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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number: 000-49796

TRUBRIDGE, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware |  | 74-3032373
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
54 St. Emanuel Street, Mobile, Alabama |  | 36602
(Address of Principal Executive Offices) |  | (Zip Code)

(251) 639-8100
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading symbol | Name of each exchange on which registered
Common Stock, par value $.001 per share | TBRG | The NASDAQ Stock Market LLC
Common Stock Purchase Rights | N/A | The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer |  | ¨ |  | Accelerated filer |  | ý
Non-accelerated filer |  | ¨ |  | Smaller reporting company |  | ☐
Emerging growth company |  | ☐ |  |  |  |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |  | ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of May 8, 2024, the re were 15,007,262 shares of the issuer’s common stock outstanding.

1

TRUBRIDGE, INC.
Quarterly Report on Form 10-Q
(For the three months ended March 31, 2024)
TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. | Financial Statements | 3
| Condensed Consolidated Balance Sheets (Unaudited) –March 31, 2024 and December 31, 2023 | 3
| Condensed Consolidated Statements of Operation (Unaudited) – Three Months Ended March 31, 2024 and 2023 | 4
| Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Three Months Ended March 31, 2024 and 2023 | 5
| Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) – Three Months Ended March 31, 2024 and 2023 | 6
| Condensed Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended March 31 2024 and 2023 | 7
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 41
Item 4. | Controls and Procedures | 41
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings | 43
Item 1A. | Risk Factors | 43
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 44
Item 3. | Defaults Upon Senior Securities | 44
Item 4. | Mine Safety Disclosures | 44
Item 5. | Other Information | 44
Item 6. | Exhibits | 45

2

PART I
FINANCIAL INFORMATION

Item 1. | Financial Statements.

TRUBRIDGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

| March 31, 2024 |  | December 31, 2023
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 4,115 |  |  | $ | 3,848 |
Accounts receivable (net of allowance for expected credit losses of $3,773 and $3,631, respectively) | 64,218 |  |  | 59,723 |
Financing receivables, current portion, net (net of allowance for expected credit losses of $304 and $319, respectively) | 3,668 |  |  | 3,997 |
Inventories | 980 |  |  | 475 |
Prepaid income taxes | 1,151 |  |  | 1,628 |
Prepaid expenses and other current assets | 17,772 |  |  | 15,807 |
Assets of held for sale disposal group | — |  |  | 25,977 |
Total current assets | 91,904 |  |  | 111,455 |
Property and equipment, net | 8,750 |  |  | 8,974 |
Software development costs, net | 41,237 |  |  | 39,139 |
Operating lease assets | 4,672 |  |  | 5,192 |
Financing receivables, net of current portion (net of allowance for expected credit losses of $79 and $97, respectively) | 959 |  |  | 1,226 |
Other assets, net of current portion | 8,331 |  |  | 7,314 |
Intangible assets, net | 86,086 |  |  | 89,213 |
Goodwill | 172,573 |  |  | 171,909 |
Deferred tax assets | 1,905 |  |  | — |
Total assets | $ | 416,417 |  |  | $ | 434,422 |
Liabilities and Stockholders’ Equity |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 11,356 |  |  | $ | 10,133 |
Current portion of long-term debt | 3,074 |  |  | 3,141 |
Deferred revenue | 9,079 |  |  | 8,677 |
Accrued vacation | 5,429 |  |  | 5,410 |
Other accrued liabilities | 18,226 |  |  | 19,892 |
Liabilities of held for sale disposal group | — |  |  | 977 |
Total current liabilities | 47,164 |  |  | 48,230 |
Long-term debt, net of current portion | 181,732 |  |  | 195,270 |
Operating lease liabilities, net of current portion | 2,848 |  |  | 3,074 |
Deferred tax liabilities | — |  |  | 1,230 |
Total liabilities | 231,744 |  |  | 247,804 |
Stockholders’ equity: |  |  |
Common stock, $0.001 par value; 30,000 shares authorized; 15,572 and 15,121 shares issued, respectively | 15 |  |  | 15 |
Additional paid-in capital | 196,346 |  |  | 195,546 |
Accumulated other comprehensive gain | 113 |  |  | — |
Retained earnings | 5,616 |  |  | 8,132 |
Treasury stock, 613 shares and 572 shares, respectively | (17,417) |  |  | (17,075) |
Total stockholders’ equity | 184,673 |  |  | 186,618 |
Total liabilities and stockholders’ equity | $ | 416,417 |  |  | $ | 434,422 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

TRUBRIDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Revenues |  |  |  |  |  |  |
RCM | $ | 53,038 |  |  | $ | 48,631 |  |  |  |  |
EHR | 28,022 |  |  | 35,191 |  |  |  |  |
Patient Engagement | 2,187 |  |  | 2,411 |  |  |  |  |
Total revenues | 83,247 |  |  | 86,233 |  |  |  |  |
Expenses |  |  |  |  |  |  |
Costs of revenue (exclusive of amortization and depreciation) |  |  |  |  |  |  |
RCM | 29,597 |  |  | 27,183 |  |  |  |  |
EHR | 11,287 |  |  | 16,348 |  |  |  |  |
Patient Engagement | 875 |  |  | 646 |  |  |  |  |
Total costs of revenue (exclusive of amortization and depreciation) | 41,759 |  |  | 44,177 |  |  |  |  |
Product development | 10,689 |  |  | 8,352 |  |  |  |  |
Sales and marketing | 6,592 |  |  | 6,957 |  |  |  |  |
General and administrative | 19,396 |  |  | 14,453 |  |  |  |  |
Amortization | 5,869 |  |  | 5,500 |  |  |  |  |
Depreciation | 400 |  |  | 499 |  |  |  |  |
Total expenses | 84,705 |  |  | 79,938 |  |  |  |  |
Operating income (loss) | (1,458) |  |  | 6,295 |  |  |  |  |
Other income (expense): |  |  |  |  |  |  |
Other income | 1,422 |  |  | 267 |  |  |  |  |
Interest expense | (4,072) |  |  | (2,669) |  |  |  |  |
Total other income (expense) | (2,650) |  |  | (2,402) |  |  |  |  |
Income (loss) before taxes | (4,108) |  |  | 3,893 |  |  |  |  |
Provision (benefit) for income taxes | (1,592) |  |  | 809 |  |  |  |  |
Net income (loss) | $ | (2,516) |  |  | $ | 3,084 |  |  |  |  |
Net income (loss) per common share—basic | $ | (0.17) |  |  | $ | 0.21 |  |  |  |  |
Net income (loss) per common share—diluted | $ | (0.17) |  |  | $ | 0.21 |  |  |  |  |
Weighted average shares outstanding used in per common share computations: |  |  |  |  |  |  |
Basic | 14,234 |  |  | 14,136 |  |  |  |  |
Diluted | 14,234 |  |  | 14,136 |  |  |  |  |

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

TRUBRIDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)

| Three Months Ended March 31,
| 2024 |  | 2023
Net income (loss) | $ | (2,516) |  |  | $ | 3,084 |
Other comprehensive income: |  |  |
Foreign currency translation adjustment | 113 |  |  | — |
Comprehensive income (loss) | $ | (2,403) |  |  | $ | 3,084 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
5

TRUBRIDGE, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)

| Common Stock |  | Additional Paid-in-Capital |  | Accumulated Other Comprehensive (Loss) Income |  | Retained Earnings |  | Treasury Stock |  | Total Stockholders’ Equity
| Shares |  | Amount |  |  |  |  |
Three Months Ended March 31, 2024 and 2023: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2023 | 15,121 |  |  | $ | 15 |  |  | $ | 195,546 |  |  | $ | — |  |  | $ | 8,132 |  |  | $ | (17,075) |  |  | $ | 186,618 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | (2,516) |  |  | — |  |  | (2,516) |
Foreign currency translation adjustment |  |  |  |  |  |  | 113 |  |  |  |  |  |  | 113 |
Issuance of restricted stock | 451 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock-based compensation | — |  |  | — |  |  | 800 |  |  | — |  |  | — |  |  | — |  |  | 800 |
Treasury stock acquired | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (342) |  |  | (342) |
Balance at March 31, 2024 | 15,572 |  |  | $ | 15 |  |  | $ | 196,346 |  |  | $ | 113 |  |  | $ | 5,616 |  |  | $ | (17,417) |  |  | $ | 184,673 |
Balance at December 31, 2022 | 14,913 |  |  | $ | 15 |  |  | $ | 192,275 |  |  | $ | — |  |  | $ | 53,921 |  |  | $ | (14,500) |  |  | $ | 231,711 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | 3,084 |  |  | — |  |  | 3,084 |
Issuance of restricted stock | 186 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock-based compensation | — |  |  | — |  |  | 1,247 |  |  | — |  |  | — |  |  | — |  |  | 1,247 |
Treasury stock acquired | — |  |  | — |  |  | — |  |  |  |  | — |  |  | (2,484) |  |  | (2,484) |
Balance at March 31, 2023 | 15,099 |  |  | $ | 15 |  |  | $ | 193,522 |  |  | $ | — |  |  | $ | 57,005 |  |  | $ | (16,984) |  |  | $ | 233,558 |

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

TRUBRIDGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

| Three Months Ended March 31,
| 2024 |  | 2023
Operating Activities: |  |  |
Net income (loss) | $ | (2,516) |  |  | $ | 3,084 |
Adjustments to net income (loss): |  |  |
Provision for credit losses | 500 |  |  | (352) |
Deferred taxes | (2,982) |  |  | 572 |
Stock-based compensation | 800 |  |  | 1,247 |
Depreciation | 400 |  |  | 499 |
Gain on sale of business | (1,250) |  |  | — |
Amortization of acquisition-related intangibles | 3,127 |  |  | 4,014 |
Amortization of software development costs | 2,742 |  |  | 1,486 |
Amortization of deferred finance costs | 107 |  |  | 90 |
Non-cash operating lease costs | 675 |  |  | 479 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable | (4,112) |  |  | (3,099) |
Financing receivables | 628 |  |  | 619 |
Inventories | (505) |  |  | (398) |
Prepaid expenses and other current assets | 772 |  |  | (3,187) |
Accounts payable | 1,253 |  |  | 5,605 |
Deferred revenue | 1,006 |  |  | 47 |
Operating lease liabilities | (583) |  |  | (499) |
Other liabilities | (2,573) |  |  | (971) |
Prepaid income taxes | 477 |  |  | 237 |
Net cash provided by (used in) operating activities | (2,034) |  |  | 9,473 |
Investing Activities: |  |  |
Sale of business, net of cash and cash equivalents sold | 21,410 |  |  | — |
Investment in software development | (4,839) |  |  | (6,233) |
Purchase of property and equipment | (177) |  |  | (16) |
Net cash provided by (used in) investing activities | 16,394 |  |  | (6,249) |
Financing Activities: |  |  |
Payments of long-term debt principal | (875) |  |  | (875) |
Proceeds from revolving line of credit | 15,423 |  |  | 5,000 |
Payments of revolving line of credit | (27,729) |  |  | (5,000) |
Debt issuance costs | (529) |  |  | — |
Treasury stock purchases | (342) |  |  | (2,484) |
Net cash provided by (used in) financing activities | (14,052) |  |  | (3,359) |
Increase (decrease) in cash and cash equivalents | 308 |  |  | (135) |
Change in cash and cash equivalents included in assets sold | (41) |  |  | — |
Cash and cash equivalents at beginning of period | 3,848 |  |  | 6,951 |
Cash and cash equivalents at end of period | $ | 4,115 |  |  | $ | 6,816 |
Supplemental disclosure of cash flow information: |  |  |
Cash paid for interest | $ | 6,820 |  |  | $ | 898 |
Cash paid for income taxes | $ | 1,000 |  |  | $ | — |
The accompanying notes are an integral part of these condensed consolidated financial statements.

7

TRUBRIDGE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are considered of a normal recurring nature. Quarterly results of operations are not necessarily indicative of annual results.
Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated balance sheet at that date. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of TruBridge, Inc. (“TruBridge” or the “Company”) for the year ended December 31, 2023 and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
During the third quarter of 2023, we changed the presentation of certain costs previously recorded within the expense captions of "Product development" and "General and administrative" to better comply with the disclosure requirements of Staff Accounting Bulletin Topic 11.B., Miscellaneous Disclosure: Depreciation and Depletion Excluded from Cost of Sales. These changes are summarized as follows:
•Amortization expense associated with capitalized software development costs, previously recorded within the expense caption of "Product development," have been combined with amounts previously recorded within the expense caption "Amortization of acquisition-related intangibles" and reflected in a newly-presented expense caption of "Amortization."
•Depreciation expense previously recorded within the expense caption of "General and administrative" have been reclassified within the newly-presented expense caption of "Depreciation."
•The expense caption previously labelled as "Costs of sales" has been renamed "Costs of revenue (exclusive of amortization and depreciation)," with the previously reported reference to "Gross profit" removed from the current presentation.
The following table provides the amounts reclassified for the three months ended March 31, 2023.

| Three Months Ended March 31, 2023
(in thousands) | As previously reported |  | Re-classifications |  | As reclassified |  |  |  | As currently reported
Costs of revenue (exclusive of amortization and depreciation) |  |  |  |  |  |  |  |  |
RCM | $ | 27,183 |  |  | $ | — |  |  | $ | 27,183 |  |  |  |  | $ | 27,183 |
EHR | 16,348 |  |  | — |  |  | 16,348 |  |  |  |  | 16,348 |
Patient engagement | 646 |  |  | — |  |  | 646 |  |  |  |  | 646 |
Other expenses |  |  |  |  |  |  |  |  |
Product development | 9,836 |  |  | (1,484) |  |  | 8,352 |  |  |  |  | 8,352 |
Sale and marketing | 6,959 |  |  | (2) |  |  | 6,957 |  |  |  |  | 6,957 |
General and administrative | 14,952 |  |  | (499) |  |  | 14,453 |  |  |  |  | 14,453 |
Amortization of acquisition-related intangibles | 4,014 |  |  | (4,014) |  |  | — |  |  |  |  | — |
Amortization | — |  |  | 5,500 |  |  | 5,500 |  |  |  |  | 5,500 |
Depreciation | — |  |  | 499 |  |  | 499 |  |  |  |  | 499 |

8

Principles of Consolidation
The condensed consolidated financial statements of TruBridge include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
2. RECENT ACCOUNTING PRONOUNCEMENTS
New Accounting Standards Adopted in 2024
There were no new accounting standards required to be adopted in 2024 that would have a material impact on our consolidated financial statements.
New Accounting Standards Yet to be Adopted
We do not believe that any other recently issued but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements.
3. REVENUE RECOGNITION
Revenue is recognized upon transfer of control of promised products or services to clients in an amount that reflects the consideration we expect to receive in exchange for those products and services. We enter into contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations. The Company employs the 5-step revenue recognition model under ASC 606, Revenue from Contracts with Customers, to: (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
Revenue is recognized net of shipping charges and any taxes collected from clients, which are subsequently remitted to governmental authorities.
•Revenue Cycle Management
Our revenue cycle management (“RCM”) business unit provides an array of business processing services (“BPS'’) consisting of accounts receivable management, private pay services, insurance services, medical coding, electronic billing, statement processing, payroll processing, and contract management. Fees are recognized over the period of the client contractual relationship as the services are performed based on the stand-alone selling price (“SSP”), net of discounts. SSP for BPS services is determined based on observable stand-alone selling prices. Fees for many of these services are invoiced, and revenue recognized accordingly, based on the volume of transactions or a percentage of client accounts receivable collections. Payment is due monthly for BPS with certain amounts varying based on utilization and/or volumes.
Our RCM business unit also provides professional IT services. Revenue from professional IT services is recognized as the services are performed based on SSP, which is determined by observable stand-alone selling prices. Payment is due monthly as services are performed.
Lastly, our RCM business unit also provides certain software solutions and related support under Software as a Service (“SaaS”) arrangements and time-based software licenses. Revenue from SaaS arrangements is recognized in a manner consistent with SaaS arrangements for electronic health records (“EHR”) software, as discussed below. Revenue from time-based software licenses is recognized upon delivery to the client (“point in time”) and revenue from non-license components (i.e., support) is recognized ratably over the respective contract term (“over time”). SSP for time-based licenses is determined using the residual approach, while the non-license component is based on cost plus reasonable margin.
•Electronic Health Records
The Company enters into contractual obligations to sell perpetual software licenses, installation, conversion, and related training services, software application support, hardware, and hardware maintenance services to acute care community hospitals and post-acute providers.
9

•Non-recurring Revenues
•Perpetual software licenses and installation, conversion, and related training services are not considered separate and distinct performance obligations due to the proprietary nature of our software and are, therefore, accounted for as a single performance obligation on a module-by-module basis. Revenue is recognized as each module's implementation is completed based on the module's SSP, net of discounts. We determine each module's SSP using the residual method. Fees for licenses and installation, conversion, and related training services are typically due in three installments: (1) at placement of order, (2) upon installation of software and commencement of training, and (3) upon satisfactory completion of monthly accounting cycle or end-of-month operation by application and as applicable for each application. Often, short-term and/or long-term financing arrangements are provided for software implementations; refer to Note 11 - Financing Receivables for further information. EHR implementations include a system warranty that terminates thirty days from the software go-live date, the date which the client begins using the system in a live environment.
•Hardware revenue is recognized separately from software licenses at the point in time it is delivered to the client. The SSP of hardware is cost plus a reasonable margin and revenue is recognized on a gross basis. Payment is generally due upon delivery of the hardware to the client. Standard manufacturer warranties apply to hardware.
•Recurring Revenues
•Software application support and hardware maintenance services sold with software licenses and hardware are separate and distinct performance obligations. Revenue for support and maintenance services is recognized based on SSP, which is the renewal price, ratably over the life of the contract, which is generally three to five years. Payment is due monthly for support and maintenance services provided.
•Subscriptions to third-party content revenue is recognized as a separate performance obligation ratably over the subscription term based on SSP, which is cost plus a reasonable margin, and revenue is recognized on a gross basis. Payment is due monthly for subscriptions to third party content.
•SaaS arrangements for EHR software and related conversion and training services are considered a single performance obligation. Revenue is recognized on a monthly basis as the SaaS service is provided to the client over the contract term. Payment is due monthly for SaaS services provided.
Refer to Note 17 - Segment Reporting for further information, including revenue by client base (acute care or post-acute care) bifurcated by recurring and non-recurring revenue.
•Patient Engagement
The Company enters into contractual obligations to sell perpetual and term-based software licenses, implementation and customization professional services, and software application support services to a variety of healthcare organizations including hospital systems, health ministries, and government and non-profit organizations.
•Non-recurring Revenues
•Perpetual software licenses are sold only to one re-seller client and are considered a separate and distinct performance obligation. Revenue is recognized at the point in time perpetual licenses are delivered to the client, which occurs at the time of sale. The SSP of perpetual licenses is directly observable. Payment is generally due upon delivery of licenses.
•Implementation and customization services are considered a separate and distinct performance obligation. Revenue is recognized over time based on SSP, which is generally directly observable. Payment for professional services is typically due in two installments: (1) upon signature of the agreement and (2) upon customer acceptance of the delivered services.
•Recurring Revenues
•Term-based software licenses are considered a separate and distinct performance obligation. Revenue is recognized based on SSP, which is directly observable, at the point in time the term-based licenses
10

are delivered to the client or upon annual renewal. Payment is generally due upon delivery of licenses or upon annual renewal.
•Software application support services sold with software licenses are separate and distinct performance obligations. The related revenues are recognized based on SSP, which is the renewal price, ratably over the life of the contract, which is generally three to five years. Payment is generally due for the full amount of annual support fees at the beginning of an annual license term.
Refer to Note 17 - Segment Reporting for further information.
Deferred Revenue
Deferred revenue represents amounts invoiced to clients for which the services under contract have not been completed and revenue has not been recognized, including annual renewals of certain software subscriptions and customer deposits for implementations to be performed at a later date. Revenue is recognized ratably over the life of the software subscriptions as services are provided and at the point-in-time when implementations have been completed.
The following table details deferred revenue for the three months ended March 31, 2024 and 2023, included in the condensed consolidated balance sheets:

(In thousands) |  |  | Three Months Ended March 31, 2024 |  | Three Months Ended March 31, 2023
Beginning balance |  |  | $ | 8,677 |  |  | $ | 11,590 |
Deferred revenue recorded |  |  | 4,360 |  |  | 6,490 |
Less deferred revenue recognized as revenue |  |  | (3,958) |  |  | (6,443) |
Ending balance |  |  | $ | 9,079 |  |  | $ | 11,637 |

The deferred revenue recorded during the three months ended March 31, 2024 and 2023 is comprised primarily of the annual renewals of certain software subscriptions billed during the first quarter of each year and deposits collected for future EHR installations. The deferred revenue recognized as revenue during the three months ended March 31, 2024 and 2023 is comprised primarily of the periodic recognition of annual renewals that were deferred until earned and deposits for future EHR installations that were earned during the period.
Costs to Obtain and Fulfill a Contract with a Customer
Costs to obtain a contract include the commission costs related to SaaS and RCM arrangements, which are capitalized and amortized ratably over the expected life of the customer contract. As a practical expedient, we generally recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset would have been one year or less. Costs to obtain a contract are expensed within the caption “Expenses - Sales and marketing” in the accompanying condensed consolidated statements of income.
Contract fulfillment costs related to the implementation of SaaS arrangements are capitalized and amortized ratably over the expected life of the customer contract. Costs to fulfill contracts consist of the payroll costs for the implementation of SaaS arrangements, including time for training, conversions, and installation that is necessary for the software to be utilized. Contract fulfillment costs are expensed within the caption “Costs of revenue (exclusive of amortization and depreciation) - EHR” in the accompanying condensed consolidated statements of income.
Costs to obtain and fulfill contracts related to SaaS and RCM arrangements are included within the “Prepaid expenses and other current assets” and "Other assets, net of current portion" line items on our condensed consolidated balance sheets as shown in the table below for the three months ended March 31, 2024 and 2023:

(In thousands) | Three Months Ended March 31, 2024 |  | Three Months Ended March 31, 2023 |  |
Beginning balance | $ | 13,115 |  |  | $ | 11,557 |  |  |
Costs to obtain and fulfill contracts capitalized | 1,703 |  |  | 1,824 |  |  |
Less costs to obtain and fulfill contracts recognized as expense | (1,884) |  |  | (1,264) |  |  |
Ending balance | $ | 12,934 |  |  | $ | 12,117 |  |  |

11

Remaining Performance Obligations
Disclosures regarding remaining performance obligations are not considered material as the overwhelming majority of the Company's remaining performance obligations either (a) are related to contracts with an expected duration of one year or less, or (b) exhibit revenue recognition in the amount to which the Company has the right to invoice.
4. BUSINESS COMBINATIONS AND DISPOSITIONS
Sale of American HealthTech, Inc.
On January 16, 2024, we entered into a Stock Purchase Agreement (the “Purchase Agreement”), by and among the Company, American HealthTech, Inc. a Mississippi corporation (“AHT”), and Healthland Inc., a Minnesota corporation and an indirect, wholly-owned subsidiary of the Company (“Healthland” and, together with the Company, the “Seller Parties”) and PointClickCare Technologies USA Corp., a Delaware corporation (“Buyer”). The Transaction (hereinafter defined) also closed on January 16, 2024. Under the Purchase Agreement, Buyer purchased from Healthland all of the issued and outstanding capital stock of AHT (the “Transaction”), with AHT becoming a wholly-owned subsidiary of Buyer. Prior to this transaction, results for AHT were reported within our EHR operating segment.
The Purchase Agreement provides for an aggregate purchase price (the “Purchase Price”) of $25 million (the “Base Cash Consideration”), subject to adjustments based on working capital, cash, indebtedness and transaction expenses of AHT. Additionally, pursuant to the Purchase Agreement, a total of approximately $3.75 million was withheld from the Base Cash Consideration at the closing and deposited by Buyer into various escrow accounts with an escrow agent, including $2.5 million as a general indemnity escrow and $1 million as a special indemnity escrow. Based upon the adjustments and the various escrow holdbacks, Buyer paid a net amount of approximately $21.41 million to Healthland at the closing. The Purchase Price was subject to a post-closing true-up. In connection with the closing of the Transaction, Buyer has provided offers of employment to certain key employees of the Company that primarily supported AHT’s business.
The Purchase Agreement contains customary representations, warranties and covenants. The representations and warranties made by the Seller Parties to Buyer cover a broad range of items related to, among other things, the business and financial condition of AHT. Subject to certain exceptions and limitations, the Seller Parties have agreed to indemnify Buyer for certain breaches of representations, warranties and covenants and certain other enumerated items. Such limitations on the Seller Parties’ indemnification obligations are subject to various exceptions for certain fundamental representations, tax representations, special representations, and fraud. Subject to certain exceptions and limitations, Buyer has likewise agreed to indemnify the Seller Parties for certain breaches of representations, warranties and covenants and certain other enumerated items.
As part of the divestiture, as of January 16, 2024 we entered into a transition services agreement with the buyer to assist them in the transition of certain functions, including, but not limited to, information technology, finance and accounting for the period of 18 months accordance with the terms of this agreement. Aside from these customary transition services, there will be no continuing involvement after the disposal.
The Company finalized the accounting for the sale during the three months ended March 31, 2024 and has recorded a $1.25 million gain on sale, which is reflected under the caption “Other income” in the condensed consolidated statements of operations.
The accompanying condensed consolidated balance sheet as of December 31, 2023 includes amounts related to this Transaction under the captions "Assets of held for sale disposal group" and "Liabilities of held for sale disposal group", the details of which are as follows as of December 31, 2023:
12

(In thousands) |
Assets of held for sale disposal group |
Accounts receivable, net | $ | 3,087 |
Financing receivables, net | 37 |
Prepaid expenses | 34 |
Software costs, net | 3,386 |
Intangibles, net | 11,739 |
Goodwill | 7,694 |
Total | $ | 25,977 |
Liabilities of held for sale disposal group |
Accounts payable | $ | 178 |
Other accrued liabilities | 576 |
Deferred tax liability | 223 |
Total | $ | 977 |

Acquisition of Viewgol, LLC
On October 16, 2023, we acquired all of the assets and liabilities of Viewgol, LLC (“Viewgol”), a Delaware limited liability company, pursuant to a Securities Purchase Agreement dated October 16, 2023. Based in Frisco, Texas, Viewgol is a provider of ambulatory RCM analytics and complementary outsourcing services with an extensive offshore presence we intend to leverage and grow to accommodate the growing demand for RCM services by our pre-existing acute care customers.
Consideration for the acquisition included cash (net of cash of the acquired entity) of $37.4 million (inclusive of seller's transaction expenses). Also included in the acquisition consideration were contingent earnout payments of (i) up to $21.5 million based on the Viewgol business achieving earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of $6.0 million or more during fiscal year 2024 (the “EBITDA Earnout Amount”), and (ii) up to $10.0 million based on the number of productive agents the Viewgol business hires in India in fiscal year 2024 (the “Offshore Earnout Amount”); provided, however, that none of the Offshore Earnout Amounts may be earned if the EBITDA Earnout Amount’s minimum EBITDA threshold of $6.0 million is not achieved during fiscal 2024. During 2023, we incurred approximately $4.7 million of pre-tax acquisition expenses in our condensed consolidated statements of operations.
13

Our acquisition of Viewgol was treated as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. Our allocation of the purchase price was based on management's judgment after evaluating several factors, including a valuation assessment.
The preliminary estimated fair values of assets acquired and liabilities assumed as of December 31, 2023, and as updated through March 31, 2024, are as follows:

(In thousands) | Purchase Price Allocation as of December 31, 2023 | Purchase Price Allocation as of March 31, 2024
Acquired cash | $ | 1,449 |  | $ | 1,449 |
Accounts receivable | 2,233 |  | 2,233 |
Prepaid expenses | 132 |  | 132 |
Property and equipment | 1,112 |  | 1,112 |
Intangible assets | 17,720 |  | 17,720 |
Goodwill | 17,263 |  | 17,927 |
Accounts payable and accrued liabilities | (711) |  | (711) |
Contingent consideration | (1,044) |  | (1,044) |
Net assets acquired | $ | 38,154 |  | $ | 38,818 |

In March 2024, the Company estimates an additional $664,000 for working capital adjustments will be paid which is reflected under the caption “Goodwill” in the condensed consolidated balance sheet.
The intangible assets in the table above are being amortized on a straight-line basis over their estimated useful lives. The amortization is included under the caption “Amortization of acquisition-related intangibles” in our condensed consolidated statements of operations.
The fair value measurements of tangible and intangible assets and liabilities (including those related to contingent consideration) were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy (see Note 16 - Fair Value). Level 3 inputs included, among others, discount rates that we estimated would be used by a market participant in valuing these assets and liabilities, projections of revenues and cash flows, client attrition rates and market comparables.
Our condensed consolidated statement of operations as of March 31, 2024 includes net sales of $4.8 million, gross profit of $2.1 million, net income of $0.8 million and adjusted EBITDA of $1.0 million (see note 17 - Segment Reporting for more information regarding, and definition of, adjusted EBITDA) attributed to the Viewgol acquistion.
14

5. PROPERTY AND EQUIPMENT
Property and equipment, net was comprised of the following at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Land | $ | 2,848 |  |  | $ | 2,848 |
Buildings and improvements | 8,487 |  |  | 8,481 |
Computer equipment | 10,241 |  |  | 10,104 |
Leasehold improvements | 631 |  |  | 631 |
Office furniture and fixtures | 618 |  |  | 586 |
Automobiles | 18 |  |  | 18 |
Property and equipment, gross | 22,843 |  |  | 22,668 |
Less: accumulated depreciation | (14,093) |  |  | (13,694) |
Property and equipment, net | $ | 8,750 |  |  | $ | 8,974 |

7. OTHER ACCRUED LIABILITIES
Other accrued liabilities was comprised of the following at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Salaries and benefits | $ | 9,125 |  |  | $ | 5,194 |
Severance | 3,359 |  |  | 5,806 |
Commissions | 714 |  |  | 1,185 |
Contingent consideration | 1,044 |  |  | 1,044 |
Operating lease liabilities, current portion | 1,601 |  |  | 1,804 |
Other | 2,383 |  |  | 4,859 |
Other accrued liabilities | $ | 18,226 |  |  | $ | 19,892 |

8. NET INCOME (LOSS) PER SHARE
The Company presents basic and diluted earnings per share (“EPS”) data for its common stock. Basic EPS is calculated by dividing the net income attributable to stockholders of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is determined by adjusting the net income attributable to stockholders of the Company and the weighted average number of shares of common stock outstanding during the period for the effects of all dilutive potential common shares, including awards under stock-based compensation arrangements.
The Company's unvested restricted stock awards (see Note 10 - Stock-Based Compensation and Equity) are considered participating securities under ASC 260, Earnings Per Share, because they entitle holders to non-forfeitable rights to dividends until the awards vest or are forfeited. When a company has a security that qualifies as a “participating security,” the Codification requires the use of the two-class method when computing basic EPS. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. In determining the amount of net income to allocate to common stockholders, income is allocated to both common stock and participating securities based on their respective weighted average shares outstanding for the period, with net income attributable to common stockholders ultimately equaling net income less net income attributable to participating securities. Diluted EPS for the Company's common stock is computed using the more dilutive of the two-class method or the treasury stock method.
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The following is a calculation of the basic and diluted EPS for the Company's common stock, including a reconciliation between net income and net income attributable to common stockholders:

| Three Months Ended March 31, |  |
(In thousands, except per share data) | 2024 |  | 2023 |  |  |  |
Net income (loss) | $ | (2,516) |  |  | $ | 3,084 |  |  |  |  |
Less: Net (income) loss attributable to participating securities | 68 |  |  | (63) |  |  |  |  |
Net income (loss) attributable to common stockholders | $ | (2,448) |  |  | $ | 3,021 |  |  |  |  |
Weighted average shares outstanding used in basic per common share computations | 14,234 |  |  | 14,136 |  |  |  |  |
Add: Dilutive potential common shares | — |  |  | — |  |  |  |  |
Weighted average shares outstanding used in diluted per common share computations | 14,234 |  |  | 14,136 |  |  |  |  |
Basic EPS | $ | (0.17) |  |  | $ | 0.21 |  |  |  |  |
Diluted EPS | $ | (0.17) |  |  | $ | 0.21 |  |  |  |  |

During 2022, 2023, and 2024, performance share awards were granted to certain executive officers and key employees of the Company that will result in the issuance of common stock if the predefined performance criteria are met. The awards provide for an aggregate target of 512,103 shares, of which none have been included in the calculation of diluted EPS for the three months ended March 31, 2024 because the related threshold award performance levels have not been achieved as of March 31, 2024. See Note 10 - Stock-Based Compensation and Equity for more information.
6. SOFTWARE DEVELOPMENT
Software development costs are accounted for in accordance with ASC 350-40, Internal-Use Software. We capitalize incurred labor costs for software development from the time the preliminary project phase is completed until the software is available for general release. Research and development costs and other computer software maintenance costs related to software development are expensed as incurred. We amortize capitalized software value on a straight-line basis over that estimated useful life of five years. If the actual useful life of the asset is determined to be shorter than our estimated useful life, we will amortize the remaining book value over the remaining actual useful life, or the asset may be deemed to be impaired and, accordingly, a write-down of the value of the asset may be recorded as a charge to earnings. Amortization begins when the related software features are placed in service.
Software development costs, net was comprised of the following at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Software development costs | $ | 56,188 |  |  | $ | 51,349 |
Less: accumulated amortization | (14,951) |  |  | (12,210) |
Software development costs, net | $ | 41,237 |  |  | $ | 39,139 |

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9. INCOME TAXES
The Company determines the tax provision for interim periods using an estimate of our annual effective tax rate ("ETR"), adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual ETR, and if our estimated tax rate changes, we make a cumulative adjustment. If a reliable estimate of the annual ETR cannot be made, the actual ETR for the year to date may be the best estimate of the annual ETR.
Our effective tax rate for the three months ended March 31, 2024 increased to 38.8% from 20.8% for the three months ended March 31, 2023, with the largest contributing factor being the impact of the gain recorded on the sale of American HealthTech, Inc. Also impacting the effective tax rate is the research and development ("R&D") tax credit. This credit, which is not correlated with taxable income, resulted in an incremental benefit of 24.2% during the first quarter of 2024 over the corresponding benefit during the first quarter of 2023. In periods with taxable income, the benefit from the R&D tax credit serves to reduce income tax expense, thereby lowering the effective tax rate. However, in periods with taxable loss, the benefit from the R&D tax credit serves to increase the income tax benefit, thereby increasing the effective tax rate.
10. STOCK-BASED COMPENSATION AND EQUITY
Stock-based compensation expense is measured at the grant date based on the fair value of the award, and is recognized as an expense over the employees’ or non-employee directors’ requisite service period.
The following table details total stock-based compensation expense for the three months ended March 31, 2024 and 2023, included in the condensed consolidated statements of income:

| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
Costs of revenue (exclusive of amortization and depreciation) | $ | 36 |  |  | $ | 181 |  |  |  |  |
Other expenses | 764 |  |  | 1,066 |  |  |  |  |
Pre-tax stock-based compensation expense | 800 |  |  | 1,247 |  |  |  |  |
Less: income tax effect | (168) |  |  | (274) |  |  |  |  |
Net stock-based compensation expense | $ | 632 |  |  | $ | 973 |  |  |  |  |

The Company's stock-based compensation awards are in the form of restricted stock and performance share awards granted pursuant to the Company's Amended and Restated 2019 Incentive Plan (the "Plan"). As of March 31, 2024, th ere was $12.4 million of unrecognized compensation expense related to unvested and unearned, as applicable, stock-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted-average period of 2.4 years.
Restricted Stock
The Company grants restricted stock to executive officers, certain key employees and non-employee directors under the Plan with the fair value of the awards representing the fair value of the common stock on the date the restricted stock is granted. During the vesting period, recipients of restricted stock are entitled to dividends and possess voting rights. Shares of restricted stock generally vest in equal annual installments over the applicable vesting period, which ranges from one to three years. The Company records expenses for these grants on a straight-line basis over the applicable vesting periods.
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A summary of restricted stock activity under the Plan during the three months ended March 31, 2024 and 2023 is as follows:

| Three Months Ended March 31, 2024 |  | Three Months Ended March 31, 2023 |  |
| Shares |  | Weighted-Average Grant Date Fair Value Per Share |  | Shares |  | Weighted-Average Grant Date Fair Value Per Share |  |  |  |
Unvested restricted stock outstanding at beginning of period | 343,315 |  |  | $ | 29.08 |  |  | 281,161 |  |  | $ | 32.24 |  |  |  |  |
Granted | 495,003 |  |  | 10.03 |  |  | 185,487 |  |  | 29.23 |  |  |  |  |
Vested | (145,180) |  |  | 31.90 |  |  | (133,298) |  |  | 31.33 |  |  |  |  |
Forfeited | (44,122) |  |  | 31.32 |  |  | — |  |  | — |  |  |  |  |
Unvested restricted stock outstanding at end of period | 649,016 |  |  | $ | 14.73 |  |  | 333,350 |  |  | $ | 30.93 |  |  |  |  |

Performance Share Awards
The Company grants performance share awards to executive officers and certain key employees under the Plan, with the number of shares of common stock earned and issuable under each award determined at the end of a three-year performance period, based on the Company's achievement of performance goals predetermined by the Compensation Committee of the Board of Directors at the time of grant. These performance share awards include a modifier to the total number of shares earned based on the Company's total shareholder return (“TSR”) compared to a small-cap stock market index. If certain levels of the performance objective are met, the award results in the issuance of shares of common stock corresponding to such level. Performance share awards that result in the issuance of shares of common stock are not subject to time-based vesting at the conclusion of the three-year performance period.
In the event that the Company's financial performance meets the predetermined targets for the performance objectives of the performance share awards, the Company will issue each award recipient the number of shares of common stock equal to the target award specified in the individual's underlying performance share award agreement. In the event the financial results of the Company exceed the predetermined targets, additional shares up to the maximum award may be issued. In the event the financial results of the Company fall below the predetermined targets, a reduced number of shares may be issued. If the financial results of the Company fall below the threshold performance levels, no shares may be issued. The total number of shares issued for the performance share award may be increased, decreased, or unchanged based on the TSR modifier described above.
The recipients of performance share awards do not receive dividends or possess voting rights during the performance period and, accordingly, the fair value of the performance share awards is the quoted market value of TruBridge’s common stock on the grant date less the present value of the expected dividends not received during the relevant period. The TSR modifier applicable to the performance share awards is considered a market condition and therefore is reflected in the grant date fair value of the award. A Monte Carlo simulation has been used to account for this market condition in the grant date fair value of the award.
Expense related to performance share awards is recognized using ratable straight-line amortization over the three-year performance period. In the event the Company determines it is no longer probable that the minimum performance level will be achieved, all previously recognized compensation expense related to the applicable awards is reversed in the period such a determination is made.
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A summary of performance share award activity under the Plan during the three months ended March 31, 2024 and 2023 is as follows, based on the target award amounts set forth in the performance share award agreements:

| Three Months Ended March 31, 2024 |  | Three Months Ended March 31, 2023 |  |
| Shares |  | Weighted-Average Grant Date Fair Value Per Share |  | Shares |  | Weighted-Average Grant Date Fair Value Per Share |  |  |  |
Performance share awards outstanding at beginning of period | 273,791 |  |  | $ | 33.17 |  |  | 252,375 |  |  | $ | 31.84 |  |  |  |  |
Granted | 323,461 |  |  | 10.03 |  |  | 123,406 |  |  | 31.21 |  |  |  |  |
Forfeited or unearned | (85,149) |  |  | 37.98 |  |  | (96,069) |  |  | 26.96 |  |  |  |  |
Performance share awards outstanding at end of period | 512,103 |  |  | $ | 18.24 |  |  | 279,712 |  |  | $ | 33.24 |  |  |  |  |

Stock Repurchases
On September 4, 2020, our Board of Directors approved a stock repurchase program under which we were authorized to repurchase up to $30.0 million of our common stock through September 3, 2022. On July 27, 2022, the Board of Directors extended the expiration date of the stock repurchase program to September 4, 2024. We repurchased 49,789 shares for the three months ended March 31, 2023, and there were no shares repurchased for three months ended March 31, 2024. The approximate dollar value of shares that may yet be repurchased under the stock repurchase program was $16.5 million as of March 31, 2024. Any future stock repurchase transactions may be made through open market purchases, privately-negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Any repurchase activity will depend on many factors, such as the availability of shares of our common stock, general market conditions, the trading price of our common stock, alternative uses for capital, the Company’s financial performance, compliance with the terms of our Amended and Restated Credit Agreement and other factors. Concurrent with the authorization of this stock repurchase program in September 2020, the Board of Directors opted to indefinitely suspend all quarterly dividends.
In addition to shares repurchased under the approved stock repurchase program, we purchased 41,000 and 39,716 shares as of March 31, 2024 and 2023, respectively, to fund required tax withholdings. Shares withheld to cover required tax withholdings related to the vesting of restricted stock do not reduce our total share repurchase authority.
Common Stock Rights Agreement
On March 26, 2024, the Company’s board of directors declared a dividend of one right (a “Right”) for each of the Company’s issued and outstanding shares of common stock. The dividend was paid to the stockholders of record at the close of business on April 4, 2024. Each Right initially entitles the registered holder, subject to the terms of the Rights Agreement (as defined below), to purchase from the Company one half of a share of common stock, at an exercise price of $28.00 for each one half of a share of common stock (equivalent to $56.00 for each whole share of common stock), subject to certain adjustments. The Rights currently are not exercisable and will only become exercisable upon the occurrence of certain events as described in the Rights Agreement. The Rights will expire prior to the earliest of (i) the close of business on March 25, 2025, or such later date as may be established by the Board prior to the expiration of the Rights; (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement; (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement; and (iv) upon the occurrence of certain transactions (the earliest of (i), (ii), (iii) and (iv) is referred to as the “Expiration Date”). The complete description and terms of the Rights are set forth in the Rights Agreement, dated as of March 26, 2024, by and between the Company and Computershare Trust Company, N.A. as rights agent, as amended by the Amendment to the Rights Agreement dated as of April 22, 2024 (as amended, the “Rights Agreement”). Given the nature of the Rights and their contingent activation, which has been deemed remote, no value is recognized in stockholders’ equity.
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11. FINANCING RECEIVABLES
Short-Term Payment Plans
The Company provides fixed monthly payment arrangements ("short-term payment plans") over terms ranging from three to twelve months for certain add-on software installations. As a practical expedient, we do not adjust the amount of consideration recognized as revenue for the financing component as unearned income when we expect payment within one year or less. These receivables, included in the current portion of financing receivables, were comprised of the following at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Short-term payment plans, gross | $ | 666 |  |  | $ | 788 |
Less: allowance for losses | (33) |  |  | (39) |
Short-term payment plans, net | $ | 633 |  |  | $ | 749 |

Long-Term Financing Arrangements
Additionally, the Company provides financing for purchases of its information and patient care systems to certain healthcare providers under long-term financing arrangements expiring in various years through 2030. Under long-term financing arrangements, the transaction price is adjusted by a discount rate that reflects market conditions that would be used for a separate financing transaction between the Company and licensee at contract inception, and takes into account the credit characteristics of the licensee and market interest rates as of the date of the agreement. As such, the amount of fixed fee revenue recognized at the beginning of the license term will be reduced by the calculated financing component. As payments are received from the licensee, the Company recognizes a portion of the financing component as interest income, reported as other income in the condensed consolidated statements of income. These receivables typically have terms from two to seven years.
The components of these receivables were as follows at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Long-term financing arrangements, gross | $ | 4,660 |  |  | $ | 5,212 |
Less: allowance for expected credit losses | (350) |  |  | (377) |
Less: unearned income | (316) |  |  | (361) |
Long-term financing arrangements, net | $ | 3,994 |  |  | $ | 4,474 |

Future minimum payments to be received subsequent to March 31, 2024 are as follows:

(In thousands) |
Years Ending December 31, |
2024 | $ | 2,375 |
2025 | 1,938 |
2026 | 206 |
2027 | 69 |
2028 | 62 |
Thereafter | 10 |
Total minimum payments to be received | 4,660 |
Less: allowance for expected credit losses | (350) |
Less: unearned income | (316) |
Receivables, net | $ | 3,994 |

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Credit Quality of Financing Receivables and Allowance for Expected Credit Losses
The following table is a roll-forward of the allowance for expected credit losses for the three months ended March 31, 2024 and year ended December 31, 2023:

(In thousands) | Balance at Beginning of Period |  | Provision |  | Charge-offs |  | Recoveries |  | Sale of AHT |  | Balance at End of Period
March 31, 2024 | $ | 416 |  |  | $ | (31) |  |  | $ | — |  |  | $ | — |  |  | $ | (2) |  |  | $ | 383 |
December 31, 2023 | $ | 549 |  |  | $ | (133) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 416 |

The Company’s financing receivables are comprised of a single portfolio segment, as the balances are all derived from short-term payment plan arrangements and long-term financing arrangements within our target market of community hospitals. The Company evaluates the credit quality of its financing receivables based on a combination of factors, including, but not limited to, customer collection experience, current and future economic conditions, the customer’s financial condition, and known risk characteristics impacting the respective customer base of community hospitals, the most notable of which relate to enacted and potential changes in Medicare and Medicaid reimbursement rates as community hospitals typically generate a significant portion of their revenues and related cash flows from beneficiaries of these programs. In addition to specific account identification, the Company utilizes historical collection experience to establish the allowance for expected credit losses. Financing receivables are written off only after the Company has exhausted all collection efforts.
Customer payments are considered past due if a scheduled payment is not received within contractually agreed upon terms. To facilitate customer collection and credit monitoring efforts, financing receivable amounts are invoiced and reclassified to trade accounts receivable when they become due, with all invoiced amounts placed on nonaccrual status. As a result, all past due amounts related to the Company’s financing receivables are included in trade accounts receivable in the accompanying condensed consolidated balance sheets. The following is an analysis of the age of financing receivables amounts (excluding short-term payment plans) that have been reclassified to trade accounts receivable and were past due as of March 31, 2024 and December 31, 2023:

(In thousands) | 1 to 90 Days Past Due |  | 91 to 180 Days Past Due |  | 181 + Days Past Due |  | Total Past Due
March 31, 2024 | $ | 532 |  |  | $ | 275 |  |  | $ | 495 |  |  | $ | 1,302 |
December 31, 2023 | $ | 857 |  |  | $ | 231 |  |  | $ | 323 |  |  | $ | 1,411 |

From time to time, the Company may agree to alternative payment terms outside of the terms of the original financing receivable agreement due to customer difficulties in achieving the original terms. In general, such alternative payment arrangements do not result in a re-aging of the related receivables. Rather, payments pursuant to any alternative payment arrangements are applied to the already outstanding invoices beginning with the oldest outstanding invoices as the payments are received.
Because amounts are reclassified to trade accounts receivable when they become due, there are no past due amounts included within financing receivables, current portion, net or financing receivables, net of current portion in the accompanying condensed consolidated balance sheets.
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The Company utilizes an aging of trade accounts receivable as the primary credit quality indicator for its financing receivables, which is facilitated by the reclassification of customer payment amounts to trade accounts receivable when they become due. The table below categorizes customer financing receivable balances (excluding short-term payment plans) based on the age of the oldest payment outstanding that has been reclassified to trade accounts receivable:

(In thousands) | March 31, 2024 |  | December 31, 2023
Stratification of uninvoiced client financing receivables based on aging of related trade accounts receivable: |  |  |
Uninvoiced client financing receivables related to trade accounts receivable that are 1 to 90 Days Past Due | $ | 984 |  |  | $ | 1,068 |
Uninvoiced client financing receivables related to trade accounts receivable that are 91 to 180 Days Past Due | 839 |  |  | 1,720 |
Uninvoiced client financing receivables related to trade accounts receivable that are 181 + Days Past Due | 1,348 |  |  | 965 |
Total uninvoiced client financing receivables balances of clients with a trade accounts receivable | $ | 3,171 |  |  | $ | 3,753 |
Total uninvoiced client financing receivables of clients with no related trade accounts receivable | 1,173 |  |  | 1,098 |
Total financing receivables with contractual maturities of one year or less | 666 |  |  | 788 |
Less: allowance for expected credit losses | (383) |  |  | (416) |
Total financing receivables | $ | 4,627 |  |  | $ | 5,223 |

12. INTANGIBLE ASSETS AND GOODWILL
The following tables summarize the gross carrying amounts, accumulated amortization and accumulated impairment of identifiable intangible assets with definite lives by major class as of March 31, 2024 and December 31, 2023:

| March 31, 2024
(In thousands) | Customer Relationships |  | Trademark |  | Developed Technology |  | Non-Compete Agreements |  | Total
Gross carrying amount, beginning of period | $ | 116,470 |  |  | $ | 7,720 |  |  | $ | 31,900 |  |  | $ | 1,620 |  |  | $ | 157,710 |
Accumulated amortization | (43,031) |  |  | (5,378) |  |  | (20,269) |  |  | (604) |  |  | (69,282) |
Accumulated impairment | — |  |  | (2,342) |  |  | — |  |  | — |  |  | (2,342) |
Net intangible assets as of March 31, 2024 | $ | 73,439 |  |  | $ | — |  |  | $ | 11,631 |  |  | $ | 1,016 |  |  | $ | 86,086 |
Weighted average remaining years of useful life | 8.2 |  | 0.0 |  | 8.3 |  | 3.2 |  | 8.2

| December 31, 2023
(In thousands) | Customer Relationships |  | Trademark |  | Developed Technology |  | Non-Compete Agreements |  | Total
Gross carrying amount, beginning of period | $ | 132,170 |  |  | $ | 12,320 |  |  | $ | 40,800 |  |  | $ | 1,400 |  |  | $ | 186,690 |
Intangible assets acquired | 16,100 |  |  | — |  |  | 1,400 |  |  | 220 |  |  | 17,720 |
Accumulated amortization | (63,686) |  |  | (6,974) |  |  | (29,934) |  |  | (522) |  |  | (101,116) |
Accumulated impairment | — |  |  | (2,342) |  |  |  |  |  |  | (2,342) |
Held for sale | (8,735) |  |  | (3,004) |  |  |  |  |  |  | (11,739) |
Net intangible assets as of December 31, 2023 | $ | 75,849 |  |  | $ | — |  |  | $ | 12,266 |  |  | $ | 1,098 |  |  | $ | 89,213 |

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During the fourth quarter of 2023, the Company committed to the Company-wide rebranding and legal entity consolidation initiative that culminated in the change of the Company’s corporate name to “TruBridge, Inc.” on March 4, 2024. As a result of this initiative, it was expected that certain of the Company’s brand names and related trademarks would cease to be used, resulting in total trademark impairment recorded during the year ended December 31, 2023 of $2.3 million. Of the total trademark impairment charge, $1.0 million is derived from our RCM segment, $1.2 million is derived from our EHR segment, and $0.1 million is derived from our Patient Engagement segment.
The following table represents the remaining amortization of definite-lived intangible assets as of March 31, 2024:

(In thousands) |
For the year ended December 31, |
2024 | $ | 9,379 |
2025 | 12,190 |
2026 | 11,517 |
2027 | 10,497 |
2028 | 10,203 |
Thereafter | 32,300 |
Total | $ | 86,086 |

The following table sets forth the change in the carrying value of our goodwill balances by reportable segment for the three months ended March 31, 2024:

(In thousands) | RCM | EHR | Patient Engagement | Total
Gross value at December 31, 2023 | $ | 79,084 |  | $ | 126,665 |  | $ | 9,767 |  | $ | 215,516 |
Accumulated impairment | — |  | (28,307) |  | (7,606) |  | (35,913) |
Held for sale | — |  | (7,694) |  | — |  | (7,694) |
Carrying value at December 31, 2023 | 79,084 |  | 90,664 |  | 2,161 |  | 171,909 |
Purchase price adjustment (Viewgol) | 664 |  | — |  | — |  | 664 |
Gross value at March 31, 2024 | 79,748 |  | 118,971 |  | 9,767 |  | 208,486 |
Accumulated impairment | — |  | (28,307) |  | (7,606) |  | (35,913) |
Carrying value as of March 31, 2024 | $ | 79,748 |  | $ | 90,664 |  | $ | 2,161 |  | $ | 172,573 |

Goodwill is evaluated for impairment annually on October 1, or more frequently if indicators of impairment are present or changes in circumstances suggest that impairment may exist. During the three months ended March 31, 2024, our share price experienced a sustained decline resulting in a decrease in our market capitalization. This decline in share price was identified as a triggering event requiring a quantitative assessment for goodwill impairment in each of our reporting units.
Our reporting units assessed for impairment of goodwill include: RCM (formerly the “TruBridge” reporting unit), EHR, and Patient Engagement (formerly a component of our former “TruBridge” reporting unit). We continue to monitor each reporting unit for interim impairment indicators and believe that the estimates and assumptions used in calculations are reasonable as of March 31, 2024. By using a combination of the income and market valuation approaches. Under the income approach, we used a discounted cash flow model, which utilizes present values of cash flows to estimate fair value. Our forecasted cash flows reflected conditions as of March 31, 2024, and reflected management’s anticipated business outlook for each reporting unit, which requires the use of estimates. The market approach applied selected trading multiples of companies comparable to the respective reporting units to the Company’s financial measures. The income approach was given significantly more weight in determining the fair values. These quantitative evaluations of the fair values of each of our reporting units resulted in no impairment as of March 31, 2024. Should the fair value of any of our reporting units fall below its carrying amount because of reduced operating performance, market declines, and other adverse factors, goodwill impairment charges may be necessary in future period.
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13. LONG-TERM DEBT
Long-term debt was comprised of the following at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Term loan facility | $ | 63,000 |  |  | $ | 63,875 |
Revolving credit facility | 123,416 |  |  | 135,723 |
Debt obligations | 186,416 |  |  | 199,598 |
Less: unamortized debt issuance costs | (1,610) |  |  | (1,187) |
Debt obligation, net | 184,806 |  |  | 198,411 |
Less: current portion | (3,074) |  |  | (3,141) |
Long-term debt | $ | 181,732 |  |  | $ | 195,270 |

As of March 31, 2024, the carrying value of debt approximated the fair value due to the variable interest rate, which reflected the market rate.
Credit Agreement
In conjunction with our acquisition of Healthland Holding Inc. ("HHI") in January 2016, we entered into a syndicated credit agreement with Regions Bank ("Regions") serving as administrative agent, which provided for a $125 million term loan facility and a $50 million revolving credit facility. On June 16, 2020, we entered into an Amended and Restated Credit Agreement that increased the aggregate principal amount of our credit facilities to $185 million, including a $75 million term loan facility and a $110 million revolving credit facility. On May 2, 2022, we entered into a First Amendment (the "First Amendment") to the Credit Agreement that increased the aggregate principal amount of our credit facilities to $230 million, which includes a $70 million term loan facility and a $160 million revolving credit facility. In addition, the interest rate provisions of the First Amendment reflect the transition from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") as the new benchmark interest rate for each loan.
Each of our credit facilities continues to bear interest at a rate per annum equal to an applicable margin plus, at our option, either (1) the Adjusted SOFR rate for the relevant interest period, subject to a floor of 0.50%, (2) an alternate base rate determined by reference to the greater of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus one half of one percent per annum and (c) the one month SOFR rate, subject to the aforementioned floor, plus one percent per annum, or (3) a combination of (1) and (2). The applicable margin range for SOFR loans and the letter of credit fee ranges from 1.8% to 3.0%. The applicable margin range for base rate loans ranges from 0.8% to 2.0%, in each case based on the Company's consolidated net leverage ratio.
Principal payments with respect to the term loan facility are due on the last day of each fiscal quarter beginning June 30, 2022, with quarterly principal payments of approximately $0.9 million through March 31, 2027, with maturity on May 2, 2027 or such earlier date as the obligations under the Amended and Restated Credit Agreement, as amended by the First Amendment, become due and payable pursuant to the terms of such agreement. Any principal outstanding under the revolving credit facility is due and payable on the maturity date.
Anticipated annual future maturities of the term loan facility and revolving credit facility are as follows as of March 31, 2024:

(In thousands) |
2024 | $ | 2,625 |
2025 | 3,500 |
2026 | 3,500 |
2027 | 176,791 |
| $ | 186,416 |

Our credit facilities are secured pursuant to the Amended and Restated Credit Agreement, dated as of June 16, 2020, among the parties identified as obligors therein and Regions, as collateral agent, on a first priority basis by a security interest in substantially all of the tangible and intangible assets (subject to certain exceptions) of the Company and certain subsidiaries of the Company, as guarantors (collectively, the “Subsidiary Guarantors”), including certain registered
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intellectual property and the capital stock of certain of the Company’s direct and indirect subsidiaries. Our obligations under the Amended and Restated Credit Agreement are also guaranteed by the Subsidiary Guarantors.
The First Amendment provides incremental facility capacity of $75 million, subject to certain conditions. The Amended and Restated Credit Agreement, as amended by the First Amendment, includes a number of restrictive covenants that, among other things and in each case subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and the Subsidiary Guarantors, including the ability to incur additional debt; incur liens and encumbrances; make certain restricted payments, including paying dividends on the Company's equity securities or payments to redeem, repurchase, or retire the Company's equity securities (which are subject to our compliance, on a pro forma basis to give effect to the restricted payment, with the fixed charge coverage ratio and consolidated net leverage ratio described below); enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into sale and leaseback transactions; engage in transactions with affiliates; and materially alter the business we conduct. The First Amendment requires the Company to maintain a minimum fixed charge coverage ratio of 1.25:1.00 throughout the duration of such agreement. Under the First Amendment, the Company is required to comply with a maximum consolidated net leverage ratio of 3.50:1.00. Further, under the First Amendment, in connection with any acquisition by the Company exceeding $25 million, the Company may elect to increase the maximum permitted consolidated net leverage ratio for the fiscal quarter in which the acquisition occurs and each of the following three fiscal quarters by 0.50:1.00 above the otherwise permitted maximum. If the consolidated net leverage ratio is less than 2.50:1.00, there is no limit on the amount of incremental facilities. The Amended and Restated Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default. On March 10, 2023, the calculation of the fixed charge coverage ratio was amended to specifically exclude from the definition of fixed charges the Company's share repurchases conducted during the third and fourth quarters of 2022.
As of September 30, 2023, we were not in compliance with the fixed charge coverage ratio required by the Amended and Restated Credit Agreement. On November 8, 2023, the Company and the subsidiary guarantors entered into a Waiver with Regions Bank, as administrative agent, and various other lenders, which provided for a one-time waiver of this failure as an event of default. As of December 31, 2023, the Company was similarly not in compliance with the fixed charge coverage ratio required by the Amended and Restated Credit Agreement, and a one-time waiver was provided in conjunction with the Fourth Amendment to the Amended and Restated Credit Agreement (described below). Any failure by us to comply with this or another covenant in the future may result in an event of default. There can be no assurance that we will be able to continue to comply with this covenant or obtain amendments to avoid future covenant violations, or that such amendments will be available on commercially acceptable terms.
The First Amendment removed the requirement of mandatory prepayment of the credit facilities with excess cash flow generated during the prior fiscal year. The Company is permitted to voluntarily prepay the credit facilities at any time without penalty, subject to customary “breakage” costs with respect to prepayments of SOFR rate loans made on a day other than the last day of any applicable interest period.
Credit Facility Third Amendment
On January 16, 2024, the Company entered into a Third Amendment (the “Third Amendment”) to the Amended and Restated Credit Agreement, dated as of June 16, 2020, by and among the Company; the Subsidiary Guarantors; Regions Bank, as administrative agent and collateral agent; and various other lenders from time to time. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.
The Third Amendment modified the term “Consolidated EBITDA” to provide that the following amounts will be added back to Consolidated Net Income: (i) the reasonably expected value of all earn-out consideration in connection with any Permitted Acquisition, provided that the aggregate amount of fees and out-of-pocket expenses incurred in connection with anticipated Permitted Acquisitions which are not consummated during any period of four fiscal quarters ending on or after the Closing Date will not exceed the greater of $7 million and 10% of Consolidated EBITDA; (ii) any fees, costs or expenses related to the implementation of cost savings, operating expense reductions and synergies related to Permitted Acquisitions, restructurings and other initiatives; and (iii) costs and expenses related to the previously disclosed U.S. Securities and Exchange Commission investigation that occurred during the fiscal year ended December 31, 2023, in an aggregate amount not to exceed $1.25 million. Additionally, the Third Amendment (y) removed from the maximum aggregate amount of fees and expenses that can be added back to Consolidated Net Income any losses resulting from any Asset Sales or Involuntary Disposition and (z) increased the maximum amount of fees and expenses that can be added back to Consolidated Net Income related to savings initiatives, Equity Transactions, the incurrence of Indebtedness and amendments to the Credit Documents from 10% to 15% of Consolidated EBITDA (determined prior to giving effect to such adjustments).
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Credit Facility Fourth Amendment
On February 29, 2024, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement, by and among the Company; the Subsidiary Guarantors; the Administrative Agent; and various other lenders. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.
The Fourth Amendment modified the term “Consolidated EBITDA” to provide that the additional following amounts will be added back to Consolidated Net Income: (i) costs and expenses related to the voluntary early retirement program during the fiscal year ending December 31, 2023; and (ii) fees, costs and expenses in categories identified to the Administrative Agent to the extent incurred during the fiscal year ending December 31, 2024, in an aggregate amount not to exceed $7.25 million. Additionally, the modified definition of “Consolidated EBITDA” limits the amount of pro forma “run rate” cost savings, operating expense reductions and synergies (collectively, “Savings”) related to the Viewgol acquisition that can be added back to Consolidated Net Income to an aggregate amount not to exceed $6.6 million; however, Savings related to the Viewgol acquisition are not subject to the cap of 15% of Consolidated EBITDA that otherwise applies to Savings related to Permitted Acquisitions, restructurings or cost savings initiatives.
Finally, the Consolidated Fixed Charge Coverage Ratio covenant was decreased from 1.25:1.00 to 1.15:1.00 for each fiscal quarter ending March 31, 2024 through and including December 31, 2024. As of December 31, 2023, the Company was not in compliance with the Consolidated Fixed Charge Coverage Ratio required by the Credit Agreement, and the Fourth Amendment provides for a one-time waiver of this failure as an event of default. We believe that we were in compliance with the covenants contained in such agreement as of March 31, 2024.
14. OPERATING LEASES
The Company leases office space in various locations in Alabama, Pennsylvania, Maryland, Mississippi, and Washington. These leases have terms expiring from 2024 through 2029 but do contain optional extension terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
On April 30, 2023, the company terminated its lease agreement for approximately 12,500 square feet of office space in Plymouth, Minnesota. Pursuant to a Termination of Lease Agreement dated April 18, 2023, the Company paid $1.1 million to the landlord as consideration for the early termination. In connection with the lease termination, the Company derecognized the assets and liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvement.
Supplemental balance sheet information related to operating leases was as follows:

(In thousands) | March 31, 2024 |  | December 31, 2023 |  |
Operating lease assets: |  |  |  |  |
Operating lease assets | $ | 4,672 |  |  | $ | 5,192 |  |  |
Operating lease liabilities: |  |  |  |  |
Other accrued liabilities | 1,601 |  | 1,804 |  |
Operating lease liabilities, net of current portion | 2,848 |  |  | 3,074 |  |  |
Total operating lease liabilities | $ | 4,449 |  |  | $ | 4,878 |  |  |
Weighted average remaining lease term in years | 3.9 |  | 4 |  |
Weighted average discount rate | 4.1% |  | 4.2% |  |

Because our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. We used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.
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The future minimum lease payments payable under these operating leases subsequent to March 31, 2024 are as follows:

(In thousands) |
2024 | $ | 1,326 |
2025 | 1,063 |
2026 | 1,025 |
2027 | 706 |
2028 | 462 |
Thereafter | 231 |
Total lease payments | 4,813 |
Less imputed interest | (364) |
Total | $ | 4,449 |

Total lease expense for the three months ended March 31, 2024 and 2023 was $0.5 million and $0.6 million, respectively.
Total cash paid for amounts included in the measurement of lease liabilities within operating cash flows from operating leases for the three months ended March 31, 2024 and 2023 was $0.5 million and $0.6 million, respectively.
15. COMMITMENTS AND CONTINGENCIES
From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. Management does not believe it is reasonably possible that such matters will have a material adverse effect on the Company’s financial statements. The Company recorded a liability of $1.0 million related to contingent consideration for Viewgol's former equity holders as of December 31, 2023 and March 31, 2024.
16. FAIR VALUE
FASB Codification topic, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands financial statement disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Codification does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. The Codification requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
At March 31, 2024, we measured the fair value of contingent consideration that represents the potential earnout incentive for Viewgol’s former equity holders. We estimated the fair value of these contingent consideration based on the probability of Viewgol meeting EBITDA targets (subject to certain pro-forma adjustments).
The following table summarizes the carrying amount and fair value of the contingent consideration at March 31, 2024:

|  |  | Fair Value at March 31, 2024 Using
(In thousands) | Carrying Amount at March 31, 2024 |  | Quoted Price in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Description |  |  |  |  |  |  |
Contingent consideration | $ | 1,044 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,044 |
Total | $ | 1,044 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,044 |

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17. SEGMENT REPORTING
Our chief operating decision makers (“CODM”) identifies the following three operating segments “RCM”, “EHR”, and “Patient Engagement”. These segments represent the components of the Company for which separate financial information is available that is utilized on a regular basis by the CODM in assessing segment performance and in allocating the Company's resources. Management evaluates the performance of the segments based on revenues and adjusted EBITDA. The Company previously evaluated the performance of the segments based on segment gross profit. Management believes adjusted EBITDA is a useful measure to assess the performance and liquidity of the Company as it provides meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. Our CODM group is comprised of the Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer. Accounting policies for each of the reportable segments are the same as those used on a consolidated basis.
Adjusted EBITDA consists of GAAP net income (loss) as reported and adjusts for (i) depreciation expense; (ii) amortization of software development costs; (iii) amortization of acquisition-related intangible assets; (iv) stock-based compensation; (v) severance and other non-recurring charges; (vi) interest expense and other, net; and (ix) the provision (benefit) for income taxes. There are no intersegment revenues to be eliminated in computing segment revenue.
The CODM do not evaluate operating segments nor make decisions regarding operating segments based on assets. Consequently, we do not disclose total assets by reportable segment.
The following table presents a summary of the revenues and adjusted EBITDA of our three operating segments for the three months ended March 31, 2024 and 2023:

| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
Revenues by segment: |  |  |  |  |  |  |
RCM | $ | 53,038 |  |  | $ | 48,631 |  |  |  |  |
EHR |  |  |  |  |  |  |
Recurring revenue |  |  |  |  |  |  |
Acute EHR | 25,910 |  |  | 27,613 |  |  |  |  |
Post-acute EHR | 582 |  |  | 3,906 |  |  |  |  |
Total recurring EHR revenue | 26,492 |  |  | 31,519 |  |  |  |  |
Non-recurring revenue |  |  |  |  |  |  |
Acute EHR | 1,449 |  |  | 3,292 |  |  |  |  |
Post-acute EHR | 81 |  |  | 380 |  |  |  |  |
Total non-recurring EHR revenue | 1,530 |  |  | 3,672 |  |  |  |  |
Total EHR revenue | $ | 28,022 |  |  | $ | 35,191 |  |  |  |  |
Patient Engagement | 2,187 |  |  | 2,411 |  |  |  |  |
Total revenues | $ | 83,247 |  |  | $ | 86,233 |  |  |  |  |
Adjusted EBITDA by segment: |  |  |  |  |  |  |
RCM | $ | 6,396 |  |  | $ | 7,898 |  |  |  |  |
EHR | 2,929 |  |  | 6,157 |  |  |  |  |
Patient Engagement | 129 |  |  | 588 |  |  |  |  |
Total adjusted EBITDA | $ | 9,454 |  |  | $ | 14,643 |  |  |  |  |

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The following table reconciles net income to adjusted EBITDA:

| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
Net income (loss), as reported | $ | (2,516) |  |  | $ | 3,084 |  |  |  |  |
Depreciation expense | 400 |  |  | 499 |  |  |  |  |
Amortization of software development costs | 2,742 |  |  | 1,486 |  |  |  |  |
Amortization of acquisition-related intangibles | 3,127 |  |  | 4,014 |  |  |  |  |
Stock-based compensation | 800 |  |  | 1,247 |  |  |  |  |
Severance and other non-recurring charges | 3,844 |  |  | 1,104 |  |  |  |  |
Interest expense | 4,072 |  |  | 2,669 |  |  |  |  |
Gain on sale of AHT | (1,250) |  |  | — |  |  |  |  |
Other | (173) |  |  | (269) |  |  |  |  |
Provision (benefit) for income taxes | (1,592) |  |  | 809 |  |  |  |  |
Total adjusted EBITDA | $ | 9,454 |  |  | $ | 14,643 |  |  |  |  |

Certain of the items excluded or adjusted to arrive at adjusted EBITDA are described below:
•Amortization of acquisition-related intangibles - Acquisition-related amortization expense is a non-cash expense arising primarily from the acquisition of intangibles in connection with acquisitions or investments. We exclude acquisition-related amortization expense from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets.
•Stock-based compensation - Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards. We exclude stock-based compensation expense from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of the timing and valuation of grants of new stock-based awards, including grants in connection with acquisitions.
•Severance and other non-recurring charges - Non-recurring charges relate to certain severance and other charges incurred in connection with activities that are considered non-recurring. We exclude non-recurring expenses (primarily related to costs associated with our recent business transformation initiative and non-recurring lease termination costs) and transaction-related costs from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods.
•Other – Other charges consist of a miscellaneous of items such as interest income, service charges, other (income)/loss, and foreign currency (gain)/loss. We exclude these other charges from adjusted EBITDA because we believe (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods.
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and related notes appearing elsewhere herein.
This discussion and analysis contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified generally by the use of forward-looking terminology and words such as "expects," "anticipates," "estimates," "believes," "predicts," "intends," "plans," "potential," "may," "continue," "should," "will" and words of comparable meaning. Without limiting the generality of the preceding statement, all statements in this report relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and future financial results are forward-looking statements. We caution investors that any such forward-looking statements are only predictions and are not guarantees of future performance. Certain risks, uncertainties and other factors may cause actual results to differ materially from those projected in the forward-looking statements. Such factors may include:
Risks Related to Our Industry
•saturation of our target market and hospital consolidations;
•unfavorable economic or market conditions that may cause a decline in spending for information technology and services;
•significant legislative and regulatory uncertainty in the healthcare industry;
•exposure to liability for failure to comply with regulatory requirements;
Risks Related to Our Business
•transition to a subscription-based recurring revenue model and modernization of our technology;
•competition with companies that have greater financial, technical and marketing resources than we have;
•potential future acquisitions that may be expensive, time consuming, and subject to other inherent risks;
•our ability to attract and retain qualified personnel;
•disruption from periodic restructuring of our sales force;
•slower than anticipated development of the market for RCM services;
•our potential inability to manage our growth in the new markets we may enter;
•our operations could be significantly disrupted due to the ongoing implementation of a new enterprise resource planning software solution;
•our operations could be significantly disrupted if we do not effectively implement a new enterprise resource planning software solution;
•exposure to numerous and often conflicting laws, regulations, policies, standards or other requirements through our international business activities;
•potential litigation against us and investigations;
•our use of an international workforce and offshore third-party resources;
•pandemics and other public health crises and related economic disruptions;
•competitive and litigation risk related to the use of artificial intelligence;
Risks Related to Our Products and Services
•potential failure to develop new products or enhance current products that keep pace with market demands;
•exposure to claims if our products fail to provide accurate and timely information for clinical decision-making;
•exposure to claims for breaches of security and viruses in our systems;
•undetected errors or problems in new products or enhancements;
•our potential inability to convince customers to migrate to current or future releases of our products;
•failure to maintain our margins and service rates;
•increase in the percentage of total revenues represented by service revenues, which have lower margins;
•exposure to liability in the event we provide inaccurate claims data to payers;
•exposure to liability claims arising out of the licensing of our software and provision of services;
•dependence on licenses of rights, products and services from third parties;
•a failure to protect our intellectual property rights;
•exposure to significant license fees or damages for intellectual property infringement;
•service interruptions resulting from loss of power and/or telecommunications capabilities;
Risks Related to Our Indebtedness
•our potential inability to secure additional financing on favorable terms to meet our future capital needs;
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•substantial indebtedness that may adversely affect our business operations;
•our ability to incur substantially more debt;
•pressures on cash flow to service our outstanding debt;
•restrictive terms of our credit agreement on our current and future operations;
Risks Related to Our Common Stock and Other General Risks
•changes in and interpretations of financial accounting matters that govern the measurement of our performance;
•the potential for our goodwill or intangible assets to become impaired;
•quarterly fluctuations in our financial results due to various factors;
•volatility in our stock price;
•failure to maintain effective internal control over financial reporting;
•inherent limitations in our internal control over financial reporting;
•vulnerability to significant damage from natural disasters;
•exposure to market risk related to interest rate changes; and
•potential material adverse effects due to macroeconomic conditions.
Additional information concerning these and other factors that could cause differences between forward-looking statements and future actual results is discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023 and our subsequent Quarterly Reports on Form 10-Q.
Background
During much of the Company's history, our strategy, operations, and financial results have been largely associated with developments in the electronic health record ("EHR") industry. With the rapid maturity of the EHR industry and the increasing prevalence of and demand for outsourced revenue cycle management ("RCM") services and complementary solutions, we've seen our strategy, operations, and financial results naturally evolve to become more heavily associated with RCM, with RCM revenues comprising 57% of our consolidated revenue for 2023. In recognition of this significant shift in strategic focus, Computer Programs and Systems, Inc. changed its corporate name to TruBridge, Inc. on March 4, 2024. Contemporaneous with this name change, the former wholly-owned subsidiaries Evident, LLC, TruBridge, LLC, and TruCode, LLC were merged into the parent company, while the former wholly-owned subsidiary Rycan Technologies, Inc. was merged into its parent and another wholly-owned subsidiary, Healthland Holding Inc. With these changes, the Company's remaining legal structure includes TruBridge, Inc., the parent company, with Viewgol, LLC ("Viewgol"), iNetXperts, Corp. d/b/a Get Real Health, Healthcare Resource Group, Inc. ("HRG"), and Healthland Holding Inc. as its wholly-owned subsidiaries.
Founded in 1979, TruBridge is a leading provider of healthcare solutions and services for community hospitals, their clinics and other healthcare systems. Our combined companies are focused on helping improve the health of the communities we serve, connecting communities for a better patient care experience, and improving the financial operations of our customers.
The Company operates its business in three operating segments, which are also our reportable segments: RCM, EHR, and Patient Engagement. The individual companies align with the reporting segments and contribute towards the combined focus of improving the h ealth of the communities we serve as follows:
•The revenue cycle management (“RCM”) reporting segment focuses on provid ing business management, consulting, and managed IT services along with its complete RCM solution for all care settings, regardless of their primary healthcare information solutions provider.
•The electronic healthcare record (“EH R”) segment provides comprehensive acute care EHR solutions and related services for community hospitals, their physician clinics, and skilled nursing and assisted living facilities. Prior to our sale of American HealthTech, Inc. in January 2024, our EHR segment also provided post-acute care EHR solutions and related services for skilled nursing and assisted living facilities.
•The Patient Engagement segment offers comprehensive patient engagement and empowerment technology solutions through Get Real Health to improve patient outcomes and engagement strategies with care providers.
Our companies currently support community hospitals and other healthcare systems with a geographically diverse patient mix within the domestic community healthcare market. Our target market for our RCM, EHR, and Patient Engagement solutions includes community hospitals with fewer than 400 acute care beds and their clinics, as well as independent or small to medium sized chains of skilled nursing facilities. 98% of our acute care hospital EHR customer base is comprised of hospitals with fewer than 100 beds.
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See Note 17 - Segment Reporting of the condensed consolidated financial statements included herein for additional information on our three reportable segments.
Management Overview
Strategy
Our core strategy is to achieve meaningful long-term revenue growth by cross-selling RCM services into our existing EHR customer base, expanding RCM market share with sales to new community hospitals and larger health systems, and pursuing competitive EHR takeaway opportunities in the acute care markets. We may also seek to grow through acquisitions of businesses, technologies or products if we determine that such acquisitions are likely to help us meet our strategic goals.
The opportunity to cross-sell RCM services is greatest within our Acute Care EHR customer base. As such, retention of existing Acute Care EHR customers is a key component of our long-term growth strategy by protecting this base of potential RCM customers, while at the same time serving as a leading indicator of our market position and stability of revenues and cash flows.
We determine retention rates by reference to the amount of beginning-of-period Acute Care EHR recurring revenues that have not been lost due to customer attrition from our production environment customer base. Production environment customers are those that are using our applications to document live patient encounters, as opposed to legacy environment customers that have view-only access to historical patient records. Since 2019, these retention rates have consistently remained in the mid-to-high 90th percentile ranges. Specifically, we achieved retention rates of 92.1% in 2023, 98.2% in 2022 and 94.9% in 2021. The annualized retention rate in the first three months of 2024 was 91.1%, as EHR product consolidation has led to an increase in attrition from our non-flagship products. We have increased customer retention efforts by enhancing support services, investing in tooling and instrumentation to proactively monitor for potential disruptions, and deploying in-application experience software that delivers application-specific insights while using our products.
As we pursue meaningful long-term revenue growth by leveraging RCM as a growth agent, we are placing ever-increasing value in further developing our already significant recurring revenue base to further stabilize our revenues and cash flows. As such, maintaining and growing recurring revenues are key components of our long-term growth strategy, aided by the aforementioned focus on customer retention. This includes a renewed focus on driving demand for subscriptions for our existing technology solutions and expanding the footprint for RCM services beyond our EHR customer base.
While the combination of revenue growth and operating leverage results in increased margin realization, we also look to increase margins through specific cost containment measures where appropriate as we continue to leverage opportunities for greater operating efficiencies. However, in the immediate future, we anticipate incremental margin pressure from the continued client transition from perpetual license arrangements to “Software as a Service” (“SaaS”) arrangements as described below.
Industry Dynamics
Turbulence in the U.S. and worldwide economies and financial markets impacts almost all industries. While the healthcare industry is not immune to economic cycles, we believe it is more significantly affected by U.S. regulatory and national health initiatives. In recent years, there have been significant changes to provider reimbursement by the U.S. federal government, followed by commercial payers and state governments. There is increasing pressure on healthcare organizations to reduce costs and increase quality while replacing the fee-for-service reimbursement model in part by enrolling in an advanced payment model that incentivizes high-quality, cost effective-care via value-based reimbursement. This pressure could further encourage adoption of healthcare IT and increase demand for business management, consulting, and managed IT services, as the future success of these healthcare providers is greatly dependent upon their ability to engage patient populations and to coordinate patient care across a multitude of settings, while optimizing operating efficiency along the way.
Additionally, healthcare organizations with a large dependency on Medicare and Medicaid populations, such as community hospitals, have been affected by the challenging financial condition of the federal government and many state governments and government programs. Accordingly, we recognize that prospective hospital clients often do not have the necessary capital to make investments in information technology while those with the necessary capital have become more selective in their investments. Despite these challenges, we believe healthcare IT will be an area of continued investment due to its unique potential to improve safety and efficiency and reduce costs while meeting current and future regulatory, compliance and government reimbursement requirements.
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EHR License Model Preferences
Much of the variability in our periodic revenues and profitability has been and will continue to be due to changing demand for different license models for our technology solutions, with variability in operating cash flows further impacted by the financing decisions within those license models. Our technology solutions are generally deployed in one of two license models: (1) perpetual licenses, for which the related revenue is recognized effectively upon installation, and (2) “Software as a Service” or “SaaS” arrangements, including our Cloud Electronic Health Record (“Cloud EHR”) offering, which generally result in revenue being recognized monthly as the services are provided over the term of the arrangement.
The overwhelming majority of our historical EHR installations have been under a perpetual license model, but new customer demand has dramatically shifted towards a SaaS license model in the past several years. SaaS license models made up only 12% of annual new acute care EHR installations in 2018, increasing to 100% during 2023 a nd the first three months of 2024. T hese SaaS offerings are attractive to our clients because this configuration allows them to obtain access to advanced software products without a significant initial capital outlay. We expect this trend to continue for the foreseeable future, with the resulting impact on the Company’s financial statements being reduced EHR revenues in the period of installation in exchange for increased recurring periodic revenues (reflected in EHR revenues) over the term of the SaaS arrangement. This naturally places downward pressure on short-term revenue growth and profitability metrics, but benefits long-term revenue growth and profitability which, in our view, is consistent with our goal of delivering long-term shareholder value.
For customers electing to purchase our technology solutions under a traditional perpetual license, we have historically made financing arrangements available on a case-by-case basis, depending on the various aspects of the proposed contract and customer attributes. These financing arrangements have comprised the majority of our perpetual license installations over the past several years, and include short-term payment plans and longer-term lease financing through us or third-party financing companies. The aforementioned shift in customer preference towards SaaS arrangements has significantly reduced the frequency of new financing arrangements for customer purchases under a perpetual license. When combined with scheduled payments on existing financing arrangements, the reduced frequency of new financing arrangements has resulted in a substantial reduction in financing receivables during 2023 and the first three months of 2024.
For those perpetual license clients not seeking a financing arrangement, the payment schedule of the typical contract is structured to provide for a scheduling deposit due at contract signing, with the remainder of the contracted fees due at various stages of the installation process (delivery of hardware, installation of software and commencement of training, and satisfactory completion of a monthly accounting cycle or end-of-month operation by each respective application, as applicable).
Margin Optimization Efforts
Our core growth strategy includes an element geared towards margin optimization by identifying opportunities to further improve our cost structure by executing against initiatives related to organizational realignment, expanded use of offshore resources and the use of automation to increase the efficiency and value of our associates' efforts.
Initial organizational realignment efforts began during 2021, when we committed to a reduction in force intended to more effectively align our resources with business priorities. Other related initiatives include our ongoing implementation of the Scaled Agile Framework® throughout our EHR product development, implementation and support functions to enhance cohesion, time-to-market and customer satisfaction. This framework is a set of organization and workflow patterns intended to guide enterprises in scaling lean and agile practices and promote alignment, collaboration, and delivery across large numbers of agile teams.
The remaining margin optimization initiatives of expanded utilization of offshore resources and automation have commenced and, to date, have provided meaningful efficiencies to our operations, particularly within RCM. As a service organization, RCM's cost structure is heavily dependent upon human capital, subjecting it to the complexities and risks associated with this resource. Chief among these complexities and risks is the ever-present pressure of wage inflation, which has recently become a reality as national and international economies recover from the economic downturn caused by the COVID-19 pandemic and has compelled the Company to make compensation adjustments that are outside of historical norms. Prior to our October 2023 acquisition of Viewgol, we were solely reliant upon third party partnerships for offshore resources, increasing both the execution risk of this initiative and the related cost of scaling this labor force. With Viewgol as a subsidiary, we have greatly enhanced our control over the resource availability for this initiative and we expect to achieve impressive per-unit cost efficiencies. However, in the near-term, we expect to see additional pressure on margins due to the integration and ramp-up of Viewgol.
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We believe that our efforts towards margin optimization are well-timed, enabling a rapid response to actual or expected wage inflation in order to preserve RCM gross margins, but we cannot guarantee that these efforts will fully eliminate any related margin deterioration.
In addition to wage inflation, we are a party to contracts with certain third-party suppliers and vendors that allow for annual price adjustments indexed to inflation. While we continually seek to proactively manage controllable expenses, inflationary pressure on costs has led to, and could lead to, erosion of margins.
Results of Operations
During the first three months of 2024, we generated revenues of $83.2 million from the sale of our products and services, compared to $86.2 million during the first three months of 2023, a decrease of 3% that is due to decreased revenues in our EHR segment partially offset by inorganic growth in RCM due to the acquisition of Viewgol. Net income (loss) decreased by $5.6 million to a net loss of $2.5 million during the first three months of 2024 from the prior-year period due to the combined effects of (i) increased severance costs associated with strategic efforts to right-size headcount, (ii) increased non-recurring charges largely related to executive leadership reorganization costs and rebranding efforts, (iii) increased interest expense due to acquisition-fueled growth in long-term debt and a rising interest rate environment, (iv) increased costs related to our strategy to migrate to a public cloud environment in order to increase business agility and improve security, and (v) increased amortization of capitalized software development costs.
The following table sets forth certain items included in our results of operations for the three months ended March 31, 2024 and 2023, expressed as a percentage of our total revenues for these periods:

| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
(In thousands) | Amount |  | % Sales |  | Amount |  | % Sales |  |  |  |  |  |  |  |
INCOME DATA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
RCM | $ | 53,038 |  |  | 63.7 | % |  | $ | 48,631 |  |  | 56.4 | % |  |  |  |  |  |  |  |
EHR | 28,022 |  |  | 33.7 | % |  | 35,191 |  |  | 40.8 | % |  |  |  |  |  |  |  |
Patient Engagement | 2,187 |  |  | 2.6 | % |  | 2,411 |  |  | 2.8 | % |  |  |  |  |  |  |  |
Total revenues | 83,247 |  |  | 100.0 | % |  | 86,233 |  |  | 100.0 | % |  |  |  |  |  |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Costs of revenue (exclusive of amortization and depreciation) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
RCM | 29,597 |  |  | 35.6 | % |  | 27,183 |  |  | 31.5 | % |  |  |  |  |  |  |  |
EHR | 11,287 |  |  | 13.6 | % |  | 16,348 |  |  | 19.0 | % |  |  |  |  |  |  |  |
Patient Engagement | 875 |  |  | 1.1 | % |  | 646 |  |  | 0.7 | % |  |  |  |  |  |  |  |
Total costs of revenue (exclusive of amortization and depreciation) | 41,759 |  |  | 50.2 | % |  | 44,177 |  |  | 51.2 | % |  |  |  |  |  |  |  |
Product development | 10,689 |  |  | 12.8 | % |  | 8,352 |  |  | 9.7 | % |  |  |  |  |  |  |  |
Sales and marketing | 6,592 |  |  | 7.9 | % |  | 6,957 |  |  | 8.1 | % |  |  |  |  |  |  |  |
General and administrative | 19,396 |  |  | 23.3 | % |  | 14,453 |  |  | 16.8 | % |  |  |  |  |  |  |  |
Amortization | 5,869 |  |  | 7.1 | % |  | 5,500 |  |  | 6.4 | % |  |  |  |  |  |  |  |
Depreciation | 400 |  |  | 0.5 | % |  | 499 |  |  | 0.6 | % |  |  |  |  |  |  |  |
Total expenses | 84,705 |  |  | 101.8 | % |  | 79,938 |  |  | 92.7 | % |  |  |  |  |  |  |  |
Operating income (loss) | (1,458) |  |  | (1.8) | % |  | 6,295 |  |  | 7.3 | % |  |  |  |  |  |  |  |
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other income | 1,422 |  |  | 1.7 | % |  | 267 |  |  | 0.3 | % |  |  |  |  |  |  |  |
Interest expense | (4,072) |  |  | (4.9) | % |  | (2,669) |  |  | (3.1) | % |  |  |  |  |  |  |  |
Total other income (expense) | (2,650) |  |  | (3.2) | % |  | (2,402) |  |  | (2.8) | % |  |  |  |  |  |  |  |
Income (loss) before taxes | (4,108) |  |  | (4.9) | % |  | 3,893 |  |  | 4.5 | % |  |  |  |  |  |  |  |
Provision (benefit) for income taxes | (1,592) |  |  | (1.9) | % |  | 809 |  |  | 0.9 | % |  |  |  |  |  |  |  |
Net income (loss) | $ | (2,516) |  |  | (3.0) | % |  | $ | 3,084 |  |  | 3.6 | % |  |  |  |  |  |  |  |

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Three Months Ended March 31, 2024 Compared with Three Months Ended March 31, 2023
Revenues
Total revenues for the three months ended March 31, 2024 decreased by $3.0 million compared to the three months ended March 31, 2023.
RCM revenues increased by $4.4 million, or 9%, compared to the first quarter of 2023 due to the acquisition of Viewgol, which increased RCM revenue by $4.7 million. Revenues excluding Viewgol decreased by $0.3 million. The decline was driven by customer attrition and was partially offset by new contracts. Recurring RCM revenues were $51.7 million, or 97.5% of total RCM revenues.
EHR revenues decreased by $7.2 million, or 20%, compared to the first quarter of 2023, and were comprised of the following during the respective periods:

| Three Months Ended March 31,
(In thousands) | 2024 |  | 2023
Recurring EHR revenues (1) |  |  |
Acute Care EHR | $ | 25,910 |  |  | $ | 27,613 |
Post-acute Care EHR | 582 |  |  | 3,906 |
Total recurring EHR revenues | 26,492 |  |  | 31,519 |
Non-recurring EHR revenues (2) |  |  |
Acute Care EHR | 1,449 |  |  | 3,292 |
Post-acute Care EHR | 81 |  |  | 380 |
Total non-recurring EHR revenues | 1,530 |  |  | 3,672 |
Total EHR revenues | $ | 28,022 |  |  | $ | 35,191 |
(1) Mostly comprised of support and maintenance, third-party subscriptions, and SaaS revenues.
(2) Mostly comprised of installation revenues from the sale of our acute care and post-acute care EHR solutions and related applications under a perpetual (non-subscription) licensing model.

Recurring EHR revenues decreased by $5.0 million, or 16%, compared to the first quarter of 2023. The decrease is driven by the sale of American HealthTech, Inc. in January of 2024, which caused a decrease in Post-acute Care recurring revenues of $3.3 million. Acute Care EHR revenues decreased by $1.7 million primarily as a result of a decline in support revenues due to customer migration to SaaS arrangements and attrition of customers using our Centriq platform which is set to be sunset at the end of 2024.
Non-recurring EHR revenues decreased by $2.1 million, or 58%, compared to the first quarter of 2023. The consequence of our continued focus on increasing recurring revenues has been the de-emphasizing of nonrecurring, perpetual license sales. In addition, $0.3 million of the decrease is attributable to the sale of our Post-acute EHR business in January 2024.
Patient Engagement revenues decreased by $0.2 million, or 9%, compared to the prior year period due the renewal timing of annual licenses.
Costs of Revenue (exclusive of amortization and depreciation)
Total costs of revenue (exclusive of amortization and depreciation) decreased by $2.4 million compared to the first quarter of 2023. As a percentage of total revenues, costs of revenue (exclusive of amortization and depreciation) decreased to 50% of revenues during the first quarter of 2024 compared to 51% during the first quarter of 2023.
Costs associated with our RCM revenues increased by $2.4 million, or 9%, compared to the first quarter of 2023, as a result of increased costs of sales from Viewgol of $2.6 million. Costs associated with revenues excluding Viewgol decreased by $0.2 million primarily due to the increased utilization of offshore labor resources.
Costs associated with our EHR revenues decreased by $5.1 million, or 31%, compared to the first quarter of 2023, primarily due to (i) the sale of American HealthTech, Inc. in January 2024, which decreased payroll and software costs, (ii) our vendor savings initiative which led to software expense reductions, and (iii) headcount reduction as a result of our voluntary early retirement program in 2023.
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Costs associated with our Patient Engagement revenues were effectively flat, increasing by only $0.2 million compared to the first quarter of 2023.
Product Development
Product development expenses consist primarily of compensation and other employee-related costs (including stock-based compensation) and infrastructure costs incurred, but not capitalized, for new product development and product enhancements. Product development costs increased by $2.3 million, or 28%, compared to the first quarter of 2023, primarily due to a decrease in capitalizable projects such as the sunsetting of Centriq compared to 2023 and increased costs related to our strategy to migrate to a public cloud environment. Centriq is a web-based acute-care EHR platform. We are discontinuing support and services of the Centriq platform as of December 31, 2024. Many of the clients that used Centriq have already migrated to the TruBridge EHR platform.
Sales and Marketing
Sales and marketing costs decreased by $0.4 million, or 5%, compared to the first quarter of 2023, driven by reduced payroll and marketing program costs.
General and Administrative
General and administrative expenses increased by $4.9 million, or 34%, compared to the first quarter of 2023. The increase was partially driven by the acquisition of Viewgol resulting in $0.9 million of incremental expense. The increase was further driven by (i) an increase in non-recurring severance costs of $1.7 million, (ii) an increase in non-recurring expenses of $1.1 million related to executive transformation and rebranding efforts, (iii) and increased bad debt reserve of $0.7 million as a result of increased aged receivables.
Amortization & Depreciation
Combined amortization and depreciation expense increased by $0.3 million, or 5%, as increasing capitalized software development asset balances resulted in an increase in the related amortization.
Total Other Income (Expense)
Total other expense increased $0.3 million during the first quarter of 2024 compared to the first quarter of 2023, The change was driven by an increased in interest expense $1.4 million offset by gain on sale of AHT of $1.3 million. Interest expense was effected by interest rate environment and a higher level of funded debt.
Income (Loss) Before Taxes
As a result of the foregoing factors, income (loss) before taxes decreased by $8.0 million, to a loss before taxes of $4.1 million in the first quarter of 2024 compared to income before taxes of $3.9 million in the first quarter of 2023.
Provision (Benefit) for Income Taxes
Our effective tax rate for the three months ended March 31, 2024 increased to 39.4% from 20.8% for the three months ended March 31, 2023, with the largest contributing factor being the impact of the gain recorded on the sale of American HealthTech, Inc. Also impacting the effective tax rate is the research and development (“R&D”) tax credit. This credit, which is not correlated with taxable income, resulted in an incremental benefit of 24.2% during the first quarter of 2024 over the corresponding benefit during the first quarter of 2023. In periods with taxable income, the benefit from the R&D tax credit serves to reduce income tax expense, thereby lowering the effective tax rate. However, in periods with taxable loss, the benefit from the R&D tax credit serves to increase the income tax benefit, thereby increasing the effective tax rate.
Net Income (Loss)
Net income (loss) for the first quarter of 2024 decreased by $5.6 million to a net loss of $(2.5) million, or $(0.17) per basic and diluted share, compared with net income of $3.1 million, or $0.21 per basic and diluted share, for the first quarter of 2023.
Supplemental Segment Information
Our reportable segments have been determined in accordance with ASC 280 - Segment Reporting. We have three reportable operating segments: RCM, EHR, and Patient Engagement. We evaluate each of our three operating segments based on segment revenues and segment adjusted EBITDA.
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Adjusted EBITDA consists of GAAP net income as reported and adjusts for (i) deferred revenue purchase accounting adjustments arising from purchase allocation adjustments related to business acquisitions; (ii) depreciation expense; (iii) amortization of software development costs; (iv) amortization of acquisition-related intangible assets; (v) stock-based compensation; (vi) severance and other non-recurring charges; (vii) interest expense and other, net; (viii) impairment of goodwill; (ix) impairment of trademark intangibles; (x) (gain) loss on contingent consideration; and (xi) the provision (benefit) for income taxes. The segment measurements provided to and evaluated by the chief operating decision makers (“CODM”) are described in Note 17 - Segment Reporting of the condensed consolidated financial statements. These results should be considered in addition to, and not as a substitute for, results reported in accordance with GAAP.
The following table presents a summary of the revenues and adjusted EBITDA of our three operating segments for the three months ended March 31, 2024 and 2023:

| Three Months Ended March 31, |  | Change |  |  |  |
| 2024 |  | 2023 |  | $ |  | % |  |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues by segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
RCM | $ | 53,038 |  |  | $ | 48,631 |  |  | $ | 4,407 |  |  | 9 | % |  |  |  |  |  |  |  |
EHR | 28,022 |  |  | 35,191 |  |  | (7,169) |  |  | (20) | % |  |  |  |  |  |  |  |
Patient Engagement | 2,187 |  |  | 2,411 |  |  | (224) |  |  | (9) | % |  |  |  |  |  |  |  |
Adjusted EBITDA by segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
RCM | $ | 6,396 |  |  | $ | 7,898 |  |  | $ | (1,502) |  |  | (19) | % |  |  |  |  |  |  |  |
EHR | 2,929 |  |  | 6,157 |  |  | (3,228) |  |  | (52) | % |  |  |  |  |  |  |  |
Patient Engagement | 129 |  |  | 588 |  |  | (459) |  |  | 78 | % |  |  |  |  |  |  |  |

Segment Revenues
Refer to the corresponding discussion of revenues for each of our reportable segments previously provided under the Revenues heading of this Management's Discussion and Analysis. There are no intersegment revenues to be eliminated in computing segment revenue.
Segment Adjusted EBITDA - Three Months Ended March 31, 2024 Compared with Three Months Ended March 31, 2023
RCM adjusted EBITDA decreased by $1.5 million, or 18%, compared to the first quarter of 2023. Gross margin was relatively flat during the first three months of 2024, when compared to the first three months of 2023, while expanding operating costs contributed to the downward pressure on adjusted EBITDA.
EHR adjusted EBITDA decreased by $3.2 million, or 52%, compared to the first quarter of 2023. The primary driver of the decrease in adjusted EBITDA was declining revenues of $7.2 million partially driven by the sale of American HealthTech, Inc. in January 2024 which led to a revenue decrease of $3.6 million. Support and installation revenues accounted for a further decrease of $3.6 million of revenue due to the shift to SaaS arrangements and lower installation volume.
Patient Engagement adjusted EBITDA decreased to $0.1 million from $0.6 million, primarily driven by a reduction of revenue of $0.2 million and lower margins in the first three months of 2024.
Liquidity and Capital Resources
Sources of Liquidity
As of March 31, 2024, the aggregate principal amount of our credit facilities to $230 million, which included a $70 million term loan facility and a $160 million revolving credit facility. As of March 31, 2024, we had $186.4 million in principal amount of indebtedness outstanding under the credit facilities.
As of March 31, 2024 we had cash and cash equivalents of $4.1 million and remaining borrowing capacity under the revolving credit facility of $36.6 million, compared to $3.8 million of cash and cash equivalents and $24.3 million of remaining borrowing capacity under the revolving credit facility as of December 31, 2023. We believe that these funding sources, taken together with the future operating cash flows of the combined entity, provide adequate resources to fund ongoing cash requirements for the next twelve months and beyond. We cannot provide assurance that our actual cash requirements will not
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be greater than we expect as of the date of filing of this Form 10-Q. If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we may be required to obtain additional sources of funds through additional operational improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms. Aside from normal operating cash requirements, obligations under our Credit Agreement (as discussed below) and operating leases, and opportunistic uses of capital in share repurchases and business acquisition transactions, we do not have any material cash commitments or planned cash commitments. Although the Company currently has no obligations related to planned acquisitions, the Company's strategy includes the potential for future acquisitions, which may be funded through draws on the credit facilities or the use of the other sources of liquidity described above.
On October 16, 2023, we made a draw of $41.0 million on the revolving credit facility in connection with the closing of the Viewgol acquisition, leaving a remaining $40.6 million of available borrowing capacity under the revolving credit facility as of that date. A portion of the proceeds from the draw, together with available cash on hand, was used by TruBridge to make the various required payments at the closing of the acquisition. During February of 2024, the Company used a portion of the proceeds received from the sale of American HealthTech, Inc. to repay $7.0 million of the outstanding balance of the revolving credit facility.
Operating Cash Flow Activities
Net cash provided by operating activities decreased by $11.5 million from $9.5 million provided by operations for the three months ended March 31, 2023 to $(2.0) million used in operations for the three months ended March 31, 2024. The decrease in cash flows provided by operations is primarily due to the aforementioned decrease in net income combined with slower collection activity on accounts receivable.
Investing Cash Flow Activities
Net cash provided by investing activities increased by $22.6 million, with $16.4 million provided during the three months ended March 31, 2024, compared to $6.2 million used during the three months ended March 31, 2023. The increase in cash provided by investing activities is primarily the result of the sale of American HealthTech, Inc. which resulted in a net cash inflow of $21.4 million in the three months ended March 31, 2024 coupled with a decrease in investments in software development.
Financing Cash Flow Activities
During the three months ended March 31, 2024, our financing activities were a net use of cash in the amount of $14.1 million, as $15.4 million in borrowings from our revolving line of credit were offset by long-term debt principal payments of $28.6 million and $0.3 million used to repurchase shares of our common stock, which are treated as treasury stock. Financing activities were a net use of cash in the amount of $3.4 million during the three months ended March 31, 2023, as $2.5 million was used to repurchase shares of our common stock, which are treated as treasury stock, while long-term debt principal payments totaled $0.9 million.
On September 4, 2020, our Board of Directors approved a stock repurchase program to repurchase up to $30.0 million in aggregate amount of the Company's outstanding shares of common stock through open market purchases, privately-negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. On July 27, 2022, our Board of Directors extended the expiration of the stock repurchase program to September 4, 2024. These shares may be purchased from time to time throughout the duration of the stock repurchase program depending upon market conditions. Our ability to repurchase shares is subject to compliance with the terms of our Amended and Restated Credit Agreement. Concurrent with the authorization of this stock repurchase program, the Board of Directors opted to indefinitely suspend all quarterly dividends.
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Credit Agreement
As of March 31, 2024, we had $63.0 million in principal amount outstanding under the term loan facility and $123.4 million in principal amount outstanding under the revolving credit facility. Each of our credit facilities continues to bear interest at a rate per annum equal to an applicable margin plus, at our option, either (1) the Adjusted SOFR rate for the relevant interest period, subject to a floor of 0.50%, (2) an alternate base rate determined by reference to the greater of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus one half of one percent per annum and (c) the one month SOFR rate, subject to the aforementioned floor, plus one percent per annum, or (3) a combination of (1) and (2). The applicable margin for SOFR loans and the letter of credit fee ranges from 1.8% to 3.0%. The applicable margin for base rate loans ranges from 0.8% to 2.0%, in each case based on the Company's consolidated net leverage ratio. As of March 31, 2024, the revolving credit facility had an average interest rate of 8.42%
Principal payments with respect to the term loan facility are due on the last day of each fiscal quarter beginning June 30, 2022, with quarterly principal payments of approximately $0.9 million through March 31, 2027, with maturity on May 2, 2027 or such earlier date as the obligations under the Amended and Restated Credit Agreement, as amended by the First Amendment, become due and payable pursuant to the terms of such agreement. Any principal outstanding under the revolving credit facility is due and payable on the maturity date.
Our credit facilities are secured pursuant to the Amended and Restated Credit Agreement, dated as of June 16, 2020, among the parties identified as obligors therein and Regions, as collateral agent, on a first priority basis by a security interest in substantially all of the tangible and intangible assets (subject to certain exceptions) of the Company and certain subsidiaries of the Company, as guarantors (collectively, the “Subsidiary Guarantors”), including certain registered intellectual property and the capital stock of certain of the Company’s direct and indirect subsidiaries. Our obligations under the Amended and Restated Credit Agreement are also guaranteed by the Subsidiary Guarantors.
The First Amendment provides incremental facility capacity of $75 million, subject to certain conditions. The Amended and Restated Credit Agreement, as amended by the First Amendment, includes a number of restrictive covenants that, among other things and in each case subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and the Subsidiary Guarantors, including the ability to incur additional debt; incur liens and encumbrances; make certain restricted payments, including paying dividends on the Company's equity securities or payments to redeem, repurchase, or retire the Company's equity securities (which are subject to our compliance, on a pro forma basis to give effect to the restricted payment, with the fixed charge coverage ratio and consolidated net leverage ratio described below); enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into sale and leaseback transactions; engage in transactions with affiliates; and materially alter the business we conduct. The First Amendment requires the Company to maintain a minimum fixed charge coverage ratio of 1.25:1.00 throughout the duration of such agreement. Under the First Amendment, the Company is required to comply with a maximum consolidated net leverage ratio of 3.50:1.00. Further, under the First Amendment, in connection with any acquisition by the Company exceeding $25 million, the Company may elect to increase the maximum permitted consolidated net leverage ratio for the fiscal quarter in which the acquisition occurs and each of the following three fiscal quarters by 0.50:1.00 above the otherwise permitted maximum. If the consolidated net leverage ratio is less than 2.50:1:00, there is no limit on the incremental facility. The Amended and Restated Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default. On March 10, 2023, the calculation of the fixed charge coverage ratio was amended to specifically exclude from the definition of fixed charges the Company's share repurchases conducted during the third and fourth quarters of 2022.
As of September 30, 2023, we were not in compliance with the fixed charge coverage ratio required by the Amended and Restated Credit Agreement. On November 8, 2023, the Company and the Subsidiary Guarantors entered into a Waiver with Regions Bank, as administrative agent, and various other lenders, which provided for a one-time waiver of this failure as an event of default. As of December 31, 2023, the Company was similarly not in compliance with the fixed charge coverage ratio required by the Amended and Restated Credit Agreement and a one-time waiver was provided in conjunction with the Fourth Amendment described below. On January 16, 2024, the definition of "Consolidated EBITDA" under the Amended and Restated Credit Agreement was modified to allow for more cost exclusions related to acquisitions and other nonrecurring events and to release American HealthTech, Inc. ("AHT") from its obligations as a Subsidiary Guarantor in connection with the closing of our sale of AHT. On February 29, 2024, the definition of “Consolidated EBITDA” was further amended, pursuant to the Fourth Amendment to the Amended and Restated Credit Agreement. The Fourth Amendment decreased the required consolidated fixed charge coverage ratio from 1.25:1.00 to 1.15:1.00 for each fiscal quarter ending March 31, 2024 through and including December 31, 2024. We believe that we were in compliance with the covenants contained in the Amended and Restated Credit Agreement as of March 31, 2024.
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Any failure by us to comply with this or another covenant in the future may result in an event of default. There can be no assurance that we will be able to continue to comply with this covenant or obtain amendments or waivers to avoid future covenant violations, or that such amendments or waivers will be available on commercially acceptable terms.
The First Amendment removed the requirement that the Company mandatorily prepay the credit facilities with excess cash flow generated during the prior fiscal year. The Company is permitted to voluntarily prepay the credit facilities at any time without penalty, subject to customary “breakage” costs with respect to prepayments of SOFR rate loans made on a day other than the last day of any applicable interest period.
Backlog
Backlog consists of revenues we reasonably expect to recognize over the next twelve months under existing contracts. The revenues to be recognized may relate to a combination of one-time fees for system sales and recurring fees for support and maintenance and RCM services. As of March 31, 2024, we had a twelve-month backlog of approximately $11 million in connection with non-recurring system purchases and approximately $321 million in connection with recurring payments under support and maintenance and RCM services. As of March 31, 2023, we had a twelve-month backlog of approximately $8 million in connection with non-recurring system purchases and approximately $324 million in connection with recurring payments under support and maintenance and RCM services.
Bookings
Bookings is a key operational metric used by management to assess the relative success of our sales generation efforts, and were as follows for the three months ended March 31, 2024 and 2023:

| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
RCM (1) | $ | 14,391 |  |  | $ | 12,100 |  |  |  |  |
EHR(2) | 8,610 |  |  | 7,271 |  |  |  |  |
Patient Engagement (1) | 568 |  |  | 476 |  |  |  |  |
Total bookings | $ | 23,569 |  |  | $ | 19,847 |  |  |  |  |
(1) Generally calculated as the total contract price (for non-recurring, project-related amounts) and annualized contract value (for recurring amounts).
(2) Generally calculated as the total contract price (for system sales) including annualized contract value (for support) for perpetual license system sales and total contract price for SaaS sales.

RCM
RCM bookings during the first quarter of 2024 increased by $2.3 million, or 19%, from the first quarter of 2023 as the relative strength in bookings from healthcare providers utilizing competing EHR products ("net-new") was outpaced by declining bookings from our existing EHR customer base ("cross-sell"). Cross-sell bookings decreased by $0.5 million, or 9%, experiencing uncharacteristically high volatility as the pace of prospective sales decisions slowed.
EHR
EHR bookings increased by $1.3 million during the first quarter of 2024, or 18%, compared to the first quarter of 2023. Acute Care EHR bookings increased by $2.6 million compared to the first quarter of 2023, primarily due to add-on and new business sales. Post-acute Care EHR bookings declined by $1.3 million due to the sale of AHT in January of 2024.
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Patient Engagement
Patient engagement bookings increased by $0.1 million during the first quarter of 2024 compared to the first quarter of 2023. As a relatively small operator in a still-nascent market, volatility in bookings is expected to remain a characteristic of our patient engagement business as the industry matures and the business grows to scale.
Critical Accounting Policies and Estimates
Our Management Discussion and Analysis is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make subjective or complex judgments that may affect the reported financial condition and results of operations. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported values of assets, liabilities, revenues, expenses and other financial amounts that are not readily apparent from other sources. Actual results may differ from these estimates and these estimates may differ under different assumptions or conditions. We continually evaluate the information used to make these estimates as our business and the economic environment changes.
In our Annual Report on Form 10-K for the year ended December 31, 2023, we identified our critical accounting policies and estimates related to revenue recognition, allowance for credit losses, business combinations, including valuation of intangible assets and goodwill, and software development costs. There have been no significant changes to these critical accounting policies during the three months ended March 31, 2024.

Item 3. | Quantitative and Qualitative Disclosures about Market Risk.

Our exposure to market risk relates primarily to the potential fluctuations in the Secured Overnight Financing Rate ("SOFR"), which replaced the British Bankers Association London Interbank Offered Rate ("LIBOR") as the new benchmark interest rate for our credit facilities. We had $186.4 million of outstanding borrowings under our credit facilities with Regions Bank at March 31, 2024. The term loan facility and revolving credit facility bear interest at a rate per annum equal to an applicable margin plus, at our option, either (1) the Adjusted SOFR rate for the relevant interest period, subject to a floor of 0.50%, (2) an alternate base rate determined by reference to the greater of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus one half of one percent per annum and (c) the one month SOFR rate, subject to the aforementioned floor, plus one percent per annum, or (3) a combination of (1) and (2). Accordingly, we are exposed to fluctuations in interest rates on borrowings under the credit facilities. A one hundred basis point change in interest rate on our borrowings outstanding as of March 31, 2024 would result in a change in interest expense of approximately $1.9 million annually.
We did not have investments as of March 31, 2024 and do not utilize derivative financial instruments to manage our interest rate risks.

Item 4. | Controls and Procedures.

Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the rules and forms promulgated by the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Because of the inherent limitations to the effectiveness of any system of disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that all control issues and instances of fraud, if any, with a company have been prevented or detected on a timely basis. Even disclosure controls and procedures determined to be effective can only provide reasonable assurance that their objectives are achieved.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
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Changes in Internal Control over Financial Reporting
On October 16, 2023, we acquired Viewgol, as further described in Note 3 - Revenue Recognition of the consolidated financial statements. We continue to integrate policies, processes, people, technology and operations for our combined operations, and will continue to evaluate the impact of any related changes to internal controls over financial reporting during the fiscal year.
Other than the changes related to Viewgol described above, there were no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II
OTHER INFORMATION

Item 1. | Legal Proceedings.

From time to time, we have been and may again become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any litigation or legal proceedings that we believe to be material and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, financial condition or cash flows. See Note 15 – Commitments and Contingencies included in the notes to our condensed consolidated financial statements included elsewhere in this Form 10-Q for information concerning other potential contingencies.

Item 1A. | Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition or operating results. There have been no material changes to the risk factors disclosed in Part 1, "Item 1A. Risk Factors" in our Annual Report on Form 10-K and Part II, "Item 1A. Risk Factors" in our subsequent Quarterly Reports on Form 10-Q other than as described in the risk factor below.
RISKS RELATED TO OUR COMMON STOCK AND OTHER GENERAL RISKS
Our Rights Agreement includes terms and conditions that could discourage a takeover or other transaction that stockholders may consider favorable.
On March 26, 2024, the Company entered into the Rights Agreement (as amended on April 22, 2024, the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as rights agent. Pursuant to the Rights Agreement, the Board of Directors declared a dividend of one right (each, a “Right”) for each share of our common stock outstanding at the close of business on April 4, 2024. Each Right initially entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one half of a share of common stock, at a price of $28.00 for each one half of a share of common stock (equivalent to $56.00 for each whole share of common stock), subject to certain adjustments. Subject to the terms of the Rights Agreement, the Rights will expire on March 25, 2025. Additional information regarding the Rights Agreement is contained in Forms 8-K filed with the SEC on March 26, 2024 and April 23, 2024.
The Rights Agreement will cause substantial dilution to any person or group that acquires beneficial ownership of 15% or more of our common stock without the approval of the Board of Directors. As a result, the overall effect of the Rights Agreement and the issuance of the Rights may be to discourage any person, entity or group from gaining a control or control-like position in the Company or engaging in other tactics, potentially disadvantaging the interests of the Company’s stockholders, without negotiating with the Board of Directors and without paying an appropriate control premium to all stockholders. The Rights Agreement is similar to plans adopted by other public companies, and it is intended to protect stockholders’ interests, including protecting stockholders from any efforts at negative control (that is, the ability to exercise influence sufficient to control or block certain important corporate actions). The Rights Agreement is intended to position the Board of Directors to fulfill its duties by ensuring that the Board of Directors has sufficient time to make informed judgments that are in the best interests of the Company and its stockholders. Nevertheless, the Rights Agreement may be considered to have certain anti-takeover effects, including potentially discouraging a takeover attempt that stockholders may consider favorable or that could result in a premium over the market price of our common stock. Even in the absence of a takeover attempt, the Rights Agreement may adversely affect the prevailing market price of our common stock if it is viewed as discouraging takeover attempts in the future.
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.

Repurchases of Equity Securities
The following table provides information about our repurchases of common stock during the three months ended March 31, 2024:

Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(3)
Beginning of Period |  |  |  | $ | 16,471,896 |
January 1, 2024 - January 31, 2024 | — |  | — |  | — |  | 16,471,896 |
February 1, 2024 -February 29, 2024 | — |  | $ | — |  | — |  | 16,471,896 |
March 1, 2024 - March 31, 2024 | 41,000 |  | 8.33 |  | — |  | 16,471,896 |
Total | 41,000 |  | $ | 8.33 |  | — |  |
(1) We repurchased 41,000 shares during the three months ended March 31, 2024 that were not purchased pursuant to our previously announced stock repurchase program, but were purchased to fund required tax withholdings related to the vesting of restricted stock. Shares withheld to cover required tax withholdings related to the vesting of restricted stock do not reduce our total share repurchase authority.
(2) No shares were purchased during the three months ended March 31, 2024 pursuant to our previously announced stock repurchase program.
(3) On September 4, 2020, our Board of Directors approved a stock repurchase program under which we were authorized to repurchase up to $30.0 million of our common stock through September 3, 2022. On July 27, 2022, the Board of Directors extended the expiration date of the stock repurchase program to September 4, 2024. Any future stock repurchase transactions may be made through open market purchases, privately-negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Item 3. | Defaults Upon Senior Securities.

Not applicable.

Item 4. | Mine Safety Disclosures.

Not applicable.

Item 5. | Other Information.

(a) None.
(b) Rule 10b5-1 Trading Arrangements
From time to time, members of the Company's Board of Directors and officers of the Company may enter into Rule 10b5-1 trading plans, which allow for the purchase or sale of common stock under pre-established terms at times when directors and officers might otherwise be prevented from trading under insider trading laws or because of self-imposed blackout periods. Such trading plans are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act and comply with the Company's insider trading policy. During the three months ended March 31, 2024, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
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Item 6. | Exhibits.

Effective as of March 4, 2024, we changed our name to TruBridge, Inc. By operation of law, any reference to “CPSI” in these exhibits should be read as “TruBridge” as set forth in the Exhibit List below.

2.1* |  | Stock Purchase Agreement, dated as of January 16, 2024, by and among Computer Programs and System, Inc., PointClickCare Technologies USA Corp,. Healthland, Inc., and American HealthTech, Inc. (incorporated by reference to Exhibit 2.1 of TruBridge, Inc.’s Current Report on Form 8-K filed January 17, 2024)
3.1 |  | Certificate of Incorporation (incorporate by ref erence to Exhibit 3.4 to TruBridge, Inc.’s Registration Statement on Form S-1 (Registration No. 333-84726))
3.2 |  | Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of TruBridge, Inc.’s Current Report on Form 8-K filed March 4, 2024)
3.3 |  | Amended and Restated Bylaws dated March 4, 3034 (incorporated by reference to Exhibit 3.2 of TruBridge, Inc.’s Current Report on Form 8-K filed March 4, 2024
4.1 |  | Rights Agreement dated as of March 26, 2024, by and between TruBridge, Inc. and Computershare Trust Company, N.A., as Rights Agent (incorporated by reference to Exhibit 4.1 of TruBridge, Inc.’s Current Report on Form 8-K filed March 26, 2024)
4.2 |  | Amendment to the Rights Agreement, dated as of April 22, 2024, by and Between TruBridge, Inc. and Computershare Trust Company, N.A., as Rights Agent (incorporated by reference to Exhibit 4.2 of TruBridge, Inc.’s Current Report on Form 8-K filed April 23, 2024)
10.1 |  | Consulting Agreement, dated January 1, 2024, by and between Computer Programs and Systems, Inc. and Matthew J. Chambless (incorporated by reference to Exhibit 10.2 to CPSI’s Current Report on Form 8-K filed January 5, 2024)
10.2 |  | Cash Retention Agreement, dated March 27, 2024, between TruBridge, Inc. and Vita MacIntyre (incorporated by reference to Exhibit 10.1 of TruBridge, Inc.’s Current Report on Form 8-K filed April 1, 2024)
10.3 |  | Third Amendment, dated as of January 12, 2024, to the Amended and Restated Credit Agreement, dated as of June 16, 2020, by and among Computer Programs and Systems, Inc., certain of its subsidiaries, as guarantors, certain lenders named therein, and Regions Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 of TruBridge, Inc.’s Current Report on Form 8-K filed January 17, 2024)
10.4 |  | Fourth Amendment, dated as of February 29, 2024, to the Amended and Restated Credit Agreement, dated as of June 16, 2020, by and among Computer Programs and Systems, Inc., certain of its subsidiaries, as guarantors, certain lenders named therein, and Regions Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 of TruBridge, Inc.’s Current Report on Form 8-K filed February 29, 2024)
31.1 |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 |  | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 |  | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statement of Stockholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements
104 |  | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Certain annexes and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby agrees to furnish supplementally copies of any of the omitted documents to the SEC upon its request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  | TRUBRIDGE, INC.
5/10/2024 |  | By: |  | /s/ Christopher L. Fowler
|  |  |  | Christopher L. Fowler
|  |  |  | President and Chief Executive Officer
5/10/2024 |  | By: |  | /s/ Vinay Bassi
|  |  |  | Vinay Bassi
|  |  |  | Chief Financial Officer

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