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Significant Accounting Policies (Policies) | 6 Months Ended
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Jun. 30, 2025
Accounting Policies [Abstract] |
Revenue [Policy Text Block] | Revenue Recognition We derive a majority of our revenues from our annually renewable subscription-based service agreements with our customers, which include performance measurement and improvement services, healthcare analytics and governance education services. Such agreements are generally cancelable on short or no notice without penalty. See Note 2 for further information about our contracts with customers. We account for revenue using the following steps:
| ● | Identify the contract, or contracts, with a customer;
| ● | Identify the performance obligations in the contract;
| ● | Determine the transaction price;
| ● | Allocate the transaction price to the identified performance obligations; and
| ● | Recognize revenue when, or as, we satisfy the performance obligations.
Our revenue arrangements with a client may include combinations of more than one service offering which may be executed at the same time, or within close proximity of one another. We combine contracts with the same customer into a single contract for accounting purposes when the contract is entered into at or near the same time and the contracts are negotiated together. For contracts that contain more than one separately identifiable performance obligation, the total transaction price is allocated to the identified performance obligations based upon the relative stand-alone selling prices of the performance obligations. The stand-alone selling prices are based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin or residual approach. We estimate the amount of total contract consideration we expect to receive for variable arrangements based on the most likely amount we expect to earn from the arrangement based on the expected quantities of services we expect to provide and the contractual pricing based on those quantities. We only include some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. We consider the sensitivity of the estimate, our relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. Our revenue arrangements do not contain any significant financing element due to the contract terms and the timing between when consideration is received and when the service is provided. Our arrangements with customers consist principally of four different types of arrangements: 1) subscription-based service agreements; 2) one-time specified services performed at a single point in time; 3) fixed, non-subscription service agreements; and 4) unit-priced service agreements. Subscription-based services – Services that are provided under subscription-based service agreements are usually for a twelve-month period and represent a single promise to stand ready to provide reporting, tools and services throughout the subscription period as requested by the customer. These agreements are renewable at the option of the customer at the completion of the initial contract term for an agreed upon price increase each year. These agreements represent a series of distinct monthly services that are substantially the same, with the same pattern of transfer to the customer as the customer receives and consumes the benefits throughout the contract period. Accordingly, subscription services are recognized ratably over the subscription period. Subscription services are typically billed either annually or quarterly in advance but may also be billed on a monthly basis. One-time services – These agreements typically require us to perform a specific one-time service in a particular month. We are entitled to a fixed payment upon completion of the service. Under these arrangements, we recognize revenue at the point in time we complete the service and it is accepted by the customer. Fixed, non-subscription services – These arrangements typically require us to perform an unspecified amount of services for a fixed price during a fixed period of time. Revenues are recognized over time based upon the costs incurred to date in relation to the total estimated contract costs. In determining cost estimates, management uses historical and forecasted cost information which is based on estimated volumes, external and internal costs and other factors necessary in estimating the total costs over the term of the contract. Changes in estimates are accounted for using a cumulative catch-up adjustment which could impact the amount and timing of revenue for any period. Unit-price services – These arrangements typically require us to perform certain services on a periodic basis as requested by the customer for a per-unit amount which is typically billed in the month following the performance of the service. Revenue under these arrangements is recognized over the time the services are performed at the per-unit amount. Revenue is presented net of any sales tax charged to our clients that we are required to remit to taxing authorities. We recognize contract assets or unbilled receivables related to revenue recognized for services completed but not invoiced to the clients. Unbilled receivables are classified as receivables when we have an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when we invoice clients in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation.
Deferred Charges, Policy [Policy Text Block] | Deferred Contract Costs Deferred contract costs, net is stated at gross deferred costs less accumulated amortization. We defer commissions and incentives, including payroll taxes, if they are incremental and recoverable costs of obtaining a renewable customer contract. Deferred contract costs are amortized over the estimated term of the contract, including renewals, which generally ranges from three to five years. The contract term was estimated by considering factors such as historical customer attrition rates and product life. The amortization period is adjusted for significant changes in the estimated remaining term of a contract. An impairment of deferred contract costs is recognized when the unamortized balance of deferred contract costs exceeds the remaining amount of consideration we expect to receive net of the expected future costs directly related to providing those services. We have elected the practical expedient to expense contract costs when incurred for any nonrenewable contracts with a term of one year or less. We deferred incremental costs of obtaining a contract of $304,000 and $197,000 in the three-month periods ended June 30, 2025 and 2024, respectively and $658,000 and $311,000 in the six-month periods ended June 30, 2025 and 2024, respectively. Deferred contract costs, net of accumulated amortization was $1.6 million at June 30, 2025 and December 31, 2024. Total amortization by expense classification for the periods ended June 30, 2025 and 2024 was as follows (in thousands):
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Direct Expenses |  | $ | 70 |  |  | $ | 31 |  |  | $ | 103 |  |  | $ | 98 |
Selling, general and administrative expenses |  |  | 199 |  |  |  | 224 |  |  |  | 542 |  |  |  | 436 |
Total amortization |  | $ | 269 |  |  | $ | 255 |  |  | $ | 645 |  |  | $ | 534 |
Additional expense included in selling, general and administrative expenses for impairment of costs capitalized due to lost clients was $2,000 and $34,000 in the six-month periods ended June 30, 2025 and 2024, respectively. There were no significant impairments in the three-month periods ended June 30, 2025 and 2024.
Accounts Receivable [Policy Text Block] | Trade Accounts Receivable The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable, determined based on our historical write-off experience, current economic conditions and reasonable and supportable forecasts about the future. We review the allowance for doubtful accounts monthly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The following table provides the activity in the allowance for doubtful accounts for the six-month periods ended June 30, 2025 and 2024 (in thousands):
|  | Balance at Beginning of Period |  |  | Bad Debt Expense (Benefit) |  |  | Write-offs |  |  | Recoveries |  |  | Balance at End of Period |
Six months ended June 30, 2025 |  | $ | 40 |  |  | $ | 25 |  |  | $ | 25 |  |  | $ | - |  |  | $ | 40 |
Six months ended June 30, 2024 |  | $ | 75 |  |  | $ | (65 | ) |  | $ | 9 |  |  | $ | 49 |  |  | $ | 50 |
Lessee, Leases [Policy Text Block] | Leases We determine whether a lease is included in an agreement at inception. We recognize a lease liability and a right-of-use (“ROU”) asset on the balance sheet for our operating leases under which we are lessee. Operating lease ROU assets are included in operating lease right-of-use assets in our condensed consolidated balance sheet. Finance lease assets are included in property and equipment. Operating and finance lease liabilities are included in other current liabilities and other long-term liabilities. Certain lease arrangements may include options to extend or terminate the lease. We include these provisions in the ROU asset and lease liabilities only when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term and is included in direct expenses and selling, general and administrative expenses. Our lease agreements do not contain any residual value guarantees. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments during the lease term. ROU assets and lease liabilities are recorded at lease commencement based on the estimated present value of lease payments. Because the rate of interest implicit in each lease is not readily determinable, we use our estimated incremental collateralized borrowing rate at lease commencement, to calculate the present value of lease payments. When determining the appropriate incremental borrowing rate, we consider our available credit facilities, recently issued debt and public interest rate information. Due to remote working arrangements, we reassessed our office needs and subleased our Seattle location under an agreement considered to be an operating lease beginning in May 2021. We had not been legally released from our primary obligations under the original lease and therefore we continued to account for the original lease separately until the lease terminates in August 2025. Rent income from the sublessee is included in the statement of operations on a straight-line basis as an offset to rent expense associated with the original operating lease included in other expenses.
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements Our valuation techniques are based on maximizing observable inputs and minimizing the use of unobservable inputs when measuring fair value. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. The inputs are then classified into the following hierarchy: (1) Level 1 Inputs—quoted prices in active markets for identical assets and liabilities; (2) Level 2 Inputs—observable market-based inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets, quoted prices for similar or identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; (3) Level 3 Inputs—unobservable inputs. The following details our financial assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy (in thousands):
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
As of June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money Market Funds |  | $ | 4,565 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,565 |
Total Cash Equivalents |  | $ | 4,565 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,565 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent Consideration Liability |  | $ | - |  |  | $ | - |  |  | $ | 661 |  |  | $ | 661 |
As of December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money Market Funds |  | $ | 4,199 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,199 |
Total Cash Equivalents |  | $ | 4,199 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,199 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent Consideration Liability |  | $ | - |  |  | $ | - |  |  | $ | 859 |  |  | $ | 859 |
There were no transfers between levels during the six months ended June 30, 2025 and 2024. Our contingent consideration liability relates to potential future payments to the former owners of Nobl Health (“Nobl”), which was acquired in the third quarter of 2024. The potential future payments are contingent upon the achievement of certain customer contract metrics. Contingent consideration is remeasured at each reporting date at its estimated fair value. The remeasured fair value could differ materially from the initial estimate and uses significant unobservable inputs classified as Level 3 inputs. We measured fair value using a discounted cash flow model based on the present value of expected future payments, which considers the likelihood of meeting contract thresholds at future payment dates. Significant increases or decreases to any of the inputs in isolation could result in a significantly higher or lower liability. The change to the contingent consideration liability from the acquisition date, at each reporting date and the final amount paid, which is capped at $1.0 million, will be recognized in earnings. The following summarizes the changes in the fair value of our contingent consideration liability during the three- and six-month periods ended June 30, 2025 (in thousands):
|  | Six months ended June 30, 2025 |
Contingent Consideration Liability, December 31, 2024 |  | $ | 859 |
Increase to fair value included in selling, general & administrative expenses |  |  | 82 |
Payments made |  |  | (280 | )
Contingent Consideration Liability, June 30, 2025 |  | $ | 661 |
Our long-term debt described in Note 4 is recorded at amortized cost. The fair value of our variable rate long-term debt is believed to approximate the carrying value because we believe the current rate reasonably estimates the current market rate for our debt. The following are the carrying amount and estimated fair values of variable rate long-term debt (in thousands):
|  | Level 1 |  |  | Level 2 |  |  | Total Fair Value |  |  | Carrying Amount |
As of June 30, 2025 |  | $ | 81,384 |  |  | $ | - |  |  | $ | 81,384 |  |  | $ | 81,384 |
As of December 31, 2024 |  | $ | 62,801 |  |  | $ | - |  |  | $ | 62,801 |  |  | $ | 62,801 |
The carrying amounts of accounts receivable, revolving loan, accounts payable, and accrued expenses approximate their fair value. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which includes ROU assets, property and equipment, goodwill, intangibles and cost method investments, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). As of June 30, 2025 and December 31, 2024, there was no indication of impairment related to these assets.
Commitments and Contingencies, Policy [Policy Text Block] | Commitments and Contingencies From time to time, we are involved in certain claims and litigation arising in the normal course of business. Management assesses the probability of loss for such contingencies and recognizes a liability when a loss is probable and estimable. Legal fees, net of estimated insurance recoveries, are expensed as incurred. We do not believe the final disposition of claims at June 30, 2025 will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

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