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BUSINESS COMBINATIONS AND DISPOSALS | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
BUSINESS COMBINATIONS AND DISPOSALS | BUSINESS COMBINATIONS AND DISPOSALS 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 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 Patient Care operating segment. The Purchase Agreement provided for an aggregate purchase price (the “Purchase Price”) of $25.0 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 $3.8 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 $1.0 million as a special indemnity escrow. Based upon the adjustments and the various escrow holdbacks, Buyer paid a net amount of approximately $21.4 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 provided offers of employment to certain key employees of the Company that primarily supported AHT’s business. During 2024, we incurred approximately $0.3 million of expenses related to this disposal reported in our consolidated statements of operations. As part of the divestiture, as of January 16, 2024 we entered into a transition services agreement (“TSA”) with Buyer to assist them in the transition of certain functions, including, but not limited to, information technology, finance and accounting, for an initial period of 18 months, with certain services being completed prior to the 18-month period. In addition to the agreed upon services, the TSA allows for additional services to be offered by the Company pursuant to a mutually agreed upon amendment to the TSA. No such amendments had been executed as of December 31, 2024. The Company has $0.3 million in receivables from Buyer for the TSA services reflected under the caption “Accounts receivable” in the consolidated balance sheet as of December 31, 2024. As of December 31, 2024, the Company had recorded a $1.5 million gain on sale, which is reflected under the caption “Other income (expense)” in the consolidated statement of operations. The accompanying consolidated balance sheet as of December 31, 2023 includes amounts related to this Transaction under the captions "Assets held for sale" and "Liabilities held for sale," the details of which are as follows as of December 31, 2023:
(In thousands) |
Assets held for sale |
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 held for sale |
Accounts payable | $ | 178 |
Other accrued liabilities | 576 |
Deferred tax liability | 223 |
Total | $ | 977 |
The following table presents the pretax loss for AHT that is included in our consolidated statement of operations for the years ended December 31, 2024 and 2023:
| December 31,
(In thousands) | 2024 |  | 2023
Pretax loss | $ | (246) |  |  | $ | (1,393) |
Acquisition of Viewgol, LLC On October 16, 2023, we acquired all of the assets and liabilities of Viewgol, LLC, a Delaware limited liability company (“Viewgol”), 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 and other adjustments specified in the Securities Purchase Agreement 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 could be earned if the EBITDA Earnout Amount’s minimum threshold of $6.0 million was not achieved during fiscal 2024. During 2023, we incurred approximately $0.3 million of pre-tax acquisition expenses in our consolidated statements of operations. At the completion of the contingent earnout period in 2024, no earnout payments were made to the former Viewgol shareholders. 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 allocation of the purchase price paid for Viewgol was as follows:
(In thousands) | Purchase Price Allocation as of December 31, 2023 | Purchase Price Allocation as of December 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 April 2024, the Company paid an additional $0.7 million for working capital adjustments which is reflected under the caption “Goodwill” in the 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 in amortization of acquisition-related intangibles in our 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 17 - 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 consolidated statements of operations for the years ended December 31, 2024 and 2023 include revenues of $20.0 million and $3.8 million, respectively, and net income of $8.1 million and $0.3 million, respectively, attributed to the acquired business since the October 16, 2023 acquisition date. The following unaudited pro forma revenue, net income and earnings per share amounts for the years ended December 31, 2023 and 2022 give effect to the Viewgol acquisition as if it had been completed on January 1, 2022. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been during the periods presented had the Viewgol acquisition been completed on January 1, 2022. In addition, the unaudited pro forma financial information does not purport to project future operating results. The pro forma information does not fully reflect: (1) any anticipated synergies (or costs to achieve synergies) or (2) the impact of non-recurring items directly related to the Viewgol acquisition.
| Year Ended December 31,
(In thousands, except per share data, unaudited) | 2023 |  | 2022
Pro forma revenues | $ | 348,251 |  |  | $ | 338,009 |
Pro forma net income (loss) | $ | (51,215) |  |  | $ | 15,536 |
Pro forma diluted earnings (loss) per share | $ | (3.61) |  |  | $ | 1.10 |
Pro forma net income (loss) was calculated by adjusting the results for the applicable period to reflect (i) the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied on January 1, 2022 and (ii) the pro forma adjustment to interest expense as a result of utilizing revolver debt to finance the acquisition.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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