What changed in this filing

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Item 1. Financial Statements

2020-10-29 compared with 2020-07-30 · 108 added, 87 removed, 407 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands)

September 30,

Current assets:

2 unchanged sentences

Accounts receivable, net of allowance for doubtful accounts of $ 648 and

$ 843 at June 30, 2020 and December 31, 2019, respectively

$ 843 at September 30, 2020 and December 31, 2019, respectively

Accounts receivable - unbilled

3 unchanged sentences

Property and equipment, net of accumulated depreciation of $ 24,524 and

$ 19,291 at June 30, 2020 and December 31, 2019, respectively

$ 19,291 at September 30, 2020 and December 31, 2019, respectively

Capitalized software development, net of accumulated amortization of $ 67,103 and

$ 57,768 at June 30, 2020 and December 31, 2019, respectively

$ 57,768 at September 30, 2020 and December 31, 2019, respectively

Operating lease right of use assets, net

Customer-related intangibles, net of accumulated amortization of $ 34,814 and

$ 29,760 at June 30, 2020 and December 31, 2019, respectively

$ 29,760 at September 30, 2020 and December 31, 2019, respectively

Other intangible assets, net of accumulated amortization of $ 15,118 and

$ 12,735 at June 30, 2020 and December 31, 2019, respectively

$ 12,735 at September 30, 2020 and December 31, 2019, respectively

Deferred tax assets

15 unchanged sentences

31,686 and 32,379 shares

issued and outstanding at June 30, 2020 and December 31, 2019, respectively

issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Retained earnings

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Revenues, net

29 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Other comprehensive income, net of taxes:

Foreign currency translation adjustments

Unrealized gain on marketable securities

Unrealized (loss) gain on marketable securities

Total other comprehensive income (loss)

4 unchanged sentences

(In thousands)

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Accumulated Other Comprehensive

10 unchanged sentences

Stock based compensation

Repurchase of common stock

Balance at June 30, 2020

Dividend forfeitures

Comprehensive income

Stock based compensation

Common stock issued under stock plans,

1 unchanged sentence

Repurchase of common stock

Balance at June 30, 2020

Balance at September 30, 2020

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited).

2 unchanged sentences

(In thousands, except per share data)

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Accumulated Other Comprehensive

13 unchanged sentences

Balance at June 30, 2019

Comprehensive loss

Stock based compensation

Common stock issued under stock plans,

net of shares withheld for employee taxes

Balance at September 30, 2019

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited).

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES:

42 unchanged sentences

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited).

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BASIS OF PRESENTATION

3 unchanged sentences

All intercompany transactions have been eliminated in consolidation.

Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

On February 12, 2018, the Company divested its Patient Experience (“PX”) business to Press Ganey Associates, Inc.

1 unchanged sentence

The sale of the PX business resulted in the Company’s divestiture of the Company’s patient experience solutions business segment.

The Company has classified the results of its previously owned PX segment as discontinued operations in its Condensed Consolidated Statement of Income for the six months ended June 30, 2019.

The Company has classified the results of its previously owned PX segment as discontinued operations in its Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2019.

See Note 10 for additional information.

16 unchanged sentences

Recognition of revenue when, or as, the Company satisfies a performance obligation

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table represents revenues disaggregated by revenue source for the three and six months ended June 30, 2020 and 2019 (in thousands).

The following table represents revenues disaggregated by revenue source for the three and nine months ended September 30, 2020 and 2019 (in thousands).

Sales taxes are excluded from revenues.

Three Months Ended June 30, 2020

Six Months Ended June 30, 2020

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Business Segments

2 unchanged sentences

Total revenues, net

Three Months Ended June 30, 2019

Six Months Ended June 30, 2019

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2019

Business Segments

2 unchanged sentences

Total revenues, net

For the three months ended June 30, 2020 and 2019, the Company recognized $ 63,000 and $ 46,000 in impairment losses on receivables and contract assets arising from the Company’s contracts with customers, respectively.

For the six months ended June 30, 2020 and 2019, the Company recognized $ 351,000 and $ 48,000 in impairment losses on receivables and contract assets arising from the Company’s contracts with customers, respectively.

For the three months ended September 30, 2020 and 2019, the Company recognized a reduction of $ 0.2 million and a charge of $ 51,000 in impairment losses on receivables and contract assets arising from the Company’s contracts with customers, respectively.

For the nine months ended September 30, 2020 and 2019, the Company recognized $ 0.2 million and $ 99,000 in impairment losses on receivables and contract assets arising from the Company’s contracts with customers, respectively.

Deferred revenue represents contract liabilities that are recorded when cash payments are received or are due in advance of our satisfaction of performance obligations.

During the three months ended June 30, 2020 and 2019, we recognized $ 35.2 million and $ 36.3 million of revenue from amounts included in deferred revenues at the beginning of the respective periods.

During the six months ended June 30, 2020 and 2019, we recognized $ 49.9 million and $ 51.2 million of revenue from amounts included in deferred revenues at the beginning of the respective periods.

As of June 30, 2020, $ 380 million of revenue is expected to be recognized from remaining performance obligations under contract with customers.

During the three months ended September 30, 2020 and 2019, we recognized $ 34.4 million and $ 33.8 million of revenue from amounts included in deferred revenues at the beginning of the respective periods.

During the nine months ended September 30, 2020 and 2019, we recognized $ 60.5 million and $ 61.3 million of revenue from amounts included in deferred revenues at the beginning of the respective periods.

As of September 30, 2020, $ 408 million of revenue is expected to be recognized from remaining performance obligations under contract with customers.

We expect to recognize revenue with respect to 45 % of these remaining performance obligations over the next 12 months, with the remaining amounts recognized thereafter.

3 unchanged sentences

the initial payment is due in the period a customer contract is entered into, and the final payment is due 60 days after the product implementation is completed.

The sales commission plan for 2019 typically included an initial payment in the period a customer contract was entered into, and subsequent payments either 15 or 27 months after the initial payment, depending on the contract term.

The sales commission plan for 2019 typically included an initial payment in the period a customer contract was entered into and subsequent payment either 15 or 27 months after the initial payment, depending on the contract term.

Under ASC 606, costs to acquire contracts with customers, such as the initial sales commission payment, are capitalized in the period a customer contract is entered into and are amortized consistent with the transfer of the goods or services to the customer over the expected period of benefit, whereas subsequent sales commission payments which require a substantive performance condition of the employee are expensed ratably through the payment date.

Under the 2020 plan, both the initial payment and subsequent payment are capitalized in the period the contract is entered into, whereas under the 2019 plan only the initial payment was capitalized, and the subsequent payment was expensed ratably through the payment date.

The timing of the second payment under the 2020 plan from an accounting perspective does not result in a substantive performance condition of the employee.

The timing of the second payment under the 2020 plan from an accounting perspective does not represent a substantive performance condition of the employee.

The capitalized contract cost is included in deferred commissions in the accompanying Condensed Consolidated Balance Sheets.

1 unchanged sentence

Non-commensurate commissions are amortized over the greater of the contract term or technological obsolescence period of approximately three years .

The Company recorded amortization of deferred commissions of $ 2.1 million for both the three months ended June 30, 2020 and 2019, and $ 4.3 million and $ 4.2 million for the six months ended June 30, 2020 and 2019, respectively, which is included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company recorded amortization of deferred commissions of $ 2.3 million and $ 2.1 million for the three months ended September 30, 2020 and 2019, and $ 6.6 million and $ 6.3 million for the nine months ended September 30, 2020 and 2019, respectively, which is included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income.

Income taxes are accounted for using the asset and liability method, whereby deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities measured at tax rates that will be in effect for the year in which the differences are expected to affect taxable income.

During the three months ended June 30, 2020 and 2019 , the Company recorded a provision for income taxes of $ 1.1 million and $ 0.7 million, respectively.

During the six months ended June 30, 2020 and 2019 , the Company recorded a provision for income taxes from continuing operations of $ 2.9 million and $ 2.1 million, respectively.

The Company’s effective tax rate for continuing operations for the six months ended June 30, 2020 and 2019 was 22 % and 23 %, respectively.

The Company’s effective tax rate primarily reflects the statutory corporate income tax rate, the net effect of state taxes, and the effect of various permanent tax differences.

The Company recorded additional income tax expense associated with tax deficiencies of $ 26,000 during the six months ended June 30, 2020 and recorded a reduction to income tax expense for excess tax benefits of $ 123,000 during the six months ended June 30, 2019.

During the three months ended September 30, 2020 and 2019 , the Company recorded a provision for income taxes from continuing operations of $ 0.6 million and $ 1.1 million, respectively.

During the nine months ended September 30, 2020 and 2019 , the Company recorded a provision for income taxes from continuing operations of $ 3.5 million and $ 3.3 million, respectively.

The Company’s effective tax rate for continuing operations for the nine months ended September 30, 2020 and 2019 was 21 % and 24 %, respectively.

The Company’s effective tax rate primarily reflects the statutory corporate income tax rate, the net effect of state taxes, and the effect of various permanent and discrete tax differences.

The decrease in the effective tax rate is primarily due to the recognition of tax benefits resulting from higher research and development tax credits than previously estimated.

The Company recorded additional income tax expense associated with tax deficiencies of $ 30,000 during the nine months ended September 30, 2020 and recorded a reduction to income tax expense for excess tax benefits of $ 0.1 million during the nine months ended September 30, 2019.

SHAREHOLDERS’ EQUITY

2 unchanged sentences

The Company accounts for its stock based compensation plans using the fair-value based method for costs related to share based payments, including restricted share units (“RSUs”).

During the six months ended June 30, 2020, the Company issued 111,510 RSUs, subject to service-based time vesting, with a weighted average grant date fair value of $ 22.96 per share measured based on the closing fair market value of the Company’s stock on the date of grant.

During the six months ended June 30, 2019, the Company issued 86,220 RSUs, subject to service-based time vesting, with a weighted average grant date fair value of $ 27.39 per share measured based on the closing fair market value of the Company’s stock on the date of grant.

Total stock based compensation expense recorded for the three and six months ended June 30, 2020 and 2019, which is recorded within continuing operations in the Condensed Consolidated Statements of Income, is as follows (in thousands):

During the nine months ended September 30, 2020, the Company issued 114,784 RSUs, subject to service-based time vesting, with a weighted average grant date fair value of $ 22.94 per share measured based on the closing fair market value of the Company’s stock on the date of grant.

During the nine months ended September 30, 2019, the Company issued 96,828 RSUs, subject to service-based time vesting, with a weighted average grant date fair value of $ 27.31 per share measured based on the closing fair market value of the Company’s stock on the date of grant.

Total stock based compensation expense recorded for the three and nine months ended September 30, 2020 and 2019, which is recorded within continuing operations in the Condensed Consolidated Statements of Income, is as follows (in thousands):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of revenues (excluding depreciation and amortization)

8 unchanged sentences

The share repurchase program does not require the Company to acquire any amount of shares and may be suspended or discontinued at any time.

Under this program during the three months ended June 30, 2020, the Company repurchased 5,799 shares at an aggregate fair value of $ 0.1 million, reflecting an average price per share of $ 22.87 (excluding the cost of dealer commissions).

During the six months ended June 30, 2020, the Company repurchased 443,941 shares at an aggregate fair value of $ 10.0 million, reflecting an average price per share of $ 22.53 (excluding the cost of broker commissions) .

Under this program during the three months ended September 30, 2020, the Company repurchased 318,902 shares at an aggregate fair value of $ 6.3 million, reflecting an average price per share of $ 19.87 (excluding the cost of dealer commissions).

During the nine months ended September 30, 2020, the Company repurchased 762,843 shares at an aggregate fair value of $ 16.3 million, reflecting an average price per share of $ 21.42 (excluding the cost of broker commissions) .

During June 2019, the Company’s Chief Executive Officer, Robert A.

3 unchanged sentences

HealthStream, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

HealthStream, Inc.

2016 Omnibus Incentive Plan.

1 unchanged sentence

As required by ASC Topic 718, Compensation – Stock Compensation , the Company recognized $ 2.0 million of stock based compensation expense for these stock awards during the three months ended June 30, 2019 based on the closing fair market value of the Company’s stock on the date of the Company’s approval of these grants.

Total payments related to the employees’ tax obligations to taxing authorities for these stock awards were $ 0.6 million and are reflected as a financing activity within the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019.

In addition, the employer taxes and expenses associated with these grants were $ 0.2 million and were recorded as an expense during June 2019.

7 unchanged sentences

The dilutive effect of common equivalent shares is included in diluted earnings per share by application of the treasury stock method.

The total number of common equivalent shares excluded from the calculations of diluted earnings per share due to their anti-dilutive effect or contingent performance conditions was 108,000 and 131,000 for the three months ended June 30, 2020 and 2019 , respectively, and 107,000 and 134,000 for the six months ended June 30, 2020 and 2019 , respectively.

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share data):

The total number of common equivalent shares excluded from the calculations of diluted earnings per share due to their anti-dilutive effect or contingent performance conditions was 115,000 and 54,000 for the three months ended September 30, 2020 and 2019 , respectively, and 112,000 and 107,000 for the nine months ended September 30, 2020 and 2019 , respectively.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share data):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Income from continuing operations

11 unchanged sentences

Net income per share - diluted

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARKETABLE SECURITIES

At June 30, 2020 and December 31, 2019, the fair value of marketable securities, which were all classified as available for sale, included the following (in thousands):

June 30, 2020

At September 30, 2020 and December 31, 2019, the fair value of marketable securities, which were all classified as available for sale, included the following (in thousands):

September 30, 2020

Cash and Cash Equivalents

Current Marketable Securities

Time deposits

Corporate debt securities

December 31, 2019

Cash and Cash Equivalents

Current Marketable Securities

Corporate debt securities

1 unchanged sentence

The carrying amounts reported in the Condensed Consolidated Balance Sheets approximate the fair value based on quoted market prices or alternative pricing sources and models utilizing market observable inputs.

As of June 30, 2020, the Company did no t recognize any allowance for credit impairments on its available for sale debt securities.

As of September 30, 2020, the Company did no t recognize any allowance for credit impairments on its available for sale debt securities.

All investments in marketable securities are classified as current assets on the Condensed Consolidated Balance Sheets because the underlying securities mature within one year from the balance sheet date.

1 unchanged sentence

CredentialMyDoc

On December 16, 2019, the Company acquired substantially all the assets of Covenant Technology Group, LLC (“CredentialMyDoc”), a Savannah, Georgia-based company focusing on intuitive, easy to use, and fast to implement software-as-a-service solution, primarily in ambulatory care settings.

On December 16, 2019, the Company acquired substantially all the assets of Covenant Technology Group, LLC (“CredentialMyDoc”), a Savannah, Georgia-based company focusing on an intuitive, easy to use, and fast to implement provider credentialing and enrollment SaaS solution, primarily in ambulatory care settings.

The consideration paid for CredentialMyDoc consisted of $ 9.0 million in cash, after giving effect to the post-closing working capital adjustment.

Of the purchase price paid at closing, $ 1.1 million is being held in escrow for a period of time following the closing to serve as a source of recovery for the working capital adjustment and certain potential indemnification claims by the Company.

Of the purchase price paid at closing, $ 1.1 million is being held in escrow for a period of time following the closing to serve as a source of recovery for certain potential indemnification claims by the Company.

The results of operations for CredentialMyDoc have been included in the Provider Solutions segment of the Company’s Financial Statements from the date of acquisition.

13 unchanged sentences

Net assets acquired

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The excess of purchase price over the fair values of net tangible and intangible assets is recorded as goodwill.

15 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Total revenues

10 unchanged sentences

The financial results of NurseGrid have been included in the Workforce Solutions segment from March 9, 2020.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of the purchase price is as follows (in thousands):

22 unchanged sentences

The preliminary fair values of assets acquired and liabilities assumed continue to be subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of these items.

The primary areas of the preliminary purchase price allocation that are not finalized include the composition and valuation of intangible assets and income tax attributes.

The primary areas of the preliminary purchase price allocation that are not finalized include the composition and valuation of income tax attributes.

The goodwill balance is primarily attributed to the assembled workforce, future market opportunities to engage and support the NurseGrid Mobile user community, and expected synergies from integrating NurseGrid with other combined functional areas within the Company.

8 unchanged sentences

Total intangible assets

The amounts of revenue and operating loss of NurseGrid included in the Company’s Consolidated Statement of Income since the date of acquisition of March 9, 2020 for the three and six months ended June 30, 2020 are as follows (in thousands):

The amounts of revenue and operating loss of NurseGrid included in the Company’s Consolidated Statement of Income since the date of acquisition of March 9, 2020 for the three and nine months ended September 30, 2020 are as follows (in thousands):

Three Months Ended

June 30, 2020

Six Months Ended

June 30, 2020

September 30, 2020

Nine Months Ended

September 30, 2020

Total revenues

Operating loss

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following unaudited pro forma financial information summarizes the results of operations of the Company and NurseGrid as though the companies were combined as of January 1, 2019 (in thousands, except per share data):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Total revenues

9 unchanged sentences

The Unallocated component below includes corporate functions, such as accounting, human resources, legal, investor relations, administrative and executive personnel, depreciation, a portion of amortization, and certain other expenses, which are not currently allocated in measuring segment performance.

The following is the Company’s business segment information for the three and six months ended June 30, 2020 and 2019 and as of June 30, 2020 and December 31, 2019 (in thousands).

The following is the Company’s business segment information for the three and nine months ended September 30, 2020 and 2019 and as of September 30, 2020 and December 31, 2019 (in thousands).

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Revenues, net:

7 unchanged sentences

Segment assets *

June 30, 2020

September 30, 2020

December 31, 2019

4 unchanged sentences

A significant portion of property and equipment assets are included within Unallocated.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

DISCONTINUED OPERATIONS

2 unchanged sentences

This sale of the PX business resulted in the Company’s divestiture of the Company’s patient experience solutions business segment.

The Company has classified this gain on the sale of the PX business as discontinued operations in its Condensed Consolidated Statement of Income for the six months ended June 30, 2019.

Our results for the three months ended June 30, 2020 and 2019 and for the six months ended June 30, 2020 do not include any discontinued operations.

The Company has classified this gain on the sale of the PX business as discontinued operations in its Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2019.

Our results for the three and nine months ended September 30, 2020 do not include any discontinued operations.

Revolving Credit Facility

13 unchanged sentences

an interest coverage ratio (consolidated EBITDA/consolidated interest expense) of not less than 3.0 to 1.0.

As of June 30, 2020, the Company was in compliance with all covenants.

There were no balances outstanding on the Revolving Credit Facility as of or during the three and six months ended June 30, 2020.

As of September 30, 2020, the Company was in compliance with all covenants.

There were no balances outstanding on the Revolving Credit Facility as of or during the three and nine months ended September 30, 2020.

NON-MARKETABLE EQUITY INVESTMENTS

Non-marketable equity investments where the Company is not able to exercise significant influence over the investee are accounted for using the measurement alternative for equity investments that do not have readily determinable fair values.

Non-marketable equity investments of preferred stock in corporations that do not result in a controlling financial interest are accounted for using the measurement alternative for equity investments that do not have readily determinable fair values.

ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income.

The aggregate carrying amount of all non-marketable equity investments accounted for using the measurement alternative was $ 2.1 million and $ 4.5 million as of June 30, 2020 and December 31, 2019, respectively, which carrying value we evaluate for impairment at each reporting period.

During the six months ended June 30, 2020, the Company recorded a $ 1.2 million upward adjustment to the carrying value of our non-marketable equity investment in NurseGrid due to a change in fair value based on the consideration paid upon the Company’s acquisition of NurseGrid on March 9, 2020 (see Note 8).

The aggregate carrying amount of all non-marketable equity investments accounted for using the measurement alternative was $ 3.9 million and $ 5.9 million as of September 30, 2020 and December 31, 2019, respectively, which carrying value we evaluate for impairment at each reporting period.

During the nine months ended September 30, 2020, the Company recorded a $ 1.2 million upward adjustment to the carrying value of our non-marketable equity investment in NurseGrid due to a change in fair value based on the consideration paid upon the Company’s acquisition of NurseGrid on March 9, 2020 (see Note 8).

Cumulatively, the Company has recorded $ 0.1 million in downward adjustments to the carrying value of non-marketable equity investments.

Such is the combination of cumulative downward adjustments of $ 1.3 million offset by

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

cumulative upward adjustments of $ 1.2 million.

Such is the combination of cumulative downward adjustments of $ 1.3 million offset by cumulative upward adjustments of $ 1.2 million.

These adjustments are the result of changes in fair value based on observable prices from orderly transactions for similar investments made in investees.

6 unchanged sentences

The de-recognition of this royalty liability and related expense was recorded as a $ 3.4 million reduction to cost of revenues in the first quarter of 2020.

SUBSEQUENT EVENTS

On October 12, 2020, the Company acquired all of the equity of ShiftWizard, Inc., a Raleigh, North Carolina-based company focused on providing a SaaS-based solution that integrates key workforce management capabilities, including scheduling, productivity, and forecasting, for $ 32.0 million in cash, subject to working capital and other purchase price adjustments.

The acquisition will be accounted for using the acquisition method of business combination under ASC 805, Business Combinations.

The initial accounting for the business combination is incomplete due to the timing of the acquisition.

Therefore, we are unable disclose certain information required by ASC 805.

We will provide preliminary purchase price allocation information in our Annual Report on Form 10-K for the year ending December 31, 2020.

On October 28, 2020, the Company entered into a Third Amendment to its Revolving Credit Agreement, dated as of November 24, 2014 (as amended, the “Revolving Credit Facility”), with Truist Bank (“Truist”), which increased the capacity under the Revolving Credit Facility to $ 65.0 million and extended the maturity date to October 28, 2023 .

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