16 unchanged sentences
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
−Removed: Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of January 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to (i) ineffective controls around the contract-to-cash life cycle of service fees, including ineffective process level controls around billing set-up during customer implementation, managing change to existing customer billing terms and conditions, timely termination of customers, implementing complex and/or non-standard billing arrangements that require manual intervention or manual controls for billing to customers, processing timely adjustments, lack of robust, established and documented policies to assess collectability and reserve for revenue, bad debts and accounts receivable, availability of customer contracts, and reviews of non-standard contracts and (ii) ineffective controls related to information technology general controls (ITGCs) in the areas of logical access and change-management over certain information technology systems that supported its financial reporting processes.
−Removed: Business process controls (automated and manual) that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: The material weaknesses referred to above are described in Management's report on internal control over financial reporting appearing under Item 9A.
−Removed: We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2022 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.
+Added: Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
−Removed: The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management's report referred to above.
+Added: The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's report on internal control over financial reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
5 unchanged sentences
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
−Removed: the consolidated financial statements.
+Added: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
1 unchanged sentence
We believe that our audits provide a reasonable basis for our opinions.
−Removed: As described in Management’s report on internal control over financial reporting, management has excluded Fort Effect Corp, d/b/a Luum (Luum) and the Further business from its assessment of internal control over financial reporting as of January 31, 2022 because they were acquired by the Company in purchase business combinations during fiscal 2022.
−Removed: We have also excluded Luum and Further from our audit of internal control over financial reporting.
−Removed: Luum and Further are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 1% and 3%, respectively, of the related consolidated financial statement amounts as of and for the year ended January 31, 2022.
Definition and Limitations of Internal Control over Financial Reporting
6 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Service Revenue Recognition
4 unchanged sentences
The Company recognizes service revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for those services, on a monthly basis as it satisfies its performance obligations.
−Removed: The principal consideration for our determination that performing procedures relating to service revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to revenue recognition after consideration of the material weaknesses that were identified as described in the “Opinions on the Financial Statements and Internal Control over Financial Reporting” section above.
+Added: The principal consideration for our determination that performing procedures relating to service revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to revenue recognition, including consideration of the material weaknesses in internal control over financial reporting that were previously disclosed by management and existed during the year related to this matter.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
These procedures included, among others, evaluating the recognition of service revenue for a sample of revenue transactions by obtaining confirmation from customers or obtaining and inspecting source documents, including invoices, sales contracts, and cash receipts.
−Removed: Valuation of Customer Relationships Relating to the Acquisition of Further
−Removed: As described in Notes 1 and 3 to the consolidated financial statements, on November 1, 2021, the Company completed its acquisition of the Further business (other than Further’s voluntary employee beneficiary association business) for $455 million.
−Removed: Identifiable intangible assets acquired as part of the acquisition were $172 million, including customer relationships, developed technology, and in-process software development costs.
−Removed: Customer relationships make up $146 million of the identifiable intangible assets acquired.
−Removed: Acquired customer relationships are valued utilizing the discounted cash flow method, a form of the income approach.
−Removed: As disclosed by management, significant estimates in valuing acquired customer relationships include, but are not limited to, discount rates and revenue growth rates, net of attrition.
−Removed: The principal considerations for our determination that performing procedures relating to the valuation of customer relationships relating to the acquisition of Further is a critical audit matter are (i) the significant judgment by management when determining the fair value of the customer relationships intangible asset acquired;
−Removed: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to discount rates and revenue growth rates, net of attrition;
−Removed: and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
−Removed: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to acquisition accounting, including controls over management’s valuation of the customer relationships intangible asset.
−Removed: These procedures also included, among others, (i) reading the purchase agreement;
−Removed: (ii) testing management’s process for determining the fair value of the customer relationships, (iii) evaluating the appropriateness of the discounted cash flow method;
−Removed: (iv) testing the completeness and accuracy of certain underlying data used in the discounted cash flow method;
−Removed: and (v) evaluating the reasonableness of the significant assumptions used by management related to discount rates and revenue growth rates, net of attrition.
−Removed: Evaluating management’s significant assumptions related to revenue growth rates, net of attrition, involved evaluating whether the significant assumptions used by management were reasonable considering (i) the past performance of the Further business;
−Removed: (ii) consistency with external market and industry data;
−Removed: and (iii) whether the significant assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow method and (ii) the reasonableness of management’s significant assumptions related to discount rates and revenue growth rates, net of attrition.
/s/ PricewaterhouseCoopers LLP
70 unchanged sentences
Income (loss) before income taxes ( 38,096 ) ( 66,741 ) 4,140
−Removed: Income tax provision (benefit) ( 22,452 ) ( 4,694 ) 3,491
+Added: Income tax benefit ( 11,953 ) ( 22,452 ) ( 4,694 )
Net income (loss) and comprehensive income (loss) $ ( 26,143 ) $ ( 44,289 ) $ 8,834
24 unchanged sentences
Stock-based compensation — — 52,750 — 52,750
−Removed: Net income — — — 8,834 8,834
+Added: Net loss — — — ( 44,289 ) ( 44,289 )
Balance as of January 31, 2022 83,780 $ 8 $ 1,676,508 $ 176,059 $ 1,852,575
1 unchanged sentence
Issuance of common stock upon exercise of options, and for restricted stock 978 — 6,594 — 6,594
−Removed: Other issuance of common stock 5,750 — 456,640 — 456,640
Stock-based compensation — — 62,614 — 62,614
29 unchanged sentences
Cash flows from investing activities:
−Removed: Acquisitions, net of cash acquired ( 504,533 ) — ( 1,644,575 )
+Added: Business combinations, net of cash acquired — ( 504,533 ) —
Purchases of software and capitalized software development costs ( 45,173 ) ( 62,708 ) ( 51,500 )
−Removed: Acquisition of intangible member assets ( 65,465 ) ( 32,371 ) ( 9,134 )
+Added: Acquisitions of HSA portfolios ( 70,583 ) ( 65,465 ) ( 32,371 )
Purchases of property and equipment ( 3,371 ) ( 8,908 ) ( 13,093 )
−Removed: Purchases of equity securities — — ( 53,845 )
Proceeds from sale of equity securities — 2,367 —
8 unchanged sentences
Payment of contingent consideration — ( 6,000 ) —
−Removed: Net cash provided by financing activities 394,863 52,422 1,465,735
+Added: Net cash provided by (used in) financing activities ( 2,671 ) 394,863 52,422
Increase (decrease) in cash and cash equivalents 28,852 ( 103,389 ) 137,077
13 unchanged sentences
Purchases of property and equipment included in accounts payable or accrued liabilities 69 1,414 160
−Removed: Purchases of intangible member assets included in accounts payable or accrued liabilities 1,692 — —
−Removed: Decrease in goodwill due to measurement period adjustments, net 19 5,438 —
+Added: Acquisitions of HSA portfolios included in accounts payable or accrued liabilities — 1,692 —
+Added: Decrease (increase) in goodwill due to measurement period adjustments, net ( 2,309 ) 19 5,438
Exercise of common stock options receivable 382 470 1,478
−Removed: Equity-based acquisition consideration — — 3,776
The accompanying notes are an integral part of the consolidated financial statements.
14 unchanged sentences
These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the consolidated financial statements.
−Removed: Certain reclassifications have been made to prior year amounts to conform to the current year presentation .
−Removed: Follow-on equity offering
−Removed: In the first quarter of fiscal year 2022, the Company closed a follow-on public offering of 5,750,000 shares of common stock at a public offering price of $ 80.30 per share, less the underwriters' discount.
−Removed: The Company received net proceeds of $ 456.6 million after deducting underwriting discounts and commissions of $ 4.6 million and other offering expenses of approximately $ 0.5 million.
Principles of consolidation
1 unchanged sentence
All significant intercompany accounts and transactions have been eliminated in consolidation.
−Removed: The Company operates in one segment.
−Removed: Management uses one measurement of profitability and does not segregate its business for internal reporting.
+Added: The Company operates in one segment, which reflects the way in which its chief operating decision maker, the Chief Executive Officer, reviews the Company's financial performance and makes decisions about resource allocation.
All long-lived assets are maintained in the United States of America.
7 unchanged sentences
Accounts receivable
−Removed: On February 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses:
−Removed: Measurement of Credit Losses on Financial Instruments using the modified retrospective transition method.
Accounts receivable represent monies due to the Company for monthly service revenue, custodial revenue and interchange revenue.
1 unchanged sentence
In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including macroeconomic variables, the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition.
−Removed: Marketable equity securities were strategic equity investments with readily determinable fair values for which the Company did not have the ability to exercise significant influence.
−Removed: These securities were accounted for at fair value and were classified as investments on the consolidated balance sheets.
−Removed: All gains and losses on these investments, realized and unrealized, were recognized in other income (expense), net in the consolidated statements of operations and comprehensive income (loss).
−Removed: As of January 31, 2022 and 2021, the Company had no marketable equity securities.
−Removed: Non-marketable equity securities were strategic equity investments without readily determinable fair values for which the Company did not have the ability to exercise significant influence.
−Removed: These securities were accounted for using the measurement alternative and were classified as other assets on the consolidated balance sheets.
−Removed: All gains and losses on these investments, realized and unrealized, were recognized in other income (expense), net on the consolidated statements of operations and comprehensive income (loss).
−Removed: As of January 31, 2022 and 2021, the Company had no non-marketable equity securities and an immaterial balance of non-marketable equity securities, respectively.
−Removed: Other assets consist primarily of contract costs, debt issuance costs, prepaid expenditures, income tax receivables, inventories, and various other assets.
+Added: Other assets consist primarily of contract costs, prepaid expenditures, debt issuance costs, income tax receivables, inventories, and various other assets.
Amounts expected to be recouped or recognized over a period of twelve months or less have been classified as current in the accompanying consolidated balance sheets.
89 unchanged sentences
The Company makes no significant judgments in determining the amount or timing of revenue recognition.
−Removed: The Company has estimated the average economic life of an HSA or CDB member
−Removed: relationship, which has been determined to be the amortization period for the capitalized sales commissions contract costs.
+Added: The Company has estimated the average economic life of an HSA or CDB member relationship, which has been determined to be the amortization period for the capitalized sales commissions contract costs.
Cost of revenue
3 unchanged sentences
Stock-based compensation
−Removed: The Company grants stock-based awards, which consist of stock options, restricted stock units ("RSUs") and restricted stock awards ("RSAs"), to certain team members, executive officers, and directors.
+Added: The Company grants stock-based awards, which consist of stock options and restricted stock units ("RSUs"), to certain team members, executive officers, and directors.
+Added: Historically, the Company also granted restricted stock awards ("RSAs").
The Company recognizes compensation expense for stock-based awards based on the grant date estimated fair value.
2 unchanged sentences
The determination of fair value for stock options on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables.
−Removed: The fair value of RSUs and RSAs is based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate.
+Added: The fair value of RSUs is based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate.
For stock-based awards with performance conditions, the Company evaluates the probability of achieving the performance criteria and of the number of shares that are expected to vest, and compensation expense is then adjusted to reflect the number of shares expected to vest and the requisite service period.
For awards with performance conditions, compensation expense is recognized using the graded-vesting attribution method in accordance with the provisions of ASC 718, Compensation—Stock Compensation ("Topic 718").
−Removed: Compensation expense related to stock-based awards with market conditions is recorded on a straight-line basis over the requisite service period regardless of whether the market condition is satisfied.
−Removed: Upon the exercise of a stock option or release of an RSU/RSA, common shares are issued from authorized, but not outstanding, common stock.
+Added: expense related to stock-based awards with market conditions is recorded on a straight-line basis over the requisite service period regardless of whether the market condition is satisfied.
+Added: Upon the exercise of a stock option or release of an RSU, common shares are issued from authorized, but not outstanding, common stock.
Interest expense
−Removed: Interest expense primarily consists of accrued interest expense and amortization of deferred financing costs associated with our long-term debt.
−Removed: Income tax provision (benefit)
+Added: Interest expense primarily consists of accrued interest expense and amortization of deferred financing costs associated with long-term debt.
+Added: Income tax benefit
The Company accounts for income taxes and the related accounts under the asset and liability method as set forth in ASC 740, Income Taxes .
14 unchanged sentences
The cost of the assets acquired, including transaction costs incurred in conjunction with an asset acquisition, is allocated to the individual assets acquired based on their relative fair values and does not give rise to goodwill.
−Removed: Business combination
+Added: Business combinations
Consideration paid for the acquisition of a business as defined by ASC 805-10 is allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.
23 unchanged sentences
Business combinations
−Removed: WageWorks Acquisition
−Removed: On August 30, 2019, the Company closed the acquisition of WageWorks, Inc.
−Removed: (the "WageWorks Acquisition") for $ 51.35 per share in cash, or $ 2.0 billion to WageWorks stockholders.
−Removed: The Company financed the transaction through a combination of $ 816.9 million cash on hand plus net borrowings of approximately $ 1.22 billion, after deducting lender fees of approximately $ 30.5 million, under a term loan facility (see Note 8—Indebtedness).
−Removed: The WageWorks Acquisition was accounted for under the acquisition method of accounting for business combinations.
−Removed: The consideration paid was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.
−Removed: The initial allocation of the consideration paid was based on a preliminary valuation and was subject to adjustment during the measurement period (up to one year from the acquisition date).
−Removed: The purchase price allocation was finalized in the third quarter of fiscal year 2021.
−Removed: The following table summarizes the Company's allocation of the consideration paid in the WageWorks Acquisition:
−Removed: (in millions) Initial Allocation Adjustments Updated Allocation
−Removed: Cash and cash equivalents $ 406.8 $ ( 14.5 ) $ 392.3
−Removed: Other current assets 56.5 2.5 59.0
−Removed: Property, plant, and equipment 26.6 — 26.6
−Removed: Operating lease right-of-use assets 42.5 — 42.5
−Removed: Intangible assets 715.3 — 715.3
−Removed: Goodwill 1,330.5 ( 8.0 ) 1,322.5
−Removed: Other assets 5.9 — 5.9
−Removed: Client-held funds obligation ( 237.5 ) 17.2 ( 220.3 )
−Removed: Other current liabilities ( 69.1 ) ( 3.7 ) ( 72.8 )
−Removed: Other long-term liabilities ( 26.7 ) — ( 26.7 )
−Removed: Deferred tax liability ( 128.7 ) 6.5 ( 122.2 )
−Removed: Total consideration paid $ 2,122.1 $ — $ 2,122.1
−Removed: Adjustments to the initial allocation were based on more detailed information obtained about the specific assets acquired, liabilities assumed, and tax-related matters.
−Removed: Pro forma information
−Removed: The unaudited pro forma results presented below include the effects of the WageWorks Acquisition as if it had been consummated as of February 1, 2018, with adjustments to give effect to pro forma events that are directly attributable to the WageWorks Acquisition, which include adjustments related to the amortization of acquired intangible assets, interest income and expense, and depreciation.
−Removed: The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings from the integration of WageWorks.
−Removed: Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the WageWorks Acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.
−Removed: The estimated pro forma revenue and net income include the alignment of accounting policies, the effect of fair value adjustments related to the WageWorks Acquisition, associated tax effects and the impact of the borrowings to finance the WageWorks Acquisition and related expenses.
−Removed: Year ended January 31,
−Removed: (in thousands) (unaudited) 2020 2019
−Removed: Revenue $ 798,253 $ 765,801
−Removed: Net income $ 23,101 $ 6,419
Luum acquisition
On March 8, 2021, the Company acquired 100 % of the outstanding capital stock of Fort Effect Corp, d/b/a Luum (the "Luum Acquisition").
−Removed: Luum provides employers with various commuter services, including access to real-time commute data to help them design and implement flexible return-to-office and hybrid-workplace strategies and benefits.
−Removed: The aggregate purchase price consisted of $ 50.2 million in cash, and up to $ 20.0 million in additional payments which were contingent on Luum achieving certain revenue targets during the two-year period following
−Removed: the closing of the Luum Acquisition and, if achieved, would be payable in fiscal years 2023 and 2024.
−Removed: The Company recorded an $ 8.1 million liability representing its best estimate of the fair value of the contingent consideration as of the acquisition date.
−Removed: The fair value of this contingent consideration was determined using a Monte Carlo valuation model based on Level 3 inputs, with any changes in the fair value recorded as other income (expense), net, in the consolidated statement of operations and comprehensive income (loss).
−Removed: On October 31, 2021, the Company entered into an amendment to the purchase agreement to pay $ 6.0 million in satisfaction of the contingent consideration liability, and recognized income of $ 2.1 million resulting from the change in fair value of the contingent consideration.
+Added: The aggregate purchase price for the acquisition consisted of $ 56.2 million in cash, which reflects a $ 2.1 million reduction in the fair value of contingent consideration during the fiscal year ended January 31, 2022.
The Luum Acquisition was accounted for under the acquisition method of accounting for business combinations.
The consideration paid was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.
−Removed: The initial allocation of the consideration paid was based on a preliminary valuation and is subject to adjustment during the measurement period (up to one year from the acquisition date).
−Removed: Balances subject to adjustment primarily include the valuations of acquired assets (tangible and intangible) and liabilities assumed, as well as tax-related matters.
−Removed: The Company expects the allocation of the consideration transferred to be finalized within the measurement period.
−Removed: The following table summarizes the Company's current allocation of the consideration paid:
+Added: The initial allocation of the consideration paid was based on a preliminary valuation and was subject to adjustment during the measurement period (up to one year from the acquisition date).
+Added: The purchase price allocation was finalized during the three months ended April 30, 2022.
+Added: The following table summarizes the Company's allocation of the consideration paid:
(in thousands) Estimated fair value Adjustments Updated Allocation
7 unchanged sentences
Total consideration paid $ 58,306 $ — $ 58,306
−Removed: The Luum Acquisition resulted in $ 36.4 million of goodwill.
−Removed: The preliminary goodwill recognized is attributable to several strategic, operational, and financial benefits expected from the Luum Acquisition, including an expanded commuter offering beyond traditional pre-tax commuter benefits and additional cross-selling opportunities.
The adjustments to the initial allocation were based on more detailed information obtained about the specific assets acquired, liabilities assumed, and tax-related matters.
−Removed: The goodwill created in the Luum Acquisition is not expected to be deductible for tax purposes.
−Removed: The preliminary allocation of consideration exchanged to acquired identified intangible assets is as follows:
−Removed: ($ in thousands) Fair value Estimated life
−Removed: Customer relationships (1) $ 12,400 7.0
−Removed: Developed technology (1) 10,900 5.0
−Removed: Trade names & trademarks (1) 600 3.0
−Removed: Total acquired intangible assets $ 23,900 6.0
−Removed: (1) The Company preliminarily valued the acquired assets utilizing the discounted cash flow method, a form of the income approach.
−Removed: The pro forma effects of the Luum Acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial information is presented.
Further acquisition
On November 1, 2021, the Company completed its acquisition of the Further business (other than Further's voluntary employee beneficiary association business) for $ 455 million (the "Further Acquisition").
−Removed: Further is a leading provider of HSA and other CDB administration services.
−Removed: The parties also entered into related agreements ancillary to the Further Acquisition, including a transition services agreement.
The Further Acquisition was accounted for under the acquisition method of accounting for business combinations.
The consideration paid was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.
−Removed: The initial allocation of the consideration paid was based on a preliminary valuation and is subject to adjustment during the measurement period (up to one year from the
−Removed: acquisition date).
−Removed: Balances subject to adjustment primarily include the valuations of acquired assets (tangible and intangible) and liabilities assumed, as well as tax-related matters.
−Removed: The Company expects the allocation of the consideration transferred to be finalized within the measurement period.
−Removed: The following table summarizes the Company's current allocation of the consideration paid:
−Removed: (in thousands) Estimated fair value
+Added: The initial allocation of the consideration paid was based on a preliminary valuation and was subject to adjustment during the measurement period (up to one year from the acquisition date).
+Added: The purchase price allocation was finalized during the three months ended January 31, 2023.
+Added: The following table summarizes the Company's allocation of the consideration paid:
+Added: (in thousands) Estimated fair value Adjustments Updated Allocation
Current assets $ 2,667 $ ( 163 ) $ 2,504
3 unchanged sentences
Total consideration paid $ 455,000 $ — $ 455,000
−Removed: The Further Acquisition resulted in $ 282.3 million of goodwill.
−Removed: The preliminary goodwill recognized is attributable to several strategic, operational, and financial benefits expected from the Further Acquisition, including an enhanced ability to drive growth with health plans, custodial and interchange revenue synergies based on current contractual relationships, and operational cost synergies resulting from increased scale in service delivery.
−Removed: The goodwill created in the Further Acquisition is not expected to be deductible for tax purposes.
−Removed: The preliminary allocation of consideration exchanged to acquired identified intangible assets is as follows:
−Removed: ($ in thousands) Fair value Estimated life
−Removed: Customer relationships (1) $ 146,000 15.0
−Removed: Developed technology (1) 25,000 5.0
−Removed: Identified intangible assets subject to amortization 171,000 13.5
−Removed: In-process software development costs 1,183 n/a
−Removed: Total acquired intangible assets $ 172,183
−Removed: (1) The Company preliminarily valued the acquired assets utilizing the discounted cash flow method, a form of the income approach.
−Removed: The pro forma effects of the Further Acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial information is presented.
+Added: The adjustments to the initial allocation were based on more detailed information obtained about the specific assets acquired, liabilities assumed, and tax-related matters.
Supplemental financial statement information
3 unchanged sentences
During the fiscal years ended January 31, 2023, 2022, and 2021, the Company recorded credit losses from trade receivables of $ 2.1 million, $ 3.3 million, and $ 3.4 million, respectively.
+Added: Prepaid expenses
+Added: As of January 31, 2023 and 2022, the Company had prepaid expenses of $ 20.1 million and $ 20.6 million, respectively, which are included within other current assets on the Company's consolidated balance sheets.
Costs to obtain a contract
15 unchanged sentences
The Company expects to recognize approximately 58 % of its balance of deferred revenue as revenue over the next 12 months and the remainder thereafter.
+Added: Amounts expected to be recognized as revenue within a period of twelve months or less are classified as accrued liabilities in the Company's consolidated balance sheets, with the remainder included within other long-term liabilities.
Revenue recognized during the fiscal year that was included in the beginning balance of deferred revenue was $ 4.9 million.
10 unchanged sentences
Interest expense
−Removed: Based on the application of ASC 470-50, Debt - Modifications and Extinguishments , the Company recorded a $ 4.0 million loss on extinguishment of debt during the year ended January 31, 2022, which is included within interest expense in the consolidated statements of operations and comprehensive income (loss) for the year ended January 31, 2022.
+Added: Based on the application of ASC 470-50, Debt - Modifications and Extinguishments, the Company recorded a $ 4.0 million loss on extinguishment of debt during the fiscal year ended January 31, 2022, which is included within interest expense in the consolidated statements of operations and comprehensive income (loss) for the fiscal year ended January 31, 2022.
The Company has entered into various non-cancelable operating lease agreements for office space, data storage facilities, and other leases with remaining lease terms of less than 1 year to approximately 8 years, often with one or more Company options to renew.
17 unchanged sentences
Lease liabilities, non-current $ 58,988 $ 65,232
−Removed: As of January 31, 2022, the Company had an additional operating lease for office space that had not yet commenced with aggregate undiscounted lease payments of $ 4.5 million.
−Removed: This operating lease will commence in fiscal year 2023 and has a lease term of approximately 9 years.
+Added: As of January 31, 2023, the Company had additional operating leases for office space that had not yet commenced with aggregate undiscounted lease payments of $ 3.2 million.
+Added: The operating leases will commence during fiscal years 2024 and 2025 and have lease terms of approximately 7 to 8 years.
Supplemental cash flow information related to the Company's operating leases was as follows:
5 unchanged sentences
During the fiscal year ended January 31, 2022, the Company recorded impairment losses on right-of-use assets of $ 11.2 million, which are included within merger integration expense in the consolidated statement of operations and comprehensive income (loss).
−Removed: The impairment losses related primarily to a right-of-use asset acquired through the WageWorks Acquisition, which had a carrying value of $ 14.8 million prior to impairment and no corresponding lease liability.
−Removed: During the year ended January 31, 2022, the right-of-use asset met the criteria to be classified as held-for-sale and an impairment loss of $ 10.9 million was recognized.
+Added: The impairment losses related primarily to a right-of-use asset acquired through the acquisition of the Company's wholly owned subsidiary WageWorks, Inc.
+Added: ("WageWorks"), which had a carrying value of $ 14.8 million prior to impairment and no corresponding lease liability.
+Added: During the fiscal year ended January 31, 2022, the right-of-use asset met the criteria to be classified as held-for-sale and an impairment loss of $ 10.9 million was recognized.
The remaining carrying value of $ 3.9 million was included within other current assets on the Company's consolidated balance sheet as of January 31, 2022.
3 unchanged sentences
The gross carrying amount and associated accumulated amortization of intangible assets were as follows:
−Removed: (in thousands) January 31, 2022 January 31, 2021
+Added: January 31, 2023
+Added: (in thousands) Gross carrying amount Accumulated amortization Net carrying amount
+Added: Amortizable intangible assets:
Software and software development costs $ 233,194 $ ( 152,178 ) $ 81,016
3 unchanged sentences
Acquired trade names 12,900 ( 12,679 ) 221
−Removed: Intangible assets, gross 1,289,854 962,752
−Removed: Accumulated amortization ( 316,717 ) ( 195,749 )
−Removed: Intangible assets, net $ 973,137 $ 767,003
+Added: Total amortizable intangible assets $ 1,399,889 $ ( 463,530 ) $ 936,359
+Added: January 31, 2022
+Added: (in thousands) Gross carrying amount Accumulated amortization Net carrying amount
+Added: Amortizable intangible assets:
+Added: Software and software development costs $ 192,050 $ ( 99,952 ) $ 92,098
+Added: Acquired HSA portfolios 192,298 ( 46,603 ) 145,695
+Added: Acquired customer relationships 759,781 ( 101,741 ) 658,040
+Added: Acquired developed technology 132,825 ( 58,334 ) 74,491
+Added: Acquired trade names 12,900 ( 10,087 ) 2,813
+Added: Total amortizable intangible assets $ 1,289,854 $ ( 316,717 ) $ 973,137
During the fiscal years ended January 31, 2023 and 2022, the Company capitalized $ 68.9 million and $ 67.2 million, respectively, to acquire the rights to act as a custodian of HSA portfolios.
Amortization expense for the fiscal years ended January 31, 2023, 2022, and 2021 was $ 148.9 million, $ 122.5 million and $ 99.9 million, respectively.
−Removed: Estimated amortization expense for the years ending January 31 is as follows:
+Added: Estimated amortization expense for the fiscal years ending January 31 is as follows:
Year ending January 31, (in thousands)
3 unchanged sentences
The Company’s annual goodwill impairment test resulted in no impairment charges in any of the periods presented in the accompanying consolidated financial statements.
−Removed: During the fiscal year ended January 31, 2022, goodwill increased by $ 318.6 million due to the acquisitions of Luum and Further.
−Removed: During the fiscal year ended January 31, 2021, goodwill decreased by $ 5.4 million due to measurement period adjustments related to the WageWorks Acquisition.
+Added: During the fiscal year ended January 31, 2023, goodwill increased by $ 2.3 million due to measurement period adjustments associated with the Further Acquisition.
+Added: During the fiscal year ended January 31, 2022, goodwill increased by $ 318.6 million due to the acquisitions of Luum and Further and associated measurement period adjustments.
There were no other changes to the goodwill carrying value during the fiscal years ended January 31, 2023 and 2022.
Commitments and contingencies
−Removed: The following table summarizes the payments due by fiscal year for our outstanding contractual obligations as of January 31, 2022:
+Added: The following table summarizes the payments due by fiscal year for the Company's outstanding contractual obligations as of January 31, 2023:
Payments due by fiscal year
5 unchanged sentences
Operating lease obligations (3) 10,443 10,877 11,094 11,344 11,600 29,058 84,416
−Removed: HealthSavings portfolio acquisition (4) 60,000 — — — — — 60,000
Other contractual obligations (4) 25,798 16,690 12,584 5,505 6,501 — 67,078
Total $ 102,061 $ 92,323 $ 95,747 $ 335,260 $ 45,101 $ 674,058 $ 1,344,550
−Removed: (1) As of January 31, 2022, our outstanding combined principal of $ 950.0 million is presented net of debt issuance costs on our consolidated balance sheets.
+Added: (1) As of January 31, 2023, the outstanding combined principal of $ 941.3 million is presented net of debt issuance costs on the consolidated balance sheets.
The debt issuance costs are not included in the table above.
(2) Estimated interest payments assume the stated interest rates applicable to the Notes and Term Loan Facility as of January 31, 2023, which were 4.50 % and 6.31 % per annum, respectively.
−Removed: (3) We lease office space and data storage facilities, and we have other non-cancelable operating leases expiring at various dates through 2030.
−Removed: These amounts exclude contractual sublease income of $ 2.2 million, which is expected to be received through March 2023.
−Removed: (4) On March 2, 2022, the Company completed its acquisition of the Health Savings Administrators, L.L.C.
−Removed: ("HealthSavings") HSA portfolio for $ 60 million in cash.
−Removed: (5) Other contractual obligations consist of processing services agreements, telephony services, and other contractual commitments.
+Added: (3) The Company leases office space and data storage facilities, and has other non-cancelable operating leases expiring at various dates through 2030.
+Added: These amounts exclude contractual sublease income of $ 0.9 million, which is expected to be received through May 2027.
+Added: (4) Other contractual obligations consist of processing services agreements, software subscriptions, telephony services, and other contractual commitments.
Contingencies
3 unchanged sentences
Legal matters
−Removed: In April 2021, WageWorks exercised its right to terminate a lease for office space in Mesa, Arizona that had not yet commenced, with aggregate lease payments of $ 63.1 million and a term of approximately 11 years, following the
−Removed: landlord's failure to fulfill its obligations under the lease agreement.
−Removed: Because the lease had not yet commenced, the Company had not recognized a right-of-use asset, operating lease liability, or any rent expense associated with the lease.
+Added: In April 2021, WageWorks exercised its right to terminate a lease for office space in Mesa, Arizona that had not yet commenced, with aggregate lease payments of $ 63.1 million and a term of approximately 11 years, following the landlord's failure to fulfill its obligations under the lease agreement.
+Added: Because the lease had not yet commenced, the Company had not recognized a right-of-use asset, operating lease liability, or any rent expense associated with the
WageWorks' right to terminate the lease agreement was disputed by the landlord, Union Mesa 1, LLC (“Union Mesa”).
4 unchanged sentences
Pursuant to the lawsuit, WageWorks seeks declaratory judgment that the lease was properly terminated and recourse against Union Mesa for breach of contract, breach of the duty of good faith and fair dealing, and conversion, including return of the funds drawn under the letter of credit.
−Removed: On January 31, 2022, Union Mesa filed a motion to dismiss for the conversion cause of action, but has not yet responded to WageWorks' other claims raised in the amended complaint.
−Removed: On March 9, 2018, a putative class action was filed in the U.S.
−Removed: District Court for the Northern District of California (the “Securities Class Action”).
−Removed: On May 16, 2019, a consolidated amended complaint was filed by the lead plaintiffs asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, against WageWorks, its former Chief Executive Officer and its former Chief Financial Officer on behalf of purchasers of WageWorks common stock between May 6, 2016 and March 1, 2018.
−Removed: The complaint also alleged claims under the Securities Act of 1933, as amended, arising from WageWorks’ June 19, 2017 common stock offering against those same defendants, as well as the members of its board of directors at the time of that offering.
−Removed: The class action settled for $ 30.0 million.
−Removed: During the fiscal year ended January 31, 2022, WageWorks contributed $ 5.0 million and its insurers paid the remaining $ 25.0 million.
−Removed: The court granted final approval of the settlement and entered a final judgment on August 20, 2021.
−Removed: This matter is now closed.
−Removed: On June 22, 2018 and September 6, 2018, two derivative lawsuits were filed against certain of WageWorks’ former officers and directors and WageWorks (as nominal defendant) in the Superior Court of the State of California, County of San Mateo.
−Removed: The actions were consolidated.
−Removed: On July 23, 2018, a similar derivative lawsuit was filed against certain former WageWorks’ officers and directors and WageWorks (as nominal defendant) in the U.S.
−Removed: District Court for the Northern District of California (together, the “Derivative Suits”).
−Removed: The allegations in the Derivative Suits relate to substantially the same facts as those underlying the Securities Class Action described above.
−Removed: The plaintiffs seek unspecified damages, fees and costs.
−Removed: Plaintiffs in the Superior Court action filed an amended consolidated complaint on October 28, 2019, naming as defendants certain former officers and directors of WageWorks and alleging a direct claim of "inseparable fraud/breach of fiduciary duty" on behalf of a class.
−Removed: WageWorks was not named as a party in that complaint.
−Removed: On June 24, 2020, the court granted the defendants’ motion to dismiss the amended complaint.
−Removed: The plaintiffs subsequently filed a notice of appeal.
−Removed: On October 28, 2021, the court of appeal dismissed the appeal pursuant to the release in the class action settlement discussed above.
−Removed: The District Court action is currently stayed .
−Removed: WageWorks previously entered into indemnification agreements with its former directors and officers and, pursuant to these indemnification agreements, is covering the defense fees and costs of its former directors and officers in the legal proceedings described above.
+Added: On January 31, 2022, Union Mesa filed a motion to dismiss for the conversion cause of action, which the Superior Court denied on April 13, 2022.
+Added: On May 18, 2022, Union Mesa filed an answer and counterclaim with the Superior Court, wherein Union Mesa denied WageWorks' claims, and separately seeks recourse against WageWorks for breach of contract and breach of the implied covenant of good faith and fair dealing.
+Added: On May 19, 2022, Union Mesa filed an amended complaint and counterclaim seeking the same recourse.
+Added: On June 29, 2022, Union Mesa filed a second amended answer and counterclaim, which names the Company as a counter-defendant.
+Added: On July 21, 2022, WageWorks and the Company filed an answer to the counterclaims.
+Added: The parties are currently engaged in discovery.
The Company and its subsidiaries are involved in various other litigation, governmental proceedings and claims, not described above, that arise in the normal course of business.
9 unchanged sentences
Term Loan Facility 341,250 350,000
−Removed: Prior Term Loan Facility — 1,003,125
Principal amount 941,250 950,000
3 unchanged sentences
Long-term debt, net $ 907,838 $ 922,077
−Removed: (1) In addition to the $ 19.2 million and $ 16.4 million of unamortized discount and issuance costs related to long-term debt as of January 31, 2022 and 2021, respectively, $ 4.4 million and $ 5.0 million of unamortized issuance costs related to our Revolving Credit Facility (as defined below) are included within other assets on the consolidated balance sheets as of January 31, 2022 and January 31, 2021, respectively.
+Added: (1) In addition to the $ 15.9 million and $ 19.2 million of unamortized discount and issuance costs related to long-term debt as of January 31, 2023 and 2022, respectively, $ 3.4 million and $ 4.4 million of unamortized issuance costs related to the Revolving Credit Facility (as defined below) are included within other assets on the consolidated balance sheets as of January 31, 2023 and January 31, 2022, respectively.
4.50 % Senior Notes due 2029
1 unchanged sentence
The Notes were issued under an indenture (the “Indenture”), dated October 8, 2021, among the Company, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.
−Removed: The net proceeds from the issuance of the Notes together with borrowings under the Credit Agreement (as defined below) and cash on hand, were used to repay the outstanding borrowings under the Prior Credit Agreement (as defined below).
−Removed: The Notes are guaranteed by each of the Company’s existing, wholly owned domestic subsidiaries that guarantees its obligations under the Credit Agreement and are required to be guaranteed by any of the Company’s future subsidiaries that guarantee its obligations under the Credit Agreement or certain of its other indebtedness.
+Added: The Notes are guaranteed by each of the Company’s existing, wholly owned domestic subsidiaries that guarantees its obligations under the Credit Agreement (as defined below) and are required to be guaranteed by any of the Company’s future subsidiaries that guarantee its obligations under the Credit Agreement or certain of its other indebtedness.
The Notes will mature on October 1, 2029.
−Removed: Interest on the Notes will be payable on April 1 and October 1 of each year, beginning on April 1, 2022.
−Removed: As of January 31, 2022, the balance of accrued interest on the Notes was $ 8.7 million, which is included within accrued liabilities on the Company's consolidated balance sheet.
+Added: Interest on the Notes is payable on April 1 and October 1 of each year.
+Added: As of January 31, 2023, the balance of accrued interest on the Notes was $ 9.0 million, which is
+Added: included within accrued liabilities on the Company's consolidated balance sheets.
The effective interest rate on the Notes is 4.72 %.
8 unchanged sentences
Credit Agreement
−Removed: On October 8, 2021, the Company entered into a new credit agreement (the “Credit Agreement”) among the Company, as borrower, each lender from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Agent”) and the Swing Line Lender (as defined in the Credit Agreement), and each L/C Issuer (as defined therein) party thereto, pursuant to which the Company established:
−Removed: (i) a five-year senior secured term loan A facility (the “Term Loan Facility”), in an aggregate principal amount of $ 350.0 million, the proceeds of which were used to refinance the Company’s existing senior secured credit facility as described below (the “Refinancing”), to pay fees and expenses incurred in connection with the Refinancing and the establishment of the Credit Facilities (as defined below) and for working capital and general corporate purposes of the Company and its subsidiaries, including the financing of acquisitions and other investments;
+Added: On October 8, 2021, the Company entered into a credit agreement (the “Credit Agreement”) among the Company, as borrower, each lender from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent and the Swing Line Lender (as defined in the Credit Agreement), and each L/C Issuer (as defined therein) party thereto, pursuant to which the Company established:
+Added: (i) a five-year senior secured term loan A facility (the “Term Loan Facility”), in an aggregate principal amount of $ 350.0 million;
(ii) a five-year senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”), in an aggregate principal amount of up to $ 1.0 billion (with a $ 25 million sub-limit for the issuance of letters of credit), the proceeds of which may be used for working capital and general corporate purposes of the Company and its subsidiaries, including the financing of acquisitions and other investments.
3 unchanged sentences
The Company is also required to pay certain fees to the Lenders, including, among others, a quarterly commitment fee on the average unused amount of the Revolving Credit Facility at a rate ranging from 0.20 % to 0.40 %, with the applicable rate also determined by reference to a leverage-based pricing grid set forth in the Credit Agreement.
−Removed: The loans made under the Term Loan Facility will amortize in equal quarterly installments in an aggregate annual amount equal to the following percentage of the original principal amount of the Term Loan Facility:
+Added: As of January 31, 2023, no amounts have been drawn under the Revolving Credit Facility.
+Added: The loans made under the Term Loan Facility amortize in equal quarterly installments in an aggregate annual amount equal to the following percentage of the original principal amount of the Term Loan Facility:
(i) 2.5 % for the first year after October 8, 2021;
3 unchanged sentences
In addition, the Term Loan Facility is required to be mandatorily prepaid with 100 % of the net cash proceeds of all asset sales, insurance and condemnation recoveries, subject to customary exceptions and thresholds, including to the extent such proceeds are reinvested in assets useful in the business of the Company and its subsidiaries within 450 days following receipt (or committed to be reinvested within such 450 -day period and reinvested within 180 days after the end of such 450 -day period).
−Removed: The loans under the Credit Facilities may be prepaid, and the commitments thereunder may be reduced, by the Company without penalty or premium, subject to the reimbursement of customary “breakage costs.”
−Removed: The Credit Agreement contains significant, customary affirmative and negative covenants, including covenants that limit, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, in each case, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the Credit Agreement contains financial performance covenants, which require the Company to maintain (i) a maximum total net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 5.00 to 1.00 beginning with the fiscal quarter ended January 31, 2022, and (ii) a minimum consolidated interest coverage ratio, measured as of the last day of each fiscal quarter, of no less than 3.00 to 1.00 beginning with the fiscal quarter ended January 31, 2022.
+Added: The loans under the Credit Facilities may be prepaid, and the commitments
+Added: thereunder may be reduced, by the Company without penalty or premium, subject to the reimbursement of customary “breakage costs.”
+Added: The Credit Agreement contains significant, customary affirmative and negative covenants, including covenants that limit, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, in each case, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the Credit Agreement contains financial performance covenants, which require the Company to maintain (i) a maximum total net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 5.00 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the last day of each fiscal quarter, of no less than 3.00 to 1.00.
The Company was in compliance with all covenants under the Credit Agreement as of January 31, 2023, and for the period then ended.
The repayment obligation under the Credit Agreement may be accelerated upon the occurrence of an event of default thereunder, including, among other things, failure to pay principal, interest or fees on a timely basis, material inaccuracy of any representation or warranty, failure to comply with covenants, cross-default to other material debt, material judgments, change of control and certain insolvency or bankruptcy-related events, in each case, subject to any certain grace and/or cure periods.
−Removed: The obligations of the Company under the Credit Agreement are required to be unconditionally guaranteed by each of the Company’s existing or subsequently acquired or organized direct and indirect domestic subsidiaries and are
−Removed: secured by security interests in substantially all assets of the Company and the guarantors, in each case, subject to certain customary exceptions.
−Removed: Prior Credit Agreement
−Removed: On August 30, 2019, the Company entered into a credit agreement (the "Prior Credit Agreement”) that provided for:
−Removed: (i) a five-year senior secured term loan A facility (the “Prior Term Loan Facility”), in an aggregate principal amount of $ 1.25 billion;
−Removed: (ii) a five-year senior secured revolving credit facility (the “Prior Revolving Credit Facility” and, together with the Prior Term Loan Facility, the “Prior Credit Facilities”), in an aggregate principal amount of up to $ 350.0 million.
−Removed: No amounts were drawn under the Prior Revolving Credit Facility.
−Removed: Borrowings under the Prior Credit Facilities bore interest at an annual rate equal to, at the option of HealthEquity, either (i) LIBOR (adjusted for reserves) plus a margin ranging from 1.25 % to 2.25 % or (ii) an alternate base rate plus a margin ranging from 0.25 % to 1.25 %, with the applicable margin determined by reference to a leverage-based pricing grid set forth in the Prior Credit Agreement.
−Removed: The Company was also required to pay certain fees to the lenders, including, among others, a quarterly commitment fee on the average unused amount of the Prior Revolving Credit Facility at a rate ranging from 0.20 % to 0.40 %, with the applicable rate also determined by reference to a leverage-based pricing grid set forth in the Prior Credit Agreement.
−Removed: The Prior Credit Agreement contained customary affirmative and negative covenants.
−Removed: The Company was in compliance with all covenants under the Prior Credit Agreement during the fiscal year ended January 31, 2022.
−Removed: The obligations of HealthEquity under the Prior Credit Agreement were required to be unconditionally guaranteed by WageWorks and Fort Effect Corp and were secured by security interests in substantially all assets of HealthEquity and the guarantors, subject to certain customary exceptions.
−Removed: On October 8, 2021, in connection with the entry into the Credit Agreement, the Company repaid all outstanding obligations under the Prior Credit Agreement and terminated all commitments thereunder.
−Removed: The income tax provision (benefit) consisted of the following:
+Added: The obligations of the Company under the Credit Agreement are required to be unconditionally guaranteed by each of the Company’s existing or subsequently acquired or organized domestic subsidiaries and are secured by security interests in substantially all assets of the Company and the guarantors, in each case, subject to certain customary exceptions.
+Added: The income tax benefit consisted of the following:
Year ended January 31,
2 unchanged sentences
State 1,968 239 258
−Removed: Total current tax provision (benefit) $ 867 $ 439 $ ( 174 )
+Added: Total current tax provision $ 5,228 $ 867 $ 439
Federal $ ( 14,382 ) $ ( 21,197 ) $ ( 1,630 )
State ( 2,799 ) ( 2,122 ) ( 3,503 )
−Removed: Total deferred tax provision (benefit) $ ( 23,319 ) $ ( 5,133 ) $ 3,665
−Removed: Total income tax provision (benefit) $ ( 22,452 ) $ ( 4,694 ) $ 3,491
−Removed: Total income tax provision (benefit) differed from the amounts computed by applying the U.S.
+Added: Total deferred tax benefit $ ( 17,181 ) $ ( 23,319 ) $ ( 5,133 )
+Added: Total income tax benefit $ ( 11,953 ) $ ( 22,452 ) $ ( 4,694 )
+Added: Total income tax benefit differed from the amounts computed by applying the U.S.
federal statutory income tax rate to income before income taxes as a result of the following:
2 unchanged sentences
Federal income tax provision (benefit) at the statutory rate $ ( 8,000 ) $ ( 14,016 ) $ 869
−Removed: State income tax provision (benefit), net of federal tax provision (benefit) ( 3,733 ) ( 99 ) 960
+Added: State income tax benefit, net of federal tax provision (benefit) ( 1,021 ) ( 3,733 ) ( 99 )
Other non-deductible or non-taxable items, net 225 ( 165 ) 469
3 unchanged sentences
Change in uncertain tax position reserves, net of indirect benefits ( 2,970 ) 836 511
−Removed: Non-deductible acquisition-related costs — — 3,032
−Removed: Non-taxable gain on investment in subsidiary — — ( 5,790 )
Reclassification of operating lease right-of-use assets — — 185
4 unchanged sentences
Other items, net ( 308 ) ( 644 ) ( 45 )
−Removed: Total income tax provision (benefit) $ ( 22,452 ) $ ( 4,694 ) $ 3,491
−Removed: The Company’s effective income tax rate for the fiscal years ended January 31, 2022, 2021, and 2020 was an effective income tax benefit rate of 33.6 % and 113.4 % and an effective income tax expense rate of 8.1 %, respectively.
+Added: Total income tax benefit $ ( 11,953 ) $ ( 22,452 ) $ ( 4,694 )
+Added: The Company’s effective income tax benefit rate for the fiscal years ended January 31, 2023, 2022, and 2021 was 31.4 %, 33.6 %, and 113.4 %, respectively.
The difference between the effective income tax rate and the U.S.
federal statutory income tax rate each period is impacted by a number of factors, including the relative mix of earnings among state jurisdictions, credits, excess tax benefits or shortfalls on stock-based compensation expense, changes in valuation allowance, and other items.
−Removed: The decrease in the effective tax benefit rate for the fiscal year ended January 31, 2022 compared to the fiscal year ended January 31, 2021 was primarily due to the impact of tax benefit items, such as stock-based compensation expense, credits, and changes to the valuation allowance, relative to the larger pre-tax book loss and smaller pre-tax book income, respectively.
−Removed: The decrease in the effective tax rate for the fiscal year ended January 31, 2021 compared to the fiscal year ended January 31, 2020 was primarily due to an increase in excess tax benefits on stock-based compensation expense, deferred tax rate adjustments due to the integration of WageWorks, and research and development credits recognized in the provision for income taxes relative to pre-tax book income.
+Added: The decrease in the effective tax benefit rate for the fiscal year ended January 31, 2023 compared to the fiscal year ended January 31, 2022 was primarily due to a decrease in benefit for state income taxes, a decrease in research and development tax credits, a decrease in excess tax benefits on stock-based compensation expense, and an increase in nondeductible executive compensation relative to pre-tax book loss, partially offset by a release of uncertain tax positions and a smaller change in valuation allowance.
+Added: The decrease in the effective tax rate for the fiscal year ended January 31, 2022 compared to the fiscal year ended January 31, 2021 was primarily due to the impact of tax benefit items, such as stock-based compensation expense, credits, and changes to the valuation allowance, relative to the larger pre-tax book loss and smaller pre-tax book income, respectively.
Deferred tax assets and liabilities consisted of the following:
5 unchanged sentences
Lease liabilities 17,337 19,356
+Added: Capitalized research and development 16,419 —
Accruals and reserves 4,439 7,729
11 unchanged sentences
Total gross deferred tax liabilities ( 148,219 ) ( 160,769 )
−Removed: Net deferred tax asset (liability) $ ( 99,846 ) $ ( 119,729 )
+Added: Net deferred tax liability $ ( 82,665 ) $ ( 99,846 )
+Added: The impact of Internal Revenue Code Section 174 changes requiring capitalization of software development costs pursuant to the Tax Cuts and Jobs Act of 2017 resulted in higher current income tax payable and significant utilization of net operating loss and research and development tax credit deferred tax assets for the fiscal year ended January 31, 2023.
Management considered whether it is more likely than not that some portion or all of the deferred tax assets would be realized.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
−Removed: Management considered the scheduled reversal of deferred tax liabilities in making this assessment and determined that based on the weight of all available evidence, it is more likely than not (i.e., a likelihood of more than 50%) that the Company will be able to realize most of its deferred tax assets.
−Removed: However, the Company recorded a valuation allowance of $ 3.6 million and $ 0.1 million as of January 31, 2022 and 2021, respectively.
−Removed: The increase in valuation allowance recorded is primarily the result of state research and development tax credits that are not expected to be utilized before expiration.
−Removed: As of January 31, 2022, the Company had recorded federal and state net operating loss carryforwards of $ 12.1 million and $ 50.1 million, respectively, which begin to expire at various intervals following the tax year ending January 31, 2029.
−Removed: As of January 31, 2022, the Company also had federal and state research and development credits of $ 10.9 million each, which begin to expire following the tax years ending January 31, 2032 and 2023, respectively.
+Added: Management considered the scheduled reversal of deferred tax liabilities in making this assessment and determined that based on the weight of all available evidence, it is more likely than not (i.e., a likelihood of more than 50%) that the Company will be able to realize all of its federal deferred tax assets and the majority if its state deferred tax assets.
+Added: The Company recorded a valuation allowance of $ 4.3 million and $ 3.6 million as of January 31, 2023 and 2022, respectively, related to certain state deferred tax assets.
+Added: The $ 0.7 million increase in valuation allowance recorded is primarily the result of state research and development tax credits that are not expected to be utilized before expiration.
+Added: As of January 31, 2023, the Company had recorded state net operating loss carryforwards of $ 43.1 million, which begin to expire at various intervals following the tax year ending January 31, 2031.
+Added: As of January 31, 2023, the Company also had federal and state research and development credits of $ 2.4 million and $ 10.8 million, respectively, which begin to expire following the tax years ending January 31, 2032 and 2024, respectively.
As of January 31, 2023 and 2022, the gross unrecognized tax benefit was $ 8.7 million and $ 11.7 million, respectively.
If recognized, $ 5.4 million and $ 10.8 million of the total unrecognized tax benefits would affect the Company's effective tax rate as of January 31, 2023 and 2022, respectively.
−Removed: Total gross unrecognized tax benefits increased by $ 1.4 million in the period from January 31, 2021 to January 31, 2022.
+Added: Total gross unrecognized tax benefits decreased by $ 3.0 million in the period from January 31, 2022 to January 31, 2023.
A tabular reconciliation of the beginning and ending amount of gross unrecognized tax benefits, including the impact of purchase accounting from the Luum Acquisition, is as follows:
4 unchanged sentences
Increases as a result of tax positions taken during a prior period — 38
+Added: Decreases as a result of tax positions taken during a prior period ( 183 ) —
Increases as a result of tax positions taken during the current period 639 1,169
+Added: Decreases resulting from the lapse of the applicable statute of limitations ( 3,419 ) —
Gross unrecognized tax benefits at end of year $ 8,690 $ 11,653
−Removed: Certain unrecognized tax benefits are required to be netted against their related deferred tax assets as a result of ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar
−Removed: Tax Loss, or a Tax Credit Carryforward Exists .
−Removed: The resulting unrecognized tax benefit recorded within the Company's consolidated balance sheet excludes the following amounts that have been netted against the related deferred tax assets or tax receivables accordingly:
+Added: Certain unrecognized tax benefits are required to be netted against their related deferred tax assets as a result of Accounting Standards Update 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists .
+Added: The resulting unrecognized tax benefit recorded within the Company's consolidated balance sheet excludes the following amounts that have been netted against the related deferred tax assets accordingly:
(in thousands) January 31, 2023 January 31, 2022
Total gross unrecognized tax benefits $ 8,690 $ 11,653
−Removed: Amounts netted against related deferred tax assets or tax receivables ( 7,097 ) ( 9,574 )
+Added: Amounts netted against related deferred tax assets ( 4,337 ) ( 7,097 )
Unrecognized tax benefits recorded on the consolidated balance sheet $ 4,353 $ 4,556
4 unchanged sentences
federal and state taxing jurisdictions and is currently under examination by the IRS and the state of Texas.
−Removed: These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes, net operating losses, and/or tax credit carryforwards.
+Added: These examinations may lead to ordinary course adjustments or proposed adjustments to the Company's taxes, net operating losses, and/or tax credit carryforwards.
As a result of the Company's net operating loss carryforwards and tax credit carryforwards, the Company remains subject to examination by one or more jurisdictions for tax years after 2003.
Stock-based compensation
−Removed: The following table shows a summary of stock-based compensation in the Company's consolidated statements of operations and comprehensive income (loss) during the years presented:
+Added: The following table shows a summary of stock-based compensation in the Company's consolidated statements of operations and comprehensive income (loss) during the fiscal years presented:
Year ended January 31,
4 unchanged sentences
General and administrative 24,539 21,359 17,109
−Removed: Merger integration — — 1,603
Other expense, net — 342 —
13 unchanged sentences
Incentive Plan.
−Removed: The Company grants stock options, restricted stock units ("RSUs"), and restricted stock awards ("RSAs") under the HealthEquity, Inc.
+Added: The Company grants stock options and restricted stock units ("RSUs") under the HealthEquity, Inc.
2014 Equity Incentive Plan (as amended and restated, the "Incentive Plan"), which provided for the issuance of stock awards to the directors and team members of the Company to purchase up to an aggregate of 2.6 million shares of common stock.
−Removed: In addition, under the Incentive Plan, the number of shares of common stock reserved for issuance under the Incentive Plan automatically increases on February 1 of each year, beginning as of February 1, 2015 and continuing
−Removed: through and including February 1, 2024, by 3 % of the total number of shares of the Company’s capital stock outstanding on January 31 of the preceding fiscal year, or a lesser number of shares determined by the board of directors.
+Added: Historically, the Company also granted restricted stock awards ("RSAs") under the Incentive Plan.
+Added: In addition, under the Incentive Plan, the number of shares of common stock reserved for issuance under the Incentive Plan automatically increases on February 1 of each year, beginning as of February 1, 2015 and continuing through and including February 1, 2024, by 3 % of the total number of shares of the Company’s capital stock outstanding on January 31 of the preceding fiscal year, or a lesser number of shares determined by the board of directors.
As of January 31, 2023, 9.6 million shares were available for grant under the Incentive Plan.
11 unchanged sentences
The variables include, but are not limited to, (1) the expected life of the option, (2) the expected volatility of the fair value of the Company's common stock over the term of the award estimated by averaging the Company's historical volatility in addition to published volatilities of a relative peer group, (3) risk-free interest rate, and (4) expected dividends.
−Removed: No options were granted during the fiscal year ended January 31, 2022.
−Removed: The weighted-average fair value of options granted during the fiscal years ended January 31, 2021 and 2020 was $ 23.68 and $ 25.97 per share, respectively.
+Added: No options were granted during the fiscal years ended January 31, 2023 and 2022.
+Added: The weighted-average fair value of options granted during the fiscal year ended January 31, 2021 was $ 23.68 per share.
The key input assumptions utilized in the valuation of the stock options were as follows:
1 unchanged sentence
2023 2022 2021
−Removed: Expected dividend yield n/a 0 % 0 %
−Removed: Expected stock price volatility n/a 37.97 %
−Removed: 35.98 % - 36.53 %
−Removed: Risk-free interest rate n/a 1.39 %
−Removed: 2.21 % - 2.43 %
−Removed: Expected life of options n/a 5.18 years
−Removed: 4.95 - 5.09 years
−Removed: Expected volatility is determined using a weighted average volatility of publicly traded peer companies and the Company's own historical volatility.
−Removed: The risk-free interest rate is determined by using published zero coupon rates on treasury notes for each grant date given the expected term on the options.
−Removed: The dividend yield of zero is based on the fact that the Company has no current plans to pay dividends on its common stock.
+Added: Expected dividend yield n/a n/a 0 %
+Added: Expected stock price volatility n/a n/a 37.97 %
+Added: Risk-free interest rate n/a n/a 1.39 %
+Added: Expected life of options n/a n/a 5.18 years
+Added: Expected volatility was determined using a weighted average volatility of publicly traded peer companies and the Company's own historical volatility.
+Added: The risk-free interest rate was determined by using published zero coupon rates
+Added: on treasury notes for each grant date given the expected term on the options.
+Added: The dividend yield of zero was based on the fact that the Company had no current plans to pay dividends on its common stock.
A summary of stock option activity is as follows:
8 unchanged sentences
Exercised ( 203 ) $ 1.25 - 59.63
+Added: Forfeited ( 8 ) $ 25.45 - 73.61
Outstanding as of January 31, 2023 1,021 $ 14.00 - 82.39
4 unchanged sentences
The total intrinsic value of options exercised during the fiscal years ended January 31, 2023, 2022 and 2021 was $ 7.2 million, $ 19.3 million, and $ 15.4 million, respectively.
−Removed: As of January 31, 2022, the weighted-average vesting period of non-vested awards expected to vest is approximately 0.7 years;
−Removed: the amount of compensation expense the Company expects to recognize for stock options vesting in future periods is approximately $ 1.1 million.
−Removed: Restricted stock units and restricted stock awards
−Removed: The Company grants RSUs and RSAs to certain team members, officers, and directors under the Incentive Plan.
−Removed: RSUs and RSAs vest upon service-based criteria and performance-based criteria.
−Removed: Generally, service-based RSUs and RSAs vest over a four-year period in equal annual installments commencing upon the first anniversary of the grant date.
−Removed: RSUs and RSAs are valued based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate.
+Added: As of January 31, 2023, the weighted-average vesting period of non-vested options expected to vest was approximately 0.2 years, and the amount of compensation expense the Company expects to recognize for stock options vesting in future periods was $ 0.1 million.
+Added: Restricted stock units
+Added: The Company grants RSUs to certain team members, officers, and directors under the Incentive Plan, which vest upon service-based criteria and performance-based criteria.
The weighted-average fair value of RSUs granted during the fiscal years ended January 31, 2023, 2022 and 2021 was $ 75.64 , $ 64.87 and $ 56.93 per share, respectively.
−Removed: Performance restricted stock units and awards.
−Removed: During the fiscal year ended January 31, 2020, the Company awarded 129,963 PRSUs (the “FY20 PRSUs”).
−Removed: The Company recorded stock-based compensation related to the FY20 PRSUs when it was considered probable that the performance conditions would be met.
−Removed: In March 2020, the Compensation Committee modified the vesting conditions of the FY20 PRSUs by basing the first year of the award solely on the Company’s revenue CAGR for the first year, exclusive of the revenue recognized through the WageWorks Acquisition, and measured using the original revenue CAGR targets set by the Compensation Committee in respect of such awards.
−Removed: As a result, one-third of the FY20 PRSUs were deemed by the Compensation Committee to be earned at target;
−Removed: however, despite this determination, and in order to encourage retention of our executive officers, our executive officers were required to remain employed until the remaining performance conditions for the FY20 PRSUs were certified by the Compensation Committee.
−Removed: The remaining two-thirds of the FY20 PRSUs vested based on the Company’s net cash provided by operating activities (as defined under GAAP) relative to target given the importance of the Company generating sufficient cash flow to service the additional indebtedness incurred in connection with the WageWorks Acquisition.
−Removed: The modification affected 12 team members and resulted in incremental stock-based compensation expense of $ 6.6 million, which was recognized over the remaining service period, adjusted for the level of achievement of the performance conditions and any forfeitures.
−Removed: Prior to the modification, the Company did not believe the FY20 PRSUs were likely to vest, and as a result, $ 2.9 million of previously recorded stock-based compensation expense was reversed during the three months ended April 30, 2020.
−Removed: The modified performance conditions for the second and third tranches allowed for a range of vesting from 0 % to 200 % based on the level of achievement of the new performance conditions.
−Removed: The Company's actual net cash provided by operating activities for the fiscal year ended January 31, 2022 was below the threshold level of achievement, and for the fiscal year ended January 31, 2021 was 163 % of the target level of achievement.
−Removed: Previously recorded stock-based compensation expense associated with FY20 PRSUs that did not vest was reversed during the fiscal year ended January 31, 2022 when it was no longer considered probable that the performance conditions would be met.
−Removed: The FY20 PRSUs cliff vested upon approval by the Compensation Committee, which occurred in March 2022.
−Removed: During the fiscal year ended January 31, 2021, the Company awarded 277,950 PRSUs subject to a market condition based on the Company’s total shareholder return ("TSR") relative to the Russell 2000 index as measured on January 31, 2023.
−Removed: The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was approximately $ 20.8 million.
+Added: Service-based restricted stock units.
+Added: Generally, service-based RSUs granted prior to March 2022 vest over a four-year period in equal annual installments commencing upon the first anniversary of the grant date.
+Added: Service-based RSUs granted in March 2022 or later generally vest 25 % on the first anniversary of the vesting commencement date, which is generally the first day of the fiscal quarter of the grant date, with the remaining portion vesting ratably over the following 12 calendar quarters.
+Added: Service-based RSUs are valued based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate.
+Added: Performance restricted stock units.
+Added: During the fiscal year ended January 31, 2021, the Company awarded 277,950 performance restricted stock units ("PRSUs") subject to a market condition based on the Company’s total shareholder return relative to the Russell 2000 index as measured on January 31, 2023.
+Added: The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $ 20.8 million.
Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied.
The market condition allows for a range of vesting from 0 % to 200 % based on the level of performance achieved.
−Removed: The PRSUs cliff vest upon approval by the Compensation Committee.
−Removed: During the fiscal year ended January 31, 2022, the Company awarded 249,750 PRSUs subject to a market condition based on the Company’s total shareholder return ("TSR") relative to the Russell 2000 index as measured on January 31, 2024.
−Removed: The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was approximately $ 22.4 million.
+Added: The PRSUs cliff vest upon approval by the Talent, Compensation and Culture Committee of the board of directors.
+Added: During the fiscal year ended January 31, 2022, the Company awarded 249,750 PRSUs subject to a market condition based on the Company’s total shareholder return relative to the Russell 2000 index as measured on January 31, 2024.
+Added: The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $ 22.4 million.
Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied.
The market condition allows for a range of vesting from 0 % to 200 % based on the level of performance achieved.
−Removed: The PRSUs cliff vest upon approval by the Compensation Committee.
−Removed: A summary of the RSU and RSA activity is as follows:
−Removed: RSUs and PRSUs RSAs and PRSAs
−Removed: (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value
+Added: The PRSUs cliff vest upon approval by the Talent, Compensation and Culture Committee of the board of directors.
+Added: During the fiscal year ended January 31, 2023, the Company awarded 281,784 PRSUs subject to a market condition based on the Company’s total shareholder return relative to the Russell 2000 index as measured on January 31, 2025.
+Added: The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $ 32.1 million.
+Added: Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied.
+Added: The market condition allows for a range of vesting from 0 % to 200 % based on the
+Added: level of performance achieved.
+Added: The PRSUs cliff vest upon approval by the Talent, Compensation and Culture Committee of the board of directors.
+Added: A summary of RSU activity is as follows:
+Added: Outstanding RSUs
+Added: (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value
Outstanding as of January 31, 2022 2,740 $ 63.15
4 unchanged sentences
During the fiscal years ended January 31, 2023, 2022 and 2021 the aggregate intrinsic value of RSUs and RSAs vested was $ 50.7 million, $ 40.9 million, and $ 31.8 million, respectively.
−Removed: Total unrecorded stock-based compensation expense as of January 31, 2022 associated with RSUs and PRSUs was $ 123.0 million, which is expected to be recognized over a weighted-average period of 2.5 years.
−Removed: Total unrecorded stock-based compensation expense as of January 31, 2022 associated with RSAs and PRSAs was less than $ 0.1 million, which is expected to be recognized over a weighted-average period of 0.2 years.
+Added: As of January 31, 2023, total unrecorded stock-based compensation expense associated with RSUs was $ 146.0 million, which was expected to be recognized over a weighted-average period of 2.4 years.
+Added: As of January 31, 2023, there was no unrecorded stock-based compensation expense associated with RSAs, and there were no RSAs outstanding.
Fair value measurements are made at a specific point in time, based on relevant market information.
13 unchanged sentences
As a result, the fair value of the Term Loan Facility approximates carrying value.
−Removed: The Prior Term Loan Facility was considered a Level 2 instrument and recorded at book value in the Company's consolidated financial statements.
−Removed: The Prior Term Loan Facility repriced frequently due to variable interest rate terms and entailed no significant changes in credit risk.
−Removed: As a result, the fair value of the Prior Term Loan Facility approximated carrying value.
−Removed: The contingent consideration liability resulting from the Luum Acquisition was determined using a Monte Carlo valuation model based on Level 3 inputs.
−Removed: The estimate of fair value of the contingent consideration obligation required subjective assumptions to be made regarding revenue growth rates, discount rates, peer revenue volatilities, and probabilities assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of achieving certain revenue targets.
−Removed: The fair value measurement was based on inputs unobservable in the market and thus represented a level 3 measurement.
−Removed: On October 31, 2021, the Company entered into an amendment to the purchase agreement to pay $ 6.0 million in satisfaction of the contingent consideration liability, and accordingly, the liability was transferred out of Level 3 as it was no longer measured at fair value.
−Removed: For further information, see Note 3—Business combination.
−Removed: The following table reconciles the change in the fair value of the contingent consideration during the fiscal year ended January 31, 2022:
−Removed: (in thousands) Carrying amount
−Removed: Balance as of January 31, 2021 $ —
−Removed: Contingent consideration recognized at acquisition 8,147
−Removed: Change in fair value recognized in the consolidated statement of operations and comprehensive income (loss) ( 2,147 )
−Removed: Payments ( 6,000 )
−Removed: Balance as of January 31, 2022 $ —
Employee benefits
7 unchanged sentences
The Company's liability for self-insured medical claims is included in accrued compensation in its consolidated balance sheet and was $ 5.1 million and $ 3.9 million as of January 31, 2023 and 2022, respectively.
−Removed: Subsequent events
−Removed: On March 2, 2022, the Company completed its acquisition of the Health Savings Administrators, L.L.C.
−Removed: HSA portfolio for $ 60 million in cash.
Changes in and disagreements with accountants on accounting and financial disclosure
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.