Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Jun. 05, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38924 | |
Entity Registrant Name | UpHealth, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-3838045 | |
Entity Address, Address Line One | 14000 S. Military Trail | |
Entity Address, Address Line Two | Suite 203 | |
Entity Address, City or Town | Delray Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33484 | |
City Area Code | 888 | |
Local Phone Number | 424-3646 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | UPH(1) | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 18,932,192 | |
Entity Central Index Key | 0001770141 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 955 | $ 2,548 |
Restricted cash | 169,388 | 0 |
Prepaid expenses and other current assets | 1,563 | 2,064 |
Assets held for sale, current | 0 | 15,597 |
Total current assets | 171,906 | 20,209 |
Property and equipment, net | 534 | 704 |
Operating lease right-of-use assets | 344 | 370 |
Equity investments | 96,768 | 96,768 |
Other assets | 182 | 207 |
Assets held for sale, noncurrent | 0 | 113,550 |
Total assets | 269,734 | 231,808 |
Current liabilities: | ||
Accounts payable | 3,739 | 6,889 |
Accrued expenses | 9,513 | 8,232 |
Due to related party | 1,533 | 948 |
Lease liabilities, current | 188 | 183 |
Income taxes payable | 18,662 | 0 |
Debt, current | 111,891 | 0 |
Liabilities held for sale, current | 0 | 10,579 |
Total current liabilities | 145,526 | 26,831 |
Debt, noncurrent | 37,268 | 146,524 |
Lease liabilities, noncurrent | 560 | 610 |
Other liabilities, noncurrent | 4,595 | 76 |
Liabilities held for sale, noncurrent | 0 | 2,663 |
Total liabilities | 187,949 | 176,704 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding at March 31, 2024 and December 31, 2023, respectively. | 0 | 0 |
Common stock, $0.0001 par value, 300,000 shares authorized, 18,981 and 18,841 shares issued, 18,811 and 18,671 shares outstanding as of March 31, 2024 and December 31, December 31, 2023, respectively | 2 | 2 |
Additional paid-in capital | 697,410 | 696,150 |
Treasury stock, at cost | (17,000) | (17,000) |
Accumulated deficit | (598,627) | (624,048) |
Total stockholders’ equity | 81,785 | 55,104 |
Total liabilities and stockholders’ equity | $ 269,734 | $ 231,808 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.1000 | $ 0.1000 |
Preferred stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.1000 | $ 0.1000 |
Common stock authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock issued (in shares) | 18,981,398 | 18,841,142 |
Common stock outstanding (in shares) | 18,811,398 | 18,671,142 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total revenues | $ 0 | $ 24,687 |
Total costs of revenues | 0 | 12,196 |
Gross profit | 0 | 12,491 |
Operating expenses: | ||
Sales and marketing | 91 | 2,527 |
Research and development | 21 | 1,043 |
General and administrative | 3,992 | 10,553 |
Depreciation and amortization | 170 | 525 |
Stock-based compensation | 920 | 981 |
Goodwill, intangible asset, and other long-lived asset impairments | 0 | 495 |
Acquisition, integration, and transformation costs | 176 | 3,400 |
Total operating expenses | 5,370 | 19,524 |
Loss from operations | (5,370) | (7,033) |
Other expense: | ||
Interest expense | (5,529) | (6,758) |
Other income, net, including interest income | 3,539 | 58 |
Total other expense | (1,990) | (6,700) |
Loss before income tax expense | (7,360) | (13,733) |
Income tax expense | (4,519) | 0 |
Net loss from continuing operations | (11,879) | (13,733) |
Net income from discontinued operations, net of tax | 37,300 | 6,098 |
Net income (loss) | 25,421 | (7,635) |
Less: net income attributable to noncontrolling interests | 0 | 448 |
Net income (loss) attributable to UpHealth, Inc. | $ 25,421 | $ (8,083) |
Net income (loss) per share - basic and diluted | ||
Continuing operations, basic (in dollars per share) | $ (0.64) | $ (0.87) |
Continuing operations, diluted (in dollars per share) | (0.64) | (0.87) |
Discontinued operation, net of tax, basic (in dollars per share) | 1.99 | 0.39 |
Discontinued operations, net of tax, diluted (in dollars per share) | 1.99 | 0.39 |
Attributable to UpHealth, Inc., basic (in dollars per share) | 1.36 | (0.51) |
Attributable to UpHealth, Inc., diluted (in dollars per share) | $ 1.36 | $ (0.51) |
Weighted average shares outstanding, basic (in shares) | 18,699 | 15,730 |
Weighted average shares outstanding, diluted (in shares) | 18,699 | 15,730 |
Services | ||
Total revenues | $ 0 | $ 13,613 |
Total costs of revenues | 0 | 6,518 |
Licenses and subscriptions | ||
Total revenues | 0 | 1,936 |
Total costs of revenues | 0 | 319 |
Products | ||
Total revenues | 0 | 9,138 |
Total costs of revenues | $ 0 | $ 5,359 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 25,421 | $ (7,635) |
Foreign currency translation adjustments, net of tax | 0 | 0 |
Comprehensive income (loss) | 25,421 | (7,635) |
Less: comprehensive income attributable to noncontrolling interests | 0 | 448 |
Comprehensive income (loss) attributable to UpHealth, Inc. | $ 25,421 | $ (8,083) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total UpHealth, Inc. Stockholders’ Equity | Noncontrolling Interests | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 15,054,000 | |||||||
Balance at beginning of period at Dec. 31, 2022 | $ 106,137 | $ 2 | $ 688,355 | $ (17,000) | $ (566,209) | $ 105,148 | $ 989 | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 170,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity award activity, net of shares withheld for taxes (in shares) | 80,000 | |||||||
Equity award activity, net of shares withheld for taxes | (3) | (3) | (3) | |||||
Issuance of common stock (in shares) | 1,650,000 | |||||||
Issuance of common stock in connection with 2023 private placement, net of issuance costs of $348000 | 4,155 | 4,155 | 4,155 | |||||
Stock-based compensation | 989 | 989 | 989 | |||||
Net income (loss) | (7,635) | (8,083) | (8,083) | 448 | ||||
Distribution to noncontrolling interests | (44) | (44) | ||||||
Balance at end of period (in shares) at Mar. 31, 2023 | 16,784,000 | |||||||
Balance at end of period at Mar. 31, 2023 | $ 103,599 | $ 2 | 693,496 | $ (17,000) | (574,292) | $ 102,206 | $ 1,393 | |
Balance at end of period (in shares) at Mar. 31, 2023 | 170,000 | |||||||
Balance at beginning of period (in shares) at Dec. 31, 2023 | 18,671,142 | 18,671,000 | ||||||
Balance at beginning of period at Dec. 31, 2023 | $ 55,104 | $ 2 | 696,150 | $ (17,000) | (624,048) | |||
Balance at beginning of period (in shares) at Dec. 31, 2023 | 170,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity award activity, net of shares withheld for taxes (in shares) | 140,000 | |||||||
Stock-based compensation | 1,260 | 1,260 | [1] | |||||
Net income (loss) | $ 25,421 | 25,421 | ||||||
Balance at end of period (in shares) at Mar. 31, 2024 | 18,811,398 | 18,811,000 | ||||||
Balance at end of period at Mar. 31, 2024 | $ 81,785 | $ 2 | $ 697,410 | $ (17,000) | $ (598,627) | |||
Balance at end of period (in shares) at Mar. 31, 2024 | 170,000 | |||||||
[1]Includes $0.3 million from the acceleration of equity awards, which is included in net income from discontinued operations, net of tax, in the unaudited condensed consolidated statements of operations. |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Offering expenses | $ 348 | |
Share based payment arrangement, accelerated cost | $ 300 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net income (loss) | $ 25,421 | $ (7,635) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Net income from discontinued operations, net of tax | (37,300) | (6,098) |
Depreciation and amortization | 170 | 578 |
Amortization of debt issuance costs and discount on convertible debt | 2,635 | 2,659 |
Stock-based compensation | 920 | 981 |
Goodwill, intangible asset, and other long-lived asset impairments | 0 | 495 |
Amortization of operating lease right-of-use assets | 26 | 402 |
Other | 0 | (18) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10 | (2,313) |
Inventories | 0 | 26 |
Prepaid expenses and other current assets | 516 | (601) |
Accounts payable and accrued expenses | 1,333 | 3,058 |
Operating lease liabilities | (45) | (412) |
Income taxes payable | 0 | (19) |
Deferred revenue | 0 | (1,260) |
Due to related parties | 585 | 3,973 |
Other liabilities | 4,519 | (39) |
Net cash used in operating activities - continuing operations | (1,210) | (6,223) |
Net cash provided by (used) in operating activities - discontinued operations | (5,364) | 2,184 |
Net cash used in operating activities | (6,574) | (4,039) |
Investing activities: | ||
Net cash received from sale of business | 175,404 | 0 |
Purchases of property and equipment | 0 | (794) |
Net cash provided by (used in) investing activities - continuing operations | 175,404 | (794) |
Net cash used in investing activities - discontinued operations | (400) | (547) |
Net cash provided by (used in) investing activities | 175,004 | (1,341) |
Financing activities: | ||
Proceeds from private placement, net of issuance costs of $348 | 0 | 4,152 |
Payments for taxes related to net settlement of equity awards | 0 | (3) |
Distributions to noncontrolling interests | 0 | (44) |
Payment of amount due to member | 0 | (50) |
Net cash provided by financing activities - continuing operations | 0 | 4,055 |
Net cash used in financing activities - discontinued operations | (635) | (899) |
Net cash provided by (used in) financing activities | (635) | 3,156 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 167,795 | (2,224) |
Cash, cash equivalents, and restricted cash, beginning of period | 2,548 | 15,557 |
Cash, cash equivalents, and restricted cash, end of period | 170,343 | 13,333 |
Supplemental cash flow information: | ||
Cash paid for interest | 2,370 | 2,283 |
Cash paid for income taxes | 22 | 19 |
Reconciliation of cash, cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 955 | 13,333 |
Restricted cash | 169,388 | 0 |
Total cash, cash equivalents, and restricted cash | $ 170,343 | $ 13,333 |
CONSOLIDATED STATEMENT OF CAS_2
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Statement of Cash Flows [Abstract] | |
Placement fee costs | $ 348 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business UpHealth, Inc. UpHealth, Inc. (“UpHealth,” “we,” “us,” “our,” or the “Company”) is the parent company of UpHealth Holdings, Inc. (“UpHealth Holdings”) and Cloudbreak Health, LLC (“Cloudbreak”), the latter of which we sold on March 15, 2024. GigCapital2, Inc. (“GigCapital2”), our predecessor, was incorporated in Delaware on March 6, 2019. GigCapital2 was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. The Company’s business combinations (the “Business Combinations”) were consummated on June 9, 2021, and in connection with the Business Combinations, GigCapital2 changed its corporate name to “UpHealth, Inc.” On November 28, 2023, we received written notice from the staff of New York Stock Exchange (“NYSE”) Regulation of its determination to commence proceedings to delist the Company’s redeemable warrants, exercisable for one share of common stock of the Company, at an exercise price of $115.00 per share, from the NYSE and that trading in the warrants was suspended immediately. As a result, effective November 29, 2023, our warrants are trading in the over-the-counter market under the symbol “UPHLW.” The NYSE on December 13, 2023 filed a Form 25 with the U.S. Securities and Exchange Commission (“SEC”) to delist the warrants from the NYSE. On December 11, 2023, we received written notice from the staff of NYSE Regulation that it has commenced proceedings to delist our common stock from the NYSE, and suspended trading in our common stock pending the completion of such proceedings. As a result, effective December 12, 2023, our common stock is trading in the over-the-counter market under the symbol “UPHL.” We timely filed an appeal of this determination with the NYSE and requested a hearing before the NYSE Regulatory Oversight Committee’s Committee for Review. On January 12, 2024, the NYSE granted the Company’s request for a hearing, which was originally scheduled to occur on April 17, 2024 but has since being rescheduled to July 18, 2024. The over-the-counter market is a significantly more limited market than the NYSE, and quotation on the over-the-counter market likely results in a less liquid market for our existing and potential stockholders to trade the common stock and could further depress the trading price of our common stock. We can provide no assurance that our common stock will continue to trade on this market, that broker-dealers will continue to provide public quotes of our common stock on this market, or that the trading volume of our common stock will be sufficient to provide for an efficient trading market. The transition of our common stock to the over-the-counter market will not affect the Company’s business operations or its reporting requirements under the rules of the SEC. Chapter 11 Cases of UpHealth Holdings, Thrasys, and BHS Since 2021, UpHealth Holdings has been a party to a legal action in state court in New York, entitled Needham & Company LLC (“Needham”) v. UpHealth Holdings, Inc. and UpHealth Services, Inc. (the “Needham Action”), which arose out of UpHealth Services’ engagement of Needham to assist with the acquisition of certain companies. On September 14, 2023, the trial court in New York issued a Decision and Order granting summary judgment in favor of Needham and denying UpHealth Holdings’ and UpHealth Services’ motion for summary judgment. The trial court in New York entered that Decision and Order on its docket on September 15, 2023. The Decision and Order concluded that Needham was entitled to a fee in the amount of $31.3 million, plus interest. On September 18, 2023, the trial court in New York signed a judgment against UpHealth Holdings and UpHealth Services in the amount of $31.3 million, plus prejudgment interest of $6.5 million, for a total judgment of $37.8 million, plus post-judgment interest of 9% per year. Following the Decision and Order in the Needham Action, on September 19, 2023, UpHealth Holdings filed a voluntary petition for relief under Chapter 11 of Title 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). In addition, on October 20, 2023, two of UpHealth Holdings’ wholly-owned subsidiaries, Thrasys, Inc. (“Thrasys”) and Behavioral Health Services, LLC (“BHS”), and each of the subsidiaries of Thrasys and BHS (such subsidiaries, collectively with UpHealth Holdings, Thrasys and BHS, being referred to individually herein and collectively as the “Debtors”), filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 cases of the Debtors are being jointly administered under the caption In re UpHealth Holdings, Inc., Case No. 23-11476 (U.S. Bankr. D. Del.), for procedural purposes only. Following the commencement of their Chapter 11 cases, the Debtors filed a number of ordinary “first-” and “second-day” motions to continue ordinary course operations and allow for a smooth transition into Chapter 11. On October 24, November 1 and November 17, 2023, the Bankruptcy Court approved all of the “first-” and “second-day” motions, including but not limited to confirming the worldwide automatic injunction of all litigation and creditor action against the Debtors, allowing the use of cash and the continued use of the Debtors’ cash management system, allowing payment to employees and independent contractors and setting a deadline for creditors to file proofs of claim. Accordingly, the Debtors continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. On November 3, 2023, the U.S. Trustee appointed an official committee of unsecured creditors. Notwithstanding the filing of the voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, and the automatic stay pursuant to section 362(a) of the Bankruptcy Code, the Clerk of Court of the Supreme Court of the State of New York entered the judgment in favor of Needham on the court’s docket on September 27, 2023. On November 13, 2023, UpHealth Holdings entered into a stipulation with Needham in the Bankruptcy Court providing that, to the extent it applies, the automatic stay pursuant to section 362(a) of the Bankruptcy Code shall be deemed modified for the sole and limited purpose of authorizing UpHealth Holdings and UpHealth Services, Inc. to appeal the New York court's judgment (and for Needham to be able to participate in the appeal). The Bankruptcy Court entered an order approving this stipulation on November 30, 2023. On December 6, 2023, UpHealth Holdings and UpHealth Services, Inc. appealed the judgment entered by the Supreme Court of the State of New York to the Supreme Court of the State of New York Appellate Division, First Judicial Department. On April 18, 2024, a panel of the Supreme Court of the State of New York Appellate Division, First Judicial Department heard oral argument of the appeal, and on May 9, 2024, this panel rendered its decision affirming the previous judgment of the Supreme Court of the State of New York in favor of Needham and against the defendants in the amount of $37.8 million. UpHealth Holdings intends to enforce the previously disclosed agreement executed by Dr. Chirinjeev Kathuria, Dr. Mariya Pylypiv and Dr. Al Gatmaitan (the “Indemnitors”), pursuant to which they agreed to be responsible for UpHealth Holding’s liabilities to Needham in excess of $8 million. There can be no assurance that UpHealth Holdings will be successful in collecting monies owed from the Indemnitors. On November 16 and December 24, 2023, Thrasys filed motions to effectuate a transition of the Integrated Care Management segment to its customers, as disclosed in the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 filed by the Company with the SEC on November 21, 2023. This transition was substantially completed as of December 28, 2023 and Thrasys subsequently ceased all operations. In addition, a motion to pay retention bonuses to Thrasys employees involved in the transition of the Integrated Care Management segment was approved by the Bankruptcy Court on November 17, 2023. On November 16, 2023, the Bankruptcy Court entered an order setting deadlines to file claims in the Chapter 11 cases. The deadline to file proofs of claim by general creditors of all Debtors passed on January 15, 2024 and the deadline for governmental entities to file proofs of claim against UpHealth Holdings passed on March 18, 2024 and passed on April 17, 2024 against the other Debtors. On December 18, 2023, the Debtors filed their schedules of assets and liabilities and their statements of financial affairs. On January 23, 2024, the Bankruptcy Court entered an order extending the Debtors’ exclusive right to file a Chapter 11 plan through and including April 30, 2024, and extending the Debtors’ exclusive right to solicit such a plan through and including July 1, 2024. The Debtors have filed a motion requesting further extension of these deadlines, which automatically tolls the expiration of the applicable periods. On May 21, 2024, the Bankruptcy Court entered an order approving, on an interim basis, the payment of certain expenses of the Company from funds held by UpHealth Holdings. A final hearing on this matter is currently scheduled for July 2, 2024. Other than UpHealth Holdings, Thrasys, BHS and the subsidiaries of Thrasys and BHS, we and our other subsidiaries have not filed a petition for relief under Chapter 11 of the Bankruptcy Code, and we and our indirect subsidiary TTC Healthcare, Inc. (“TTC”) continue to operate outside of bankruptcy. The filing of the Chapter 11 cases by the Debtors constituted an event of default under the Indentures (as defined below) governing UpHealth’s 6.25% Convertible Senior Notes due 2026 (the “2026 Notes” and all beneficial holders thereof, the “2026 Noteholders”) and UpHealth’s Variable Rate Convertible Senior Secured Notes due 2025 (the “2025 Notes” and all beneficial holders thereof, the “2025 Noteholders”), which accelerated our payment obligations in respect of the 2025 Notes. On February 9, 2024, we entered into the Waivers and Rescission Agreements (as defined below), providing for, among other things, the waiver of the specified events of default under the Indentures and the recission of the automatic acceleration the principal and interest due in respect of the 2025 Notes pursuant to the applicable Indenture. See Sale of Cloudbreak below for further information. Award of Arbitration Regarding Control of Glocal Board of Directors UpHealth Holdings has been a party to a commercial arbitration (the “Arbitration”) regarding control of Glocal Healthcare Systems Private Limited, an Indian company with its registered office in Kolkata, West Bengal, India (“Glocal”). The Arbitration is being administered by the International Court of Arbitration (the “ICA”) of the International Chamber of Commerce (the “ICC”). The Arbitration commenced on November 4, 2022, when UpHealth Holdings filed a Request for Arbitration against certain of UpHealth Holdings’ counterparties to a Share Purchase Agreement, dated October 30, 2020 (the “Original SPA”, and as amended on November 20, 2020 and March 4, 2021, the “SPA”), pursuant to which UpHealth Holdings had acquired Glocal. The SPA counterparties against whom UpHealth Holdings brought the Arbitration include Glocal, Dr. Syed Sabahat Azim (“Sabahat Azim”), Richa Sana Azim (“Richa Azim,” and together with Sabahat Azim, the “Azims”), Gautam Chowdhury (“Chowdhury”), Meleveetil Damodaran (“Damodaran”), and Kimberlite Social Infra Private Limited (“Kimberlite,” and together with Glocal, the Azims, Chowdhury and Damodaran, the “Respondents”). Sabahat Azim, Richa Azim, and Chowdhury have constituted the board of directors of Glocal (the “Glocal Board”) since UpHealth Holdings entered into the Original SPA. Damodaran is a current shareholder and former director of Glocal. Kimberlite is an Indian entity of which the Azims are shareholders and directors, and it is a shareholder of Glocal. UpHealth Holdings brought claims against the Respondents for breach of the SPA, violation of UpHealth Holdings’ rights under the Indian Company Act as supermajority shareholder of Glocal, and misrepresentation. UpHealth Holdings requested specific relief, damages and costs from the arbitral tribunal that was constituted by the ICA to decide UpHealth Holdings’ claims (the “Tribunal”). The Tribunal closed the Arbitration proceedings on February 5, 2024. On March 18, 2024, the ICA formally notified the final award in the Arbitration (the “Award”) of the Tribunal to the parties. The dispositive section of the Award reads substantially as follows, of which sub‑paragraphs (a) through (f) constitute the Tribunal’s findings and sub-paragraphs (g) through (u) constitute the relief ordered by the Tribunal: a. The Tribunal has jurisdiction over Glocal, the Azims, Chowdhury, Damodaran, and Kimberlite in the Arbitration; b. The Tribunal has jurisdiction to hear and determine the disputes in the Arbitration and rejects Glocal’s, the Azims’s, and Chowdhury’s jurisdictional objections; c. UpHealth Holdings holds (i) 7,503,016 equity shares in Glocal (95.29% of the total equity shares), (ii) 24,867 preference shares in Glocal (37.52% of the total preference shares), and (iii) 94.81% of the total (equity plus preference) shares in Glocal; d. UpHealth Holdings has good and marketable title over its shareholding in Glocal detailed in sub-paragraph (c) above, free and clear of all encumbrances and together with all rights, title, interest and benefits appertaining thereto; e. The Extraordinary General Meeting held by Glocal on September 26, 2022 was carried out contrary to the terms of the SPA; f. The Azims, Chowdhury, Damodaran, and Kimberlite have breached the SPA, specifically its Clause 5.2(b), (c) and (d), as well as Clauses 10 and 12; g. The Tribunal issues a permanent mandatory injunction: 1. Directing the Respondents to take all necessary steps to (i) convene a meeting of the Glocal Board to appoint UpHealth Holdings’ designee(s) as director(s) of the Glocal Board, and (ii) at that meeting, approve and authorize the appointment of UpHealth Holdings’ designee(s) as director(s) of the Glocal Board, pursuant to Clauses 5.2.1(b)(iii) and 12 of the Original SPA (as amended); 2. Directing Glocal, the Azims, Chowdhury, Damodaran and Kimberlite, both individually and jointly to file Form DIR-12 with the jurisdictional registrar of companies in relation to the appointment of UpHealth Holdings’ designee(s) to the Glocal Board pursuant to Clauses 5.2.1(c) and 12 of the Original SPA (as amended); 3. Directing Glocal, the Azims, Chowdhury, Damodaran and Kimberlite, both individually and jointly, to provide UpHealth Holdings with true extracts, duly certified by the Glocal Board, of board resolutions appointing UpHealth Holdings’ designee(s) to the Glocal Board, following such appointment Clauses 5.2.1(d) and 12 of the Original SPA (as amended); 4. Pursuant to Clauses 10.2 and 12 of the Original SPA (as amended), directing Glocal, the Azims, Chowdhury, Damodaran, and Kimberlite to cooperate with UpHealth Holdings to increase UpHealth Holdings’ ownership to 100% of the share capital of Glocal, in a form and manner acceptable to UpHealth Holdings; and 5. Prohibiting Glocal, the Azims, Chowdhury, Damodaran, and Kimberlite from acting in violation of Clause 12 of the SPA and requiring Glocal, the Azims, Chowdhury, Damodaran, and Kimberlite to provide UpHealth Holdings access to all financial statement(s), information, data, documents, books and records in the form and manner requested by UpHealth Holdings. h. The Azims, Chowdhury, Damodaran, and Kimberlite are ordered to comply with the terms of the SPA as amended by observing the requests of UpHealth Holdings to fulfill the terms of the SPA; i. The Tribunal orders the Azims, Chowdhury, Damodaran, and Kimberlite to severally pay UpHealth Holdings Primary Damages (as defined in the Award) in the sums set out below: 1. Sabahat Azim – USD $10,140,625.00 2. Richa Azim – USD $10,140,625.00 3. Chowdhury – USD $1,382,812.50 4. Damodaran – USD $6,650,669.64 5. Kimberlite – USD $1,185,267.86 j. In the event that Glocal, the Azims, Chowdhury, Damodaran and Kimberlite, at any time prior to September 30, 2024, offer to give UpHealth Holdings actual control of Glocal without all or some of the assets provided for and/or contemplated by the SPA, UpHealth Holdings may forthwith elect to: 1. Receive actual control of Glocal notwithstanding the diminution of its assets; or 2. Recover from the Azims, Chowdhury, Damodaran, and Kimberlite Additional Damages (as defined in the Award) amounting to USD $80.7 million for the permanent loss of actual control. k. If UpHealth Holdings does not secure actual control of Glocal on or before September 30, 2024 with the assets provided for or contemplated in the SPA and sub-paragraph (j) above does not take effect then UpHealth Holdings is entitled to recover the Additional Damages (as defined in the Award) for the permanent loss of actual control from the Azims, Chowdhury, Damodaran, and Kimberlite; l. If UpHealth Holdings elects to recover the Additional Damages under sub-paragraphs (j)(2) or (k) above, the Tribunal orders the Azims, Chowdhury, Damodaran, and Kimberlite to severally pay UpHealth Holdings damages in the sums below: 1. Sabahat Azim – USD $27,740,625.00 2. Richa Azim – USD $27,740,625.00 3. Chowdhury – USD $3,782,812.50 4. Damodaran – USD $18,193,526.79 5. Kimberlite – USD $3,242,410.71 m. In the event that UpHealth Holdings elects to receive the Additional Damages under sub-paragraphs (j)(2) or (k) above, the Azims, Chowdhury, Damodaran, and Kimberlite are not required to comply with the following orders/paragraphs in the dispositive part of the Award: 1. Sub-paragraph (g); 2. Sub-paragraph (h); 3. Sub-paragraph (r); and 4. Sub-paragraph (s). n. The Azims, Chowdhury, Damodaran, and Kimberlite must, severally in the proportions set out in sub-paragraphs (i) and (l) above, pay UpHealth Holdings all withholding tax applied to the interest on the damages awarded to UpHealth Holdings, subject to UpHealth Holdings providing the enforcement court with sufficient evidence of the amount of withholding tax applied to the interest on damages awarded; o. The Azims and Chowdhury must in equal shares pay UpHealth Holdings’ costs and expenses amounting to USD $868,440 reasonably incurred in relation to the emergency arbitration; p. The Azims, Chowdhury, Damodaran, and Kimberlite must in equal shares pay UpHealth Holdings its costs and expenses amounting to USD $4,488,562 reasonably incurred in relation to this Arbitration (excluding the emergency-arbitration stage); q. The Azims, Chowdhury, Damodaran, and Kimberlite must pay UpHealth Holdings post-award interest on the sums they are individually liable to pay from the date of the Award until full payment at a rate of nine percent (9%) per annum on a simple basis; r. UpHealth Holdings and the Respondents must give continuing effect to subparts (c), (e), and (f) of Section VII (the dispositif) of the emergency arbitrator’s order, as amended below, pursuant to the Tribunal’s authority under Article 29(3) of the ICC Rules and Article 6(6)(c) of Appendix V to the ICC Rules: 1. Glocal, the Azims, and Chowdhury are directed, both individually and jointly, to cooperate with UpHealth Holdings and with any PCAOB-registered accounting firm identified by UpHealth Holdings, in providing access to all unaudited financial statement(s), data, documents, books and records of Glocal, as and when required in the form and manner requested by UpHealth Holdings; 2. Glocal, the Azims and Chowdhury are directed, both individually and jointly, to cooperate with any PCAOB‑registered accounting firm identified by UpHealth Holdings in their review of the information provided pursuant to sub-paragraph (r)(1) above, including responding to any questions, making any company employees or officers available to respond to questions, and complying with any requests for further information or clarifications; and 3. Glocal, the Azims, and Chowdhury are, jointly and individually, ordered to refrain from (i) taking any steps to access the funds in Glocal’s bank account at ICICI Bank, account number 104905001983 whether on the basis of the August 15, 2022 board resolution or otherwise, (ii) making, or causing to be made, any changes to the authorized signatory that can access such bank account, and (iii) making, or causing to be made, any other changes to such bank account. s. Martin Beck and/or Jeremy Livianu and/or such other person as may be designated by the board of directors of UpHealth Holdings, by board resolution (and notified in writing to ICICI Bank by the Chief Executive Officer of UpHealth Holdings, attaching a certified copy of the resolution of the board of directors of UpHealth Holdings designating such person), may, jointly or severally, be permitted to access and operate Glocal’s bank account at ICICI Bank, account number 104905001983; t. The Tribunal dismisses all other claims by UpHealth Holdings, including its claim for damages for misrepresentations; and u. All other claims and defenses are dismissed. Rule 36 of the ICC Rules gives all parties to the Arbitration 30 days from the date the Award was notified to apply to the ICC for the correction of “clerical, computational or typographical error[s], or any errors of a similar nature.” In the same thirty-day window, the parties may apply to the ICC for “interpretation” of the Award. On April 12, 2024, UpHealth Holdings made an Application to the ICC for certain corrections and an interpretation of the Award (“Corrections Application”) with respect to the election option at sub-paragraph (j) above, granted to UpHealth Holdings by the Tribunal. After submissions by UpHealth Holdings and Damodaran in respect of the Corrections Application, the Secretariat of the ICC in New York informed all parties on May 13, 2024 that it has received the draft decision by the Tribunal which will be scrutinized by the ICC at one of its next sessions. Proposed Sale of TTC Through ongoing discussions with its key economic stakeholders, including a group of certain of the beneficial holders of the Company’s 2025 Notes and the Creditors’ Committee in the bankruptcy case (collectively, the “Consultation Parties”), UpHealth Holdings has determined that the sale of UpHealth Holdings’ equity interest in TTC may be appropriate to maximize value to the UpHealth Holdings’ estate because a sale of the equity interests in TTC may provide funding necessary for UpHealth Holdings to consummate a Chapter 11 plan and successfully exit its Chapter 11 case. UpHealth Holdings anticipates that it will pursue a motion before the Bankruptcy Court to approve procedures applicable to the sale of its equity interests in TTC, and eventually, authorize the sale of such equity interests free and clear of all liens, claims, encumbrances and other interests. In addition, UpHealth Holdings anticipates that it will pursue confirmation of a liquidating plan (including seeking approval of a related disclosure statement) alongside of the sale process, which UpHealth Holdings is hopeful will provide payment in full to creditors at UpHealth Holdings and, potentially, a dividend to the Company. In furtherance of the anticipated sales process, UpHealth Holdings, after consulting with the Consultation Parties, has selected an investment banker, Stout Capital, LLC (“Stout”), to assist in a marketing and sale process to identify a party ready, willing and able to consummate a transaction. As of this time, UpHealth Holdings has not marketed the equity interests in TTC for sale, and it would not expect to do so until after the Bankruptcy Court has granted a motion approving procedures applicable to the sale of its equity interests in TTC and related relief, and authorizing procedures applicable to the sale of its equity interests in TTC and related relief. Furthermore, UpHealth Holdings anticipates submitting an application to the Bankruptcy Court to employ Stout to provide financial and investment banking services in connection with a sale of UpHealth Holdings’ equity interests in TTC. Stout would not be expected to provide any services to UpHealth Holdings unless Stout’s retention is approved by the Bankruptcy Court. Sale of Cloudbreak On November 16, 2023, the Company and Cloudbreak, entered into a membership interests purchase agreement (the “Membership Interests Purchase Agreement”) with Forest Buyer, LLC, a Delaware limited liability company (“Forest Buyer”) and an affiliate of GTCR LLC, a leading private equity firm, pursuant to which we agreed to sell all of the outstanding equity interests of Cloudbreak and the wholly-owned subsidiaries of Cloudbreak to Forest Buyer for $180.0 million in cash, subject to certain adjustments for closing indebtedness, net working capital, cash and unpaid transaction expenses related to the transactions contemplated by the Membership Interests Purchase Agreement (the “Sale” and all of the transactions contemplated by the Membership Interests Purchase Agreement, collectively, the “Transactions”). See Note 3, Discontinued Operations , for further information. In connection and concurrently with the entry into the Membership Interests Purchase Agreement, the Company, Cloudbreak and Forest Buyer entered into a transaction support agreement, dated as of November 16, 2023 (the “Transaction Support Agreement”), with certain beneficial holders of our 2025 Notes (being the holders of at least 69% of the 2025 Notes, the “Consenting 2025 Noteholders”) and certain beneficial holders of our 2026 Notes (being the holders of at least 88% of the 2026 Notes, the “Consenting 2026 Noteholders,” and together the Consenting Senior Secured Noteholders, the “Consenting Noteholders”), pursuant to which the parties thereto agreed, among other things, to support the Membership Interests Purchase Agreement and the Transactions, including the Sale, and to enter into and effect the Supplemental Indentures (as defined below) in connection with the offers to repurchase certain of the 2025 Notes and the 2026 Notes in accordance with the terms of the applicable Indenture as a result of any or all of the Transactions constituting a Fundamental Change (as such term is defined in each of the Indentures) under the applicable Indenture (each, a “Fundamental Change Repurchase Offer”) to be made by us pursuant to the terms of the Transaction Support Agreement. Furthermore, on February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, we entered into a supplemental indenture and amendment to security and pledge agreement, dated as of February 9, 2024 (the “First Lien Supplemental Indenture and Amendment to Security Agreement”), which amended the terms of the indenture, dated as of August 18, 2022, by and among the Company, the Guarantors (as defined below) party thereto and Wilmington Trust, National Association (“Wilmington Trust”), in its capacity as trustee and collateral agent thereunder, relating to the 2025 Notes (as amended, restated, supplemented or otherwise modified from time to time, including pursuant to the First Lien Supplemental Indenture and Amendment to Security Agreement as described below, the “First Lien Indenture”), and the security and pledge agreement, dated as of August 18, 2022, by and among the Company, the Guarantors from time to time party thereto and Wilmington Trust, as collateral agent, relating to the 2025 Notes (as amended, restated, supplemented or otherwise modified from time to time, including pursuant to the First Lien Supplemental Indenture and Amendment to Security Agreement as described below, the “First Lien Security Agreement” and together with the First Lien Indenture, the “First Lien Documents”). The First Lien Supplemental Indenture and Amendment to Security Agreement amended the terms of the First Lien Indenture to, among other things, (a) provide for certain changes to certain of the definitions in the First Lien Indenture, including “Permitted Indebtedness,” “Permitted Investments,” “Permitted Liens,” “Asset Sale,” “Excluded Subsidiary,” and “Significant Subsidiary;” (b) provide for certain modifications to covenants of the Company and certain changes with respects to events of default; (c) provide a carveout for the Sale from the terms of the First Lien Indenture with respect to mergers and sale transactions; (d) delete the rule prohibiting repurchases in connection with a Fundamental Change arising from the Sale at the time the 2025 Notes have been accelerated, and (e) modify the provisions in respect of repurchases of 2025 Notes as a result of a Fundamental Change for the Consenting 2025 Noteholders in respect of the Sale to account for a multi-step process for the repurchase of the 2025 Notes (i.e., to require a repurchase offer at Closing and in connection with subsequent paydowns with the proceeds of released funds from the Escrow Accounts (as defined below)), in each case, at a 5.00% premium to the principal amount of such 2025 Notes pursuant to the terms of the Transaction Support Agreement. In addition, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, we entered into a supplemental indenture (the “Second Lien Supplemental Indenture” and together with the First Lien Supplemental Indenture, the “Supplemental Indentures”) to the indenture, dated June 9, 2021, by and between the Company and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”), in its capacity as successor trustee and as collateral agent thereunder (as amended, restated, supplemented or otherwise modified from time to time, including pursuant to the Second Lien Supplemental Indenture and the Second Lien Security Agreement as described below, the “Second Lien Indenture” and together with the First Lien Indenture, the “Indentures”), the terms of which amended the Second Lien Indenture to, among other things, (a) add each subsidiary of UpHealth, other than Glocal Healthcare Systems Private Limited, UPH Digital Health Services Private Limited and any subsidiary of UpHealth that is, as of the date of the Supplemental Indentures, a debtor or debtor in possession in any bankruptcy proceeding, including the Chapter 11 Proceedings (as defined below) (collectively, the “Guarantors”), as a guarantor of the obligations under the 2026 Notes pursuant to the Second Lien Indenture; (b) cause UpHealth and the Guarantors to grant a second-priority security interest on the same collateral that secures the 2025 Notes; (c) in connection with those items described in clauses (a) and (b) above, incorporate provisions similar to those in the First Lien Indenture, including with respect to covenants and events of default, as previously disclosed by the Company and as modified by the First Lien Supplemental Indenture; and (d) provide a carveout for the Sale from the terms of the Second Lien Indenture with respect to mergers and sale transactions. Pursuant to the terms of the Second Lien Indenture, the 2026 Notes are secured by a second-priority lien, subject only to certain permitted liens, in substantially all assets of the Company and the Guarantors, subject to customary exclusions, pursuant to a security and pledge agreement, dated as of February 9, 2024 (as it may be amended, modified, or supplemented from time to time, the “Second Lien Security Agreement” and together with the Second Lien Indenture, the “Second Lien Documents”), by and among the Company, the Guarantors and BNY Mellon, as collateral agent on behalf of the 2026 Noteholders. In connection with the entry into the Supplemental Indentures, on February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, the Company, Cloudbreak and the Consenting 2025 Noteholders entered into a waiver and rescission agreement, dated as of February 9, 2024 (the “Waiver and Recission Agreement”), pursuant to which the Consenting 2025 Noteholders have agreed to waive, with respect to the Company and Cloudbreak, the specified events of default under the First Lien Indenture resulting from the commence |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Our unaudited condensed consolidated financial statements, including the condensed notes thereto, are unaudited and exclude some of the disclosures required in audited consolidated financial statements. Our unaudited condensed consolidated balance sheet as of December 31, 2023 has been derived from our audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, our accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with U.S. GAAP. The results of operations in the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any future period. Our accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2023. Our unaudited condensed consolidated financial statements include the accounts of UpHealth and its consolidated subsidiaries. As described in Note 1. Organization and Business , our Glocal subsidiary was deconsolidated effective July 1, 2022 and our UpHealth Holdings subsidiary was deconsolidated effective September 30, 2023. As also described in Note 1. Organization and Business , our Innovations Group subsidiary was sold effective May 11, 2023, and our Cloudbreak subsidiary was sold effective March 15, 2024. We follow the FASB ASC guidance for identification and reporting of entities over which control is achieved through means other than voting rights. The guidance defines such entities as VIEs. We consolidate VIEs when we have variable interests and are the primary beneficiary. We continually evaluate our involvement with VIEs to determine when these criteria are met. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes thereto. Significant estimates and assumptions made by management include the determination of: • The identification and reporting of VIEs. We consolidate VIEs when we have variable interests and are the primary beneficiary. We continually evaluate our involvement with VIEs to determine when these criteria are met; • The valuation of equity investments; • The valuation of assets acquired and liabilities assumed for business combinations, including intangible assets and goodwill; • The estimated economic lives and recoverability of intangible assets; • The valuations prepared in connection with the review of goodwill, intangible assets, and other long-lived assets for impairment; • The timing and amount of revenues to be recognized, including standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations; • The identification of and provision for uncollectible accounts receivable; • The capitalization and useful life of internal-use software development costs; • The valuation of derivatives and warrants; and • The recognition, measurement, and valuation of current and deferred income taxes and uncertain tax positions. Actual results could differ materially from those estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities. Reclassifications The accompanying unaudited condensed consolidated financial statement include accounts of UpHealth and its wholly owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the fiscal year 2023 condensed consolidated financial statements to conform to the fiscal year 2024 presentation. The reclassification had no impact on net loss, total assets, total liabilities, or stockholders' equity. New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (the “CODM”) and included within each reported measure of a segment’s profit or loss. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements and early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as additional disclosure on income taxes paid. The ASU is effective on a prospective basis for fiscal years beginning after December 15, 2024 for public entities and early adoption is permitted. We are currently evaluating the impact of adopting of this ASU on our consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) . This ASU simplifies the accounting for convertible instruments by eliminating the conversion option separation model for convertible debt that can be settled in cash and by eliminating the measurement model for beneficial conversion features. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. This ASU also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This ASU was effective for us on January 1, 2024. Early adoption is permitted, but no earlier than the fiscal year beginning on January 1, 2021, including interim periods within that fiscal year. The adoption of this ASU did not have a material impact on our unaudited condensed consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations As discussed in Note 1, Organization and Business , on November 16, 2023, we agreed to sell 100% of the outstanding equity interests of Cloudbreak, our wholly owned subsidiary, to Forest Buyer, LLC, a Delaware limited liability company and an affiliate of GTCR, pursuant to the Purchase Agreement. We will utilize the proceeds from the Sale for payment in full or in part of the 2026 Notes and 2025 Notes, as well as other expenses related to the Transactions. The sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023 as discontinued operations in the accompanying unaudited condensed consolidated financial statements. The following table presents information related to the major classes of assets and liabilities of Cloudbreak that were classified as held for sale in our unaudited condensed consolidated balance sheets (in thousands): (In thousands) March 14, 2024 December 31, 2023 Current assets: Accounts receivable, net $ 16,453 $ 14,655 Prepaid expenses and other current assets 908 942 Assets held for sale, current 17,361 15,597 Property and equipment, net 8,463 8,823 Operating lease right-of-use assets 1,436 1,532 Intangible assets, net 21,891 22,717 Goodwill 80,310 80,310 Other assets 108 168 Assets held for sale, noncurrent 112,208 113,550 Total assets held for sale $ 129,569 $ 129,147 Current liabilities: Accounts payable $ 4,069 $ 4,834 Accrued expenses 3,287 2,358 Deferred revenue 39 48 Lease liabilities, current 3,108 3,339 Liabilities held for sale, current 10,503 10,579 Lease liabilities, noncurrent 2,133 2,663 Liabilities held for sale, noncurrent 2,133 2,663 Total liabilities held for sale $ 12,636 $ 13,242 The following table presents information related to the major classes of line items constituting the net income from discontinued operations, net of tax, in our unaudited condensed consolidated statements of operations (in thousands): (In thousands) Period from January 1 to March 14, 2024 Three Months Ended March 31, 2023 Revenues: Services $ 15,168 $ 17,328 Products 68 130 Total revenues 15,236 17,458 Costs of revenues: Services 6,840 7,226 Licenses and subscriptions 4 — Products 114 47 Total costs of revenues 6,958 7,273 Gross profit 8,278 10,185 Operating expenses: Sales and marketing 1,444 2,092 Research and development 253 242 General and administrative 1,301 456 Depreciation and amortization 959 1,086 Stock compensation expense — 8 Acquisition, integration, and transformation costs — 46 Total operating expenses 3,957 3,930 Income from operations 4,321 6,255 Other income (expense): Gain on sale of business 53,104 — Other expense, net, including interest income (202) (157) Total other income (expense) 52,902 (157) Income from discontinued operations before income taxes 57,223 6,098 Income tax expense (19,923) — Net income from discontinued operations, net of tax $ 37,300 $ 6,098 |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues As discussed in Note 1, Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial results of UpHealth Holdings and its subsidiaries for the three month ended March 31, 2023 are included in our unaudited condensed consolidated financial statements and the financial position of UpHealth Holdings as of March 31, 2024 and December 31, 2023 and the financial results of UpHealth Holdings and its subsidiaries for the three months ended March 31, 2024 are not included in our unaudited condensed consolidated financial statements. Also, as discussed in Note 3 Discontinued Operations , on November 16, 2023 we agreed to sell 100% of the equity interest in Cloudbreak to Forest Buyer, LLC. The Sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023 as discontinued operations in the accompanying unaudited condensed consolidated financial statements. Revenues by service offering consisted of the following : Three Months Ended March 31, (In thousands) 2024 2023 Services $ — $ 13,613 Licenses and subscriptions — 1,936 Products — 9,138 Total revenues $ — $ 24,687 Our revenues were entirely derived from the healthcare industry in the Americas. Revenue recognized over time was approximately 58% of total revenues during the three months ended March 31, 2023. Contract Assets There were no impairments of contract assets, consisting of unbilled receivables, during the three months ended March 31, 2024 and 2023, respectively. The change in contract assets, consisting of unbilled receivables, was as follows: (In thousands) March 31, 2024 March 31, 2023 Unbilled receivables, beginning of period $ — $ 694 Reclassifications to billed receivables — (694) Revenues recognized in excess of period billings — 668 Unbilled receivables, end of period $ — $ 668 Contract Liabilities The change in contract liabilities, consisting of deferred revenue, was as follows: (In thousands) March 31, 2024 March 31, 2023 Deferred revenue, beginning of period $ — $ 2,659 Revenues recognized from balances held at the beginning of the period — (1,442) Revenues deferred from period collections on unfulfilled performance obligations — 253 Deferred revenue, end of period $ — $ 1,470 Revenue recognized ratably over time is generally billed in advance and includes SaaS internet hosting, subscriptions, and related consulting, implementation, services support, and advisory services. Revenue recognized as delivered over time includes professional services billed on a time and materials basis, and fixed fee professional services and training classes that are primarily billed, delivered, and recognized within the same reporting period. Approximately 5.8% of the revenue recognized during the three months ended March 31, 2023 was from the deferred revenue balance existing as of December 31, 2022. |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Supplemental Financial Statement Information | Supplemental Financial Statement Information As discussed in Note 1, Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial results of UpHealth Holdings and its subsidiaries for the three month ended March 31, 2023 are included in our unaudited condensed consolidated financial statements and the financial position of UpHealth Holdings as of March 31, 2024 and December 31, 2023 and the financial results of UpHealth Holdings and its subsidiaries for the three months ended March 31, 2024 are not included in our unaudited condensed consolidated financial statements. Also, as discussed in Note 3 Discontinued Operations , on November 16, 2023 we agreed to sell 100% of the equity interest in Cloudbreak to Forest Buyer, LLC. The Sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023 as discontinued operations in the accompanying unaudited condensed consolidated financial statements. Property and equipment, net consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Computer equipment, furniture and fixtures 43 43 Capitalized software development costs 1,997 1,997 2,040 2,040 Accumulated depreciation and amortization (1,506) (1,336) Total property and equipment, net $ 534 $ 704 As discussed in Note 3, Discontinued Operations , $8.8 million of property and equipment, net are included in assets held for sale, noncurrent in the unaudited condensed consolidated balance sheet as of December 31, 2023. Depreciation expense was $0.2 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively. Accrued expenses consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Accrued professional fees $ 527 $ 1,499 Accrued payroll and bonuses 6,309 5,691 Accrued interest on debt 2,495 846 Other accruals 182 196 Total accrued expenses $ 9,513 $ 8,232 As discussed in Note 3, Discontinued Operations , $2.4 million of accrued expenses are included in liabilities held for sale, noncurrent in the unaudited condensed consolidated balance sheet as of December 31, 2023. Other liabilities, noncurrent consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Derivative liability, noncurrent $ 59 $ 59 Warrant liabilities, noncurrent 17 17 Liability for uncertain tax positions, noncurrent 4,519 $ — Total other liabilities, noncurrent $ 4,595 $ 76 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets As discussed in Note 1, Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial results of UpHealth Holdings and its subsidiaries for the three month ended March 31, 2023 are included in our unaudited condensed consolidated financial statements and the financial position of UpHealth Holdings as of March 31, 2024 and December 31, 2023 and the financial results of UpHealth Holdings and its subsidiaries for the three months ended March 31, 2024 are not included in our unaudited condensed consolidated financial statements. Also, as discussed in Note 3 Discontinued Operations , on November 16, 2023 we agreed to sell 100% of the equity interest in Cloudbreak to Forest Buyer, LLC. The Sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023 as discontinued operations in the accompanying unaudited condensed consolidated financial statements. As discussed in Note 3, Discontinued Operations , $80.3 million of goodwill and $22.7 million of intangible assets are included in assets held for sale, noncurrent, in the unaudited condensed consolidated balance sheet as of December 31, 2023. In the three months ended March 31, 2023, we recorded a goodwill impairment charge of $0.5 million, resulting from the remeasurement of the Innovations Group disposal group to the expected proceeds, less cost to sell. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt As discussed in Note 1 , Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial results of UpHealth Holdings and its subsidiaries for the three month ended March 31, 2023 are included in our unaudited condensed consolidated financial statements, and the financial position of UpHealth Holdings as of March 31, 2024 and December 31, 2023 and the financial results of UpHealth Holdings and its subsidiaries for the three months ended March 31, 2024 are not included in our unaudited condensed consolidated financial statements. Also, as discussed in Note 3 Discontinued Operations , on November 16, 2023 we agreed to sell 100% of the equity interest in Cloudbreak to Forest Buyer, LLC. The Sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023 as discontinued operations in the accompanying unaudited condensed consolidated financial statements. Debt consisted of the following: (In thousands) March 31, 2024 December 31, 2023 2025 Notes $ 57,227 $ 57,227 2026 Notes 115,000 115,000 Total debt 172,227 172,227 Less: unamortized original issue and debt discount (23,068) (25,703) Total debt, net of unamortized original issue and debt discount 149,159 146,524 Less: current portion of debt (111,891) — Noncurrent portion of debt $ 37,268 $ 146,524 2025 Senior Secured Convertible Notes and Indenture On August 12, 2022, we entered into the Indenture governing our 2025 Notes with Wilmington Trust, National Association, a national banking association (“Wilmington Trust”) in its capacity as trustee thereunder, in respect of the $67.5 million in aggregate principal amount of 2025 Notes issued to holders of our 2026 Notes in a private placement transaction (“2025 Notes Offering”), raising approximately $22.5 million in gross cash proceeds, net of debt issuance costs of $2.2 million, after paying for a repurchase of $45.0 million of the 2026 Notes, which net proceeds were used in part to fully repay the Seller Notes (see below). The debt issuance costs consisted of cash paid in the amount of $1.5 million and the issuance of 115,000 shares of common stock with a value of $0.7 million. The 2025 Notes are convertible into 3,857,142 shares of our common stock at a conversion price, subject to the occurrence of certain corporate events, of $17.50 per share. The 2025 Notes are senior secured obligations of UpHealth, secured by substantially all of our assets and those of our domestic subsidiaries, and accrue interest at a rate equal to the daily secured overnight financing rate (“SOFR”) plus 9.0% per annum, with a minimum rate of 10.5% per annum, payable quarterly in arrears, for a quarterly rate of 14.41% for our December 15, 2023 interest payment date. The 2025 Notes will mature on December 15, 2025, unless earlier repurchased, redeemed or converted. Holders will have the right to convert their 2025 Notes at any time. Upon the occurrence of certain corporate events, holders of the 2025 Notes can require us to repurchase for cash all or part of their 2025 Notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price that will be equal to 105% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest thereon, if any. In the event that we sell assets with net proceeds in excess of $15.0 million, then we will make an offer to all holders of the 2025 Notes to repurchase the 2025 Notes for an aggregate amount of cash equal to 20% of the net proceeds of such asset sale, at a repurchase price per 2025 Note equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any. We may not otherwise seek to redeem the 2025 Notes prior to June 16, 2024. We will settle conversions solely in shares of our common stock, except for payments of cash in lieu of fractional shares. As discussed in Note 1, Organization and Business , on May 11, 2023 we completed the sale of 100% of the outstanding capital stock of Innovations Group. In accordance with the terms and conditions set forth in the Senior Secured Notes Indenture, on June 9, 2023, we commenced an offer to purchase up to $10.3 million (representing 20% of the net proceeds from the sale subject to adjustment to maintain the authorized denominations of the 2025 Notes) in aggregate principal amount of our 2025 Notes for cash, at a repurchase price per 2025 Note equal to 100% of the principal amount thereof, plus accrued and unpaid interest (if any), from the holders of the 2025 Notes (the “Offer”). On June 15, 2023, we completed the repurchase of $10.3 million in aggregate principal amount of 2025 Notes, which were validly tendered and accepted for repurchase by us in accordance with the terms and conditions of the Offer (the “Note Repurchase”), representing 15.2% of the outstanding principal amount of the 2025 Notes before the Note Repurchase. Following the completion of the Note Repurchase, there is $57.2 million in aggregate principal amount of 2025 Notes outstanding. The remaining 2025 Notes are convertible into 3,270,114 shares of our common stock at a conversion price, subject to the occurrence of certain corporate events, of $17.50 per share. On February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, we entered into a supplemental indenture and amendment to security and pledge agreement which amended the terms of the Indenture governing our 2025 Notes. See Supplemental Indentures and Waivers and Rescission Agreements below for further information. Total interest expense related to the 2025 Notes consisted of the following: Three Months Ended March 31, (In thousands) 2024 2023 Contractual variable interest expense $ 1,749 $ 2,298 Debt issuance costs amortization 138 162 Total interest expense $ 1,887 $ 2,460 In December 2023, Wilmington Trust, in its capacity as calculation agent, notified us of the quarterly rate reset of 14.38% for our March 15, 2024 interest payment date. In March 2024, Wilmington Trust, in its capacity as calculation agent, notified us of the quarterly rate reset of 14.33%. for our June 15, 2024 interest payment date. 2026 Unsecured Convertible Notes and Indenture On January 20, 2021, GigCapital2 entered into convertible note subscription agreements, each dated January 20, 2021 and amended on June 8, 2021, with certain institutional investors, pursuant to which GigCapital2 agreed to issue and sell unsecured convertible notes in a private placement to close immediately prior to the closing of the Business Combinations. On June 15, 2021, in connection with the closing of the Business Combinations, we entered into an Indenture with Wilmington Trust, National Association, a national banking association, in its capacity as trustee thereunder, in respect of the $160.0 million in aggregate principal amount of unsecured convertible notes due in 2026 (the “2026 Notes”) that were issued to certain institutional investors. The 2026 Notes bear interest at a rate of 6.25% per annum, payable semi-annually, and are convertible into approximately 1,502,347 shares of common stock at a conversion price of $106.50 in accordance with the terms of the Indenture, and will mature on June 15, 2026. The total proceeds received from the 2026 Notes were $151.9 million, net of debt issuance costs of $8.1 million. In accounting for the 2026 Notes, we bifurcated and accounted for the conversion option as a derivative measured at fair value on the issuance date in accordance with ASC 815, Derivatives and Hed ging . The difference between the proceeds allocated to the 2026 Notes at issuance and the fair value of the conversion option was allocated to the host debt contract. As of both March 31, 2024 and December 31, 2023, the fair value of the derivative was $0.1 million, which was included in other liabilities, noncurrent, in our unaudited condensed consolidated balance sheets. On August 12, 2022, concurrently and in connection with the offering of our 2025 senior secured convertible notes and indenture (see below), Oppenheimer & Co. Inc. (“OpCo”) commenced a private offer to repurchase approximately $45.0 million in aggregate principal amount of our 2026 Notes (the “2026 Notes Repurchase”). In connection with the 2026 Notes Repurchase, OpCo entered into a note purchase agreement with each institutional investor pursuant to which OpCo agreed to purchase 2026 Notes from each investor, concurrently with each investor’s purchase of 2025 Notes in the 2025 Notes Offering (see below). At the closing, each investor had the ability to sell $2.0 million in principal amount of 2026 Notes at 100% of par value for each $3.0 million in principal amount of 2025 Notes purchased in the 2025 Notes Offering. Concurrently and in connection with the closing on August 18, 2022, OpCo purchased from each investor the principal amount of the 2026 Notes set forth in each investor’s note purchase agreement, pursuant to and in accordance with the terms thereof. The remaining 2026 Notes are convertible into approximately 1,079,812 shares of common stock at a conversion price of $106.50 in accordance with the terms of the Indenture. On February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, we entered into a supplemental indenture and security and pledge agreement which amended the terms of the Indenture governing our 2026 Notes. See Supplemental Indentures and Waivers and Rescission Agreements below for further information. Total interest expense related to the 2026 Notes consisted of the following: Three Months Ended March 31, (In thousands) 2023 2022 Contractual variable interest expense $ 1,145 $ 1,797 Derivative accretion 287 2,210 Debt issuance costs amortization 2,210 287 Total interest expense $ 3,642 $ 4,294 Supplemental Indentures On February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, we entered into the First Lien Supplemental Indenture and Amendment to Security Agreement, which amends the terms of the indenture, dated as of August 18, 2022, by and among the Company, the Guarantors (as defined below) party thereto and Wilmington Trust, in its capacity as trustee and collateral agent thereunder, relating to the 2025 Notes (as amended, restated, supplemented or otherwise modified from time to time, including pursuant to the First Lien Indenture), and the security and pledge agreement, dated as of August 18, 2022, by and among the Company, the Guarantors from time to time party thereto and Wilmington Trust, as collateral agent, relating to the 2025 Notes (as amended, restated, supplemented or otherwise modified from time to time, including pursuant to the First Lien Documents. The First Lien Supplemental Indenture and Amendment to Security Agreement amends the terms of the First Lien Indenture to, among other things, (a) provide for certain changes to certain of the definitions in the First Lien Indenture, including “Permitted Indebtedness,” “Permitted Investments,” “Permitted Liens,” “Asset Sale,” “Excluded Subsidiary,” and “Significant Subsidiary;” (b) provide for certain modifications to covenants of the Company and certain changes with respects to events of default; (c) provide a carveout for the Sale from the terms of the First Lien Indenture with respect to mergers and sale transactions; (d) delete the rule prohibiting repurchases in connection with a Fundamental Change arising from the Sale at the time the 2025 Notes have been accelerated, and (e) modify the provisions in respect of repurchases of 2025 Notes as a result of a Fundamental Change for the Consenting 2025 Noteholders in respect of the Sale to account for a multi-step process for the repurchase of the 2025 Notes (i.e., to require a repurchase offer at Closing and in connection with subsequent paydowns with the proceeds of released funds from certain segregated escrow accounts to be established prior to the Closing pursuant to one or more escrow agreements in a customary form to be agreed upon as provided under the Membership Interests Purchase Agreement by Forest Buyer, the Company, the Required Noteholders (as defined in the Proxy Statement) and an escrow agent), in each case, at a 5.00% premium to the principal amount of such 2025 Notes pursuant to the terms of the Transaction Support Agreement. Furthermore, the First Lien Supplemental Indenture and Amendment to Security Agreement amends the terms of the First Lien Security Agreement to (i) reduce the deadline for timely performance of certain covenants by the Company and the Guarantors from 20 business days to 7 business days, and (ii) provide that in the event the collateral agent exercises certain voting and other rights in respect of the capital stock and other securities of the Guarantors upon the occurrence or during the continuation of an event of default under the First Lien Indenture, the collateral agent’s notice to a Guarantor may be provided concurrently with such exercise. In addition, on February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, the Company entered into the Second Lien Supplemental Indenture by and between the Company and BNY Mellon, in its capacity as successor trustee and as collateral agent thereunder (as amended, restated, supplemented or otherwise modified from time to time, including pursuant to the Indentures), the terms of which amend the Second Lien Indenture to, among other things, (a) add the Guarantors, as a guarantor of the obligations under the 2026 Notes pursuant to the Second Lien Indenture; (b) cause UpHealth and the Guarantors to grant a second-priority security interest on the same collateral that secures the 2025 Notes, subject only to certain permitted liens, pursuant to the Second Lien Security Agreement dated as of February 9, 2024; (c) in connection with those items described in clauses (a) and (b) above, incorporate provisions similar to those in the First Lien Indenture, including with respect to covenants and events of default, as previously disclosed by the Company and as modified by the First Lien Supplemental Indenture; and (d) provide a carveout for the Sale from the terms of the Second Lien Indenture with respect to mergers and sale transactions. Pursuant to the terms of the Second Lien Indenture, the 2026 Notes are secured by a second-priority lien, subject only to certain permitted liens, in substantially all assets of the Company and the Guarantors, subject to customary exclusions, pursuant to the Second Lien Documents, by and among the Company, the Guarantors and BNY Mellon, as collateral agent on behalf of the 2026 Noteholders. At any time when the Company and its subsidiaries receive Net Proceeds (as defined in the Second Lien Indenture) from an Asset Sale (as defined in the Second Lien Indenture), so long as the 2025 Notes have been repaid in full or to the extent the Company’s Fundamental Change Repurchase Offer in respect of the 2025 Notes has been declined by the holders of the 2025 Notes then outstanding, the Company will make an Asset Sale Offer to all 2026 Noteholders to repurchase 2026 Notes for an aggregate amount of cash equal to 100.0% of such Net Proceeds (excluding, for the avoidance of doubt, any Net Proceeds previously applied to the repurchase of any 2025 Notes or 2026 Notes pursuant to any preceding Asset Sale Offer), at a repurchase price per 2026 Note equal to 100.0% of the principal amount thereof, plus accrued and unpaid interest, if any, plus any remaining amounts that would be owed to, but not excluding, the Maturity Date. In addition, each party to the Supplemental Indentures has expressly agreed that the Supplemental Indentures will be deemed not to affect any rights or obligations of any subsidiary of the Company that is, as of the date of the Supplemental Indentures, a debtor or debtor in possession in the Chapter 11 Proceedings. In accordance with the terms of the Indentures, the Company received consents to the Supplemental Indentures from the holders of $43,357,000 in aggregate principal amount of 2025 Notes, representing approximately 75.76% of the aggregate principal amount of the outstanding 2025 Notes, and the holders of $86,329,000 in aggregate principal amount of 2026 Notes, representing approximately 75.07% of the aggregate principal amount of the outstanding 2026 Notes. The amendments set forth in the Supplemental Indentures became effective as of the date upon which the Company has paid all reasonable costs and expenses, disbursements and advances incurred or made by Wilmington Trust and BNY Mellon, respectively, in connection with the Supplemental Indentures to the extent due and payable pursuant to the terms of the First Lien Documents and the Second Lien Supplemental Indenture, respectively. As previously disclosed by the Company in the November 20 Current Report, pursuant to the terms of the Transaction Support Agreement, the Supplemental Indentures may not be amended, modified or terminated in a manner that is material and adverse to Forest Buyer without its prior written consent. In connection with the entry into the Supplemental Indentures, on February 9, 2024, Wilmington Trust, in its capacity as trustee and collateral agent on behalf of the 2025 Noteholders, and BNY Mellon, in its capacity as successor trustee and collateral agent on behalf of the 2026 Noteholders, entered into an intercreditor agreement, dated as of February 9, 2024, and acknowledged by the Company and the Guarantors (the “Intercreditor Agreement”), the terms of which, among other things, confirm the relative priority of their respective Liens (as defined in the applicable Indenture) in the Collateral (as defined in the applicable Indenture) and provide for the application, in accordance with such priorities, of proceeds of such Collateral. The foregoing description of the First Lien Supplemental Indenture and Amendment to Security Agreement, the Second Lien Supplemental Indenture, and the Second Lien Security Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the full text of the First Lien Supplemental Indenture and Amendment to Security Agreement, the Second Lien Supplemental Indenture, and the Second Lien Security Agreement, respectively. Waivers and Rescission Agreements In connection with the entry into the Supplemental Indentures, on February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, the Company, Cloudbreak and the Consenting 2025 Noteholders entered into the Waiver and Recission Agreement, pursuant to which the Consenting 2025 Noteholders have agreed to waive, with respect to the Company and Cloudbreak, the specified events of default under Indenture governing the 2025 Notes and rescind, with respect to the Company and Cloudbreak, the 2025 Notes Acceleration. Furthermore, on February 9, 2024, in accordance with the terms of the Membership Interests Purchase Agreement and the Transaction Support Agreement, the Company and the Consenting 2026 Noteholders entered into the Waivers and Rescission Agreements, pursuant to which the Consenting 2026 Noteholders have agreed to waive, with respect to the Company and Cloudbreak, the events of default under Indenture governing the 2026 Notes. Upon the effectiveness of the Waivers and Rescission Agreements and until the earlier of (i) the completion of the Company’s initial Fundamental Change Repurchase Offer in respect of the 2026 Notes or (ii) the termination of the Transaction Support Agreement in accordance with the terms thereof, each of the Consenting Noteholders has agreed not to consent to, execute or otherwise participate in any way in any declaration of acceleration of the principal amount of the 2025 Notes and 2026 Notes (as applicable) as a result of the failure of the Company to issue a Fundamental Change Company Notice (as defined in the applicable Indenture) or to conduct or consummate a Fundamental Change repurchase pursuant to Article 15 of the Indenture, in each case, in the event of the Delisting Fundamental Change. Accordingly, the events of default were waived as of February 9, 2024. As of March 31, 2024, the Notes Escrow Account, which is included in restricted cash in the accompanying unaudited condensed consolidated balance sheets, totaled $139 million. The funds in the Notes Escrow Account have been released on June 3, 2024, and have been used to satisfy in full, plus accrued interest, the 2026 Notes and to repurchase approximately $19.7 million of the 2025 Notes, plus accrued interest, following which approximately $37.3 million in aggregate principal amount of 2025 Notes remain outstanding, excluding $0.2 million of unamortized debt issuance costs, which will constitute the entirety of our outstanding debt. Accordingly, as of March 31, 2024, we classified $111.9 million of the debt, including unamortized original issue discount and debt issuance costs, as current and $37.3 million as non-current. As of December 31, 2023, we classified the entire $146.5 million of debt, including unamortized original issue discount and debt issuance costs, as noncurrent. Contractual Maturities As of March 31, 2024, long-term debt contractual maturities, excluding unamortized original issue discount and debt issuance costs, were as follows: (In thousands) 2024 (remaining nine months) $ 134,706 2025 37,521 Total $ 172,227 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We estimate the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate. As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, prepaid assets and other current assets, accounts payable, and accrued expenses approximate their carrying values due to the short-term nature of these instruments. Additionally, the fair values of long-term debt instruments approximate their carrying values. Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. Fair value measurements are categorized into one of three levels of the fair value hierarchy based on the lowest level of significant input used. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Considerable judgment and a high degree of subjectivity are involved in developing these estimates. These estimates may differ from the actual amounts that we could realize upon settlement. The fair value hierarchy is as follows: Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2 - Other observable inputs, either directly or indirectly, other than quoted prices included in Level 1, including: • Quoted prices for similar assets/liabilities in active markets; • Quoted prices for identical or similar assets/liabilities in non-active markets (e.g., few transactions, limited information, non-current prices, high variability over time); • Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, volatilities, default rates); and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Unobservable inputs that cannot be corroborated by observable market data. The following tables present information about our financial liabilities measured at fair value on are recurring basis: March 31, 2024 (In thousands) Level 1 Level 2 Level 3 Total Liabilities: Derivative liability $ — $ — $ 59 $ 59 Warrant liability — 17 — 17 Total liabilities $ — $ 17 $ 59 $ 76 December 31, 2023 (In thousands) Level 1 Level 2 Level 3 Total Liabilities: Derivative liability $ — $ — $ 59 $ 59 Warrant liability — 17 — 17 Total liabilities $ — $ 17 $ 59 $ 76 Derivative Liability In accounting for the 2026 Notes, we bifurcated and accounted for the conversion option as a derivative measured at fair value on the issuance date in accordance with ASC 815, Derivatives and Hedging . As of both March 31, 2024 and December 31, 2023 , the fair value of the deriv ative was $0.1 million, which were included in other liabilities, noncurrent, in the unaudited condensed consolidated balance sheets. See Note 7 , De bt , for further information. The gain (loss) on the fair value of the derivative liability for the three months ended March 31, 2024 and 2023 , which is included in other income, net in the unaudited condensed consolidated statements of operations , was not significant . The fair value of the derivative liability is considered a Level 3 valuation and is determined using a Binomial Lattice Option Pricing Model. The change in the fair value of the Level 3 derivative liability for the three months ended March 31, 2024 and 2023 was as follows: (In thousands) March 31, 2024 December 31, 2023 Fair value, beginning of period $ 59 $ 56 Change in fair value — 3 Fair value, end of period $ 59 $ 59 2021 Private Placement Warrants and 2021 PIPE Warrants We have classified the 2021 Private Placement Warrants and 2021 PIPE Warrants (the “2021 Private Placement Warrants”) and the 2021 PIPE Warrants (the “2021 PIPE Warrants”) as liabilities at fair value, due to their redemption characteristics, with subsequent changes in their fair values to be recognized in the consolidated financial statements at each reporting date. See Note 9, Capital Structure , for further information. The fair value of the 2021 Private Placement Warrants and the 2021 PIPE Warrants, both of which are included in other liabilities, noncurrent in the unaudited condensed consolidated balance sheets, was not significant as of March 31, 2024 and December 31, 2023. The gain or loss due to the fair value changes in the 2021 Private Placement Warrants and the 2021 PIPE Warrants, both of which are included in other income, net in our unaudited condensed consolidated statements of operations, was not significant during the three months ended March 31, 2024 and December 31, 2023. The fair value of the Private Placement Warrants and PIPE Warrants is considered a Level 2 valuation as we have derived their value by using quoted market prices. The transfer of the Private Placement Warrants and PIPE Warrants to anyone other than the purchasers or their permitted transferees, would result in these Private Placement Warrants and PIPE Warrants having substantially the same terms as the Public Warrants, which are traded in active markets. There were no transfers between fair value levels during the three months ended March 31, 2024 or 2023 . |
Capital Structure
Capital Structure | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Capital Structure | Capital Structure Preferred Stock Our Second Amended and Restated Certificate of Incorporation authorizes the issuance of 1,000,000,000 shares of preferred stock, par value $0.1000 with such designation, rights and preferences as may be determined from time to time by our board of directors. As of March 31, 2024 and December 31, 2023 there were no shares of preferred stock outstanding. Common Stock Our Second Amend ed and Restated Certificate of Incorporation authorizes the issuance of 300,000,000 shares of common stock, par value of $0.1000. As of March 31, 2024, there were 18,981,398 shares of common stock issued, and 18,811,398 shares of common stock outstanding. As of December 31, 2023, there were 18,841,142 shares of common stock issued and 18,671,142 shares of common stock outstanding. Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance as of March 31, 2024 were as follows: (In thousands) Number of Shares Restricted stock units (“RSUs”) and stock options outstanding under 2021 EIP 2,396 RSUs outstanding under 2023 IEIP 200 Stock options outstanding under Cloudbreak Plan 48 Shares issuable upon conversion of 2025 Notes 3,270 Shares issuable upon conversion of 2026 Notes 1,080 Shares issuable upon conversion of 2021 Public Warrants 1,725 Shares issuable upon conversion of the 2023 Private Placement Series A Warrants 3,000 Shares issuable upon conversion of the 2023 Private Placement Series B Warrants 3,000 Shares issuable upon conversion of 2021 Private Warrants 57 Shares issuable upon conversion of 2021 PIPE Warrants 30 Shares available for future grant under 2021 EIP 171 Shares available for future grant under 2023 IEIP 400 Total 15,377 2015 Cloudbreak Incentive Plan On June 19, 2015, Cloudbreak created the 2015 Unit Incentive Plan (the “Cloudbreak Plan”), which had a maximum aggregate number of 2,200,000 common units. Cloudbreak measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period. Upon completion of the Business Combinations, UpHealth assumed 1,576,670 options with a fair value of $99.0 million, which were included in purchase consideration, and 134,943 unvested options with a fair value of $0.6 million, which were subject to continued vesting and will be recorded as stock-based compensation prospectively; and Cloudbreak ceased granting awards under the Cloudbreak Plan. On March 15, 2024, we completed the Sale of Cloudbreak to Forest Buyer, and in accordance with the Cloudbreak Plan, the 48,035 unvested outstanding options as of such date were immediately vested and will expire on September 15, 2024 if unexercised. 2021 Equity Incentive Plan On June 4, 2021, the GigCapital2 stockholders considered and approved the 2021 Equity Incentive Plan (“ 2021 EIP ”). The 2021 EIP was previously approved, subject to stockholder approval, by the Board of Directors of GigCapital2 on February 7, 2021. The 2021 EIP became effective immediately upon the closing of the Business Combinations. The number of shares of common stock reserved for issuance under the 2021 EIP will automatically increase on January 1 of each year, beginning on January 1, 2022 and each anniversary thereof during the effectiveness of the 2021 EIP, by an amount equal to the lesser of (i) five percent (5%) of the total number of shares of our common stock outstanding on such date, and (ii) such lesser number of shares as may be determined by our Board of Directors. On January 1, 2024, the number of shares of common stock reserved for issuance under the 2021 EIP was automatically increased by 933,557 shares. In conjunction with the approval of the 2021 EIP, our Board of Directors also adopted a form of Restricted Stock Units Agreement (the “ RSU Agreement ”) and a form of Stock Option Agreement (the “ Stock Option Agreement ”) that we will generally use for grants under our 2021 EIP. The RSU Agreement provides that RSUs will vest over a fixed period and be paid as shares of common stock, and that the unvested RSUs will expire upon certain terminations of the grantees’ employment or other service relationship with us. The Stock Option Agreement provides that stock options will vest over a fixed period, and that the unvested options will expire upon certain terminations of the grantees’ employment or other service relationship with us. We had 171,422 and 1,315,646 shares available for grant as of March 31, 2024 and December 31, 2023, respectively. The following table summarizes our RSU activity under the 2021 EIP: (In thousands, except per share amounts) Number of RSUs Weighted Average Grant Date Fair Value Per Share Outstanding as of December 31, 2023 522 $ 3.10 RSUs granted 820 $ 0.31 RSUs vested and issued (204) $ 3.15 RSUs forfeited (42) $ 18.03 Outstanding as of March 31, 2024 1,096 $ 1.04 During the three months ended March 31, 2024, 181,638 RSUs were accelerated under the 2021 EIP in connection with the Sale of Cloudbreak, as discussed in Note 1, Organization and Business . As of March 31, 2024, there was $0.9 million of unrecognized stock-based compensation expense related to RSUs, expected to be recognized over a weighted-average period of 1.28 years. The following table summarizes our stock options granted during the three months ended March 31, 2024 : (In thousands, except per share amounts) Number of Options Weighted Average Grant Date Fair Value Per Share Outstanding as of December 31, 2023 — $ — Options granted 1,300 $ 0.41 Outstanding as of March 31, 2024 1,300 $ 0.41 For the options granted during the three months ended March 31, 2024, the fair value of stock options granted to employees was estimated using the Black-Scholes option-pricing model and with the following weighted average assumptions presented below: March 31, 2024 Expected term (years) 5 to 5.5 Expected volatility 110.0 % Expected dividend yield — % Risk-free interest rate 4.2 % As of March 31, 2024, there was $0.6 million of unrecognized stock-based compensation expense related to stock options, expected to be recognized over a weighted-average period of 2.93 years. 2023 Inducement Equity Incentive Plan On May 1, 2023, for purposes of facilitating grants of equity awards to individuals as an inducement to the commencement of employment with us, our Board of Directors approved and adopted each of the UpHealth, Inc. Inducement Equity Incentive Plan (the “2023 IEIP”) providing for the issuance of an aggregate of up to 600,000 shares of UpHealth common stock pursuant to awards granted thereunder, and a form of Inducement RSU Agreement and Notice of Grant (the “Inducement RSU Agreement”) that we will generally use for grants under the 2023 IEIP. The Inducement RSU Agreement provides that RSUs will vest over a fixed period and be paid as shares of common stock, and that the unvested RSUs will expire upon certain terminations of the grantees’ employment or other service relationship with us. The 2023 IEIP does not provide for an automatic increase in the number of shares of common stock reserved for issuance pursuant to awards granted under the 2023 IEIP. We had 200,000 shares outstanding at weighted average grant date fair value of $1.24 as of both March 31, 2024 and December 31, 2023. We had 400,000 shares available for grant under the 2023 IEIP as of both March 31, 2024 and December 31, 2023. As of March 31, 2024, there was $0.1 million of unrecognized stock-based compensation expense related to RSUs, expected to be recognized over a weighted-average period of 2.14 years. Stock-based Compensation During the three months ended March 31, 2024 and 2023, we recorded stock-based compensation expense totaling $0.9 million and $1.0 million, respectively, all of which was attributed to our general and administrative function. In addition, we recorded $0.3 million related to the acceleration of equity awards in connection with the Sale of Cloudbreak, which is included in gain on sale of business in the unaudited condensed consolidated statements of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As discussed in Note 1, Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial results of UpHealth Holdings and its subsidiaries for the three month ended March 31, 2023 are included in our unaudited condensed consolidated financial statements and the financial position of UpHealth Holdings as of March 31, 2024 and December 31, 2023 and the financial results of UpHealth Holdings and its subsidiaries for the three months ended March 31, 2024 are not included in our unaudited condensed consolidated financial statements. Also, as discussed in Note 3 Discontinued Operations , on November 16, 2023 we agreed to sell 100% of the equity interest in Cloudbreak to Forest Buyer, LLC. The Sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023, as well as the gain on Sale of Cloudbreak, as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For the three months ended March 31, 2024, the net income from discontinued operations is net of $19.9 million of income tax expense, which consists of $1.2 million of tax expense related to the operations of Cloudbreak prior to the Sale, and $18.7 million of tax expense from the Sale of Cloudbreak. The income tax expense from continuing operations was $4.5 million and zero in the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, $4.5 million of tax expense was recorded related to the recognition of prior period liabilities for uncertain tax positions that were previously recognized in accordance with ASC 740 as contra-balances in the deferred tax asset account because the Company had net operating loss carryforwards against which these uncertain tax positions could be settled. Since the deferred tax assets had a full valuation allowance against them, there was no net impact to income tax expense when the liabilities for uncertain tax positions were reported in the prior year. In the current year, the gain on Sale of Cloudbreak will cause the net operating losses to be utilized and the liability for uncertain tax positions is now recognized as a liability on our balance sheet. We evaluate our deferred tax assets periodically to determine if valuation allowances are required. Ultimately, the realization of deferred tax assets is dependent upon generation of future taxable income during those periods in which temporary differences become deductible and/or tax attributes can be utilized. To this end, we consider the level of historical taxable income, the scheduled reversal of deferred tax liabilities, tax-planning strategies, and projected future taxable income. Based on these above considerations, and consistent with our conclusion as of December 31, 2023, we continue to believe it is more likely than not that a portion of the benefit from the deferred tax assets will not be realized, and as such have recorded a valuation allowance of $42.8 million against our deferred tax assets as of March 31, 2024. The net change in the valuation allowance for the three months ended March 31, 2024 was a reduction of $6.0 million. The total amount of liabilities for uncertain tax positions as of March 31, 2024 and December 31, 2023 was $4.5 million. The Internal Revenue Service (“IRS”) audited the 2008 and 2009 tax returns for Thrasys, a business that was since made a part of our Integrated Care Management segment, for the proper year of inclusion in income of an approximately $15 million payment on the license of certain intellectual property rights. Thrasys originally included the $15 million payment in income on its 2010 S Corporation tax return, matching the year of inclusion for financial accounting purposes. The corporate level tax was paid to California and the business passed the gain through to its shareholders. The IRS has asserted that Thrasys owes an entity-level tax of approximately $5 million for 2008, or in the alternative, the business owes C Corporation tax of approximately $5 million for 2009 as a built-in gain. In addition, Thrasys could be assessed additional California franchise tax of approximately $1.3 million; and if additional income taxes are imposed, interest will be charged at approximately 4% to 10% per year, compounded annually, resulting in potential interest of approximate $4 million. The IRS has not asked that penalties be imposed. The matter is currently pending before the U.S. Tax Court, Docket 11565-15. There are related tax cases for some of the former shareholders of Thrasys for additional income taxes due if the gain is shifted to 2009 without triggering the entity-level tax on the business as an S corporation. On December 4, 2018, the IRS filed a motion for summary judgment; however, Thrasys prevailed, and the motion was denied by the U.S. Tax court. In January 2020, Thrasys filed a motion for summary judgment arguing that either the gain was properly reported in 2010 and all taxes have been paid or in the alternative it should have been taxable in 2009 with no built-in gains tax. In both cases, there would be no additional income tax due for 2008 or 2009 to be paid by the business. The IRS filed an objection to the business’ motion. On March 3, 2021, the U.S. Tax Court, without consideration of the merits of the case, issued a very brief court order dismissing Thrasys’ motion. Had the motion been granted, the need for a trial would have been obviated. When we acquired Thrasys in November 2020, all of the former shareholders of the business agreed to indemnify us for any losses as a result of this dispute with the IRS. Thrasys filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code commencing a Chapter 11 case in the Bankruptcy Court on October 20, 2023. As a result, the automatic stay imposed by section 362(a) of the Bankruptcy Code became immediately effective, and, on October 30, 2023, the U.S. Tax Court entered an order staying all proceedings in the case. On November 17, 2023, the IRS filed before the Bankruptcy Court an amended proof of claim asserting a priority claim under section 507(a)(8) of the Bankruptcy Code in the amount of $17,282,914.83 (the “IRS Proof of Claim”) based on both of the IRS’s alternative positions. On March 14, 2024, the Thrasys filed a motion in the Bankruptcy Court to estimate the IRS Proof of Claim pursuant to sections 502(c) and 105 (a) of the Bankruptcy Code, or, alternatively pursuant to section 505 of the Bankruptcy Code, and believe that it should be substantially reduced to an amount between $0 to approximately $166,835. The Debtors withdrew without prejudice the estimation motion with respect to the IRS Proof of Claim. On April 23, 2024, the Debtors filed an objection to the IRS Proof of Claim, seeking to disallow the IRS Proof of Claim in its entirety or reduce it to approximately $161,000. The ultimate outcome of this matter is unknown at this time. On March 21, 2024, the California Franchise Tax Board (the “FTB”) filed before the Bankruptcy Court a proof of claim arising out of the same facts described above against Thrasys asserting a claim of $6,983,089.81, with $6,226,194.94 of the claim allegedly entitled to priority under section 507(a)(8) of the Bankruptcy Code (the “FTB Proof of Claim”). According to the FTB Proof of Claim, the basis of the asserted liability is the FTB's “understanding that [Thrasys] and the IRS are in the process of resolving disputes concerning tax years 2008, 2009, and 2010.” The FTB states that the claim was submitted to “protect its interests” and that it “will amend the claim when issues are resolved between the IRS and” Thrasys. While Thrasys disputes any such liability, the ultimate outcome of this matter is unknown at this time. Thrasys is a subsidiary of UpHealth Holdings, which we deconsolidated as of September 30, 2023 (as discussed in Note 1, Organization and Business ). |
Income (Loss) Per Share
Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share applicable to common stockholders is computed by dividing income (loss) applicable to common stockholders by the weighted average number of common shares outstanding. Diluted income (loss) per share assumes the conversion of any convertible securities using the treasury stock method or the if-converted method. Three Months Ended March 31, (In thousands, except per share data) 2024 2023 Numerator: Net loss from continuing operations $ (11,879) $ (13,733) Net income from discontinued operations, net of tax 37,300 6,098 Net income (loss) 25,421 (7,635) Less: net income attributable to noncontrolling interests — 448 Net income (loss) attributable to UpHealth, Inc. $ 25,421 $ (8,083) Denominator: Weighted average shares outstanding - basic and diluted 18,699 15,730 Net income (loss) per share - basic and diluted Continuing operations $ (0.64) $ (0.87) Discontinued operations, net of tax $ 1.99 $ 0.39 Attributable to UpHealth, Inc. $ 1.36 $ (0.51) The calculation of income (loss) per share excluded the following because the effect would be anti-dilutive: Three Months Ended March 31, (In thousands, except per share data) 2024 2023 2021 Public, Private and PIPE Warrants at a $115.00 per share conversion price 1,812 1,812 2023 Private Placement Series A and B Warrants at a $2.04 per share conversion price 6,000 6,000 Stock options 1,348 138 Restricted stock units 1,296 1,342 2025 Notes at a $17.50 per share conversion price (1) 3,270 3,857 2026 Notes at a $106.50 per share conversion price 1,080 1,080 (1) Subject to the occurrence of certain corporate events. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our business was organized into three operating business segments and one non-operating business segment: • Services—consisting of Behavioral and Pharmacy businesses; • Virtual Care Infrastructure—consisting of Telehealth business; • Integrated Care Management—consisting of SaaS business; and • Corporate—consisting of parent company. As discussed in Note 1, Organization and Business , as of March 16, 2024, UpHealth no longer offers Virtual Care Infrastructure or Integrated Care Management platforms and has repositioned its business efforts to continue growth in its Services division as a leading provider of a full continuum of behavioral health services. TTC, UpHealth’s remaining operating company, provides behavioral healthcare treatment services by utilizing psychiatrists, physicians, advanced nurse practitioners, physician assistants, psychologists, licensed therapists, and clinical social workers in a full continuum of care from inpatient to outpatient levels of care. However, until UpHealth Holdings emerges from bankruptcy pursuant to a restructuring plan, the operations of UpHealth Holdings and its subsidiaries, including TTC, will remain deconsolidated from the rest of UpHealth. As a result, subsequent to the Sale of Cloudbreak on March 15, 2024, the financial position, results of operations, and cash flows of UpHealth will solely consist of the operations of UpHealth, which comprises a fourth non-operating business segment, Corporate, consisting solely of the operating expenses of UpHealth as the parent company of TTC. In the Corporate segment, we perform executive, administrative, finance, human resources, legal, and information technology services for UpHealth, Inc. and for its subsidiaries, managed in a corporate shared services environment. Since they are not the responsibility of segment operating management, they are not allocated to the operating segments and instead reported within Corporate. The reportable segments were consistent with how management viewed our services and products and the financial information reviewed by the chief operating decision makers. We managed our businesses as components of an enterprise for which separate information is available and is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and assess performance. We evaluate performance based on several factors, of which Revenues, Gross Profit and Total Assets by service and product, are the primary financial measures: Revenues by segment consisted of the following: Three Months Ended March 31, In thousands 2024 2023 Services $ — $ 20,814 Integrated Care Management — 3,873 Total revenues $ — $ 24,687 Gross profit by segment consisted of the following: Three Months Ended March 31, In thousands 2024 2023 Services $ — $ 9,911 Integrated Care Management — 2,580 Total gross profit $ — $ 12,491 Total long-lived assets by segment consisted of the following: In thousands March 31, 2024 December 31, 2023 Corporate $ 878 $ 1,074 Total long-lived assets $ 878 $ 1,074 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases As discussed in Note 1, Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial results of UpHealth Holdings and its subsidiaries for the three month ended March 31, 2023 are included in our unaudited condensed consolidated financial statements and the financial position of UpHealth Holdings as of March 31, 2024 and December 31, 2023 and the financial results of UpHealth Holdings and its subsidiaries for the three months ended March 31, 2024 are not included in our unaudited condensed consolidated financial statements. Also, as discussed in Note 3 Discontinued Operations , on November 16, 2023 we agreed to sell 100% of the equity interest in Cloudbreak to Forest Buyer, LLC. The Sale closed on March 15, 2024. Accordingly, we have presented the financial position of Cloudbreak as of December 31, 2023 as held for sale and the results of operations of Cloudbreak for the period from January 1, 2024 to March 15, 2024 and for the three months ended March 31, 2023 as discontinued operations in the accompanying unaudited condensed consolidated financial statements. We lease real estate for our offices as well as certain equipment under operating leases with varying expiration dates through 2027. Leases are categorized at their commencement date, which is the date we take possession or control of the underlying asset. Generally, the term of real estate leases ranges from 1 to 5 years at inception of the contract and the term for equipment leases ranges from 1 to 3 years at the inception of the contract. The components of lease expense consisted of the following for the three months ended March 31, 2024 and 2023: March 31, 2024 March 31, 2023 In thousands Third Party Related Party Total Third Party Related Party Total Operating lease cost 42 — 42 520 98 $ 618 Short-term lease cost — — — 17 67 $ 84 Variable lease cost — — — 15 — $ 15 Sublease income — — — (2) — $ (2) Total lease cost $ 42 $ — $ 42 $ 550 $ 165 $ 715 Lease-related assets and liabilities recorded on the unaudited condensed consolidated balance sheets are as follows: March 31, 2024 December 31, 2023 In thousands Third Party Third Party Assets Operating lease right-of-use assets 344 370 Total leased assets $ 344 $ 370 Liabilities Operating lease liabilities: Lease liabilities, current 188 183 Lease liabilities, noncurrent 560 610 Total leased liabilities $ 748 $ 793 Other information consisted of the following: March 31, 2024 March 31, 2023 In thousands Third Party Related Party Total Third Party Related Party Total Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 45 $ — $ 45 $ 317 $ 95 $ 412 The following table summarizes our lease term and discount rate assumptions as of March 31, 2024: March 31, 2024 Third Party Related Party Total Weighted-average remaining lease term (years): Operating leases 3.42 N/A 3.42 Weighted-average discount rate: Operating leases 9.1 % N/A 9.1 % Undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year, as of March 31, 2024, have been reconciled to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2024 as follows: March 31, 2024 Operating Leases In thousands Third Party Remaining 2024 $ 182 2025 250 2026 257 2027 175 Total lease payments 864 Less: interest 116 Present value of lease liabilities $ 748 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Operating leases See Note 13, Leases , for commitments related to our operating leases. Contingencies From time to time, we may be subjected to claims or lawsuits which arise in the ordinary course of business, including the previously disclosed tax matter and matters described below. See Note 10, Income Taxes , for further information. Estimates for resolution of legal and other contingencies are accrued when losses are probable and reasonably estimable in accordance with ASC 450, Contingencies . Except as set forth below, in the opinion of management, after consulting with legal counsel, none of these other claims are currently expected to have a material adverse effect on our consolidated results of operations, financial position or cash flows. Advisory Services Agreement Dispute As discussed in Note 1, Organization and Business , since 2021, UpHealth Holdings has been a party to a legal action in the state court in New York entitled Needham & Company LLC (“Needham”) v. UpHealth Holdings, Inc. and UpHealth Services, Inc. (the “Needham Action”), which arose out of UpHealth Services’ engagement of Needham to provide placement and other financial advisory services. On September 14, 2023, the court in New York issued a Decision and Order granting summary judgment in favor of Needham and denying UpHealth Holdings’ and UpHealth Services’ motion for summary judgment. The court in New York entered that Decision and Order on its docket on September 15, 2023. The Decision and Order concluded that Needham is entitled to a fee in the amount of $31.3 million, plus interest. On September 18, 2023, the court in New York signed a judgment against UpHealth Holdings and UpHealth Services in the amount of $31.3 million, plus prejudgment interest of $6.5 million, for a total judgment of $37.8 million, plus post-judgment interest of 9% per year. Notwithstanding the filing of the voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, and the automatic stay pursuant to section 362(a) of the Bankruptcy Code, the Clerk of Court of the court in New York entered the judgment in favor of Needham on the court’s docket on September 27, 2023. On November 13, 2023, UpHealth Holdings entered into a stipulation with Needham in the Bankruptcy Court providing that, to the extent it applies, the automatic stay pursuant to section 362(a) of the Bankruptcy Code shall be deemed modified for the sole and limited purpose of authorizing UpHealth Holdings and UpHealth Services to appeal the New York court’s judgment (and for Needham to be able to participate in the appeal). The Bankruptcy Court entered an order approving this stipulation on November 30, 2023. On December 6, 2023, UpHealth Holdings and UpHealth Services, Inc. appealed the judgment entered in New York state court to the New York Supreme Court’s Appellate Division, First Department. On May 9, 2024, the Appellate Division issued an order affirming the judgment in full. As a result of the summary judgment, in the three months ended September 30, 2023, we recorded additional expense of $29.8 million, which was included in acquisition, integration, and transformation costs in our unaudited condensed consolidated statements of operations, which increased our total liability to $37.8 million as of September 30, 2023. As discussed in Note 1, Organization and Business , we deconsolidated UpHealth Holdings and its subsidiaries as of September 30, 2023; accordingly, the financial position of UpHealth Holdings subsequent to September 30, 2023 is not included in our unaudited condensed consolidated financial statements. Indemnification |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Management has determined that no material events or transactions have occurred subsequent to the unaudited condensed consolidated balance sheet date, other than those events noted below, that require disclosure in the unaudited condensed consolidated financial statements. As discussed in Note 1, Organization and Business , and Note 14, Commitments and Contingencies , on May 9, 2024, the New York Supreme Court’s Appellate Division issued an order affirming in full the New York trial court’s $37.8 million judgment. As discussed in Note 1, Organization and Business , on May 20, 2024, UpHealth Holdings has determined that the sale of UpHealth Holdings’ equity interest in TTC may be appropriate to maximize value to the UpHealth Holdings’ estate because a sale of the equity interests in TTC may provide funding necessary for UpHealth Holdings to consummate a Chapter 11 plan and successfully exit its Chapter 11 case. As discussed in Note 1, Organization and Business , and Note 7, Debt , the funds in the Notes Escrow Account have been released on June 3, 2024, and have been used to satisfy in full, plus accrued interest, the 2026 Notes and to repurchase approximately $19.7 million of the 2025 Notes, plus accrued interest, following which approximately $37.3 million in aggregate principal amount of 2025 Notes remain outstanding, excluding $0.2 million of unamortized debt issuance costs, which will constitute the entirety of our outstanding debt. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Our unaudited condensed consolidated financial statements, including the condensed notes thereto, are unaudited and exclude some of the disclosures required in audited consolidated financial statements. Our unaudited condensed consolidated balance sheet as of December 31, 2023 has been derived from our audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, our accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with U.S. GAAP. The results of operations in the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any future period. Our accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2023. |
Principles of Consolidation | Our unaudited condensed consolidated financial statements include the accounts of UpHealth and its consolidated subsidiaries. As described in Note 1. Organization and Business , our Glocal subsidiary was deconsolidated effective July 1, 2022 and our UpHealth Holdings subsidiary was deconsolidated effective September 30, 2023. As also described in Note 1. Organization and Business , our Innovations Group subsidiary was sold effective May 11, 2023, and our Cloudbreak subsidiary was sold effective March 15, 2024. We follow the FASB ASC guidance for identification and reporting of entities over which control is achieved through means other than voting rights. The guidance defines such entities as VIEs. We consolidate VIEs when we have variable interests and are the primary beneficiary. We continually evaluate our involvement with VIEs to determine when these criteria are met. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and accompanying notes thereto. Significant estimates and assumptions made by management include the determination of: • The identification and reporting of VIEs. We consolidate VIEs when we have variable interests and are the primary beneficiary. We continually evaluate our involvement with VIEs to determine when these criteria are met; • The valuation of equity investments; • The valuation of assets acquired and liabilities assumed for business combinations, including intangible assets and goodwill; • The estimated economic lives and recoverability of intangible assets; • The valuations prepared in connection with the review of goodwill, intangible assets, and other long-lived assets for impairment; • The timing and amount of revenues to be recognized, including standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations; • The identification of and provision for uncollectible accounts receivable; • The capitalization and useful life of internal-use software development costs; • The valuation of derivatives and warrants; and • The recognition, measurement, and valuation of current and deferred income taxes and uncertain tax positions. Actual results could differ materially from those estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities. |
Reclassifications | Reclassifications The accompanying unaudited condensed consolidated financial statement include accounts of UpHealth and its wholly owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the fiscal year 2023 condensed consolidated financial statements to conform to the fiscal year 2024 presentation. The reclassification had no impact on net loss, total assets, total liabilities, or stockholders' equity. |
New Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Pronouncements | New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (the “CODM”) and included within each reported measure of a segment’s profit or loss. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements and early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as additional disclosure on income taxes paid. The ASU is effective on a prospective basis for fiscal years beginning after December 15, 2024 for public entities and early adoption is permitted. We are currently evaluating the impact of adopting of this ASU on our consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) . This ASU simplifies the accounting for convertible instruments by eliminating the conversion option separation model for convertible debt that can be settled in cash and by eliminating the measurement model for beneficial conversion features. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. This ASU also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This ASU was effective for us on January 1, 2024. Early adoption is permitted, but no earlier than the fiscal year beginning on January 1, 2021, including interim periods within that fiscal year. The adoption of this ASU did not have a material impact on our unaudited condensed consolidated financial statements. |
Fair Value of Financial Instruments | Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. Fair value measurements are categorized into one of three levels of the fair value hierarchy based on the lowest level of significant input used. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Considerable judgment and a high degree of subjectivity are involved in developing these estimates. These estimates may differ from the actual amounts that we could realize upon settlement. The fair value hierarchy is as follows: Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2 - Other observable inputs, either directly or indirectly, other than quoted prices included in Level 1, including: • Quoted prices for similar assets/liabilities in active markets; • Quoted prices for identical or similar assets/liabilities in non-active markets (e.g., few transactions, limited information, non-current prices, high variability over time); • Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, volatilities, default rates); and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Unobservable inputs that cannot be corroborated by observable market data. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | The following table presents information related to the major classes of assets and liabilities of Cloudbreak that were classified as held for sale in our unaudited condensed consolidated balance sheets (in thousands): (In thousands) March 14, 2024 December 31, 2023 Current assets: Accounts receivable, net $ 16,453 $ 14,655 Prepaid expenses and other current assets 908 942 Assets held for sale, current 17,361 15,597 Property and equipment, net 8,463 8,823 Operating lease right-of-use assets 1,436 1,532 Intangible assets, net 21,891 22,717 Goodwill 80,310 80,310 Other assets 108 168 Assets held for sale, noncurrent 112,208 113,550 Total assets held for sale $ 129,569 $ 129,147 Current liabilities: Accounts payable $ 4,069 $ 4,834 Accrued expenses 3,287 2,358 Deferred revenue 39 48 Lease liabilities, current 3,108 3,339 Liabilities held for sale, current 10,503 10,579 Lease liabilities, noncurrent 2,133 2,663 Liabilities held for sale, noncurrent 2,133 2,663 Total liabilities held for sale $ 12,636 $ 13,242 The following table presents information related to the major classes of line items constituting the net income from discontinued operations, net of tax, in our unaudited condensed consolidated statements of operations (in thousands): (In thousands) Period from January 1 to March 14, 2024 Three Months Ended March 31, 2023 Revenues: Services $ 15,168 $ 17,328 Products 68 130 Total revenues 15,236 17,458 Costs of revenues: Services 6,840 7,226 Licenses and subscriptions 4 — Products 114 47 Total costs of revenues 6,958 7,273 Gross profit 8,278 10,185 Operating expenses: Sales and marketing 1,444 2,092 Research and development 253 242 General and administrative 1,301 456 Depreciation and amortization 959 1,086 Stock compensation expense — 8 Acquisition, integration, and transformation costs — 46 Total operating expenses 3,957 3,930 Income from operations 4,321 6,255 Other income (expense): Gain on sale of business 53,104 — Other expense, net, including interest income (202) (157) Total other income (expense) 52,902 (157) Income from discontinued operations before income taxes 57,223 6,098 Income tax expense (19,923) — Net income from discontinued operations, net of tax $ 37,300 $ 6,098 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenues by service offering consisted of the following : Three Months Ended March 31, (In thousands) 2024 2023 Services $ — $ 13,613 Licenses and subscriptions — 1,936 Products — 9,138 Total revenues $ — $ 24,687 |
Schedule of Change in Contract Assets and Contract Liabilities | The change in contract assets, consisting of unbilled receivables, was as follows: (In thousands) March 31, 2024 March 31, 2023 Unbilled receivables, beginning of period $ — $ 694 Reclassifications to billed receivables — (694) Revenues recognized in excess of period billings — 668 Unbilled receivables, end of period $ — $ 668 The change in contract liabilities, consisting of deferred revenue, was as follows: (In thousands) March 31, 2024 March 31, 2023 Deferred revenue, beginning of period $ — $ 2,659 Revenues recognized from balances held at the beginning of the period — (1,442) Revenues deferred from period collections on unfulfilled performance obligations — 253 Deferred revenue, end of period $ — $ 1,470 |
Supplemental Financial Statem_2
Supplemental Financial Statement Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Computer equipment, furniture and fixtures 43 43 Capitalized software development costs 1,997 1,997 2,040 2,040 Accumulated depreciation and amortization (1,506) (1,336) Total property and equipment, net $ 534 $ 704 |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Accrued professional fees $ 527 $ 1,499 Accrued payroll and bonuses 6,309 5,691 Accrued interest on debt 2,495 846 Other accruals 182 196 Total accrued expenses $ 9,513 $ 8,232 |
Schedule of Other Noncurrent Liabilities | Other liabilities, noncurrent consisted of the following: (In thousands) March 31, 2024 December 31, 2023 Derivative liability, noncurrent $ 59 $ 59 Warrant liabilities, noncurrent 17 17 Liability for uncertain tax positions, noncurrent 4,519 $ — Total other liabilities, noncurrent $ 4,595 $ 76 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: (In thousands) March 31, 2024 December 31, 2023 2025 Notes $ 57,227 $ 57,227 2026 Notes 115,000 115,000 Total debt 172,227 172,227 Less: unamortized original issue and debt discount (23,068) (25,703) Total debt, net of unamortized original issue and debt discount 149,159 146,524 Less: current portion of debt (111,891) — Noncurrent portion of debt $ 37,268 $ 146,524 |
Schedule of Debt, Interest Expense | Total interest expense related to the 2025 Notes consisted of the following: Three Months Ended March 31, (In thousands) 2024 2023 Contractual variable interest expense $ 1,749 $ 2,298 Debt issuance costs amortization 138 162 Total interest expense $ 1,887 $ 2,460 Total interest expense related to the 2026 Notes consisted of the following: Three Months Ended March 31, (In thousands) 2023 2022 Contractual variable interest expense $ 1,145 $ 1,797 Derivative accretion 287 2,210 Debt issuance costs amortization 2,210 287 Total interest expense $ 3,642 $ 4,294 |
Schedule of Long-term Debt Contractual Maturities | As of March 31, 2024, long-term debt contractual maturities, excluding unamortized original issue discount and debt issuance costs, were as follows: (In thousands) 2024 (remaining nine months) $ 134,706 2025 37,521 Total $ 172,227 |
Fair Value of Financial Measure
Fair Value of Financial Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value On a Recurring Basis | The following tables present information about our financial liabilities measured at fair value on are recurring basis: March 31, 2024 (In thousands) Level 1 Level 2 Level 3 Total Liabilities: Derivative liability $ — $ — $ 59 $ 59 Warrant liability — 17 — 17 Total liabilities $ — $ 17 $ 59 $ 76 December 31, 2023 (In thousands) Level 1 Level 2 Level 3 Total Liabilities: Derivative liability $ — $ — $ 59 $ 59 Warrant liability — 17 — 17 Total liabilities $ — $ 17 $ 59 $ 76 |
Schedule of Change in the Fair Value of the Level 3 Derivative Liability | The change in the fair value of the Level 3 derivative liability for the three months ended March 31, 2024 and 2023 was as follows: (In thousands) March 31, 2024 December 31, 2023 Fair value, beginning of period $ 59 $ 56 Change in fair value — 3 Fair value, end of period $ 59 $ 59 |
Capital Structure (Tables)
Capital Structure (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance as of March 31, 2024 were as follows: (In thousands) Number of Shares Restricted stock units (“RSUs”) and stock options outstanding under 2021 EIP 2,396 RSUs outstanding under 2023 IEIP 200 Stock options outstanding under Cloudbreak Plan 48 Shares issuable upon conversion of 2025 Notes 3,270 Shares issuable upon conversion of 2026 Notes 1,080 Shares issuable upon conversion of 2021 Public Warrants 1,725 Shares issuable upon conversion of the 2023 Private Placement Series A Warrants 3,000 Shares issuable upon conversion of the 2023 Private Placement Series B Warrants 3,000 Shares issuable upon conversion of 2021 Private Warrants 57 Shares issuable upon conversion of 2021 PIPE Warrants 30 Shares available for future grant under 2021 EIP 171 Shares available for future grant under 2023 IEIP 400 Total 15,377 |
Schedule of RSU Activity | The following table summarizes our RSU activity under the 2021 EIP: (In thousands, except per share amounts) Number of RSUs Weighted Average Grant Date Fair Value Per Share Outstanding as of December 31, 2023 522 $ 3.10 RSUs granted 820 $ 0.31 RSUs vested and issued (204) $ 3.15 RSUs forfeited (42) $ 18.03 Outstanding as of March 31, 2024 1,096 $ 1.04 |
Schedule of Stock Option Activity | The following table summarizes our stock options granted during the three months ended March 31, 2024 : (In thousands, except per share amounts) Number of Options Weighted Average Grant Date Fair Value Per Share Outstanding as of December 31, 2023 — $ — Options granted 1,300 $ 0.41 Outstanding as of March 31, 2024 1,300 $ 0.41 |
Schedule of Stock Options, Fair Value Weighted Average Assumptions | For the options granted during the three months ended March 31, 2024, the fair value of stock options granted to employees was estimated using the Black-Scholes option-pricing model and with the following weighted average assumptions presented below: March 31, 2024 Expected term (years) 5 to 5.5 Expected volatility 110.0 % Expected dividend yield — % Risk-free interest rate 4.2 % |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Income (Loss) Per Share | Three Months Ended March 31, (In thousands, except per share data) 2024 2023 Numerator: Net loss from continuing operations $ (11,879) $ (13,733) Net income from discontinued operations, net of tax 37,300 6,098 Net income (loss) 25,421 (7,635) Less: net income attributable to noncontrolling interests — 448 Net income (loss) attributable to UpHealth, Inc. $ 25,421 $ (8,083) Denominator: Weighted average shares outstanding - basic and diluted 18,699 15,730 Net income (loss) per share - basic and diluted Continuing operations $ (0.64) $ (0.87) Discontinued operations, net of tax $ 1.99 $ 0.39 Attributable to UpHealth, Inc. $ 1.36 $ (0.51) |
Schedule of Calculation of Income (Loss) Per Share | The calculation of income (loss) per share excluded the following because the effect would be anti-dilutive: Three Months Ended March 31, (In thousands, except per share data) 2024 2023 2021 Public, Private and PIPE Warrants at a $115.00 per share conversion price 1,812 1,812 2023 Private Placement Series A and B Warrants at a $2.04 per share conversion price 6,000 6,000 Stock options 1,348 138 Restricted stock units 1,296 1,342 2025 Notes at a $17.50 per share conversion price (1) 3,270 3,857 2026 Notes at a $106.50 per share conversion price 1,080 1,080 (1) Subject to the occurrence of certain corporate events. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Segment | Revenues by segment consisted of the following: Three Months Ended March 31, In thousands 2024 2023 Services $ — $ 20,814 Integrated Care Management — 3,873 Total revenues $ — $ 24,687 Gross profit by segment consisted of the following: Three Months Ended March 31, In thousands 2024 2023 Services $ — $ 9,911 Integrated Care Management — 2,580 Total gross profit $ — $ 12,491 Total long-lived assets by segment consisted of the following: In thousands March 31, 2024 December 31, 2023 Corporate $ 878 $ 1,074 Total long-lived assets $ 878 $ 1,074 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense consisted of the following for the three months ended March 31, 2024 and 2023: March 31, 2024 March 31, 2023 In thousands Third Party Related Party Total Third Party Related Party Total Operating lease cost 42 — 42 520 98 $ 618 Short-term lease cost — — — 17 67 $ 84 Variable lease cost — — — 15 — $ 15 Sublease income — — — (2) — $ (2) Total lease cost $ 42 $ — $ 42 $ 550 $ 165 $ 715 Other information consisted of the following: March 31, 2024 March 31, 2023 In thousands Third Party Related Party Total Third Party Related Party Total Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 45 $ — $ 45 $ 317 $ 95 $ 412 |
Schedule of Company's Lease Assets and Liabilities, Lease Term and Discount Rate Assumptions | Lease-related assets and liabilities recorded on the unaudited condensed consolidated balance sheets are as follows: March 31, 2024 December 31, 2023 In thousands Third Party Third Party Assets Operating lease right-of-use assets 344 370 Total leased assets $ 344 $ 370 Liabilities Operating lease liabilities: Lease liabilities, current 188 183 Lease liabilities, noncurrent 560 610 Total leased liabilities $ 748 $ 793 The following table summarizes our lease term and discount rate assumptions as of March 31, 2024: March 31, 2024 Third Party Related Party Total Weighted-average remaining lease term (years): Operating leases 3.42 N/A 3.42 Weighted-average discount rate: Operating leases 9.1 % N/A 9.1 % |
Schedule of Undiscounted Future Minimum Lease Payments, Operating Lease Maturity | Undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year, as of March 31, 2024, have been reconciled to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2024 as follows: March 31, 2024 Operating Leases In thousands Third Party Remaining 2024 $ 182 2025 250 2026 257 2027 175 Total lease payments 864 Less: interest 116 Present value of lease liabilities $ 748 |
Organization and Business - (De
Organization and Business - (Details) | 3 Months Ended | |||||||||||||||||||||
May 09, 2024 USD ($) | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 18, 2024 USD ($) shares | Mar. 15, 2024 USD ($) escrow_account | Nov. 16, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 18, 2023 USD ($) | Sep. 15, 2023 USD ($) | May 11, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) shares | Jun. 03, 2024 USD ($) | Feb. 09, 2024 $ / shares | Dec. 31, 2023 USD ($) $ / shares shares | Nov. 28, 2023 $ / shares shares | Jun. 16, 2023 USD ($) | Jun. 09, 2023 USD ($) | Feb. 26, 2023 | Dec. 31, 2022 shares | Jun. 15, 2021 | Jun. 09, 2021 | Oct. 30, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 115 | |||||||||||||||||||||
Common stock outstanding (in shares) | shares | 18,811,398 | 18,671,142 | ||||||||||||||||||||
Preferred stock, outstanding (in shares) | shares | 0 | 0 | ||||||||||||||||||||
Purchase agreement cash consideration amount | $ 180,000,000 | $ 180,000,000 | ||||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.1000 | $ 0.0001 | $ 0.1000 | |||||||||||||||||||
Number of escrow accounts | escrow_account | 3 | |||||||||||||||||||||
Purchase agreement, adjustment escrow amount | $ 3,000,000 | |||||||||||||||||||||
Purchase agreement, tax escrow amount | 27,000,000 | |||||||||||||||||||||
Notes escrow amount | $ 139,000,000 | $ 139,000,000 | ||||||||||||||||||||
Aggregate carrying value | 172,227,000 | $ 172,227,000 | ||||||||||||||||||||
Gain (loss) on deconsolidation of subsidiary | $ 59,100,000 | |||||||||||||||||||||
Fair value of holdings and subsidiaries at deconsolidation | 75,600,000 | |||||||||||||||||||||
Carrying value at deconsolidation | $ 16,500,000 | |||||||||||||||||||||
Cash and cash equivalents | 955,000 | $ 13,333,000 | 2,548,000 | |||||||||||||||||||
Restricted cash | 169,388,000 | 0 | 0 | |||||||||||||||||||
Accumulated deficit | 598,627,000 | 624,048,000 | ||||||||||||||||||||
Glocal | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Step acquisition, ownership percentage after transaction | 100% | |||||||||||||||||||||
Innovations Group | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Consideration | $ 56,000,000 | |||||||||||||||||||||
Total loss on disposal group held for sale | $ 1,400,000 | |||||||||||||||||||||
Proceeds from sale of business, net of expenses | $ 54,900,000 | |||||||||||||||||||||
Innovations Group | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Total loss on disposal group held for sale | $ 500,000 | |||||||||||||||||||||
Innovations Group | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 100% | 100% | ||||||||||||||||||||
Glocal | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Common stock outstanding (in shares) | shares | 7,503,016 | |||||||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 94.81% | |||||||||||||||||||||
Preferred stock, outstanding (in shares) | shares | 24,867 | |||||||||||||||||||||
2026 Notes | Convertible notes | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Debt instrument, interest rate | 6.25% | 6.25% | ||||||||||||||||||||
Percentage of noteholders | 0.88 | |||||||||||||||||||||
Aggregate carrying value | 115,000,000 | 115,000,000 | ||||||||||||||||||||
2025 Notes | Convertible notes | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Percentage of noteholders | 0.69 | |||||||||||||||||||||
Premium percentage | 0.0500 | |||||||||||||||||||||
Purchase agreement, notes escrow fund estimated balance | $ 10,300,000 | |||||||||||||||||||||
Aggregate carrying value | $ 57,227,000 | $ 57,227,000 | $ 57,200,000 | |||||||||||||||||||
2025 Notes | Convertible notes | Subsequent Event | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Purchase agreement, notes escrow fund estimated balance | $ 19,700,000 | |||||||||||||||||||||
Aggregate carrying value | 37,300,000 | |||||||||||||||||||||
Unamortized debt issuance costs | $ 200,000 | |||||||||||||||||||||
Needham V. Uphealth Holdings | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Fees awarded excluding interest | $ 31,300,000 | $ 31,300,000 | ||||||||||||||||||||
Settlement interest | 6,500,000 | |||||||||||||||||||||
Amount awarded to other party | $ 37,800,000 | |||||||||||||||||||||
Annual settlement interest, percent | 9% | |||||||||||||||||||||
Needham V. Uphealth Holdings | Subsequent Event | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded to other party | $ 37,800,000 | |||||||||||||||||||||
Loss contingency accrual | $ 8,000,000 | |||||||||||||||||||||
Glocal Vs. Uphealth | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded from other party | $ 80,700,000 | |||||||||||||||||||||
Glocal Vs. Uphealth | Sabahat Azim | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded from other party | 10,140,625 | |||||||||||||||||||||
Additional damages from other party | 27,740,625 | |||||||||||||||||||||
Reimbursement of legal fees | 4,488,562 | |||||||||||||||||||||
Glocal Vs. Uphealth | Richa Azim | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded from other party | 10,140,625 | |||||||||||||||||||||
Additional damages from other party | 27,740,625 | |||||||||||||||||||||
Reimbursement of legal fees | 4,488,562 | |||||||||||||||||||||
Glocal Vs. Uphealth | Chowdhury | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded from other party | 1,382,812.5 | |||||||||||||||||||||
Additional damages from other party | 3,782,812.5 | |||||||||||||||||||||
Reimbursement of legal fees | 4,488,562 | |||||||||||||||||||||
Glocal Vs. Uphealth | Damodaran | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded from other party | 6,650,669.64 | |||||||||||||||||||||
Additional damages from other party | 18,193,526.79 | |||||||||||||||||||||
Reimbursement of legal fees | 4,488,562 | |||||||||||||||||||||
Glocal Vs. Uphealth | Kimberlite | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Amount awarded from other party | 1,185,267.86 | |||||||||||||||||||||
Additional damages from other party | 3,242,410.71 | |||||||||||||||||||||
Reimbursement of legal fees | $ 4,488,562 | |||||||||||||||||||||
Glocal Vs. Uphealth | Sabahat Azim, Richa Azim And Chowdhury | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Annual settlement interest, percent | 9% | |||||||||||||||||||||
Proceeds from reimbursement of emergency arbitration fees | $ 868,440 | |||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Number of shares called by each warrant (in shares) | shares | 1 | |||||||||||||||||||||
Common stock outstanding (in shares) | shares | 18,811,000 | 16,784,000 | 18,671,000 | 15,054,000 | ||||||||||||||||||
Common Stock | Glocal | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 95.29% | |||||||||||||||||||||
Preferred Stock | Glocal | ||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 37.52% |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) | Nov. 16, 2023 |
Cloudbreak Health, LLC. | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Noncontrolling interest, ownership percentage by parent | 100% |
Discontinued Operations - Sched
Discontinued Operations - Schedule of The Major Classes of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Mar. 14, 2024 | Dec. 31, 2023 |
Current assets: | |||
Assets held for sale, current | $ 0 | $ 15,597 | |
Assets held for sale, noncurrent | 0 | 113,550 | |
Current liabilities: | |||
Liabilities held for sale, current | 0 | 10,579 | |
Liabilities held for sale, noncurrent | $ 0 | 2,663 | |
Discontinued Operations Held for Sale | Cloudbreak Health, LLC. | |||
Current assets: | |||
Accounts receivable, net | $ 16,453 | 14,655 | |
Prepaid expenses and other current assets | 908 | 942 | |
Assets held for sale, current | 17,361 | 15,597 | |
Property and equipment, net | 8,463 | 8,823 | |
Operating lease right-of-use assets | 1,436 | 1,532 | |
Intangible assets, net | 21,891 | 22,717 | |
Goodwill | 80,310 | 80,310 | |
Other assets | 108 | 168 | |
Assets held for sale, noncurrent | 112,208 | 113,550 | |
Total assets held for sale | 129,569 | 129,147 | |
Current liabilities: | |||
Accounts payable | 4,069 | 4,834 | |
Accrued expenses | 3,287 | 2,358 | |
Deferred revenue | 39 | 48 | |
Lease liabilities, current | 3,108 | 3,339 | |
Liabilities held for sale, current | 10,503 | 10,579 | |
Lease liabilities, noncurrent | 2,133 | 2,663 | |
Liabilities held for sale, noncurrent | 2,133 | 2,663 | |
Total liabilities held for sale | $ 12,636 | $ 13,242 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Net Income from Discontinued Operations, Net of Tax (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | |
Mar. 14, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Other income (expense): | |||
Net income from discontinued operations, net of tax | $ 37,300 | $ 6,098 | |
Discontinued Operations Held for Sale | Cloudbreak | |||
Revenues: | |||
Total revenues | $ 15,236 | 17,458 | |
Total costs of revenues | 6,958 | 7,273 | |
Gross profit | 8,278 | 10,185 | |
Operating expenses: | |||
Sales and marketing | 1,444 | 2,092 | |
Research and development | 253 | 242 | |
General and administrative | 1,301 | 456 | |
Depreciation and amortization | 959 | 1,086 | |
Stock compensation expense | 0 | 8 | |
Acquisition, integration, and transformation costs | 0 | 46 | |
Total operating expenses | 3,957 | 3,930 | |
Income from operations | 4,321 | 6,255 | |
Other income (expense): | |||
Gain on sale of business | 53,104 | 0 | |
Other expense, net, including interest income | (202) | (157) | |
Total other income (expense) | 52,902 | (157) | |
Income from discontinued operations before income taxes | 57,223 | 6,098 | |
Income tax expense | (19,923) | $ (19,900) | 0 |
Net income from discontinued operations, net of tax | 37,300 | 6,098 | |
Services | Discontinued Operations Held for Sale | Cloudbreak | |||
Revenues: | |||
Total revenues | 15,168 | 17,328 | |
Total costs of revenues | 6,840 | 7,226 | |
Licenses and subscriptions | Discontinued Operations Held for Sale | Cloudbreak | |||
Revenues: | |||
Total costs of revenues | 4 | 0 | |
Products | Discontinued Operations Held for Sale | Cloudbreak | |||
Revenues: | |||
Total revenues | 68 | 130 | |
Total costs of revenues | $ 114 | $ 47 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Nov. 16, 2023 | |
Concentration Risk [Line Items] | |||
Impairment of contract assets | $ 0 | $ 0 | |
Revenue recognized, percentage | 5.80% | ||
Revenue Recognition Timing | Revenues | Transferred over Time | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 58% | ||
Cloudbreak Health, LLC. | |||
Concentration Risk [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 100% |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 0 | $ 24,687 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 13,613 |
Licenses and subscriptions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 1,936 |
Products | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 0 | $ 9,138 |
Revenues - Contract Assets (Det
Revenues - Contract Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Change In Contract With Customer, Asset [Roll Forward] | ||
Unbilled receivables, beginning of period | $ 0 | $ 694 |
Reclassifications to billed receivables | 0 | (694) |
Revenues recognized in excess of period billings | 0 | 668 |
Unbilled receivables, end of period | $ 0 | $ 668 |
Revenues - Contract Liabilities
Revenues - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Change In Contract With Customer, Liability [Roll Forward] | ||
Deferred revenue, beginning of period | $ 0 | $ 2,659 |
Revenues recognized from balances held at the beginning of the period | 0 | (1,442) |
Revenues deferred from period collections on unfulfilled performance obligations | 0 | 253 |
Deferred revenue, end of period | $ 0 | $ 1,470 |
Supplemental Financial Statem_3
Supplemental Financial Statement Information - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 14, 2024 | Dec. 31, 2023 | Nov. 16, 2023 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 200 | $ 400 | |||
Discontinued Operations Held for Sale | Cloudbreak Health, LLC. | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, net | $ 8,463 | $ 8,823 | |||
Accrued expenses | $ 3,287 | $ 2,358 | |||
Cloudbreak Health, LLC. | |||||
Property, Plant and Equipment [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 100% |
Supplemental Financial Statem_4
Supplemental Financial Statement Information - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,040 | $ 2,040 |
Accumulated depreciation and amortization | (1,506) | (1,336) |
Total property and equipment, net | 534 | 704 |
Computer equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 43 | 43 |
Capitalized software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,997 | $ 1,997 |
Supplemental Financial Statem_5
Supplemental Financial Statement Information - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued professional fees | $ 527 | $ 1,499 |
Accrued payroll and bonuses | 6,309 | 5,691 |
Accrued interest on debt | 2,495 | 846 |
Other accruals | 182 | 196 |
Accrued expenses | $ 9,513 | $ 8,232 |
Supplemental Financial Statem_6
Supplemental Financial Statement Information - Schedule of Other Liabilities, Noncurrent (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Derivative liability, noncurrent | $ 59 | $ 59 |
Warrant liabilities, noncurrent | 17 | 17 |
Liability for uncertain tax positions, noncurrent | 4,519 | 0 |
Total other liabilities, noncurrent | $ 4,595 | $ 76 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 14, 2024 | Dec. 31, 2023 | Nov. 16, 2023 | |
Goodwill [Line Items] | |||||
Goodwill, intangible asset, and other long-lived asset impairments | $ 0 | $ 495 | |||
Discontinued Operations Held for Sale | Cloudbreak Health, LLC. | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 80,310 | $ 80,310 | |||
Intangible assets, net | $ 21,891 | $ 22,717 | |||
Cloudbreak Health, LLC. | |||||
Goodwill [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 100% |
Debt - Narrative (Details)
Debt - Narrative (Details) | Mar. 31, 2024 USD ($) | Mar. 15, 2024 USD ($) | Feb. 09, 2024 USD ($) day | Jun. 16, 2023 USD ($) $ / shares shares | Jun. 15, 2023 USD ($) | Jun. 09, 2023 USD ($) | Aug. 12, 2022 USD ($) $ / shares shares | Jun. 15, 2021 USD ($) $ / shares shares | Jun. 03, 2024 USD ($) | Dec. 31, 2023 USD ($) | Dec. 15, 2023 | Nov. 16, 2023 | May 11, 2023 | Feb. 26, 2023 | Jun. 09, 2021 |
Debt Instrument [Line Items] | |||||||||||||||
Stock issued during period, reverse stock splits (in shares) | shares | 115,000 | ||||||||||||||
Stock issued during period, reverse stock splits | $ 700,000 | ||||||||||||||
Total debt | $ 172,227,000 | $ 172,227,000 | |||||||||||||
Purchase agreement, remaining portion of the estimated cash consideration | 139,000,000 | $ 139,000,000 | |||||||||||||
Debt, current | 111,891,000 | 0 | |||||||||||||
Debt, noncurrent | $ 37,268,000 | $ 146,524,000 | |||||||||||||
2025 Notes | Disposal Group, Not Discontinued Operations | Innovation Group | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Net proceeds | 0.20 | ||||||||||||||
2025 Notes | Convertible notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Principal amount | $ 43,357,000 | 67,500,000 | |||||||||||||
Proceeds from debt | 22,500,000 | ||||||||||||||
Repayments of convertible debt | $ 10,300,000 | ||||||||||||||
Payments of debt issuance costs | $ 1,500,000 | ||||||||||||||
Convertible, shares issuable (in shares) | shares | 3,270,114 | 3,857,142 | |||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 17.50 | $ 17.50 | |||||||||||||
Debt instrument, interest rate floor | 10.50% | ||||||||||||||
Effective interest rate | 14.33% | 14.38% | 14.41% | ||||||||||||
Debt redemption, repurchase increment | $ 1,000 | ||||||||||||||
Debt repurchase, percentage of principal amount | 100% | 105% | |||||||||||||
Sale of assets, net proceeds threshold for repurchase | $ 15,000,000 | ||||||||||||||
Sale of assets, cash repurchase price as a percentage of net proceeds | 20% | ||||||||||||||
Sale of assets, net proceeds threshold, redemption price percentage | 100% | ||||||||||||||
Repurchased face amount | $ 10,300,000 | ||||||||||||||
Percentage of principal amount redeemed | 15.20% | ||||||||||||||
Total debt | $ 57,227,000 | $ 57,200,000 | $ 57,227,000 | ||||||||||||
Premium percentage | 0.0500 | ||||||||||||||
Previously held number of business days before deadline for timely performance | day | 20 | ||||||||||||||
Current number of business days before deadline for timely performance | day | 7 | ||||||||||||||
Supplemental indentures, principal amount outstanding percent | 75.76% | ||||||||||||||
2025 Notes | Convertible notes | Subsequent Event | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repurchased face amount | $ 19,700,000 | ||||||||||||||
Total debt | 37,300,000 | ||||||||||||||
Unamortized debt issuance costs | $ 200,000 | ||||||||||||||
2025 Notes | Convertible notes | Secured Overnight Financing Rate (SOFR) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Basis spread on variable rate | 9% | ||||||||||||||
2026 Notes | Convertible notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Principal amount | $ 86,329,000 | $ 3,000,000 | $ 160,000,000 | ||||||||||||
Debt issuance costs | 2,200,000 | $ 8,100,000 | |||||||||||||
Repayments of convertible debt | $ 45,000,000 | ||||||||||||||
Convertible, shares issuable (in shares) | shares | 1,079,812 | 1,502,347 | |||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 106.50 | $ 106.50 | |||||||||||||
Debt repurchase, percentage of principal amount | 100% | ||||||||||||||
Sale of assets, cash repurchase price as a percentage of net proceeds | 100% | ||||||||||||||
Sale of assets, net proceeds threshold, redemption price percentage | 100% | ||||||||||||||
Total debt | 115,000,000 | 115,000,000 | |||||||||||||
Debt instrument, interest rate | 6.25% | 6.25% | |||||||||||||
Proceeds from issuance of long-term debt | $ 151,900,000 | ||||||||||||||
Fair value of derivative liability | $ 100,000 | $ 100,000 | |||||||||||||
Debt instrument, fact amount, per instrument | $ 2,000,000 | ||||||||||||||
Supplemental indentures, principal amount outstanding percent | 75.07% | ||||||||||||||
Cloudbreak Health, LLC. | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Noncontrolling interest, ownership percentage by parent | 100% | ||||||||||||||
Innovations Group | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Noncontrolling interest, ownership percentage by parent | 100% | 100% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 16, 2023 |
Debt Instrument [Line Items] | |||
Total debt | $ 172,227 | $ 172,227 | |
Less: unamortized original issue and debt discount | (23,068) | (25,703) | |
Total debt, net of unamortized original issue and debt discount | 149,159 | 146,524 | |
Less: current portion of debt | (111,891) | 0 | |
Noncurrent portion of debt | 37,268 | 146,524 | |
Convertible notes | 2025 Notes | |||
Debt Instrument [Line Items] | |||
Total debt | 57,227 | 57,227 | $ 57,200 |
Convertible notes | 2026 Notes | |||
Debt Instrument [Line Items] | |||
Total debt | $ 115,000 | $ 115,000 |
Debt - Schedule of Debt Interes
Debt - Schedule of Debt Interest Expenses (Details) - Convertible notes - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Contractual variable interest expense | $ 1,749 | $ 2,298 |
Debt issuance costs amortization | 138 | 162 |
Total interest expense | 1,887 | 2,460 |
2026 Notes | ||
Debt Instrument [Line Items] | ||
Contractual variable interest expense | 1,145 | 1,797 |
Derivative accretion | 287 | 2,210 |
Debt issuance costs amortization | 2,210 | 287 |
Total interest expense | $ 3,642 | $ 4,294 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
2024 (remaining nine months) | $ 134,706 | |
2025 | 37,521 | |
Total debt | $ 172,227 | $ 172,227 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments - Schedule of Financial Assets and Liabilities Measured at Fair Value On a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Liabilities: | ||
Warrant liability | $ 17 | $ 17 |
Fair Value, Recurring | ||
Liabilities: | ||
Derivative liability | 59 | 59 |
Warrant liability | 17 | 17 |
Total liabilities | 76 | 76 |
Fair Value, Recurring | Level 1 | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Warrant liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Warrant liability | 17 | 17 |
Total liabilities | 17 | 17 |
Fair Value, Recurring | Level 3 | ||
Liabilities: | ||
Derivative liability | 59 | 59 |
Warrant liability | 0 | 0 |
Total liabilities | $ 59 | $ 59 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
2026 Notes | Convertible notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of derivative liability | $ 0.1 | $ 0.1 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Change in Fair Value of Level 3 Derivative Liability (Details) - Derivative liabilities - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning of period | $ 59 | $ 56 |
Change in fair value | 0 | 3 |
Fair value, end of period | $ 59 | $ 59 |
Capital Structure - Common and
Capital Structure - Common and Preferred Stock (Details) - $ / shares | Mar. 31, 2024 | Feb. 09, 2024 | Dec. 31, 2023 |
Equity [Abstract] | |||
Preferred stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.1000 | $ 0.1000 | |
Preferred stock, outstanding (in shares) | 0 | 0 | |
Common stock authorized (in shares) | 300,000,000 | 300,000,000 | |
Common stock, par value (in dollars per share) | $ 0.1000 | $ 0.0001 | $ 0.1000 |
Common stock issued (in shares) | 18,981,398 | 18,841,142 | |
Common stock outstanding (in shares) | 18,811,398 | 18,671,142 |
Capital Structure - Schedule of
Capital Structure - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 15,377,000 | |
Shares available for future grant under 2021 EIP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 171,422 | 1,315,646 |
2023 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 400,000 | 400,000 |
Shares issuable upon conversion of 2021 Public Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 1,725,000 | |
Shares issuable upon conversion of the 2023 Private Placement Series A Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 3,000,000 | |
Shares issuable upon conversion of the 2023 Private Placement Series B Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 3,000,000 | |
Shares issuable upon conversion of 2021 Private Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 57,000 | |
Shares issuable upon conversion of 2021 PIPE Warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 30,000 | |
Shares issuable upon conversion of 2025 Notes | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 3,270,000 | |
Shares issuable upon conversion of 2026 Notes | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 1,080,000 | |
Restricted Stock Units And Employee Stock Options | Shares available for future grant under 2021 EIP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 2,396,000 | |
Restricted stock units | 2023 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 200,000 | |
Stock options outstanding under Cloudbreak Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance (in shares) | 48,000 |
Capital Structure - Equity Ince
Capital Structure - Equity Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||||||
Jan. 01, 2024 | Jun. 09, 2021 | Jun. 04, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Mar. 15, 2024 | Dec. 31, 2023 | May 01, 2023 | Jun. 19, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved for issuance (in shares) | 15,377,000 | ||||||||
Stock-based compensation | $ 0.9 | $ 1 | |||||||
Share based payment arrangement, accelerated cost | $ 0.3 | ||||||||
Stock options outstanding under Cloudbreak Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved for issuance (in shares) | 48,000 | ||||||||
Cloudbreak | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares options (in shares) | 1,576,670 | ||||||||
Shares options | $ 99 | ||||||||
Unvested options assumed (in shares) | 134,943 | ||||||||
Unvested options, fair value | $ 0.6 | ||||||||
Cloudbreak 2015 Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Outstanding options (in shares) | 48,035 | ||||||||
Cloudbreak 2015 Incentive Plan | Cloudbreak | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 2,200,000 | ||||||||
2021 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Outstanding options (in shares) | 1,300,000 | 0 | |||||||
Common stock reserved for issuance increase, percentage of common stock outstanding | 5% | ||||||||
Additional shares authorized (in shares) | 933,557 | ||||||||
Common stock reserved for issuance (in shares) | 171,422 | 1,315,646 | |||||||
Unrecognized stock-based compensation expense related to stock options | $ 0.6 | ||||||||
2021 Equity Incentive Plan | Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
PSUs and RSUs accelerated (in shares) | 181,638 | ||||||||
Unrecognized stock-based compensation expense related to stock options and RSUs | $ 0.9 | ||||||||
Weighted average period expected to be recognized (in years) | 1 year 3 months 10 days | ||||||||
Outstanding awards (in shares) | 1,096,000 | 522,000 | |||||||
Weighted average grant date fair value (in dollars per share) | $ 1.04 | $ 3.10 | |||||||
2021 Equity Incentive Plan | Stock options outstanding under Cloudbreak Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average period expected to be recognized (in years) | 2 years 11 months 4 days | ||||||||
2023 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 600,000 | ||||||||
Common stock reserved for issuance (in shares) | 400,000 | 400,000 | |||||||
2023 Equity Incentive Plan | Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved for issuance (in shares) | 200,000 | ||||||||
Unrecognized stock-based compensation expense related to stock options and RSUs | $ 0.1 | ||||||||
Weighted average period expected to be recognized (in years) | 2 years 1 month 20 days | ||||||||
Outstanding awards (in shares) | 200,000 | 200,000 | |||||||
Weighted average grant date fair value (in dollars per share) | $ 1.24 | $ 1.24 |
Capital Structure - Schedule _2
Capital Structure - Schedule of RSU Activity (Details) - Restricted stock units - 2021 Equity Incentive Plan shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of RSUs | |
Outstanding at beginning of period (in shares) | shares | 522 |
RSUs granted (in shares) | shares | 820 |
RSUs vested and issued (in shares) | shares | (204) |
RSUs forfeited (in shares) | shares | (42) |
Outstanding at end of period (in shares) | shares | 1,096 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 3.10 |
RSUs granted (in dollars per share) | $ / shares | 0.31 |
RSUs vested and issued (in dollars per share) | $ / shares | 3.15 |
RSUs forfeited (in dollars per share) | $ / shares | 18.03 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 1.04 |
Capital Structure - Schedule _3
Capital Structure - Schedule of Stock Option Activity (Details) - 2021 Equity Incentive Plan shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Options | |
Options outstanding - balance at beginning of period (in shares) | shares | 0 |
Options granted (in dollars per share) | shares | 1,300 |
Options outstanding - balance at end of period (in shares) | shares | 1,300 |
Weighted Average Grant Date Fair Value Per Share | |
Options outstanding - balance at beginning of period (in dollars per shares) | $ / shares | $ 0 |
Options granted (in dollars per share) | $ / shares | 0.41 |
Options outstanding - balance at end of period (in dollars per shares) | $ / shares | $ 0.41 |
Capital Structure - Schedule _4
Capital Structure - Schedule of Stock Options, Fair Value Weighted Average Assumptions (Details) - 2021 Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 110% |
Expected dividend yield | 0% |
Risk-free interest rate | 4.20% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 5 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 5 years 6 months |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 24 Months Ended | |||||||
Apr. 23, 2024 | Mar. 21, 2024 | Mar. 14, 2024 | Nov. 17, 2023 | Mar. 14, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2009 | Dec. 31, 2023 | Nov. 16, 2023 | |
Income Tax Examination [Line Items] | ||||||||||
Income tax expense from continuing operations | $ 4,519,000 | $ 0 | ||||||||
Unrecognized tax benefits | 4,500,000 | $ 4,500,000 | ||||||||
Deferred tax assets valuation allowance | 42,800,000 | |||||||||
Reduction in valuation allowance | 6,000,000 | |||||||||
IRS proof of claim amount | $ 17,282,914.83 | |||||||||
Subsequent Event | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
IRS proof of claim amount | $ 161,000 | |||||||||
Minimum | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
IRS proof of claim amount | $ 0 | |||||||||
Maximum | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
IRS proof of claim amount | $ 166,835 | |||||||||
Thrasys | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Long-term capital gain on sale | $ 15,000,000 | |||||||||
Thrasys | Internal Revenue Service (IRS) | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Assertion of tax owed | 5,000,000 | |||||||||
Potential interest expense | $ 4,000,000 | |||||||||
Thrasys | Internal Revenue Service (IRS) | Minimum | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Interest on tax, percentage | 4% | |||||||||
Thrasys | Internal Revenue Service (IRS) | Maximum | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Interest on tax, percentage | 10% | |||||||||
Thrasys | California Franchise Tax Board | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Assertion of tax owed | $ 1,300,000 | |||||||||
IRS proof of claim amount | $ 6,983,089.81 | |||||||||
Thrasys | California Franchise Tax Board | Minimum | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
IRS proof of claim amount | $ 6,226,194.94 | |||||||||
Cloudbreak | Discontinued Operations Held for Sale | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Income tax expense | $ 19,923,000 | 19,900,000 | $ 0 | |||||||
Tax expense related to prior to the sale | 1,200,000 | |||||||||
Tax expense related to the sale | $ 18,700,000 | |||||||||
Cloudbreak Health, LLC. | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Noncontrolling interest, ownership percentage by parent | 100% |
Income (Loss) Per Share - Sched
Income (Loss) Per Share - Schedule of Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss from continuing operations | $ (11,879) | $ (13,733) |
Net income from discontinued operations, net of tax | 37,300 | 6,098 |
Net income (loss) | 25,421 | (7,635) |
Less: net income attributable to noncontrolling interests | 0 | 448 |
Net income (loss) attributable to UpHealth, Inc. | $ 25,421 | $ (8,083) |
Denominator: | ||
Weighted average shares outstanding, basic (in shares) | 18,699 | 15,730 |
Weighted average shares outstanding, diluted (in shares) | 18,699 | 15,730 |
Net income (loss) per share - basic and diluted | ||
Continuing operations, basic (in dollars per share) | $ (0.64) | $ (0.87) |
Continuing operations, diluted (in dollars per share) | (0.64) | (0.87) |
Discontinued operation, net of tax, basic (in dollars per share) | 1.99 | 0.39 |
Discontinued operations, net of tax, diluted (in dollars per share) | 1.99 | 0.39 |
Attributable to UpHealth, Inc., basic (in dollars per share) | 1.36 | (0.51) |
Attributable to UpHealth, Inc., diluted (in dollars per share) | $ 1.36 | $ (0.51) |
Income (Loss) Per Share - Sch_2
Income (Loss) Per Share - Schedule of Calculation of Income (Loss) Per Share (Details) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 1,812 | 1,812 |
Potentially dilutive shares, price per share (in dollars per share) | $ 115 | $ 115 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 1,348 | 138 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 1,296 | 1,342 |
Senior convertible notes | 2025 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 3,270 | 3,857 |
Potentially dilutive shares, price per share (in dollars per share) | $ 17.50 | $ 17.50 |
Senior convertible notes | 2026 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 1,080 | 1,080 |
Potentially dilutive shares, price per share (in dollars per share) | $ 106.50 | $ 106.50 |
Common Stock Warrants | Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 6,000 | 6,000 |
Potentially dilutive shares, price per share (in dollars per share) | $ 2.04 | $ 2.04 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segment Reporting [Abstract] | |
Number of operating business segments | 3 |
Number of non-operating business segments | 1 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Revenues by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | $ 0 | $ 24,687 | |
Gross profit | 0 | 12,491 | |
Total long-lived assets | 878 | $ 1,074 | |
Services | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | 0 | 20,814 | |
Gross profit | 0 | 9,911 | |
Integrated Care Management | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | 0 | 3,873 | |
Gross profit | 0 | $ 2,580 | |
Corporate | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total long-lived assets | $ 878 | $ 1,074 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2024 | Nov. 16, 2023 |
Minimum | Real Estate | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 1 year | |
Minimum | Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 1 year | |
Maximum | Real Estate | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 5 years | |
Maximum | Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 3 years | |
Cloudbreak Health, LLC. | ||
Lessee, Lease, Description [Line Items] | ||
Noncontrolling interest, ownership percentage by parent | 100% |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 42 | $ 618 |
Short-term lease cost | 0 | 84 |
Variable lease cost | 0 | 15 |
Sublease income | 0 | (2) |
Total lease cost | 42 | 715 |
Third Party | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 42 | 520 |
Short-term lease cost | 0 | 17 |
Variable lease cost | 0 | 15 |
Sublease income | 0 | (2) |
Total lease cost | 42 | 550 |
Related Party | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 0 | 98 |
Short-term lease cost | 0 | 67 |
Variable lease cost | 0 | 0 |
Sublease income | 0 | 0 |
Total lease cost | $ 0 | $ 165 |
Leases - Lease-Related Assets a
Leases - Lease-Related Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 344 | $ 370 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease liabilities, current | Lease liabilities, current |
Third Party | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 344 | $ 370 |
Total leased assets | 344 | 370 |
Lease liabilities, current | 188 | 183 |
Lease liabilities, noncurrent | 560 | 610 |
Total leased liabilities | $ 748 | $ 793 |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | ||
Operating cash flows from operating leases | $ 45 | $ 412 |
Third Party | ||
Lessee, Lease, Description [Line Items] | ||
Operating cash flows from operating leases | 45 | 317 |
Related Party | ||
Lessee, Lease, Description [Line Items] | ||
Operating cash flows from operating leases | $ 0 | $ 95 |
Leases - Company's Lease Term a
Leases - Company's Lease Term and Discount Rate Assumptions (Details) | Mar. 31, 2024 |
Weighted-average remaining lease term (years): | |
Operating leases | 3 years 5 months 1 day |
Weighted-average discount rate: | |
Operating leases | 9.10% |
Third Party | |
Weighted-average remaining lease term (years): | |
Operating leases | 3 years 5 months 1 day |
Weighted-average discount rate: | |
Operating leases | 9.10% |
Leases - Undiscounted Future Mi
Leases - Undiscounted Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Operating Leases | |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Lease liabilities, current, Lease liabilities, noncurrent |
Third Party | |
Operating Leases | |
Remaining 2024 | $ 182 |
2025 | 250 |
2026 | 257 |
2027 | 175 |
Total lease payments | 864 |
Less: interest | 116 |
Present value of lease liabilities | $ 748 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Needham V. Uphealth Holdings - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 18, 2023 | Sep. 15, 2023 | Sep. 30, 2023 | |
Loss Contingencies [Line Items] | |||
Fees awarded excluding interest | $ 31.3 | $ 31.3 | |
Settlement interest | 6.5 | ||
Amount awarded to other party | $ 37.8 | ||
Annual settlement interest, percent | 9% | ||
Legal fees | $ 29.8 | ||
Current accrual loss provision | $ 37.8 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | May 09, 2024 | Sep. 18, 2023 | Jun. 03, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 16, 2023 | Jun. 09, 2023 |
Subsequent Event [Line Items] | |||||||
Aggregate carrying value | $ 172,227 | $ 172,227 | |||||
2025 Notes | Convertible notes | |||||||
Subsequent Event [Line Items] | |||||||
Repurchased face amount | $ 10,300 | ||||||
Aggregate carrying value | $ 57,227 | $ 57,227 | $ 57,200 | ||||
Subsequent Event | 2025 Notes | Convertible notes | |||||||
Subsequent Event [Line Items] | |||||||
Repurchased face amount | $ 19,700 | ||||||
Aggregate carrying value | 37,300 | ||||||
Unamortized debt issuance costs | $ 200 | ||||||
Needham V. Uphealth Holdings | |||||||
Subsequent Event [Line Items] | |||||||
Amount awarded to other party | $ 37,800 | ||||||
Needham V. Uphealth Holdings | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Amount awarded to other party | $ 37,800 |