What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-25 compared with 2021-02-24 · 370 added, 277 removed, 1439 unchanged (31% of the section changed)

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OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

Certain information required by Part III is omitted from this Annual Report on Form 10-K because the registrant will file with the United States Securities and Exchange Commission a definitive proxy statement pursuant to Regulation 14A in connection with the solicitation of proxies for Omnicell’s Annual Meeting of Stockholders expected to be held in May 2022 (the “Proxy Statement”) not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and certain information included therein is incorporated herein by reference.

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Our written Code of Conduct applies to all of our directors and employees, including executive officers, including without limitation our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

The Code of Conduct is available on our website at www.omnicell.com under the hyperlink titled “Corporate Governance.” Changes to or waivers of the Code of Conduct will be disclosed on the same website.

The Code of Conduct is available on our investor relations website is located at ir.omnicell.com under the hyperlink entitled “Leadership & Governance—Governance Documents.” Changes to or waivers of the Code of Conduct will be disclosed on the same website.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver of, any provision of the Code of Conduct by disclosing such information on the same website.

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Index to Financial Statements Page

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (P CAOB ID No.

Consolidated Balance Sheets as of December 31, 2021 and 2020

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(2) Exhibits:

The information required by this item is set forth on the exhibit index which precedes the signature page of this report.

The information required by this item is set forth on the exhibit index which precedes the signature page of this Annual Report on Form 10-K.

FORM 10-K SUMMARY

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and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America (U.S.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2022, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Change in Accounting Principle

Effective January 1, 2019, the Company changed its method of accounting for leases due to the adoption of ASC Topic 842, Leases .

Basis for Opinion

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• For a sample of software development projects, we obtained an understanding of the new software enhancements and features planned for development by reviewing management’s project documentation and inquiring of project managers and engineers.

• For a sample of software development projects, we tested the timing of software development cost recognition as either a capitalized or an expensed development cost, depending on which stage of project development the cost was incurred.

• For a sample of software development projects, we tested the timing of software development cost recognition as either a capitalized or an expensed development cost, depending which stage of project development the cost was incurred.

We also inquired of project managers and engineers regarding the date technological feasibility was reached and observed the new features developed in the working model.

Business Acquisitions - Valuation of Customer Relationship Intangible Assets — Refer to Note 1 and 2 to the financial statements

Critical Audit Matter Description

The Company completed the acquisitions of RxInnovation Inc., operating as FDS Amplicare, ReCept Holdings, Inc., and MarkeTouch Media, LLC (“Acquired Companies”) for consideration of $178.5 million, $102.5 million, and $82.6 million on September 9, 2021, December 29, 2021, and December 31, 2021, respectively.

The Company accounted for the acquisitions of the Acquired Companies under the acquisition method.

Accordingly, the purchase price paid for assets acquired and liabilities assumed was allocated, based on relative fair value, to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values.

The Company estimated the fair value of Acquired Companies' identifiable intangible assets to be $136.1 million, including $122.1 million related to customer relationships.

There was a high degree of auditor judgment and subjectivity in applying audit procedures relating to the fair value measurement of intangible assets acquired, specifically the customer relationships, and the fair value of the customer relationship intangible assets acquired was estimated by management through a discounted cash flow model using the multi-period excess earnings method, which involved the use of significant estimates and assumptions related to revenue growth rates and other forecasted financial information, discount rates, and customer attrition rates, among certain other assumptions.

The audit effort involved the use of professionals with specialized skill and knowledge to assist in evaluating the audit evidence obtained from these procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the management’s estimates of the fair value of the customer relationships intangible assets included the following, among others:

• We tested the effectiveness of internal controls over business combinations including (i) the controls over the valuation of the acquired intangible assets and (ii) controls over the forecasted financial information including assumptions of revenue growth rates and forecasted financial information, discount rates, and customer attrition rates selected by management.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodologies used and (2) discount rates, including testing the underlying source information, testing the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rates selected by management.

• Compared the customer attrition rate to an independently developed estimate and for a sample of underlying data, agreed information to historical records of the Acquired Companies.

• We evaluated the reasonableness of management’s forecasts of revenue growth rates, gross margin and operating income before taxes by comparing to:

◦ Historical forecasting accuracy for previously acquired companies.

◦ Analyst reports for the Company and the Acquired Companies, as well as industry reports, and comparison of historical rates to companies in the peer group.

◦ Inquiries with appropriate individuals within the Company and Acquired Companies’ operations, engineering, and finance departments regarding the forecasts of revenue growth rates, gross margin and operating income before taxes.

• We evaluated whether the audit evidence obtained through these procedures was consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche LLP

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 24, 2021, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s change in its method of accounting for leases in fiscal year 2019 due to the adoption of ASC Topic 842, Leases .

Basis for Opinion

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Deferred revenues, net 112,196 100,053

Convertible senior notes, net 488,152 —

Total current liabilities 876,158 276,423

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Other long-term liabilities 7,839 19,174

Revolving credit facility — 50,000

Convertible senior notes, net — 467,201

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44,179 and 42,783 shares outstanding, respectively

Treasury stock at cost, 9,894 and 9,145 shares outstanding, respectively

Treasury stock at cost, 9,894 shares outstanding, respectively

( 238,109 ) ( 238,109 )

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Net income — — — — — 61,338 — 61,338

Other comprehensive loss — — — — — — ( 4,741 ) ( 4,741 )

At the market equity offering, net of costs 557 1 — — 39,566 — — 39,567

Share-based compensation — — — — 28,885 — — 28,885

Issuance of common stock under employee stock plans 1,346 1 — — 30,610 — — 30,611

Tax payments related to restricted stock units — — — — ( 6,775 ) — — ( 6,775 )

Balances as of December 31, 2018 49,480 50 ( 9,145 ) ( 185,074 ) 678,041 197,454 ( 10,854 ) 679,617

Net income — — — — — 61,338 — 61,338

Other comprehensive income — — — — — — 1,408 1,408

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Balances as of December 31, 2020 52,677 53 ( 9,894 ) ( 238,109 ) 920,359 290,722 ( 5,522 ) 967,503

Net income — — — — — 77,849 — 77,849

Other comprehensive loss — — — — — — ( 2,885 ) ( 2,885 )

Share-based compensation — — — — 53,160 — — 53,160

Issuance of common stock under employee stock plans 1,396 1 — — 67,347 — — 67,348

Tax payments related to restricted stock units — — — — ( 16,286 ) — — ( 16,286 )

Balances as of December 31, 2021 54,073 $ 54 ( 9,894 ) $ ( 238,109 ) $ 1,024,580 $ 368,571 $ ( 8,407 ) $ 1,146,689

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Purchases of property and equipment ( 28,967 ) ( 22,842 ) ( 15,894 )

Business acquisition ( 225,000 ) — —

Business acquisitions, net of cash acquired ( 354,163 ) ( 225,000 ) —

Net cash used in investing activities ( 412,498 ) ( 279,866 ) ( 61,664 )

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Effect of exchange rate changes on cash and cash equivalents ( 974 ) 437 153

Net increase in cash, cash equivalents, and restricted cash 362,710 60,018 34,768

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 134,300 ) 362,710 60,018

Cash, cash equivalents, and restricted cash at beginning of period 489,920 127,210 67,192

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Cash paid for interest $ 1,917 $ 522 $ 3,582

Cash paid for taxes, net of refunds $ 10,343 $ 7,761 $ 3,489

Income taxes paid (refunds received), net $ ( 1,733 ) $ 10,343 $ 7,761

Supplemental disclosure of non-cash activities

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and reincorporated in Delaware in 2001 as Omnicell, Inc.

The Company’s major products are medication management automation solutions and adherence tools for healthcare systems and pharmacies, which are sold in its principal market, the healthcare industry.

The Company’s major products and related services are medication management solutions and adherence tools for healthcare systems and pharmacies, which are sold in its principal market, the healthcare industry.

The Company’s market is primarily located in the United States and Europe.

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All intercompany accounts and transactions have been eliminated in consolidation.

On October 1, 2020, the Company completed its acquisition of the 340B Link business (the “340B Link Business”) of Pharmaceutical Strategies Group, LLC.

The Consolidated Financial Statements include the results of operations of this recently acquired company, commencing as of the acquisition date.

The significant accounting policies of the acquired business have been aligned to conform to the accounting policies of Omnicell.

Reclassifications and Adjustments

Certain prior-year amounts have been reclassified to conform with current-period presentation.

These reclassifications include (i) a change in the presentation of certain items in the disaggregation of revenues for the years ended December 31, 2020, 2019, and 2018 in Note 3, Revenues, and (ii) a change in the presentation of certain items in the reconciliation of the provision for (benefit from) income taxes for the years ended December 31, 2019 and 2018 in Note 17, Income Taxes .

These changes were not deemed material and were included to conform with current-period classification and presentation.

On September 9, 2021, the Company completed its acquisition of RxInnovation Inc., operating as FDS Amplicare (“FDS Amplicare”);

on December 29, 2021, the Company completed its acquisition of ReCept Holdings, Inc.

and on December 31, 2021, the Company completed its acquisition of MarkeTouch Media, LLC (“MarkeTouch Media”).

The Consolidated Financial Statements include the results of operations of these recently acquired companies, commencing as of the respective acquisition dates.

The significant accounting policies of the acquired businesses have been aligned to conform to the accounting policies of Omnicell.

Use of Estimates

The preparation of financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s Consolidated Financial Statements and accompanying Notes.

Management bases its estimates on historical experience and various other assumptions believed to be reasonable, including any potential impacts from the COVID-19 pandemic.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s Consolidated Financial Statements and accompanying Notes.

Management bases its estimates on historical experience and various other assumptions believed to be reasonable.

Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results may be different from the estimates.

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Those policies are revenue recognition;

accounts receivable, unbilled receivables, and notes receivable from investment in sales-type leases;

allowance for credit losses for accounts receivable and unbilled receivables;

notes receivable from investment in sales-type leases;

operating lease right-of-use assets and liabilities;

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As of December 31, 2021, the Company is not aware of any events or circumstances that would require an update to its estimates, judgments, or revisions to the carrying value of its assets or liabilities.

Given the ongoing uncertainty surrounding the COVID-19 pandemic, events or circumstances may arise that could result in a change in estimates, judgments, or revisions to the carrying value of the Company’s assets or liabilities.

Segment Reporting

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Emerging software and service solutions which are offered on a subscription basis with fees typically based either on transaction volume or a fee over a specified period of time.

Solutions in this category include, but are not limited to, EnlivenHealth (formerly Population Health Solutions), 340B solutions, and services associated with Omnicell One (formerly Performance Center), Central Pharmacy Compounding Services, including the XR2 Automated Central Pharmacy system, and Central Pharmacy Compounding Services, including IV compounding automation solutions.

Solutions in this category include, but are not limited to, EnlivenHealth inclusive of FDS Amplicare and MarkeTouch Media, 340B solutions, ReCept management services, and services associated with Omnicell One, Central Pharmacy Dispensing Services, including the XR2 Automated Central Pharmacy system, and Central Pharmacy Compounding Services, including IV compounding automation solutions.

The following table summarizes revenue recognition for each revenue category which is further discussed below:

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It is probable the entity will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer .

The Company performs a credit check for all significant customers or transactions and where collectability is not probable, payment in full or a substantial down payment is typically required to help assure the full agreed upon contract price will be collected.

The Company performs a credit check for all significant customers or transactions and where collectability is not probable, payment in full or a substantial down payment prior to shipment is typically required to help assure the full agreed upon contract price will be collected.

Distinct goods or services are identified as performance obligations.

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When performance obligations are included in separate contracts, the Company considers an entire customer arrangement to determine if separate contracts should be considered combined for the purposes of revenue recognition.

Most of the Company’s sales, other than renewals of support and maintenance, contain multiple performance obligations, with a combination of hardware systems, consumables and software products, support and maintenance, and professional services.

Most of the Company’s sales, other than renewals of support and maintenance, contain multiple performance obligations, with a combination of hardware systems, software products, consumables, support and maintenance, and professional services.

The transaction price of a contract is determined based on the fixed consideration, net of an estimate for variable consideration such as various discounts or rebates provided to customers.

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For all other products, control generally passes when product has been shipped and title has passed.

For maintenance contracts and certain other services provided on a subscription basis, control passes to the customer over time, generally ratably over the service term as the Company provides a stand-ready service to service the customer’s equipment.

For maintenance contracts and certain other services, including SaaS, subscription software, and technology-enabled services, provided on a subscription basis, control passes to the customer over time, generally ratably over the service term as the Company provides a stand-ready service for the customer’s equipment.

Time and material services transfer control to the customer at the time the services are provided.

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The amount invoiced for equipment and software is typically reflected in both accounts receivable and deferred revenues, net.

The Company typically recognizes product revenue, and correspondingly reduces deferred revenues, net, for equipment and software upon written customer acceptance of installation.

The Company typically recognizes product revenue, and correspondingly reduces deferred revenues, net, for equipment and on-premise software upon written customer acceptance of installation.

Consumables are recorded as revenue upon shipment to or receipt by the customer, depending upon contract terms.

The portion of deferred revenues, net, not expected to be recognized as revenue within twelve months of the balance sheet date are included in long-term deferred revenues on the Consolidated Balance Sheets.

The Company often enters into change orders which modify the product to be received by the customer pursuant to certain contracts.

From time to time, the Company enters into change orders which modify the product to be received by the customer pursuant to certain contracts.

Changes to any contract are accounted for as a modification of the existing contract to the extent the goods and services to be delivered as part of the contract are generally consistent with the nature and type of those to be provided under the terms of the original contract.

Examples of such change orders include the addition or removal of units of equipment or changes to the configuration of the equipment where the overall nature of the contract remains intact.

Examples of such change orders include the addition or removal of units of

equipment or changes to the configuration of the equipment where the overall nature of the contract remains intact.

The Company’s change orders generally result in the change being accounted for as modifications of existing contracts given the nature of the impacted orders.

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The Company contracts with Group Purchasing Organizations (“GPOs”), each of which functions as a purchasing agent on behalf of member hospitals and other healthcare providers.

The Company also has a Federal Supply Schedule contract with the Department of Veterans Affairs (the "GSA Contract"), allowing the Department of Veterans Affairs, the Department of Defense, and other Federal government customers to purchase or lease the Company's products.

The Company also has a Federal Supply Schedule Contract with the Department of Veterans Affairs (the “GSA Contract”), allowing the Department of Veterans Affairs, the Department of Defense, and other Federal government customers to purchase the Company’s products.

Pursuant to the terms of GPO agreements and the GSA Contract, each member or agency contracts directly with Omnicell and can purchase the Company’s products at pre-negotiated contract terms and pricing.

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The accounts receivable balances are with individual members of the GPOs and Federal agencies that purchase under the GSA Contract, and therefore no significant concentration of credit risk exists.

During the year ended December 31, 2020, sales to members of the ten largest GPOs and Federal agencies that purchase under the GSA Contract accounted for approximately 60 % of total consolidated revenues.

During the year ended December 31, 2021, sales to members of the ten largest GPOs and Federal agencies that purchase under the GSA Contract accounted for approximately 67 % of the Company’s total consolidated revenues.

Contract Assets and Contract Liabilities

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Significant changes in the contract assets and the contract liabilities balances during the period are the result of the issuance of invoices and recognition of deferred revenues in the normal course of business.

As a result of the right to invoice for the transaction consideration becoming unconditional, unbilled contract assets as of December 31, 2019 which were invoiced during the year ended December 31, 2020 were not material.

The contract modifications entered into during the year ended December 31, 2021 did not have a significant impact on the Company’s contract assets or deferred revenues.

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Capitalized costs are periodically reviewed for impairment.

In accordance with U.S.

GAAP, while certain compensation elements are expensed as incurred, a portion of the pool’s capitalized asset is recorded as an expense over the first two quarters after booking, which represents the estimated period during which the product revenue associated with the contract is recorded.

In accordance with GAAP, while certain compensation elements are expensed as incurred, a portion of the pool’s capitalized asset is recorded as an expense over the first five quarters after booking, which represents the estimated period during which the product revenue associated with the contract is recorded.

The remaining capitalized contract costs are recorded as expense ratably over the ten year estimated initial and renewal service periods.

The Company recognized contract cost expense of $ 22.1 million, $ 24.4 million, and $ 21.1 million during the years

ended December 31, 2020, 2019, and 2018, respectively.

The Company recognized contract cost expense of $ 25.8 million, $ 22.1 million, and $ 24.4 million during the years ended December 31, 2021, 2020, and 2019, respectively.

The commission expenses paid or due to be paid as of the consolidated balance sheet date to be recognized in future periods are recorded in long-term prepaid commissions on the Consolidated Balance Sheets.

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The Company determines if an arrangement is a lease at inception.

The transaction price is allocated to separate performance obligations, generally consisting of hardware and software products, installation, and post-installation technical support, proportionally based on the standalone selling price of each performance obligation.

The transaction price is allocated to separate performance obligations, generally consisting of a combination of hardware systems, software products, support and maintenance, and professional services, proportionally based on the standalone selling price of each performance obligation.

Standalone selling price is best evidenced by the price the Company charges for the good or service when selling it separately in similar circumstances to similar customers.

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Failure of the customer to either return the equipment or negotiate a new agreement results in the contract becoming a month-to-month rental.

Certain sales-type leases automatically renew for successive one year periods at the end of each lease term with written notice from the customer.

Certain sales-type leases automatically renew for successive one-year periods at the end of each lease term without written notice from the customer.

The Company’s sales-type lease agreements do not contain any material residual value guarantees.

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The allowance for credit losses is measured using a loss rate method, considering factors such as customers’ credit risk, historical loss experience, current conditions, and forecasts.

The allowance for credit losses is measured on a collective

(pool) basis by aggregating customer balances with similar risk characteristics.

The Company also records a specific allowance based on an analysis of individual past due balances or customer-specific information, such as a decline in creditworthiness or bankruptcy.

The allowance for credit losses is measured on a collective (pool) basis by aggregating customer balances with similar risk characteristics.

The Company also records a specific allowance based on an analysis of individual past due balances or customer-specific information, such as a decline in creditworthiness or

Actual collection losses may differ from management’s estimates, and such differences could be material to the Company’s financial position and results of operations.

The allowance for credit losses is presented in the Consolidated Balance Sheets as a deduction from the respective asset balance.

The following table summarizes the Company’s allowance for credit losses by asset type:

(In thousands)

Allowance for credit losses:

Accounts receivable and unbilled receivables $ 4,286 $ 3,227

Long-term unbilled receivables (1)

Net investment in sales-type leases (2)

_________________________________________________

(1) Included in other long-term assets in the Consolidated Balance Sheets.

(2) Includes both current and long-term portions presented in other current assets and long-term investment in sales-type leases, net, respectively.

As of December 31, 2021 and 2020, the allowance for credit losses for long-term unbilled receivables and net investment in sales-type leases were not material.

Funds Held for Customers and Customer Fund Liabilities

With the acquisition of the 340B Link Business, the Company now offers certain products and services in which it is customary for pharmacies to owe funds to the Company which are collected on behalf of, and, after a short holding period, disbursed to, the Company’s customers.

With the acquisition of the 340B Link Business and ReCept, the Company offers certain products and services in which it is customary for pharmacies or insurance payors to owe funds to the Company which are collected on behalf of, and, after a short holding period, disbursed to, the Company’s customers.

The Company presents amounts due from pharmacies and amounts due to be disbursed to customers on a gross basis within other current assets and accrued liabilities, respectively, in the Consolidated Balance Sheets, as such amounts are expected to be settled within one year.

Any funds received from the pharmacies that are held by the Company are segregated from its other corporate cash accounts.

Generally, any funds received from the pharmacies or insurance payors that are held by the Company are segregated from its other corporate cash accounts.

These funds are classified as restricted cash as the Company is contractually obligated to disburse these amounts to customers.

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The Company’s cash and cash equivalent balances include bank accounts and highly-liquid U.S.

Government money market funds held in sweep accounts with financial institutions of high credit quality.

Government money market funds held in sweep and asset management accounts with financial institutions of high credit quality.

The Company continuously monitors the credit worthiness of the financial institutions in which it invests.

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Cash and cash equivalents were $ 349.1 million and $ 485.9 million as of December 31, 2021 and 2020, respectively.

As of December 31, 2020, cash equivalents were $ 447.2 million, which consisted of money market funds held in sweep accounts, and as of December 31, 2019, the Company had no cash equivalents.

As of December 31, 2021 and 2020, cash equivalents were $ 320.2 million and $ 447.2 million, respectively, which consisted of money market funds held in sweep and asset management accounts.

Financial Instruments

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On a quarterly basis, the Company performs a qualitative assessment to determine effectiveness.

For further information, refer to Note 5, Fair Value of Financial Instruments .

Refer to Note 5, Fair Value of Financial Instruments , for additional information.

As of December 31, 2021, the Company did not have any outstanding interest rate swap agreements.

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Costs recognized in the preliminary project phase and the post-implementation phase are expensed as incurred.

The Company capitalized $ 6.8 million and $ 0.3 million of

costs related to the application development of enterprise-level software and its subscription and cloud-based offerings that were included in property and equipment during the years ended December 31, 2020 and 2019, respectively.

The Company capitalized $ 12.7 million and $ 6.8 million of costs related to the application development of enterprise-level software and its subscription and cloud-based offerings that were included in property and equipment during the years ended December 31, 2021 and 2020, respectively.

Software Development Costs

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Lease expense is recognized on a straight-line basis over the lease term.

The Company does not recognize a right-of-use asset and a lease liability for leases with an initial term of 12 months or less.

The Company does not recognize a right-of-use asset and a lease liability for leases with an initial term of twelve months or less.

The Company elected the practical expedient to not separate lease components from nonlease components and applied that practical expedient to all material classes of leased assets.

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The Company uses the acquisition method of accounting under ASC 805, Business Combinations .

Each acquired company’s operating results are included in the Company's Consolidated Financial Statements starting on the date of acquisition.

Each acquired company’s operating results are included in the Company’s Consolidated Financial Statements starting on the acquisition date.

The purchase price is equivalent to the fair value of consideration transferred.

Tangible and identifiable intangible assets acquired and liabilities assumed as of the date of acquisition are recorded at the acquisition date fair value.

Tangible and identifiable intangible assets acquired and liabilities assumed as of the acquisition date are recorded at the acquisition date fair value.

Goodwill is recognized for the excess of purchase price over the net fair value of assets acquired and liabilities assumed.

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Management makes estimates of fair value based upon assumptions believed to be reasonable and that of a market participant.

These estimates are based on historical experience and information obtained from the management of the acquired companies and the estimates are inherently uncertain.

These estimates are based on available historical information as well as future expectations, and the estimates are inherently uncertain.

The separately identifiable intangible assets generally include customer relationships, acquired technology, backlog, trade names, and non-compete agreements.

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The impairment charge will be limited to the amount of goodwill.

To determine the reporting unit’s fair value under the quantitative approach, the Company uses a combination of income and market approaches, equally weighting the two approaches, such as estimated discounted future cash flows of the reporting unit, multiples of earnings or revenues, and analysis of recent sales or offerings of comparable entities.

reporting unit, multiples of earnings or revenues, and analysis of recent sales or offerings of comparable entities.

The Company also considers its market capitalization on the date of the analysis to ensure the reasonableness of its reporting unit’s fair value.

The Company performed a qualitative impairment assessment analysis as of October 1, 2020 for its reporting unit taking into consideration past, current, and projected future earnings, recent trends, and market conditions, and valuation metrics involving similar companies that are publicly-traded.

The Company performed a qualitative impairment assessment analysis as of October 1, 2021 for its reporting unit taking into consideration past, current, and projected future earnings, recent trends, market conditions, and valuation metrics involving similar companies that are publicly-traded.

Based on the result of this analysis, an impairment does not exist as of December 31, 2021, and there were no accumulated impairment losses.

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Intangible assets are carried at cost less accumulated amortization.

Such amortization is provided on a straight-line basis or on an accelerated basis based on a pattern of economic benefit that is expected to be obtained over the estimated useful lives of the respective assets, generally from one to 30 years.

Amortization for acquired technology and backlog is recognized in cost of revenues, and amortization for customer relationships, trade names, non-compete agreements, and patents is recognized in selling, general, and administrative expenses.

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The RSUs and RSAs are subject to a service vesting condition and are recognized on a straight-line basis over the requisite service period.

The fair value of performance-based stock unit awards (“PSUs”) with service and market conditions is estimated using a Monte Carlo simulation model applying multiple awards approach.

The fair value of performance-based stock unit awards (“PSUs”) with service and market conditions is estimated using a Monte Carlo simulation model applying a multiple awards approach.

Expense is recognized when it is probable that the performance condition will be met using the accelerated attribution method over the requisite service period.

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Recently Adopted Authoritative Guidance

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The update simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740, Income Taxes, as well as improves consistent application of and simplifies the guidance for other areas of ASC 740 by clarifying and amending existing guidance.

The Company adopted ASU 2019-12 on January 1, 2021 on a prospective basis.

The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , that modifies or replaces existing models for trade and other receivables, debt securities, loans, and certain other financial instruments.

For instruments measured at amortized cost, including trade and lease receivables, loans, and held-to-maturity debt securities, the standard replaced the current “incurred loss” approach with an

“expected loss” model.

Entities are required to estimate expected credit losses over the life of the instrument, considering available relevant information about the collectibility of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts.

The Company adopted the new standard on January 1, 2020 using the modified retrospective transition method, which resulted in the recognition of an immaterial cumulative-effect adjustment to retained earnings.

Recently Issued Authoritative Guidance

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes .

The update simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740, as well as improves consistent application of and simplifies the guidance for other areas of ASC 740 by clarifying and amending existing guidance.

ASU 2019-12 will be effective for the Company beginning January 1, 2021.

The Company does not expect ASU 2019-12 to have a material impact on its Consolidated Financial Statements.

In August 2020, the FASB issued ASU 2020-06 , Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) .

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ASU 2020-06 also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance.

ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method is no longer permitted for convertible instruments.

This update permits the use of either the modified retrospective or fully retrospective method of transition.

ASU 2020-06 will be effective for the Company beginning January 1, 2022.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company will adopt ASU 2020-06 on January 1, 2022, and expects to use the modified retrospective method of transition.

The Company’s adoption of the update is estimated to result in an increase in convertible senior notes, net of issuance costs, of $ 75.4 million;

a decrease in additional paid-in capital of $ 72.7 million;

a decrease of long-term deferred tax liabilities of $ 19.8 million;

a decrease in long-term deferred tax assets of $ 0.5 million;

and an increase in retained earnings of $ 16.7 million, all as of January 1, 2022.

In December 2021, the Company made an irrevocable election under the indenture to require the principal portion of the Company's convertible senior notes to be settled in cash and any conversion consideration in excess of the principal portion in cash and/or shares of the Company's common stock at the Company's option upon conversion.

Following the irrevocable election, only the amounts expected to be settled in excess of the principal portion are considered dilutive in calculating earnings per share under the if-converted method.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The update addresses diversity in practice by requiring that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers.

The guidance will be applied prospectively to acquisitions occurring on or after the effective

ASU 2021-08 will be effective for the Company beginning January 1, 2023, and early adoption is permitted.

The Company is currently evaluating the impact ASU 2021-08 will have on its Consolidated Financial Statements.

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Business Combinations

340B Link Business Acquisition

The Company accounted for its acquisitions in accordance with ASC 805, Business Combinations .

The tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the respective acquisition dates.

Intangible assets eligible for recognition separate from goodwill were those that satisfied either the contractual or legal criterion or the separability criterion in the accounting guidance.

The preliminary fair values assume management’s best estimates based on information available at the respective acquisition date and may change over the measurement period, which will end no later than one year from the respective acquisition date, as additional information is received.

The Company believes that the fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that market participants would use.

Actual results may differ from these estimates and assumptions.

The Company's Consolidated Financial Statements include the results of operations of each acquired company, commencing as of the respective acquisition dates.

Acquisition-related costs were expensed as incurred, and are included in selling, general, and administrative expenses in the Company’s Consolidated Statements of Operations.

2021 Acquisitions

MarkeTouch Media

On December 31, 2021, the Company completed the acquisition of all of the outstanding equity interests in MarkeTouch Media pursuant to the terms and conditions of the Unit Purchase Agreement, dated December 31, 2021, by and among ateb, Inc.

(a wholly-owned subsidiary of the Company), MarkeTouch Media, LLC, MarkeTouch Holdings, Inc., Toucan Enterprises, Inc., and certain beneficial stockholders specified therein for a base purchase price of $ 82.0 million, prior to customary adjustments for closing cash, net working capital, and assumed indebtedness.

The MarkeTouch Media acquisition adds mobile and web-based technology and patient engagement solutions, which is expected to expand the footprint of EnlivenHealth across the retail pharmacy sector, while enhancing potential growth opportunities in new market segments like specialty pharmacy and pharmacy benefits management.

The Company incurred approximately $ 1.2 million in acquisition-related costs related to the MarkeTouch Media acquisition during the year ended December 31, 2021.

On December 29, 2021, the Company completed the acquisition of all outstanding equity securities of ReCept pursuant to the terms and conditions of the Agreement and Plan of Merger, dated December 1, 2021, by and among Omnicell, Inc., ReCept Holdings, Inc., Redfish Acquisition Corp, and the representative of the securityholders for a base purchase price of $ 100.0 million, prior to customary adjustments for closing cash, net working capital, and assumed indebtedness.

The addition of ReCept’s specialty pharmacy management services for health systems, provider groups, and federally qualified health centers expands Omnicell’s Advanced Services portfolio in an effort to address the growing and complex specialty pharmacy market.

The Company incurred approximately $ 2.5 million in acquisition-related costs related to the ReCept acquisition during the year ended December 31, 2021.

FDS Amplicare

On September 9, 2021, the Company completed the acquisition of all of the outstanding equity interests in FDS Amplicare pursuant to the terms and conditions of the Agreement and Plan of Merger, dated July 25, 2021, by and among RxInnovation Inc., Omnicell, Inc., Fleming Acquisition Corp., and the representative of the securityholders for a base purchase price of $ 177.0 million, prior to customary adjustments for closing cash, net working capital, and assumed indebtedness.

The FDS Amplicare acquisition adds a comprehensive and complementary suite of SaaS financial management, analytics, and population health solutions to the Company’s EnlivenHealth offering.

The Company incurred approximately $ 7.0 million in acquisition-related costs related to the FDS Amplicare acquisition during the year ended December 31, 2021.

Revenues and net losses from the FDS Amplicare operations since the acquisition date through December 31, 2021 were $ 11.3 million and $ 0.9 million, respectively.

The following tables represent the preliminary allocation of the respective purchase price to the assets acquired and the liabilities assumed by the Company as part of each acquisition included in the Company’s Consolidated Balance Sheets, and is reconciled to the respective purchase price transferred:

FDS Amplicare (1)

(Preliminary) (2)

MarkeTouch Media

(Preliminary)

(In thousands)

Purchase price transferred:

Base purchase price $ 177,000 $ 100,000 $ 82,000

Closing cash 465 6,664 191

Net working capital adjustment 1,654 ( 2,296 ) 448

Assumed indebtedness ( 653 ) ( 1,902 ) ( 13 )

Total purchase price transferred $ 178,466 $ 102,466 $ 82,626

FDS Amplicare (Preliminary) (1)

(Preliminary) (2)

MarkeTouch Media

(Preliminary)

Fair value of assets acquired and liabilities assumed:

Cash and cash equivalents $ 465 $ — $ 237

Accounts receivable and unbilled receivables 5,330 2,383 2,302

Prepaid expenses 506 192 96

Other current assets 45 13,955 —

Total current assets 6,346 16,530 2,635

Property and equipment 444 172 177

Operating lease right-of-use assets 2,252 773 602

Goodwill 117,374 81,588 42,530

Intangible assets 70,000 28,100 38,000

Other long-term assets 51 200 2,850

Total assets 196,467 127,363 86,794

Accounts payable 950 219 473

Accrued compensation 1,312 1,756 —

Accrued liabilities 1,396 18,499 292

Deferred revenues 1,916 222 347

Long-term deferred tax liabilities 11,377 3,587 —

Long-term operating lease liabilities 920 614 206

Other long-term liabilities 130 — 2,850

Total liabilities 18,001 24,897 4,168

Total purchase price $ 178,466 $ 102,466 $ 82,626

Total purchase price, net of cash acquired $ 178,001 $ 95,897 $ 82,389

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(1) During the fourth quarter of 2021, the Company recorded measurement period adjustments of $ 1.5 million to goodwill, consisting of an increase in intangible assets, accounts receivable and unbilled receivables, and long-term deferred tax liabilities of $ 0.4 million, $ 1.1 million, and $ 0.1 million, respectively, and a net working capital adjustment of $ 0.1 million.

(2) Closing cash is included in other current assets due to its restrictive nature as cash held for customers.

The $ 117.4 million of goodwill arising from the FDS Amplicare acquisition is primarily attributed to future sales of SaaS solutions and FDS Amplicare’s assembled workforce.

None of the FDS Amplicare goodwill is expected to be deductible for tax purposes.

The $ 81.6 million of goodwill arising from the ReCept acquisition is primarily attributed to future sales of its offerings and services and ReCept’s assembled workforce.

None of the ReCept goodwill is expected to be deductible for tax purposes.

The $ 42.5 million of goodwill arising from the MarkeTouch Media acquisition is primarily attributed to future sales of SaaS solutions and MarkeTouch Media’s assembled workforce.

The full amount of the MarkeTouch Media goodwill is expected to be deductible for tax purposes.

The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows:

FDS Amplicare (1)

ReCept MarkeTouch Media

Fair value Useful life

(years) Fair value Useful life

(In thousands, except for years)

Customer relationships $ 59,900 23 $ 28,100 23 $ 34,100 26

Acquired technology 7,700 5 - 7

Backlog — — — — 1,800 2

Trade names 2,400 5 — — — —

Total purchased intangible assets $ 70,000 $ 28,100 $ 38,000

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(1) During the fourth quarter of 2021, the Company recorded a measurement period adjustment of $ 0.4 million in customer relationships.

The customer relationships intangible assets represent the fair values of the underlying relationships and agreements with each acquired company's customers.

The acquired technology intangible assets represent the fair values of the portfolio of SaaS solutions that have reached technological feasibility and were part of the respective acquired company’s offerings at their respective acquisition dates.

The backlog intangible asset represents contractually committed future billings associated with MarkeTouch Media customer contracts.

The trade names intangible asset represents the fair value of brand and name recognition associated with the marketing of certain FDS Amplicare SaaS solutions.

The fair values of the customer relationships and backlog intangible assets were determined based on the excess earnings method, and the fair values of the acquired technology and trade names intangible assets were determined based on the relief-from-royalty method.

The key assumptions used in estimating the fair values of intangible assets included forecasted financial information;

customer attrition rates;

royalty rate of 10.0 % for the acquired technology intangible assets for both FDS Amplicare and MarkeTouch Media;

royalty rate of 2.0 % for the FDS Amplicare trade names intangible asset;

discount rate of 13.0 % for the FDS Amplicare acquisition;

discount rate of 15.0 % for the ReCept acquisition;

discount rate of 11.5 % for the MarkeTouch Media acquisition;

and certain other assumptions.

The customer relationships and acquired technology intangible assets are being amortized using a double-declining method of amortization as such method better represents the economic benefits to be obtained.

The backlog and trade names intangible assets are being amortized over their respective estimated useful lives using the straight-line method of amortization.

2020 Acquisition

340B Link Business

On October 1, 2020, the Company completed the acquisition of all of the outstanding equity of the 340B Link Business pursuant to the terms and conditions of the Equity Purchase Agreement, dated August 11, 2020, as amended, by and among the Company, PSGH, LLC, BW Apothecary Holdings, LLC, the sellers identified therein and the sellers’ representative for total cash consideration of $ 225.0 million.

The 340B Link Business acquisition adds a comprehensive and differentiated suite of software-enabled services and solutions used by certain eligible hospitals, health systems, clinics, and entities to manage compliance and capture 340B drug cost savings on outpatient prescriptions filled through the eligible entity’s pharmacy or a contracted pharmacy partner.

The results of the 340B Link Business' operations have been included in the Company's consolidated results of operations, commencing as of the acquisition date.

The Company accounted for the acquisition of the 340B Link Business in accordance with ASC 805.

The tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

The preliminary fair values assume management's best estimates based on information available at the acquisition date and may change over the measurement period, which will end no later than one year form the acquisition date, as additional information is received.

The following table represents the preliminary allocation of the purchase price to the assets acquired and the liabilities assumed by the Company as part of the acquisition reconciled to the purchase price transferred included in the Company's Consolidated Balance Sheets:

The Company incurred approximately $ 6.5 million in acquisition-related costs related to the 340B Link Business acquisition during the year ended December 31, 2020.

Revenues and earnings from the 340B Link Business operations since the acquisition date through December 31, 2020 were $ 10.2 million and $ 1.3 million, respectively.

The following table represents the allocation of the purchase price to the assets acquired and the liabilities assumed by the Company as part of the acquisition included in the Company's Consolidated Balance Sheets, and is reconciled to the purchase price transferred:

340B Link Business (1)

(Preliminary)

(In thousands)

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Total purchase price $ 225,000

The $ 161.1 million of goodwill arising from the 340B Link Business acquisition is primarily attributed to sales of future software-enabled services and solutions and the 340B Link Business’ assembled workforce.

Goodwill that is expected to be deductible for tax purposes is approximately $ 93.9 million.

Intangible assets eligible for recognition separate from goodwill were those that satisfied either the contractual/legal criterion or the separability criterion in the accounting guidance.

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(1) During the third quarter of 2021, the Company recorded measurement period adjustments of $ 0.9 million to goodwill, consisting of an increase in other current assets, a decrease in accrued liabilities, and a decrease in long-term deferred tax liabilities of $ 0.3 million, $ 0.1 million, and $ 0.5 million, respectively.

The $ 160.3 million of goodwill arising from the 340B Link Business acquisition is primarily attributed to sales of future software-enabled services and solutions and the 340B Link Business’s assembled workforce.

Approximately $ 93.7 million of the 340B Link Business goodwill is expected to be deductible for tax purposes.

The identifiable intangible assets acquired and their estimated useful lives for amortization are as follows:

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Total purchased intangible assets $ 62,800

The customer relationships intangible asset represents the fair value of the underlying relationships and agreements with the 340B Link Business’ customers.

The acquired technology intangible asset represents the fair value of the 340B Link Business' portfolio of software and solutions that have reached technological feasibility and were part of the 340B Link Business’ offerings at the date of acquisition.

The trade names intangible asset represents the fair value of brand and name recognition associated with the marketing of the 340B Link Business' software-enabled services and solutions.

The non-compete agreements intangible asset represents the fair value of non-compete agreements with former key members of the 340B Link Business' management.

The customer relationships intangible asset represents the fair value of the underlying relationships and agreements with the 340B Link Business’s customers.

The acquired technology intangible asset represents the fair value of the 340B Link Business’s portfolio of software and solutions that have reached technological feasibility and were part of the 340B Link Business’s offerings at the acquisition date.

The trade names intangible asset represents the fair value of brand and name recognition associated with the marketing of the 340B Link Business’s software-enabled services and solutions.

The non-compete agreements intangible asset represents the fair value of non-compete agreements with former key members of the 340B Link Business’s management.

The fair value of the customer relationships intangible asset was determined based on the excess earnings method;

the fair values of the acquired technology and trade names intangible assets were determined based on the relief-from-royalty

the fair values of the acquired technology and trade names intangible assets were determined based on the relief-from-royalty method;

and the fair value of the non-compete agreements intangible asset was determined based on the lost profits method.

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The trade names and non-compete agreements are being amortized over their estimated useful lives using the straight-line method of amortization.

The Company believes that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that market participants would use.

Actual results may differ from these estimates and assumptions.

The Company incurred approximately $ 6.5 million in acquisition-related costs related to the 340B Link Business acquisition during the year ended December 31, 2020.

These costs were expensed as incurred, and are included in selling, general, and administrative expenses in the Company's Consolidated Statements of Operations.

Revenues and earnings from the 340B Link Business operations since the acquisition date through December 31, 2020 were $ 10.2 million and $ 1.3 million, respectively.

Pro Forma Financial Information

The following table presents certain unaudited pro forma information for illustrative purposes only, for the years ended December 31, 2020 and 2019 as if this acquisition had been completed on January 1, 2019.

The pro forma information is not indicative of what would have occurred had the acquisition taken place on January 1, 2019.

The unaudited pro forma information combines the historical results of the acquisition with the Company’s consolidated historical results and includes certain adjustments including, but not limited to, amortization and depreciation of intangible assets and property and equipment acquired;

imputed interest, interest expense, and amortization of debt issuance costs for the indebtedness incurred to complete the acquisition;

and acquisition-related costs incurred.

The following table presents certain unaudited pro forma consolidated financial information for the years ended December 31, 2021, 2020, and 2019 as if the FDS Amplicare, ReCept, and MarkeTouch Media acquisitions had been completed on January 1, 2020 and the 340B Link Business acquisition had been completed on January 1, 2019.

The unaudited pro forma financial information is presented for informational purposes only, and is not indicative of what would have occurred had the acquisitions taken place on those respective dates.

The unaudited pro forma financial information combines the historical results of the acquisitions with the Company’s consolidated historical results and includes certain adjustments including, but not limited to, amortization and depreciation of intangible assets and property and equipment acquired;

imputed interest, interest expense, and amortization of debt issuance costs related to acquisitions, as applicable;

and certain acquisition-related costs incurred.

Year Ended December 31,

(In thousands, except per share data)

2021 2020 2019

(In thousands)

Pro forma revenues $ 1,195,473 $ 986,310 $ 929,106

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The short-term deferred revenues from product sales relate to delivered and invoiced products, pending installation and acceptance, expected to occur within the next twelve months.

During the year ended December 31, 2020, the Company recognized revenues of $ 84.0 million that were included in the corresponding gross short-term deferred revenue balance of $ 104.0 million as of December 31, 2019.

Long-term deferred revenues include deferred revenues from service contracts of $ 5.7 million and $ 7.1 million as of December 31, 2020 and 2019, respectively.

Remaining performance obligations primarily relate to maintenance contracts and are recognized ratably over the remaining term of the contract, generally not more than five years.

During the year ended December 31, 2021, the Company recognized revenues of $ 96.8 million that were included in the corresponding gross short-term deferred revenues balance of $ 121.1 million as of December 31, 2020.

Long-term deferred revenues include deferred revenues from product and service contracts of $ 20.2 million and $ 5.7 million as of December 31, 2021 and 2020, respectively.

Remaining performance obligations are primarily recognized ratably over the remaining term of the contract, generally not more than ten years.

Significant Customers

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Net Income Per Share

Basic net income per share is computed by dividing net income for the period by the weighted-average number of shares outstanding during the period.

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of shares outstanding during the period.

In periods of net loss, all potential common shares are anti-dilutive, so diluted net loss per share equals the basic net loss per share.

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Effect of dilutive securities from stock award plans 2,136 1,160 1,481

Effect of convertible senior notes and warrants — — —

Effect of convertible senior notes 2,044 — —

Effect of warrants 288 — —

Weighted-average shares outstanding – diluted 47,943 43,743 42,943

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The Company’s cash, cash equivalents, and restricted cash are classified within Level 1 of the fair value hierarchy as they are valued primarily using quoted market prices utilizing market observable inputs.

The Company's interest rate swap contracts and credit facilities are classified within Level 2 as the valuation inputs are based on quoted prices or market observable data of similar instruments.

The Company’s interest rate swap contracts and credit facility are classified within Level 2 as the valuation inputs are based on quoted prices or market observable data of similar instruments.

The Company’s convertible senior notes are classified within Level 2 as the valuation inputs are based on quoted prices in an inactive market on the last day in the reporting period.

As of December 31, 2020, the fair value of the convertible senior notes was $ 782.3 million, compared to their carrying value of $ 467.2 million, which is net of unamortized discount and debt issuance costs and excludes amounts classified within additional paid-in capital.

Refer to Note 9, Debt and Credit Agreements , for further information regarding the Company’s credit facilities and Note 10, Convertible Senior Notes , for further information regarding the Company’s convertible senior notes.

As of December 31, 2021 and 2020, the fair value of the convertible senior notes was $ 1.085 billion and $ 782.3 million, respectively, compared to their carrying value of $ 488.2 million and $ 467.2 million, respectively, which are net of unamortized discount and debt issuance costs and excludes amounts classified within additional paid-in capital.

Refer to Note 9, Debt and Credit Agreements , for further information regarding the Company’s credit facility and Note 10, Convertible Senior Notes , for further information regarding the Company’s convertible senior notes.

Interest Rate Swap Contracts

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Amounts payable by or due to the Company were net settled with the respective counterparty on the last business day of each month, commencing July 31, 2016.

The Company’s interest rate swap agreement matured during the second quarter of 2019, and, as of December 31, 2020, the Company did not have any outstanding interest rate swap agreements.

The Company’s interest rate swap agreement matured during the second quarter of 2019, and, as of December 31, 2021 and 2020, the Company did not have any outstanding interest rate swap agreements.

Balance Sheet Components

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Funds held for customers, including restricted cash (1)

$ 20,405 $ 18,164

Net investment in sales-type leases, current portion 10,665 10,246

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_________________________________________________

(1) Includes $ 4.0 million of restricted cash.

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the years ended December 31, 2020 and 2019:

Foreign currency translation adjustments Unrealized gain (loss) on interest rate swap hedges Total

(1) Includes restricted cash of $ 6.6 million and $ 4.0 million as of December 31, 2021 and 2020, respectively.

The following table summarizes the changes in accumulated balances of other comprehensive income (loss), which consisted of foreign currency translation adjustments, for the years ended December 31, 2021 and 2020:

(In thousands)

Balance as of December 31, 2019 $ ( 9,446 )

Other comprehensive income (loss) before reclassifications 1,828 148 1,976

Amounts reclassified from other comprehensive income (loss), net of tax — ( 568 ) ( 568 )

Net current-period other comprehensive income (loss), net of tax 1,828 ( 420 ) 1,408

Other comprehensive income 3,924

Balance as of December 31, 2020 ( 5,522 )

Other comprehensive income (loss) before reclassifications 3,924 — 3,924

Amounts reclassified from other comprehensive income (loss), net of tax — — —

Net current-period other comprehensive income (loss), net of tax 3,924 — 3,924

Other comprehensive loss ( 2,885 )

Balance as of December 31, 2021 $ ( 8,407 )

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Property and equipment, gross 193,088 165,374

165,374 169,961

Accumulated depreciation and amortization ( 121,947 ) ( 106,301 )

( 106,301 ) ( 115,715 )

Total property and equipment, net $ 71,141 $ 59,073

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(1) The change in balances between periods is primarily due to the disposal of certain fully depreciated property and equipment, partially offset by additions, and depreciation and amortization.

Depreciation and amortization expense of property and equipment was $ 20.1 million, $ 18.3 million, and $ 17.2 million for the years ended December 31, 2021, 2020, and 2019, respectively.

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(1) No individual country represented more than 10% of the total property and equipment, net.

(1) No individual country represented more than 10% of total property and equipment, net.

Goodwill and Intangible Assets

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Balance as of December 31, 2019 $ 336,539

Additions (1)

Foreign currency exchange rate fluctuations 1,653

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Additions (1)

Measurement period adjustments (1)

Foreign currency exchange rate fluctuations ( 1,052 )

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_________________________________________________

(1) Additions represent the preliminary value assigned to goodwill in connection with the 340B Link Business acquisition in October 2020.

(1) Refer to Note 2, Business Combinations , for further information.

Intangible Assets, Net

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Patents 2,930 ( 1,455 ) 2 1,477 2 - 20

Non-compete agreements 600 ( 50 ) — 550 3

Total intangibles assets, net $ 286,448 $ ( 117,482 ) $ ( 755 ) $ 168,211

_________________________________________________

(1) The differences in gross carrying amounts between periods are primarily due to additions of intangible assets in connection with the 340B Link Business acquisition, partially offset by the write-off of certain fully amortized intangible assets.

(1) The differences in gross carrying amounts between periods are primarily due to additions of intangible assets in connection with acquisitions, partially offset by the write-off of certain fully amortized intangible assets.

Amortization expense of intangible assets was $ 26.5 million, $ 19.7 million, and $ 18.9 million for the years ended December 31, 2021, 2020, and 2019, respectively.

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2019 Revolving Credit Facility

On November 15, 2019, the Company refinanced the Prior Credit Agreement and entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with the lenders from time to time party thereto, Wells Fargo Securities, LLC, Citizens Bank, N.A., and JPMorgan Chase Bank, N.A., as joint lead arrangers and Wells Fargo Bank, National Association, as administrative agent.

The A&R Credit Agreement replaced the Prior Credit Agreement and provides for (a) a five-year revolving credit facility of $ 500.0 million (the “Current Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to $ 250.0 million (the “Incremental Facility”).

On November 15, 2019, the Company refinanced the Prior Credit Agreement and entered into an Amended and Restated Credit Agreement (as subsequently amended as discussed below, the “A&R Credit Agreement”) with the lenders from time to time party thereto, Wells Fargo Securities, LLC, Citizens Bank, N.A., and JPMorgan Chase Bank, N.A., as joint lead arrangers, and Wells Fargo Bank, National Association, as administrative agent.

The A&R Credit Agreement superseded the Prior Credit Agreement and provides for (a) a five-year revolving credit facility of $ 500.0 million (the “Revolving Credit Facility”) and (b) an uncommitted incremental loan facility of up to $ 250.0 million (the “Incremental Facility”).

In addition, the A&R Credit Agreement includes a letter of credit sub-limit of up to $ 15.0 million and a swing line loan sub-limit of up to $ 25.0 million.

The A&R Credit Agreement has an expiration date of November 15, 2024, upon which date all remaining outstanding borrowings will be due and payable.

On November 15, 2019, the $ 80.0 million outstanding term loan balance under the Prior Facilities was transferred to the Current Revolving Credit Facility.

Loans under the Current Revolving Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) the LIBOR Rate, plus an applicable margin ranging from 1.25 % to 2.00 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (as defined in the A&R Credit Agreement), or (b) an alternate base rate equal to the highest of (i) the

prime rate, (ii) the federal funds rate plus 0.50 %, and (iii) LIBOR for an interest period of one month plus 1.00 %, plus an applicable margin ranging from 0.25 % to 1.00 % per annum based on the Company’s Consolidated Total Net Leverage Ratio.

Undrawn commitments under the Current Revolving Credit Facility are subject to a commitment fee ranging from 0.15 % to 0.30 % per annum based on the Company’s Consolidated Total Net Leverage Ratio on the average daily unused portion of the Current Revolving Credit Facility.

On November 15, 2019, the $ 80.0 million outstanding term loan balance under the Prior Facilities was transferred to the Revolving Credit Facility.

Loans under the Revolving Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) the LIBOR Rate, plus an applicable margin ranging from 1.25 % to 2.00 % per annum based on the Company’s Consolidated Total Net Leverage Ratio (as defined in the A&R Credit Agreement), or (b) an alternate base rate equal to the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50 %, and (iii) LIBOR for an interest period of one month plus 1.00 %, plus an applicable margin ranging from 0.25 % to 1.00 % per annum based on the Company’s Consolidated Total Net Leverage Ratio.

Undrawn commitments under the Revolving Credit Facility are subject to a commitment fee ranging from 0.15 % to 0.30 % per annum based on the Company’s Consolidated Total Net Leverage Ratio on the average daily unused portion of the Revolving Credit Facility.

The applicable margin for and certain other terms of any term loans under the Incremental Facility will be determined prior to the incurrence of such loans.

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The A&R Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, dividends, and other distributions.

The A&R Credit Agreement contains financial covenants that require the Company and its subsidiaries to not exceed a maximum consolidated total net leverage ratio and maintain a minimum interest coverage ratio.

The A&R Credit Agreement contains financial covenants that require the Company and its subsidiaries to not exceed a maximum total secured net leverage ratio (as described above) and maintain a minimum interest coverage ratio.

In addition, the A&R Credit Agreement contains certain customary events of default including, but not limited to, failure to pay interest, principal, and fees or other amounts when due, material misrepresentations or misstatements in any representation or warranty, covenant defaults, certain cross defaults to other material indebtedness, certain judgment defaults, and events of bankruptcy.

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The Company was in full compliance with all covenants as of December 31, 2021.

The refinancing of the Prior Credit Agreement was evaluated in accordance with ASC 470-50, Debt - Modifications and Extinguishments.

The refinancing of the Prior Credit Agreement by means of the A&R Credit Agreement was evaluated in accordance with ASC 470-50, Debt - Modifications and Extinguishments.

In determining whether the refinancing was to be accounted for as a debt extinguishment or a debt modification, the Company considered whether lenders within the syndicate remained the same or changed and whether the changes in debt terms were substantial.

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The debt issuance costs are being amortized to interest expense using the straight-line method through 2024.

Amortization expense related to debt issuance costs was approximately $ 1.0 million, $ 2.2 million, and $ 2.3 million for the years ended December 31, 2020, 2019, and 2018, respectively.

Interest expense (exclusive of fees and debt issuance cost amortization) was approximately $ 0.5 million, $ 3.6 million, and $ 7.5 million for the years ended December 31, 2020, 2019, and 2018, respectively.

The following table represents changes in the carrying amount of the Company's debt obligations:

Current Revolving Credit Facility

(In thousands)

Balance as of December 31, 2019 $ 50,000

Proceeds 150,000

Repayments ( 200,000 )

Balance as of December 31, 2020 $ —

Amortization expense related to debt issuance costs for credit agreements was approximately $ 1.1 million, $ 1.0 million, and $ 2.2 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Interest expense (exclusive of fees and debt issuance cost amortization) was approximately $ 0.5 million and $ 3.6 million for the years ended December 31, 2020 and 2019, respectively.

No interest expense was incurred during the year ended December 31, 2021 as there was no outstanding balance under the Revolving Credit Facility.

The following table represents changes in the balance of the Company’s deferred debt issuance costs:

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Balance as of December 31, 2020 $ 4,253

Additions 550

Amortization ( 1,097 )

Balance as of December 31, 2021 $ 3,156

As of each of December 31, 2021 and 2020, there was no outstanding balance for the Revolving Credit Facility.

Convertible Senior Notes

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The Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding May 15, 2025, only under the following circumstances:

(i) during any fiscal quarter commencing after the fiscal quarter ended on December 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the Notes on each applicable trading day;

(i) during any fiscal quarter commencing after the fiscal quarter ended on December 31, 2020 (and only during such fiscal quarter), if the last reported sale price of the

Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130 % of the conversion price for the Notes on each applicable trading day;

(ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate for the Notes on each such trading day;

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On or after May 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or any portion of their Notes at any time, regardless of the foregoing conditions.

Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the Indenture.

During the three months ended December 31, 2021, the conditional conversion feature of the Notes was triggered, based on the price of the Company’s common stock, as the last reported sale price of the Company’s common stock was greater than or equal to 130 % of the then applicable conversion price for the Notes for at least 20 trading days during the period of 30 consecutive trading days ending on December 31, 2021, the last trading day of the fiscal quarter.

Accordingly, the Notes are convertible, in whole or in part, at the option of the holders during the first quarter of 2022.

Whether the Notes will be convertible following the first fiscal quarter of 2022 will depend on the continued satisfaction of this condition or another conversion condition in the future.

The Company classified the Notes as a current liability in its Consolidated Financial Statements as of December 31, 2021 based on its irrevocable election to settle the principal amount in cash as discussed below.

Under the original terms of the Indenture, upon conversion, the Company could satisfy its conversion obligation by paying or delivering a combination of cash and shares of its common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the Indenture.

On December 13, 2021, the Company irrevocably elected to fix its settlement method to a combination of cash and shares of the Company’s common stock with the specified cash amount per $1,000 principal amount of Notes of at least $ 1,000 .

As a result, for Notes converted on or after December 13, 2021, a converting noteholder will receive (i) up to $ 1,000 in cash per $1,000 principal amount of Notes and (ii) cash and/or shares of the Company’s common stock, at the Company’s option for any conversion consideration in excess of $ 1,000 .

In addition, the Company continues to have the ability to set the specified cash amount per $1,000 principal amount of Notes above $ 1,000 .

The initial conversion rate for the Notes is 10.2751 shares of the Company’s common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $ 97.32 per share of the Company’s common stock, subject to adjustment under certain circumstances in accordance with the terms of the Indenture.

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The Company may redeem for cash all or any portion of the Notes, at its option, on or after September 20, 2023, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

If the Company redeems less than all the outstanding Notes, at least $ 150.0 million aggregate

principal amount of Notes must be outstanding and not subject to redemption as of the date of the relevant notice of redemption.

If the Company redeems less than all of the outstanding Notes, at least $ 150.0 million aggregate principal amount of Notes must be outstanding and not subject to redemption as of the date of the relevant notice of redemption.

No sinking fund is provided for in the Notes.

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The difference between the principal amount of the Notes and the liability component, inclusive of issuance costs, represents the debt discount, which the Company will amortize to interest expense over the term of the Notes using an effective interest rate of 4.18 %.

The determination of the discount rate required certain estimates and assumptions.

determination of the discount rate required certain estimates and assumptions.

As of December 31, 2021, the remaining life of the Notes and the related debt discount and issuance cost accretion is approximately 3.7 years.

The maximum number of shares issuable upon conversion, including the effect of a fundamental change and subject to other conversion rate adjustments, would be 5.9 million shares.

The Notes consisted of the following balances reported in the Consolidated Balance Sheets as of December 31, 2020:

As of December 31, 2021, the if-converted value of the Notes exceeded the principal amount by $ 491.1 million.

The Notes consisted of the following balances reported in the Consolidated Balance Sheets as of December 31, 2021 and 2020:

(In thousands)

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Convertible senior notes, liability component (1)

Embedded conversion option $ 100,510

Debt issuance costs ( 2,680 )

Deferred tax impact ( 25,098 )

$ 488,152 $ 467,201

Convertible senior notes, equity component (2)

$ 72,732 $ 72,732

_________________________________________________

(1) Classified as a current liability as of December 31, 2021 and a long-term liability as of December 30, 2020 in the Consolidated Balance Sheets.

(2) Included in additional paid-in capital in the Consolidated Balance Sheets.

The following table summarizes the components of interest expense resulting from the Notes recognized in interest and other income (expense), net in the Consolidated Statements of Operations for the year ended December 31, 2020:

Year Ended December 31,

(In thousands)

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The Company recorded a deferred tax asset of $ 25.8 million at issuance related to the convertible note hedge transaction.

convertible note hedge is expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes.

The convertible note hedge is expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes.

Separately from the convertible note hedge, the Company entered into warrant transactions to sell to the option counterparties warrants to acquire, subject to customary anti-dilution adjustments, up to approximately 5.9 million shares of its common stock in the aggregate at an initial strike price of $ 141.56 per share.

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The Company received aggregate proceeds of approximately $ 51.3 million for the issuance of the warrants, which was recorded in additional paid-in capital at issuance in the Consolidated Balance Sheets.

The warrants could separately have a dilutive effect to the Company’s common stock to the extent that the market price per share of its common stock exceeds the strike price of the warrants.

warrants could separately have a dilutive effect to the Company’s common stock to the extent that the market price per share of its common stock exceeds the strike price of the warrants.

Lessor Leases

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Rental income $ 10,467 $ 11,668 $ 12,660

The net carrying value of the leased equipment under operating leases was $ 1.4 million and $ 2.1 million, which includes accumulated depreciation of $ 2.5 million and $ 1.6 million, as of December 31, 2020 and 2019, respectively.

Depreciation expense of the leased equipment for the years ended December 31, 2020, 2019, and 2018 was $ 0.6 million, $ 0.7 million, and $ 0.5 million, respectively.

The maturity schedule of future minimum lease payments under operating leases was as follows:

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(1) Amount consists of a current and long-term portion of operating lease liabilities of $ 12.9 million and $ 39.9 million, respectively.

The short-term portion of the operating lease liabilities is included in accrued liabilities in the Consolidated Balance Sheets.

Operating lease costs were $ 14.3 million and $ 14.6 million for the years ended December 31, 2020 and 2019, respectively.

Short-term lease costs and variable lease costs were immaterial for the years ended December 31, 2020 and 2019, respectively.

The current portion of the operating lease liabilities is included in accrued liabilities in the Consolidated Balance Sheets.

Operating lease costs were $ 15.0 million, $ 14.3 million, and $ 14.6 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Short-term lease costs and variable lease costs were not material for the years ended December 31, 2021, 2020, and 2019, respectively.

The following table summarizes supplemental cash flow information related to the Company’s operating leases for the years ended December 31, 2021, 2020, and 2019:

Year Ended December 31,

2021 2020 2019

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities $ 15,625 $ 14,490 $ 14,636

Right-of-use assets obtained in exchange for new lease liabilities, including leases obtained from recent acquisitions $ 10,025 $ 1,204

Right-of-use assets obtained in exchange for new lease liabilities $ 5,503 $ 10,025 $ 1,204

The following table summarizes the weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases as of December 31, 2021 and 2020:

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Omnicell, Inc., Case No.

2019-CH-06817 .

2019-CH-06817 (the “Heard Action”).

The complaint seeks class certification, monetary damages in the form of statutory damages for willful and/or reckless or, in the alternative, negligent violation of the Illinois Biometric Information Privacy Act (“BIPA”), and certain declaratory, injunctive, and other relief based on causes of action directed to allegations of violation of BIPA by the Company.

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2018-CH-07161, pending in the Circuit Court of Cook County, Illinois, Chancery Division (the “Mazya Action”).

The Court subsequently, on October 10, 2019, denied the motion, without prejudice, as being moot in view of the Company’s dismissal from the Mazya Action.

The Company filed a motion to dismiss the complaint on October 31, 2019.

The Court subsequently, on October 10, 2019, denied the motion, without prejudice, as being moot in view of the dismissal of the claims against the Company in the Mazya Action.

The Company filed a motion to dismiss the complaint in the Heard Action on October 31, 2019.

The hearing on the Company’s motion to dismiss was held on September 2, 2020.

The Court ruled from the bench and dismissed the complaint without prejudice giving plaintiff leave to file an amended complaint by September 30, 2020.

Plaintiff filed an amended complaint on September 30, 2020 and the Company subsequently filed a motion to dismiss the complaint on October 28, 2020.

The Company's motion to dismiss is now fully briefed and the Court has scheduled oral argument on the motion for June 4, 2021.

The Company intends to defend the lawsuit vigorously.

On December 21, 2020, Becton, Dickinson and Company (“BD”) filed a complaint against the Company in the United States District Court for the Middle District of North Carolina, asserting claims of misappropriation under the Defend Trade Secrets Act, misappropriation under the North Carolina Trade Secrets Protection Act, unfair competition, and unfair/deceptive trade practices in violation of North Carolina law (the “Omnicell Complaint”).

This action was commenced in relation to another action brought by BD, in the same Court, (the “Related Matter”) against a former BD employee who is also a former Company employee (the “Former Employee”) alleging that the Former Employee had violated the Former Employee’s legal obligations to BD regarding BD’s confidential and trade secret information when the Former Employee allegedly downloaded certain documents from BD’s information technology system following the end of the Former Employee’s employment with BD.

In connection with the Related Matter, BD, the Former Employee, and the Company entered into a protocol to facilitate the return to BD of any BD documents that may have been resident, as a result of the Former Employee’s actions, on any devices belonging to the Former Employee or the Company.

The Omnicell Complaint seeks injunctive relief and monetary damages in the form of compensatory, punitive, and exemplary damages, attorneys’ fees and costs, and pre-judgment and post-judgment interest.

BD has not yet served the Omnicell Complaint on the Company, and, therefore, there are no response dates pending.

Plaintiff filed an amended complaint on September 30, 2020 and the Company subsequently filed a motion to dismiss the amended complaint on October 28, 2020, which was fully briefed, but the Court had not heard oral argument on the motion.

The parties entered into a settlement agreement on January 25, 2022.

On February 1, 2022, the Court granted preliminary approval of the settlement.

The Court has scheduled a status conference for June 1, 2022.

Subject to final approval of the settlement, the Company intends to defend the lawsuit vigorously.

This action (the “BD Action”) was commenced in relation to another action brought by BD, in the same Court (the “Related Matter”) against a former BD employee who is also a former Company employee (the “Former Employee”) alleging that the Former Employee had violated the Former Employee’s legal obligations to BD regarding BD’s confidential and trade secret information when the Former Employee allegedly downloaded certain documents from BD’s information technology system following the end of the Former Employee’s employment with BD.

In connection with the Related Matter, BD, the Former Employee, and the Company entered into a protocol with the purpose of facilitating the return to BD of any BD documents that may have been resident, as a result of the Former Employee’s actions, on any devices belonging to the Former Employee or the Company.

The BD Complaint seeks injunctive relief and monetary damages in the form of compensatory, punitive, and exemplary damages, attorneys’ fees and costs, and pre-judgment and post-judgment interest.

On March 17, 2021, the parties filed a joint motion to stay the BD Action,

which motion was granted by the Court on June 8, 2021.

The stay has since been lifted and the Company’s answer to the BD Complaint is due March 9, 2022, unless an extension to such stay is mutually agreed to by the parties and approved by the Court.

The Company intends to defend the lawsuit vigorously.

As required under ASC 450, Contingencies , the Company accrues for contingencies when it believes that a loss is probable and that it can reasonably estimate the amount of any such loss.

The Company has not recorded any material accrual for contingent liabilities associated with the legal proceedings described above based on its belief that any potential loss, while reasonably possible, is not probable.

The Company has not recorded any material accrual for contingent liabilities associated with the legal proceedings described above based on its belief that any potential material loss, while reasonably possible, is not probable.

Further, any possible range of loss in these matters cannot be reasonably estimated at this time or is not deemed material.

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In addition, the Company has in the past and may in the future warrant to its customers that its products will conform to functional specifications for a limited period of time following the date of installation (generally not exceeding 30 days) or that its software media is free from material defects.

Sales contracts for certain of the Company’s medication packaging systems often include limited warranties for up to six months , but the periodic activity and ending warranty balances the Company records have historically been immaterial.

From time to time, the Company may also warrant that its professional services will be performed in a good and workmanlike manner or in a professional manner consistent with industry standards.

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Total share-based compensation expense $ 53,160 $ 44,697 $ 34,049

The Company did not capitalize any share-based compensation as inventory as such amounts were not material for the years ended December 31, 2020 and 2019.

The Company did not capitalize any material share-based compensation amounts to inventory, capitalized software, or internal-use software for the years ended December 31, 2021 and 2020.

Income tax benefits realized from share-based compensation were $ 26.6 million, $ 10.3 million, and $ 11.0 million, for the years ended December 31, 2021, 2020, and 2019, respectively.

Stock Options and ESPP Shares

The following assumptions were used to value stock options and ESPP shares granted pursuant to the Company’s equity incentive plans for the years ended December 31, 2020, 2019, and 2018:

The following assumptions were used to value shares granted under the ESPP for the years ended December 31, 2021, 2020, and 2019:

Year Ended December 31,

2021 2020 2019

Stock options

Expected life, years 0.5 - 2.0

Expected volatility, % 27.4 % - 53.5 %

30.4 % - 53.5 %

28.2 % - 39.9 %

Risk-free interest rate, % 0.1 % - 2.6 %

Estimated forfeiture rate, % 5.7 % 7.2 % 6.9 %

0.1 % - 2.7 %

1.3 % - 2.7 %

Dividend yield, % — % — % — %

For the years ended December 31, 2021 and 2020, employees purchased approximately 287,000 and 333,000 shares of common stock, respectively, under the ESPP at a weighted-average price of $ 62.14 and $ 48.77 , respectively.

As of December 31, 2021, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $ 1.9 million and is expected to be recognized over a weighted-average period of 1.3 years.

Stock Options

The following assumptions were used to value stock options granted pursuant to the 2009 Plan for the years ended December 31, 2021, 2020, and 2019:

Year Ended December 31,

2021 2020 2019

Employee stock purchase plan shares

Expected life, years 4.9 4.7 4.4

Expected volatility, % 31.5 % 39.4 % 33.7 %

28.2 % - 39.9 %

28.1 % - 33.8 %

Risk-free interest rate, % 0.9 % 0.7 % 2.0 %

1.3 % - 2.7 %

0.8 % - 2.7 %

Estimated forfeiture rate, % 7.9 % 5.7 % 7.2 %

Dividend yield, % — % — % — %

Stock Options Activity

The following table summarizes the share option activity under the Company’s 2009 Plan during the year ended December 31, 2020:

The following table summarizes the stock option activity under the 2009 Plan during the year ended December 31, 2021:

Weighted-Average

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As of December 31, 2021, total unrecognized compensation cost related to unvested stock options was $ 33.8 million, which is expected to be recognized over a weighted-average vesting period of 2.2 years.

Employee Stock Purchase Plan Activity

For the years ended December 31, 2020 and 2019, employees purchased approximately 333,000 and 374,000 shares of common stock, respectively, under the ESPP at a weighted-average price of $ 48.77 and $ 41.44 , respectively.

As of December 31, 2020, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $ 4.1 million and is expected to be recognized over a weighted-average period of 1.3 years.

Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs)

Summaries of the restricted stock activity under the 2009 Plan are presented below for the year ended December 31, 2020:

Restricted Stock Units (“RSU”)

The following table summarizes the RSU activity under the 2009 Plan during the year ended December 31, 2021:

Weighted-Average

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(In thousands, except per share data)

Restricted stock units

Outstanding at December 31, 2020 580 $ 72.87 1.6 $ 69,670

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As of December 31, 2021, total unrecognized compensation cost related to RSUs was $ 76.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.1 years.

Restricted Stock Awards (“RSAs”)

The following table summarizes the RSA activity under the 2009 Plan during the year ended December 31, 2021:

Weighted-Average

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(In thousands, except per share data)

Restricted stock awards

Outstanding at December 31, 2020 21 $ 68.11

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As of December 31, 2021, total unrecognized compensation cost related to RSAs was $ 0.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.4 years.

Performance-Based Restricted Stock Units (PSUs)

In 2019, the Company granted 61,098 PSUs to its executive officers, all of which became eligible for vesting upon the achievement of a certain level of shareholder return.

In 2020, the Company granted 62,759 PSUs to its executive officers, all, none, or a portion of which may become eligible for vesting depending on the level of shareholder return for the period from March 1, 2020 through March 1, 2021.

The fair value of PSU awards to executive officers is determined using a Monte Carlo simulation model.

Performance-Based Stock Unit Awards (“PSUs”)

During the year ended December 31, 2020, the Company granted 62,759 PSUs to its executive officers, all of which became eligible for vesting upon the achievement of a certain level of shareholder return.

During the year ended December 31, 2021, the Company granted 51,110 PSUs to its executive officers, of which 0 % to 200 % may become eligible for vesting depending on the level of shareholder return for the period from March 1, 2021 through March 1, 2022.

The number of shares that vest at the end of the performance period depends on the percentile ranking of the total shareholder return for Omnicell stock over the performance period relative to the total shareholder return of each of the other companies in the NASDAQ Healthcare Index (the “Index”).

For PSUs granted on February 13, 2020, stock price appreciation is calculated based on the trailing 20 -day average stock price just prior to the first trading day of March 2020, compared to the trailing 20 -day average stock price just prior to the first trading day of March 2021.

For PSUs granted on February 13, 2019, stock price appreciation is calculated based on the trailing 20 -day average stock price just prior to the first trading day of March 2019, compared to the trailing 20 -day average stock price just prior to the first trading day of March 2020.

On March 5, 2019, the Compensation Committee confirmed the Company's total stockholder return at the 90 th percentile rank of the Index.

This resulted in 100 % of the 2018 PSUs, or 110,432 shares, as eligible for further time-based vesting.

The eligible PSUs will vest as follows:

25 % of the shares vested immediately on March 5, 2019 with the remaining shares vesting on a semi-annual basis period of 36 months commencing on June 15, 2019.

Vesting is contingent upon continued service.

Of the 110,432 shares eligible for time-based vesting under the 2018 PSUs, 67,066 shares, net of forfeitures, have vested as of December 31, 2020.

On March 3, 2020, the Compensation Committee confirmed the Company's total stockholder return at the 70 th percentile rank of the Index.

This resulted in 100 % of the 2019 PSUs, or 61,098 shares, as eligible for further time-based vesting.

The eligible PSUs will vest as follows:

25 % of the shares vested immediately on March 3, 2020 with the remaining shares vesting on a semi-annual basis period of 36 months commencing on June 15, 2020.

Stock price appreciation is calculated based on the trailing 20 -day average stock price just prior to the first trading day of March in the grant year, compared to the trailing 20 -day average stock price just prior to the first trading day of March in the year subsequent to the grant year.

The fair value of PSU awards to executive officers is determined using a Monte Carlo simulation model.

PSUs generally vest over periods of up to four years , with one-fourth of the shares vesting approximately one year from the vesting commencement date with respect to initial grants and upon confirmation by the Compensation Committee that the performance target has been met, and the remaining shares vesting in six equal semi-annual installments thereafter.

Vesting is contingent upon continued service.

Of the 61,098 shares eligible for time-based vesting under the 2019 PSUs, 30,548 shares, net of forfeitures, have vested as of December 31, 2020.

In addition to executive officers’ PSU awards, from time to time, the Company may grant PSUs with specific performance and service conditions to certain employees on an ad hoc basis.

Historically such grants have not been material.

A summary of the performance-based restricted stock activity under the 2009 Plan is presented below for the year ended December 31, 2020:

The following table summarizes the PSU activity under the 2009 Plan during the year ended December 31, 2021:

Weighted-Average

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The total fair value of PSUs that vested in the years ended December 31, 2021, 2020, and 2019 was $ 4.4 million, $ 3.7 million, and $ 3.5 million, respectively.

As of December 31, 2020, total unrecognized compensation cost related to PSUs was approximately $ 5.6 million, which is expected to be recognized over the remaining weighted-average period of 1.4 years.

As of December 31, 2021, total unrecognized compensation cost related to PSUs was approximately $ 7.5 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.2 years.

Summary of Shares Reserved for Future Issuance under Equity Incentive Plans

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The stock repurchase programs do not obligate the Company to repurchase any specific number of shares, and the Company may terminate or suspend the repurchase programs at any time.

On September 17, 2020, the Board authorized a one-time stock repurchase transaction providing for the repurchase of up to $ 75.0 million of the Company’s common stock in privately negotiated transactions concurrently with the issuance of the Notes, described in Note 10, Convertible Senior Notes .

In September 2020, the Company repurchased 749,300 shares of its common stock from purchasers of the Notes in the offering in privately negotiated transactions effected through one of the

initial purchasers or its affiliate at an average price of $ 70.78 per share for an aggregate purchase price of approximately $ 53.0 million.

Notes, described in Note 10, Convertible Senior Notes .

In September 2020, the Company repurchased 749,300 shares of its common stock from purchasers of the Notes in the offering in privately negotiated transactions effected through one of the initial purchasers or its affiliate at an average price of $ 70.78 per share for an aggregate purchase price of approximately $ 53.0 million.

There will be no further repurchases under this one-time authorization.

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Morgan Securities LLC, Wells Fargo Securities, LLC, and HSBC Securities (USA) Inc., as its sales agents, pursuant to which the Company was able to offer and sell from time to time through the sales agents up to $ 125.0 million maximum aggregate offering price of the Company’s common stock.

Sales of the common stock pursuant to the Distribution Agreement may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, including sales made directly on the Nasdaq Stock Market, or sales made to or through a market maker other than on an exchange.

For the year ended December 31, 2018, the Company received gross proceeds of $ 40.3 million from sales of its common stock under the Distribution Agreement and incurred issuance costs of $ 0.7 million on sales of approximately 557,000 shares of its common stock at an average price of approximately $ 72.40 per share.

Sales of the common stock pursuant to the Distribution Agreement were to be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Stock Market, or sales made to or through a market maker other than on an exchange.

For the year ended December 31, 2019, the Company received gross proceeds of $ 38.5 million from sales of its common stock under the Distribution Agreement and incurred issuance costs of $ 0.7 million on sales of approximately 460,000 shares of its common stock at an average price of approximately $ 83.81 per share.

For the year ended December 31, 2020, the Company did not sell any of its common stock under the Distribution Agreement.

For the years ended December 31, 2021 and 2020, the Company did not sell any of its common stock under the Distribution Agreement.

The registration statement under which the shares that could have been sold pursuant to the Distribution Agreement expired on November 3, 2020, and, accordingly, no additional sales will be made pursuant to the Distribution Agreement.

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Foreign rate differential 17 ( 102 ) ( 1,424 )

Transaction cost 1,097 422 —

Other 158 ( 37 ) 524

Total provision for (benefit from) income taxes $ ( 11,842 ) $ ( 2,845 ) $ 12,595

As a result of global operational centralization activities during the year ended December 31, 2018, the Company recognized $ 4.2 million of tax benefit associated with making a check-the-box election to treat Aesynt Holding Coöperatief U.A.

(Netherlands) as the U.S.

disregarded entity beginning in the first quarter of 2018.

Subsequently, during the year ended December 31, 2019, the Company recognized gain on the sale of certain intellectual property rights by Aesynt B.V.

The Company has executed various global operational centralization activities and legal entity rationalization in recent years.

During the year ended December 31, 2021, the Company recognized a benefit on the release of previously recorded uncertain tax positions related to the sale of certain intellectual property rights by Aesynt B.V.

to Omnicell, Inc.

and by Mach4 Automatisierungstechnik GmbH ("Mach4") to Omnicell, Inc., which resulted in a tax expense, net of tax benefit, of $ 7.4 million.

As the Company continued with global operational centralization activities during the year ended December 31, 2020, Aesynt B.V.

and a gain on the transfer of certain assets to Omnicell Pty Ltd, which resulted in a tax benefit, net of tax expense, of $ 6.1 million.

During the year ended December 31, 2020, Aesynt B.V.

merged with and into Aesynt Holding B.V., with Aesynt Holding B.V.

surviving and changing its name to Omnicell B.V., Aesynt Holding Coöperatief U.A.

liquidated into Omnicell, Inc., and Omnicell GmbH merged with and into Mach4, with Mach4 surviving and changing its name to Omnicell GmbH.

liquidated into Omnicell, Inc., and Omnicell GmbH merged with and into Mach4 Automatisierungstechnik GmbH (“Mach4”), with Mach4 surviving and changing its name to Omnicell GmbH.

During the year ended December 31, 2020, the Company also recognized a gain on Omnicell Limited’s transferring shares of Omnicell GmbH to Omnicell International, LLC, which resulted in an immaterial tax expense.

During the year ended December 31, 2019, the Company recognized gain on the sale of certain intellectual property rights by Aesynt B.V.

to Omnicell, Inc.

and by Mach4 to Omnicell, Inc., which resulted in a tax expense, net of tax benefit, of $ 7.4 million.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law in response to the COVID-19 pandemic.

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The provisions of the CARES Act did not have a material impact on the Company’s income taxes.

On March 11, 2021, the President of the United States signed into law the “American Rescue Plan Act of 2021” (the “ARP Act”), which provides additional economic stimulus and tax credits, including the expansion and modification of the employee retention tax credit enacted by the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and the refundable tax credits for COVID-related paid sick and family leave enacted by the Family First Act.

The Company does not expect these provisions of the ARP Act to have a material impact for income taxes.

The ARP Act further expands the “covered employees” definition for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, used in determining the limitation on the deduction for excessive employee remuneration rules to be applicable for taxable years beginning after December 31, 2026.

The provisions of the ARP Act did not have a material impact on the Company’s income taxes.

Significant components of the Company’s deferred tax assets (liabilities) were as follows:

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Right-of-use assets ( 12,039 ) ( 13,949 )

Other, net ( 381 ) —

Total deferred tax liabilities ( 110,277 ) ( 88,141 )

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In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies, and results of recent operations.

On the basis of this evaluation, as of December 31, 2020, $ 1.2 million of valuation allowance was recorded on certain foreign net operating losses carried forward, as the Company believes that such deferred tax assets are not more likely than not to be realized.

As of December 31, 2020, the Company had $ 6.0 million of state net operating loss carryforwards expiring at various dates beginning in 2024, and $ 29.7 million of foreign net operating losses carried forward indefinitely.

On the basis of this evaluation, as of December 31, 2021, previously recorded valuation allowance of $ 1.2 million for certain foreign net operating loss carryforwards was released, and the Company no longer has a valuation allowance against any of its deferred tax assets.

As of December 31, 2021, the Company had $ 30.5 million of federal net operating losses and $ 18.0 million of state net operating loss carryforwards expiring at various dates beginning in 2024, and $ 23.5 million of foreign net operating losses carried forward indefinitely.

For income tax purposes, the Company has federal and California research tax credits carryforwards of $ 5.3 million and $ 19.0 million, respectively.

Federal research tax credit carryforwards from prior years will begin to expire in 2035.

Federal research tax credit carryforwards will begin to expire in 2040.

California credits are available indefinitely to reduce cash taxes payable.

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The Company files income tax returns in the United States and various state and foreign jurisdictions.

In the normal course of business, the Company is subject to examination by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, Netherlands, and the United Kingdom.

In the normal course of business, the Company is subject to examinations by taxing authorities, including major jurisdictions such as the United States, Germany, Italy, Netherlands, and the United Kingdom.

With few exceptions, as of December 31, 2021, the Company was no longer subject to U.S., state, and foreign examination for years before 2018, 2017, and 2017, respectively.

The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the three years ended December 31, 2020 was as follows:

The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the years ended December 31, 2021, 2020, and 2019:

(In thousands)

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The total amounts of gross unrecognized tax benefit that, if realized, would favorably affect the Company’s effective income tax rate in future periods, was $ 9.0 million and $ 18.2 million as of December 31, 2021 and 2020, respectively.

The Company recognizes interest and/or penalties related to uncertain tax positions in interest and other income (expense), net in the Consolidated Statements of Operations, accruing $ 0.4 million, $ 0.5 million, and $ 0.5 million for the years ended December 31, 2020, 2019, and 2018, respectively.

The decrease in the gross uncertain tax benefits during the year ended December 31, 2021 was primarily due to a release of certain unrecognized tax benefits as a result of an effective settlement with the tax authorities.

The Company recognizes interest and penalties related to uncertain tax positions in interest and other income (expense), net in the Consolidated Statements of Operations, accruing $ 0.3 million, $ 0.4 million, and $ 0.5 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Accrued interest and penalties are included within other long-term liabilities on the Consolidated Balance Sheets.

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Restructuring Expenses

In the first quarter of 2020, the Company announced a company-wide organizational realignment initiative in order to more effectively align its organizational infrastructure and operations with the strategic vision of the autonomous pharmacy.

In the second quarter of 2020, the Company continued its organizational realignment initiative, as well as initiated a restructuring plan to help mitigate the adverse impact of the COVID-19 pandemic on its business and financial results.

During the year ended December 31, 2020, the Company incurred and accrued $ 10.0 million of employee severance costs and related expenses.

As of December 31, 2020, the unpaid balance related to this restructuring plan was $ 0.6 million.

In the fourth quarter of 2018, the Company announced a company-wide organizational realignment initiative in order to align its organizational infrastructure for future expected growth.

During the year ended December 31, 2018, the Company accrued and paid out $ 1.3 million of restructuring expenses, which includes severance and consulting-related expenses.

On March 2, 2018, the Company initiated the realignment of its Automation and Analytics commercial group in North America and France.

During the year ended December 31, 2018, the Company accrued and paid out $ 3.0 million of employee severance costs and related expenses.

During 2020, the Company announced a company-wide organizational realignment initiative in order to more effectively align its organizational infrastructure and operations with the industry vision of the Autonomous Pharmacy.

During the second quarter of 2020, the Company also initiated a restructuring plan to help mitigate the adverse impact of the COVID-19 pandemic on its business and financial results.

During the year ended December 31, 2020, the Company incurred $ 10.0 million of employee severance costs and related expenses.

During the first quarter of 2021, the Company continued its organizational realignment initiative, incurring $ 2.0 million of employee severance costs and related expenses.

As of December 31, 2021, there was no unpaid balance related to this realignment initiative.

The following table summarizes the total restructuring expenses recognized in the Company’s Consolidated Statements of Operations for the years ended December 31, 2021, 2020, and 2019:

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Costs and Expenses (2)

Debited (Credited) to

Other Accounts (3)

Written Off (3)

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(2) Represents amounts charged and credited for provisions for credit losses.

(3) Represents amounts debited to receivables as recoveries, increasing the allowance.

(3) Represents amounts written off from the allowance and receivable.

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Incorporated By Reference

Exhibit Number Exhibit Description Form File No.

Exhibit Filing Date

Exhibit Number Exhibit Description Form Exhibit Filing Date

2.1 Securities Purchase Agreement, dated October 29, 2015, by and among Omnicell International, Inc., Omnicell, Inc., Aesynt Holding, L.P., Aesynt, Ltd., and Aesynt Holding Coöperatief U.A.

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S-8 99.2 7/2/2015

10.2* Omnicell, Inc.

2009 Equity Incentive Plan, as amended

S-8 99.1 6/10/2021

10.3* Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement for 2009 Equity Incentive Plan, as amended

10-K 000-33043 10.17 3/11/2011

10.3* Amendment to Omnicell, Inc.

2009 Equity Incentive Plan

10-Q 10.1 11/5/2021

10.4* Form of Restricted Stock Unit Award Agreement for the 2009 Equity Incentive Plan, as amended

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10-Q 10.1 7/31/2020

Incorporated By Reference

Exhibit Number Exhibit Description Form File No.

Exhibit Filing Date

10.9* Form of Restricted Stock Unit Grant Notice and Form of Global Restricted Stock Unit Award Agreement for 2009 Equity Incentive Plan, as amended (July 2020)

10-K 10.9 2/24/2021

10.10* Form of Restricted Stock Unit Grant Notice and Form of Global Restricted Stock Unit Award Agreement for 2009 Equity Incentive Plan, as amended (February 2021)

10-K 10.10 2/24/2021

10.11* Omnicell, Inc.

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8-K 10.1 3/17/2010

Incorporated By Reference

Exhibit Number Exhibit Description Form Exhibit Filing Date

10.12* Omnicell, Inc.

1 unchanged sentence

10-Q 10.1 5/5/2017

10.13* Omnicell, Inc.

Board of Directors Compensation Plan

10-K 000-33043 10.34 2/26/2020

10.13* Form of Director and Officer Indemnity Agreement

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10-K 10.14 3/11/2011

10.18* Employment Agreement, dated October 17, 2008, between Omnicell, Inc.

10-K 000-33043 10.29 2/24/2009

10.17* Offer letter between Omnicell, Inc.

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10.20 First Amendment to Lease, dated September 28, 2012, by and between Middlefield Station Associates, LLC and Omnicell, Inc.

10-K 10.22 2/24/2021

10.21 Lease Agreement, dated December 21, 2001, by and between TC Northeast Metro, Inc.

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10.22 First Amendment to Lease, dated April 8, 2005, by and between Multi-Employer Property Trust and Aesynt Incorporated (formerly McKesson Automation Inc.)

10-K 10.24 2/24/2021

10.23 Second Amendment to Lease, dated April 21, 2008, by and between NewTower Trust Company Multi-Employer Property Trust and Aesynt Incorporated (formerly McKesson Automation Inc.)

10-K 10.25 2/24/2021

10.24 Third Amendment to Lease, dated January 11, 2011, between Cranberry Cochran Road, L.P., et al.

and Aesynt Incorporated (formerly McKesson Automation Inc.)

10-K 10.26 2/24/2021

10.25 Fourth Amendment to Lease, dated October 29, 2013, between McKnight Cranberry III, L.P.

and Aesynt Incorporated (formerly McKesson Automation Inc.)

10-K 10.27 2/24/2021

10.26 Fifth Amendment to Lease, dated April 28, 2017, between McKnight Cranberry III, L.P.

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10-K 10.39 2/26/2020

Incorporated By Reference

Exhibit Number Exhibit Description Form File No.

Exhibit Filing Date

10.30 Distribution Agreement, dated November 3, 2017, among Omnicell, Inc.

Morgan Securities LLC, Wells Fargo Securities, LLC, and HSBC Securities (USA) Inc.

8-K 000-33043 1.1 11/3/2017

10.28 Amended and Restated Credit Agreement, dated as of November 15, 2019, by and among Omnicell, Inc., the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent

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8-K 10.2 9/25/2020

Offer letter between Omnicell, Inc.

and Christine Mellon dated February 12, 2021

Omnicell, Inc.

Board of Directors Compensation Plan

Subsidiaries of the Registrant

Incorporated By Reference

Exhibit Number Exhibit Description Form Exhibit Filing Date

Consent of Independent Registered Public Accounting Firm

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+ Filed herewith.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

OMNICELL, INC.

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Kuipers, each of them acting individually, as his or her attorney-in-fact, each with the full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming our signatures as they may be signed by our said attorney-in-fact and any and all amendments to this Annual Report on Form 10-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

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Bauer Director

/s/ EDWARD P.

BOUSA February 25, 2022

Bousa Director

JUDSON February 25, 2022

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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-K

Item 9A. Controls and Procedures