclosures | |||
Total unrecognized compensation cost (in dollars) | $ 24,756 | ||
Weighted average period expected to be recognized | 2 years 8 months 12 days |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | $ 27,278 | $ 10,361 | $ 8,752 |
Cost of revenue - product | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 1,196 | 692 | 502 |
Cost of revenue - service | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 3,780 | 1,590 | 293 |
Research and development | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 7,499 | 2,566 | 694 |
Sales and marketing | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | 4,282 | 1,580 | 598 |
General and administrative | |||
Stock-based compensation expense | |||
Total stock-based compensation expense (in dollars) | $ 10,521 | $ 3,933 | $ 6,665 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Measurements | ||
Acquisition-related contingent consideration - short-term | $ 43,397 | |
Acquisition-related contingent consideration - long-term | 7,800 | |
Liabilities | $ 10,800 | 51,197 |
Level 3 | ||
Fair Value Measurements | ||
Acquisition-related contingent consideration - short-term | 43,397 | |
Acquisition-related contingent consideration - long-term | 7,800 | |
Liabilities | $ 10,800 | $ 51,197 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent consideration (Details) - USD ($) $ in Thousands | Jan. 02, 2019 | Oct. 19, 2018 | May 01, 2018 | Sep. 06, 2017 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Change in fair value | ||||||||||
Change in fair value of acquisition-related contingent consideration expense (income) | $ 3,816 | $ 49,468 | $ (6,173) | |||||||
SinfoniaRx | ||||||||||
Change in fair value | ||||||||||
Change in fair value of acquisition-related contingent consideration expense (income) | 624 | 49,903 | ||||||||
Contingent consideration | 81,692 | |||||||||
Contingent consideration equity-classified | 39,774 | |||||||||
Cash payment for acquisition-related contingent consideration | $ 43,150 | |||||||||
Issuance of common stock (in shares) | 520,821 | 614,225 | ||||||||
Value of shares issued | $ 39,166 | |||||||||
Estimated fair value of contingent consideration | $ 38,092 | |||||||||
Peak PACE Solutions | ||||||||||
Change in fair value | ||||||||||
Change in fair value of acquisition-related contingent consideration expense (income) | 163 | (141) | ||||||||
Contingent consideration liability | 1,479 | |||||||||
Cash payment for acquisition-related contingent consideration | $ 1,642 | |||||||||
Estimated fair value of contingent consideration | $ 1,620 | |||||||||
Cognify, Inc | ||||||||||
Change in fair value | ||||||||||
Change in fair value of acquisition-related contingent consideration expense (income) | 3,000 | (300) | ||||||||
Contingent consideration liability | 10,800 | $ 7,800 | ||||||||
Issuance of common stock (in shares) | 93,579 | |||||||||
Estimated fair value of contingent consideration | $ 8,100 | |||||||||
Cognify, Inc | Maximum | ||||||||||
Change in fair value | ||||||||||
Estimated fair value of contingent consideration | $ 14,000 | |||||||||
DoseMe | ||||||||||
Change in fair value | ||||||||||
Change in fair value of acquisition-related contingent consideration expense (income) | $ 30 | |||||||||
Cash payment for acquisition-related contingent consideration | $ 8,750 | |||||||||
Issuance of common stock (in shares) | 149,053 | |||||||||
Estimated fair value of contingent consideration | $ 8,720 |
Fair Value Measurements - Con_2
Fair Value Measurements - Contingent consideration rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Change in fair value using significant unobservable inputs (Level 3): | ||
Balance at beginning of period | $ 51,197 | $ 33,429 |
Fair value of cash consideration paid | (53,542) | (1,646) |
Adjustments to fair value measurement | 3,816 | 49,468 |
Reclassification of amounts to be settled in common stock to equity | (39,774) | |
Adjustment to reclassify amounts settled in cash (previously reflected in equity) | 609 | |
Balance at end of period | 10,800 | 51,197 |
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 | |
DoseMe | ||
Change in fair value using significant unobservable inputs (Level 3): | ||
Acquisition date fair value of contingent consideration | $ 8,720 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Feb. 12, 2019 |
Fair Value Measurements | ||
Amount before unaccreted debt discount and unamortized debt issuance costs | $ 325,000 | |
Convertible Senior Subordinated Notes | ||
Fair Value Measurements | ||
Interest rate (as a percent) | 1.75% | 1.75% |
Face value | $ 325,000 | $ 325,000 |
Amount before unaccreted debt discount and unamortized debt issuance costs | 325,000 | |
Convertible Senior Subordinated Notes | Carrying Value | ||
Fair Value Measurements | ||
Debt instrument | 226,291 | |
Convertible Senior Subordinated Notes | Fair Value | ||
Fair Value Measurements | ||
Debt instrument | $ 324,675 |
Commitments and Contingencies -
Commitments and Contingencies - Vendor Purchase Agreements (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 29, 2019 | May 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
AmerisourceBergen and Thrifty Drug Stores, Inc. | |||||
Purchase Agreements | |||||
Amount due as a result of prescription drug purchases | $ 2,465 | ||||
AmerisourceBergen | |||||
Purchase Agreements | |||||
Monthly minimum purchase obligation | $ 1,750 | ||||
Purchase obligation period | 3 years | ||||
Amount due as a result of prescription drug purchases | $ 5,340 | ||||
Thrifty Drug Stores, Inc. | |||||
Purchase Agreements | |||||
Purchase obligation (as a percent) | 98.00% | ||||
Data aggregation partner | Subsequent Event | |||||
Purchase Agreements | |||||
Monthly minimum purchase obligation | $ 30 | ||||
Purchase obligation period | 3 years |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Plan | |||
Contributions by employer | $ 2,242 | $ 1,643 | $ 644 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selected Quarterly Financial Data (unaudited) | |||||||||||
Total revenue | $ 73,223 | $ 74,270 | $ 76,255 | $ 60,959 | $ 57,310 | $ 54,418 | $ 48,598 | $ 43,944 | $ 284,707 | $ 204,270 | $ 133,485 |
(Loss) income from operations | (7,798) | (7,764) | (4,760) | (12,327) | (9,343) | 9,810 | (34,825) | (15,381) | (32,649) | (49,739) | 4,140 |
Net (loss) income, basic and diluted | |||||||||||
Basic | (6,824) | (8,104) | (6,529) | (10,979) | (10,565) | 10,416 | (29,026) | (18,094) | (32,436) | (47,269) | 12,791 |
Diluted | $ (9,288) | $ (8,104) | $ (6,529) | $ (10,979) | $ (10,565) | $ 10,416 | $ (29,026) | $ (18,094) | $ (34,900) | $ (47,269) | $ 12,791 |
Net (loss) income per share: | |||||||||||
Basic and diluted (in dollars per share) | $ (0.33) | $ (0.39) | $ (0.32) | $ (0.54) | $ (1.57) | ||||||
Basic (in dollars per share) | $ (0.54) | $ 0.54 | $ (1.53) | $ (0.96) | (1.57) | $ (2.48) | $ 0.76 | ||||
Diluted (in dollars per share) | $ (0.54) | $ 0.47 | $ (1.53) | $ (0.96) | $ (1.57) | $ (2.48) | $ 0.68 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 528 | $ 63 | $ 39 |
Additions Charged to Costs and Expenses/Allowance Recorded on Current Year Losses | 745 | 362 | 24 |
Deductions/Release of Allowance on Losses Expired or Revalued | (916) | ||
Acquisition | 29 | 103 | |
Balance at End of Period | 386 | 528 | 63 |
Deferred tax asset valuation allowance | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 1,436 | 1,338 | 7,389 |
Additions Charged to Costs and Expenses/Allowance Recorded on Current Year Losses | 1,424 | 659 | (265) |
Deductions/Release of Allowance on Losses Expired or Revalued | (561) | (5,786) | |
Acquisition | 301 | ||
Balance at End of Period | $ 3,161 | $ 1,436 | $ 1,338 |