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Item 1. Financial Statements

2024-11-06 compared with 2024-08-06 · 113 added, 113 removed, 590 unchanged (28% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) JUNE 30,

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) SEPTEMBER 30,

2024 DECEMBER 31,

31 unchanged sentences

Stockholders' equity

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 161,764,197 and 160,284,901 shares issued as of June 30, 2024 and December 31, 2023, respectively;

160,881,314 and 159,848,286 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 161,791,989 and 160,284,901 shares issued, 160,900,211 and 159,848,286 shares outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,209,196 1,178,461

1 unchanged sentence

Accumulated other comprehensive loss ( 5,013 ) ( 7,593 )

Treasury stock at cost, 882,883 and 436,615 shares at June 30, 2024 and December 31, 2023, respectively

Treasury stock at cost, 891,778 and 436,615 shares at September 30, 2024 and December 31, 2023, respectively

( 17,538 ) ( 9,401 )

6 unchanged sentences

AND COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2024 2023 2024 2023

7 unchanged sentences

Depreciation and amortization expense 439 367 1,322 1,139

Goodwill impairment expense — 46,984 — 46,984

Total operating expenses 55,037 102,484 176,268 191,678

4 unchanged sentences

Total other expenses ( 4,255 ) ( 825 ) ( 11,630 ) ( 10,452 )

Income (loss) before income taxes ( 12,269 ) 8,381 ( 17,703 ) 10,850

Loss before income taxes ( 1,661 ) ( 53,609 ) ( 19,364 ) ( 42,759 )

Provision (benefit) for income taxes ( 290 ) ( 4,644 ) ( 736 ) 142

Net income (loss) ( 12,574 ) 4,706 ( 17,257 ) 6,064

Net loss ( 1,371 ) ( 48,965 ) ( 18,628 ) ( 42,901 )

Other comprehensive income (loss):

23 unchanged sentences

SHARES AMOUNT SHARES AMOUNT

Balance as of April 1, 2024 160,687,886 $ 1,607 $ 1,191,237 $ ( 120,913 ) $ ( 7,036 ) ( 496,792 ) $ ( 10,537 ) $ 1,054,358

Balance as of June 30, 2024 161,764,197 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

Equity-based compensation expense, net of forfeiture — 0 — 8,187 — — — — 8,187

1 unchanged sentence

Common shares issued for employee share-based compensation 27,792 0 — — — — — — —

Restricted stock forfeiture ( 5,123 ) — — — — — — —

Change in fair value from interest rate swap, net of tax — — — — ( 2,385 ) — — ( 2,385 )

1 unchanged sentence

Foreign currency translation adjustment, net of tax — 0 — — — 5,700 — — 5,700

Balance as of June 30, 2024 161,764,197 0 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

Balance as of January 1, 2024 160,284,901 $ 1,603 $ 1,178,461 $ ( 116,230 ) $ ( 7,593 ) ( 436,615 ) $ ( 9,401 ) $ 1,046,840

Balance as of September 30, 2024 161,791,989 0 $ 1,618 $ 1,209,196 $ ( 134,858 ) $ ( 5,013 ) ( 891,778 ) $ ( 17,538 ) $ 1,053,405

Balance as of December 31, 2023 160,284,901 $ 1,603 $ 1,178,461 $ ( 116,230 ) $ ( 7,593 ) ( 436,615 ) $ ( 9,401 ) $ 1,046,840

Equity-based compensation expense, net of forfeiture — — 27,043 — — — — 27,043

6 unchanged sentences

Foreign currency translation adjustment, net of tax — — — — 4,992 — — 4,992

Balance as of June 30, 2024 161,764,197 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

Balance as of September 30, 2024 161,791,989 $ 1,618 $ 1,209,196 $ ( 134,858 ) $ ( 5,013 ) ( 891,778 ) $ ( 17,538 ) $ 1,053,405

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

10 unchanged sentences

SHARES AMOUNT SHARES AMOUNT

Balance as of April 1, 2023 160,218,109 $ 1,601 $ 1,158,708 $ ( 59,515 ) $ ( 7,320 ) ( 378,366 ) $ ( 8,419 ) $ 1,085,055

Balance as of June 30, 2023 160,171,493 $ 1,601 $ 1,162,317 $ ( 54,809 ) $ ( 3,173 ) ( 394,209 ) $ ( 8,762 ) $ 1,097,174

Equity-based compensation expense, net of forfeiture — — 8,645 — — — 8,645

2 unchanged sentences

Change in fair value from interest rate swap, net of tax — — — 117 — — 117

Net income — — — 4,706 — — — 4,706

Net loss — — — ( 48,965 ) — — — ( 48,965 )

Foreign currency translation adjustment, net of tax — — — — ( 4,658 ) — — ( 4,658 )

Balance as of June 30, 2023 160,171,493 $ 1,601 $ 1,162,317 $ ( 54,809 ) $ ( 3,173 ) ( 394,209 ) $ ( 8,762 ) $ 1,097,174

Balance as of January 1, 2023 159,676,150 $ 1,596 $ 1,150,168 $ ( 60,873 ) $ ( 8,230 ) ( 150,207 ) $ ( 3,000 ) 1,079,661

Balance as of September 30, 2023 160,279,919 $ 1,602 $ 1,170,960 $ ( 103,774 ) $ ( 7,714 ) ( 431,153 ) $ ( 9,323 ) $ 1,051,751

Balance as of December 31, 2022 159,676,150 $ 1,596 $ 1,150,168 $ ( 60,873 ) $ ( 8,230 ) ( 150,207 ) $ ( 3,000 ) 1,079,661

Equity-based compensation awards — — 20,798 — — — — 20,798

2 unchanged sentences

Change in fair value from interest rate swap, net of tax — — — — 758 — — 758

Net income — — — 6,064 — — 6,064

Net loss — — — ( 42,901 ) — — ( 42,901 )

Foreign currency translation adjustment — — — — ( 242 ) — — ( 242 )

Balance as of June 30, 2023 160,171,493 $ 1,601 $ 1,162,317 $ ( 54,809 ) $ ( 3,173 ) ( 394,209 ) $ ( 8,762 ) $ 1,097,174

Balance as of September 30, 2023 160,279,919 $ 1,602 $ 1,170,960 $ ( 103,774 ) $ ( 7,714 ) ( 431,153 ) $ ( 9,323 ) $ 1,051,751

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30,

NINE MONTHS ENDED SEPTEMBER 30,

(IN THOUSANDS) 2024 2023

Cash flows from operating activities:

Net income (loss) $ ( 17,257 ) $ 6,064

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net loss $ ( 18,628 ) $ ( 42,901 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization of property and equipment 1,322 1,139

1 unchanged sentence

Amortization of debt issuance costs 891 1,146

Loss on extinguishing debt 196 —

(Recovery of) provision for credit losses 393 52

Loss on retirement of assets 13 29

Equity-based compensation expense 27,043 20,798

Change in fair value of contingent considerations 8,092 11,316

Lease abandonment expense 29 —

Goodwill impairment — 46,984

Deferred income taxes ( 12,626 ) ( 18,532 )

4 unchanged sentences

Deferred revenues ( 2,122 ) ( 6,978 )

Other operating activities, net 1,457 1,631

Net cash provided by operating activities 31,097 59,429

43 unchanged sentences

(b) Unaudited Interim Financial Statements

The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2024 and

2023, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and the related interim disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of September 30, 2024, the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30,

2024 and 2023, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023, and the related interim disclosures are unaudited.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

43 unchanged sentences

expected eligible revenue for the acquired businesses over the relevant measurement periods, the risk-profile of the expected eligible revenue for the acquired businesses, the uncertainty regarding the expected eligible revenue for the acquired businesses, the risk-free rate of return, the expected timing at which settlement of the contingent liabilities may occur, and the credit-adjusted discount rate associated with the risk of the Company’s future liability payments.

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at June 30, 2024:

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at September 30, 2024:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

13 unchanged sentences

Total liabilities $ — $ — $ 54,457 $ 54,457

For the period ended June 30, 2024, there were no transfers between the levels within the fair value hierarchy.

For the period ended September 30, 2024, there were no transfers between the levels within the fair value hierarchy.

The Company’s Level 3 liabilities are acquisition related contingent consideration liabilities.

The following table summarizes the Level 3 activity of the changes in the contingent consideration liability.

SEPTEMBER 30, 2024

(In thousands)

2 unchanged sentences

Fair value remeasurement 8,102

Ending balance at June 30, 2024

Ending balance at September 30, 2024

For more information regarding fair value measurements and the fair value hierarchy, see Note 2.

2 unchanged sentences

Cash equivalents include highly liquid investments with maturities of three months or less from the date purchased.

The cash and cash equivalents was $ 224,599 and $ 234,951 at June 30, 2024 and December 31, 2023, respectively.

The cash and cash equivalents was $ 233,023 and $ 234,951 at September 30, 2024 and December 31, 2023, respectively.

(g) Accounts Receivable

6 unchanged sentences

The Company generally writes off a receivable or records a specific allowance for credit losses if it determines that the receivable is not collectible.

Allowances for credit losses of $ 1,968 and $ 1,312 were provided in the accompanying condensed consolidated financial statements as of June 30, 2024 and December 31, 2023, respectively.

Allowances for credit losses of $ 1,556 and $ 1,312 were provided in the accompanying condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, respectively.

Accounts receivable consists of the following:

2024 DECEMBER 31,

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

4 unchanged sentences

Accounts receivable, net $ 95,956 $ 84,857

The following table presents the information regarding the allowance of accounts receivable:

2024 DECEMBER 31,

The following table presents the information regarding the allowance for credit losses:

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

20 unchanged sentences

During the quarter ended September 30, 2023, the Company and the counter party amended the floating rate of the swap agreement from term LIBOR to term SOFR due to LIBOR cessation.

At June 30, 2024 and December 31, 2023, the interest swap had a fair value of $ 5,603 and $ 5,624 , respectively.

The gross fair value recognized in accumulated other comprehensive income was $ 5,603 and $ 5,624 , respectively, at June 30, 2024 and December 31, 2023.

At September 30, 2024 and December 31, 2023, the interest swap had a fair value of $ 2,424 and $ 5,624 , respectively.

The gross fair value recognized in accumulated other comprehensive income (loss) was $ 2,424 and $ 5,624 , respectively, at September 30, 2024 and December 31, 2023.

The Company uses derivatives to manage certain interest exposures and designated all the derivatives as cash flow hedges.

2 unchanged sentences

Those amounts are reclassified into interest expenses in the same period during which the hedged transactions impact earnings.

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 1,526 , $ 1,276 , $ 3,051 , and $ 2,262 for the three and six months ended June 30, 2024 and 2023, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 were as follows:

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 1,529 , $ 1,489 , $ 4,580 , and $ 3,751 for the three and nine months ended September 30, 2024 and 2023, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 were as follows:

Interest rate swap derivative designated as cash flow hedging instrument:

2024 DECEMBER 31,

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

51 unchanged sentences

The portion of deferred revenue that will be recognized within 12 months is recorded as current deferred revenue, and the remaining portion is recorded as deferred revenue in the condensed consolidated balance sheets.

Contract balances at June 30, 2024 and December 31, 2023 were as follows:

2024 DECEMBER 31,

Contract balances at September 30, 2024 and December 31, 2023 were as follows:

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

1 unchanged sentence

Contract liabilities $ 60,513 $ 61,748

During the six months ended June 30, 2024, the Company recognized revenue of $ 45,783 related to contract liabilities at December 31, 2023.

The unsatisfied performance obligations as of June 30, 2024 were $ 120,444 .

During the nine months ended September 30, 2024, the Company recognized revenue of $ 55,782 related to contract liabilities at December 31, 2023.

The unsatisfied performance obligations as of September 30, 2024 were $ 123,447 .

We expect to recognize approximately $ 107,010 or 86.7 % of this revenue over the next 12 months and the remainder thereafter.

6 unchanged sentences

Amortization of capitalized costs is included in sales and marketing expenses in our condensed consolidated statements of operations and comprehensive income (loss).

Capitalized contract acquisition costs were $ 733 and $ 655 as of June 30, 2024 and December 31, 2023, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Capitalized contract acquisition costs were $ 639 and $ 655 as of September 30, 2024 and December 31, 2023, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Grant Revenue

6 unchanged sentences

The following table presents the Company’s revenue by timing of revenue recognition to understand the risks of timing of transfer of control and cash flows:

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

12 unchanged sentences

The Company invests available cash in bank deposits, investment-grade securities, and short-term interest-producing investments, including government obligations and other money market instruments.

At June 30, 2024 and December 31, 2023, the investments were bank deposits, overnight sweep accounts, and money market funds.

At September 30, 2024 and December 31, 2023, the investments were bank deposits, overnight sweep accounts, and money market funds.

The Company has adopted credit policies and standards to evaluate the risk associated with sales that require collateral, such as letters of credit or bank guarantees, whenever deemed necessary.

Management believes that any risk of loss is significantly reduced due to the nature of the customers and distributors with which the Company does business.

As of June 30, 2024 and December 31, 2023, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the six months ended June 30, 2024 and 2023.

As of September 30, 2024 and December 31, 2023, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the nine months ended September 30, 2024 and 2023.

Business Combinations

1 unchanged sentence

The results of operations for the acquisitions have been included in the Company’s results of operations prospectively from the date of acquisition.

Since 2013, and as of June 30, 2024, the Company has completed 20 acquisitions, of which 13 have included software or technology.

Since 2013, and as of September 30, 2024, the Company has completed 20 acquisitions, of which 13 have included software or technology.

Details of acquisitions that have closed since the beginning of fiscal year 2023 are provided below.

1 unchanged sentence

On June 20, 2023, the Company entered into an asset purchase agreement with the University of Washington and completed the acquisition of DIDB, including the Drug Interaction Database and related products, from The University of Washington for a total consideration of $ 8,340 .

The business combination was not significant to the Company’s consolidated financial statements.

The business combination was not significant to the Company’s condensed consolidated financial statements.

The total estimated consideration included a portion of contingent consideration that is payable over the next two years in cash, not to exceed $ 2,000 .

1 unchanged sentence

The fair value of the contingent consideration was estimated to be $ 790 as of the acquisition date.

At June 30, 2024, the contingent consideration was remeasured to $ 136 , resulting in a fair value adjustment of $ 4 and recorded in general and administrative expenses (“G&A”) on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

At September 30, 2024, the contingent consideration was remeasured to $ 136 , resulting in a fair value adjustment of $ 4 and recorded in general and administrative expenses (“G&A”) on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

Based on the Company’s purchase price allocation, approximately $ 330 , $ 5,600 , $ 360 , and $ 2,289 of the purchase price were assigned to trademarks, database content/technology, customer relationships and goodwill, respectively.

9 unchanged sentences

In total, the fair value of the contingent consideration was estimated to be $ 5,161 as of the acquisition date.

During the six months ended June 30, 2024, the Company made a payment of $ 1,777 on contingent consideration.

At June 30, 2024, the contingent consideration related to eligible revenue was remeasured to zero , resulting in a negative fair value remeasurement and adjustment of $ 1,919 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

During the nine months ended September 30, 2024, the Company made a payment of $ 1,777 on contingent consideration.

At September 30, 2024, the contingent consideration related to eligible revenue was remeasured to zero , resulting in a negative fair value remeasurement and adjustment of $ 1,919 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

Based on the Company’s purchase price allocation, approximately $ 11,700 , $ 3,100 , and $ 25,062 of the purchase price were assigned to developed technology, customer relationships, and goodwill, respectively.

3 unchanged sentences

The business combination was not material to the Company’s consolidated financial statements.

Based on the Company’s preliminary purchase price allocation, approximately $ 4,600 , $ 800 , $ 13,700 , and $ 15,872 of the purchase price were assigned to developed technology, non-compete agreements, customer relationships, and goodwill, respectively.

Based on the Company’s purchase price allocation, approximately $ 4,600 , $ 800 , $ 13,700 , and $ 15,872 of the purchase price were assigned to developed technology, non-compete agreements, customer relationships, and goodwill, respectively.

The Company expects goodwill to be fully deductible for U.S.

3 unchanged sentences

The fair value of the contingent consideration was estimated to be $ 5,357 as of the acquisition date.

At June 30, 2024, the contingent consideration was remeasured to $ 4,730 , resulting in a negative fair value adjustment of $ 650 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

During the nine months ended September 30, 2024, the Company made a payment of $ 4,730 on contingent consideration.

At September 30, 2024, the contingent consideration related to eligible revenue was remeasured to zero , resulting in a negative fair value remeasurement and adjustment of $ 650 and recorded in G&A on the accompanying condensed consolidated statement of operations and comprehensive income (loss).

The contingent considerations for all acquisitions were classified as liability and included in accrued expense and other long-term liabilities on the Company’s condensed consolidated balance sheet.

The contingent consideration relates to eligible revenues that are remeasured on a recurring basis at fair value for each reporting period.

The contingent consideration relates to eligible revenues that are remeasured on a recurring basis at fair value for each reporting

Any changes in the fair value of these contingent liabilities are included in the earnings in the condensed consolidated statements of operations and comprehensive income (loss).

The current purchase price allocations for the acquisitions of Formedix and ABM are preliminary.

The primary areas of the preliminary purchase price allocations are not yet finalized that relate to the fair value of certain tangible assets and liabilities assumed, and residual goodwill.

During the measurement period, the Company continues to gather information supporting the acquired assets and liabilities, including but not limited to the estimation of the fair value of the identifiable intangible assets, measurement of deferred revenue, and corresponding impact on goodwill.

Any adjustments to the preliminary purchase price allocation identified during the measurement period, which will not exceed one year from the acquisition date, will be accounted for prospectively.

The results of operations of the acquired businesses and the fair value of the acquired assets and liabilities assumed are included in the Company’s consolidated financial statements with effect from the date of the acquisitions.

The results of operations of the acquired businesses and the fair value of the acquired assets and liabilities assumed are included in the Company’s condensed consolidated financial statements with effect from the date of the acquisitions.

Prepaid Expenses and Other Current Assets and Other Long-Term Assets

Prepaid expense and other current assets at June 30, 2024 and December 31, 2023 consist of the following:

2024 DECEMBER 31,

Prepaid expense and other current assets at September 30, 2024 and December 31, 2023 consist of the following:

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

5 unchanged sentences

Prepaid expenses and other current assets $ 21,630 $ 20,393

Other long-term assets at June 30, 2024 and December 31, 2023 consisted of the following:

2024 DECEMBER 31,

Other long-term assets at September 30, 2024 and December 31, 2023 consisted of the following:

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

7 unchanged sentences

and (2) extending the termination date of the $ 100,000 revolving credit commitment to June 26, 2029.

The term loan under this Amendment has substantially the same terms as the existing term loans and revolving credit

The term loan under this Amendment has substantially the same terms as the existing term loans and revolving credit commitments.

The Credit Agreement is collateralized by substantially all U.S.

7 unchanged sentences

Additionally, the Company is obligated to pay a commitment fee of the unused amount and other customary fees.

As of June 30, 2024 and December 31, 2023, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 9.2 % and 8.4 % for the six months ended June 30, 2024 and 2023 for the term loan debt.

As of September 30, 2024 and December 31, 2023, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 8.96 % and 8.67 % for the nine months ended September 30, 2024 and 2023 for the term loan debt.

As discussed previously, the Company entered into interest rate swap agreements and continues to use the swap to mitigate the interest risk for the Company's debt obligations under the Credit Agreement.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 6,736 , $ 6,465 , $ 13,534 , and $ 12,439 for the three and six months ended June 30, 2024 and 2023, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 348 and $ 2,400 at June 30, 2024 and December 31, 2023, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 63 , $ 64 , $ 126 , and $ 128 for both the three and six months ended June 30, 2024 and 2023, respectively.

There was $ 2 accrued interest payable on the revolving line of credit both June 30, 2024 and December 31, 2023.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 6,366 , $ 6,844 , $ 19,900 , and $ 19,283 for the three and nine months ended September 30, 2024 and 2023, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 65 and $ 2,400 at September 30, 2024 and December 31, 2023, respectively, and is included in accrued expenses.

Interest incurred on the Credit Agreement with respect to the revolving line of credit was $ 81 , $ 65 , $ 207 , and $ 193 for the three and nine months ended September 30, 2024 and 2023, respectively.

There was $ 1 and $ 2 accrued interest payable on the revolving line of credit September 30, 2024 and December 31, 2023.

Long-term debt consists of the following:

2024 DECEMBER 31,

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

5 unchanged sentences

Long-term debt, net of current portion and debt issuance costs $ 293,053 $ 288,217

The principal amount of long-term debt outstanding as of June 30, 2024 matures in the following years:

The principal amount of long-term debt outstanding as of September 30, 2024 matures in the following years:

Remainder of 2024 2025 2026 2027 2028 Thereafter TOTAL

5 unchanged sentences

The fair values of the Company’s variable interest term loan and revolving line of credit are not significantly different than their carrying value because the interest rates on these instruments are subject to change with market interest rates.

The Company leases certain office facilities and equipment under non-cancelable operating leases with remaining terms ranging from less than one to ten years .

The Company leases certain office facilities and equipment under non-cancelable operating leases with remaining terms ranging from less than one to nine years .

Operating lease ROU assets are included in other assets.

With respect to operating lease liabilities, current operating lease liabilities are included in current liabilities and non-current operating lease liabilities are included in long-term liabilities in the condensed consolidated balance sheets.

At June 30, 2024, the weighted average remaining lease terms were 5.97 years for operating leases, and the weighted average discount rate was 5.54 % for operating leases.

At September 30, 2024, the weighted average remaining lease terms were 5.76 years for operating leases, and the weighted average discount rate was 5.54 % for operating leases.

For additional information on the Company's leases, see Note 14.

“Leases” to the consolidated financial statements included in the Company’s 2023 Annual Report.

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at June 30, 2024 and December 31, 2023:

Lease Position Balance Sheet Classification JUNE 30, 2024 DECEMBER 31, 2023

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at September 30, 2024 and December 31, 2023:

Lease Position Balance Sheet Classification SEPTEMBER 30, 2024 DECEMBER 31, 2023

(In thousands)

4 unchanged sentences

Total lease liabilities $ 15,001 $ 11,330

The following table summarizes by year the maturities of our minimum lease payments as of June 30, 2024:

The following table summarizes by year the maturities of our minimum lease payments as of September 30, 2024:

(In thousands)

6 unchanged sentences

Accrued expenses consist of the following:

2024 DECEMBER 31,

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

7 unchanged sentences

Other long-term liabilities consist of the following:

2024 DECEMBER 31,

SEPTEMBER 30, 2024 DECEMBER 31,

(In thousands)

11 unchanged sentences

The fair value of the restricted stock awarded was initially based on the fair value of our common stock on the date of grant, then adjusted for time restrictions due to unregistered shares and lack of marketability.

The non-vested restricted stock at June 30, 2024 issued in 2021 has a three-year vesting period.

The non-vested restricted stock at September 30, 2024 issued in 2021 has a three-year vesting period.

SHARES WEIGHTED-

4 unchanged sentences

Cancelled* ( 16,842 ) 23.00

Non-vested restricted stock as of June 30, 2024 405,447 $ 23.24

Non-vested restricted stock as of September 30, 2024 241,296 $ 23.41

___________________________________

* The Company did not legally authorize or issue any restricted stock during the six month period ended June 30, 2024.

During the first half of 2024, the Company modified an award for a recipient, resulting in 16,842 shares assumed to be granted, vested, and cancelled.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 156 , $( 491 ), $ 406 , and $ 164 for the three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 422 , which is expected to be recognized over a weighted-average period of 10.9 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 221 and $ 312 , $ 598 , and $ 810 for the three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 651 , which is expected to be recognized over a weighted-average period of 12.8 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle 21, LLC acquisition was $ 106 , $ 292 , $ 212 , and $ 584 for the three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $ 106 , which is expected to be recognized over a weighted-average period of 3 months.

* The Company did not legally authorize or issue any restricted stock during the nine month period ended September 30, 2024.

During the nine months ended 2024, the Company modified an award for a recipient, resulting in 16,842 shares assumed to be granted, vested, and cancelled.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 173 , $ 333 , $ 579 , and $ 497 for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 249 , which is expected to be recognized over a weighted-average period of 10.2 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 196 and $ 252 , $ 794 , and $ 1,062 for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 455 , which is expected to be recognized over a weighted-average period of 11 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle 21, LLC acquisition was $ 106 , $ 292 , $ 318 , and $ 877 for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, there is no unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach.

2020 Incentive Plan

14 unchanged sentences

Cancelled* ( 42,098 ) 24.21

Non-vested RSUs as of June 30, 2024 3,567,171 $ 20.16

Non-vested RSUs as of September 30, 2024 3,408,009 $ 20.10

___________________________________

* The majority of shares granted during the first quarter of 2024 were issued under the 2020 Incentive Plan.

During the first half of 2024, the Company modified awards for recipients, resulting in 42,098 shares assumed to be granted, vested, and cancelled for accounting purposes.

* The majority of shares granted during the first nine months of 2024 were issued under the 2020 Incentive Plan.

During the first nine months of 2024, the Company modified awards for recipients, resulting in 42,098 shares assumed to be granted, vested, and cancelled for accounting purposes.

** The number of the RSUs vested included 408,378 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the RSUs were $ 8,614 , $ 7,325 , $ 16,319 , and $ 12,137 for three and six months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 60,461 , which is expected to be recognized over a weighted-average period of 26.6 months.

Equity-based compensation expenses related to the RSUs were $ 8,069 , $ 7,260 , $ 24,388 , and $ 19,397 for three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 49,584 , which is expected to be recognized over a weighted-average period of 24.6 months.

Performance Stock Units

3 unchanged sentences

The Company will continue to assess the probability of each condition being achieved at each reporting period to determine whether and when to recognize compensation costs.

A summary of the Company’s PSU activity for the period ended June 30, 2024 is as follows:

A summary of the Company’s PSU activity for the period ended September 30, 2024 is as follows:

UNITS WEIGHTED-

4 unchanged sentences

Cancelled* ( 394,050 ) 27.09

Non-vested PSUs as of June 30, 2024 763,134 $ 21.08

Non-vested PSUs as of September 30, 2024 743,092 $ 21.07

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1 unchanged sentence

** The number of the PSUs vested included 46,785 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the PSUs were $ 686 , $( 3,828 ), $ 1,321 , and $( 1,542 ) for the three and six months ended at June 30, 2024 and 2023, respectively.

At June 30, 2024, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 3,452 , which is expected to be recognized over a weighted-average period of 17.0 months.

Equity-based compensation expenses related to the PSUs were $( 358 ), $ 506 , $ 964 , and $( 1,035 ) for the three and nine months ended at September 30, 2024 and 2023, respectively.

At September 30, 2024, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 1,335 , which is expected to be recognized over a weighted-average period of 15.7 months.

The following table summarizes the components of total equity-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss) for each period presented:

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

7 unchanged sentences

Contingent consideration

In connection with the Vyasa Analytics LLC ("Vyasa"), DIDB, Formedix, and ABM acquisitions, the Company is required to pay additional consideration if the acquired businesses achieve certain eligible revenue thresholds for certain periods.

The maximum contingent considerations related to revenue thread for Vyasa, DIDB, Formedix, and ABM to be earned are $ 60,000 , $ 2,000 , $ 9,000 , and $ 17,550 , respectively.

In connection with the business acquisitions, the Company is required to pay additional consideration if the acquired businesses achieve certain eligible revenue thresholds for certain periods.

The maximum contingent considerations related to revenue thread to be earned are $ 88,550 .

Additionally, the Company agreed to further contingent consideration based on the resolution of certain tax contingencies related to the Formedix acquisition.

During the six months ended June 30, 2024, the Company made a combined payment of $ 14,133 on the contingent consideration, consisting of $ 10,426 in cash and $ 3,707 in Company's stock.

The total contingent liabilities were $ 46,776 and $ 55,238 at June 30, 2024 and December 31, 2023, respectively.

During the nine months ended September 30, 2024, the Company made a combined payment of $ 18,863 on the contingent consideration, consisting of $ 15,156 in cash and $ 3,707 in Company's stock.

The total contingent liabilities were $ 44,477 and $ 55,238 at September 30, 2024 and December 31, 2023, respectively.

The contingent liabilities are included in accrued expenses and other long-term liabilities in the Company's condensed consolidated balance sheet.

Legal proceedings

The Company does not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on its condensed consolidated financial statements as of June 30, 2024.

Assurance-type warranty

7 unchanged sentences

Since the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements.

The following table summarizes revenue by geographic area for the three and six months ended June 30, 2024 and 2023:

The following table summarizes revenue by geographic area for the three and nine months ended September 30, 2024 and 2023:

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

SEPTEMBER 30, NINE MONTHS ENDED

SEPTEMBER 30,

2024 2023 2024 2023

9 unchanged sentences

The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

The Company's global ETR for the three and six months ended June 30, 2024 and 2023 were ( 2 )%, 44 %, 3 %, and 44 %, respectively, including discrete tax items.

The Company's global ETR for the three and nine months ended September 30, 2024 and 2023 were 17 % , 9 % , 4 % , and ( 0.3 )%, respectively, including discrete tax items.

The current year decrease in the ETR was principally due to the combined effect of the overall decrease in pre-tax book income, the impact of non-deductible items, and the tax effect of certain discrete items.

2 unchanged sentences

Diluted earnings per share is computed by dividing the net income (loss) attributable to stockholders by the weighted-average number of shares and dilutive potential common shares during the period.

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2024 2023 2024 2023

9 unchanged sentences

__________________________________

• For the period ended June 30, 2024, the Company excluded potentially dilutive securities from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

• For the period ended June 30, 2023, the Company excluded certain potentially dilutive securities attributable to outstanding RSUs and restricted stocks from the computation of diluted earnings per share because the securities would have had an antidilutive effect.

• For the period ended September 30, 2024 and 2023, the Company excluded potentially dilutive securities from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

Subsequent Event

On October 1, 2024, the Company completed the acquisition of Chemaxon, a leading provider of scientific informatics software products.

The total cash consideration paid for this acquisition is $ 90,000 .

The Company will finalize the initial accounting for the acquisition of Chemaxon, including the allocation of the purchase consideration, in the fourth quarter of 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements