For the quarterly period ended April 30, 2020
For the transition period from                      to                     
Commission File Number: 001-38977
(Exact name of registrant as specified in its charter)

(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
432 Park Avenue South, 12th Floor
New York, NY
(Address of principal executive offices)(Zip Code)
(888) 654-7473
(Registrant’s telephone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading
 Name of each exchange
on which registered
Common Stock, par value $0.01 per share PHR The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ☒
As of June 5, 2020, 37,677,171 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

For the Quarter Ended April 30, 2020
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.


This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “appears,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our future financial performance, including our revenue, costs of revenue and operating expenses and cash
the rapidly evolving industry and the market for technology-enabled services in healthcare in the United States being relatively immature and unproven;
our reliance on a limited number of clients for a substantial portion of our revenue;
our anticipated growth and growth strategies and our ability to effectively manage that growth;
our ability to achieve and grow profitability;
the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs;
potentially competing with our customers or partners;
our existing clients not renewing their existing contracts with us, renewing at lower fee levels or declining to purchase additional applications from us;
failure to adequately expand our direct sales force impeding our growth;
our ability to recover the significant upfront costs in our customer relationships;
our ability to determine the size of our target market;
liability arising from our collection, use, disclosure, or storage of sensitive data collected from or about patients;
consolidation in the healthcare industry resulting in loss of clients;
the uncertainty of the regulatory and political framework;
the impact of the COVID-19 pandemic on our business and our ability to attract, retain and cross-sell to
healthcare provider clients;
our ability to obtain, maintain and enforce intellectual property for our technology and products;
our inability to protect the confidentiality of our trade secrets impacting the value of our technology;
our reliance on third-party vendors, manufacturers and partners to execute our business strategy;
our inability to implement our solutions for clients resulting in loss of clients and reputation;
our dependency on our key personnel, and our ability to attract, hire, integrate, and retain key personnel;
the possibility that we may become subject to future litigation;
our future indebtedness;
our expectations regarding trends in our key metrics and revenue from subscription fees from our provider clients, payment processing fees and fees charged to our life science clients by delivering targeted messages to patients; and
increased expense associated with being a public company.
other risks and uncertainties, including those listed under the caption “Risk Factors.”


All forward-looking statements are based on information and estimates available to the Company at the time of this Quarterly Report on Form 10-Q and are not guarantees of future financial performance. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events.

Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our platform, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD:
PHREESIA Twitter Account (https://twitter.com/phreesia)
PHREESIA Company Blog (https://www.phreesia.com/blog/)
PHREESIA Facebook Page (https://www.facebook.com/Phreesia/)
PHREESIA LinkedIn Page (https://www.linkedin.com/company/phreesia/)
PHREESIA Instagram Page (https://www.instagram.com/phreesiacareers)
The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this quarterly report on Form 10-Q. These channels may be updated from time to time on Phreesia’s investor relations website.


Phreesia, Inc.
Balance sheets
(in thousands, except share and per share data)
April 30, 2020January 31, 2020
Cash and cash equivalents$90,252  $90,315  
Settlement assets8,672  12,368  
Accounts receivable, net of allowance of $1,353 and $943
24,223  21,978  
Deferred contract acquisition costs1,788  1,720  
Prepaid expenses and other current assets5,435  5,157  
Total current assets130,370  131,538  
Property and equipment, net of accumulated depreciation and amortization of $37,813 and $35,551
14,986  14,487  
Capitalized internal-use software, net of accumulated amortization of $20,847 and $19,554
9,198  8,735  
Operating lease right-of-use assets (1)2,795    
Deferred contract acquisition costs1,715  1,594  
Intangible assets, net of accumulated amortization of $331 and $271
1,139  1,199  
Long-term deferred tax asset719  775  
Goodwill250  250  
Other assets128  180  
Total assets$161,300  $158,758  
Liabilities and Stockholders’ Equity
Settlement obligations$8,672  $12,368  
Current portion of finance lease liabilities (1)2,366  2,324  
Current portion of operating lease liabilities (1)1,414    
Accounts payable7,649  6,017  
Accrued expenses11,374  9,243  
Deferred revenue6,629  5,401  
Total current liabilities38,104  35,353  
Long-term debt19,470  19,444  
Finance lease liabilities, noncurrent (1)2,234  2,096  
Operating lease liabilities, noncurrent (1)1,578    
Total liabilities61,386  56,893  
Commitments and contingencies (Note 12)
Stockholders’ Equity:
Common stock, $0.01 par value - 500,000,000 shares authorized as of April 30, 2020 and January 31, 2020, respectively; 37,599,441 and 36,610,763 shares issued and outstanding as of April 30, 2020 and January 31, 2020, respectively
376  366  
Additional paid-in capital
390,981  386,383  
Accumulated deficit(290,597) (284,485) 
Treasury stock(846) (399) 
Total Stockholders’ Equity99,914  101,865  
Total Liabilities and Stockholders’ Equity$161,300  $158,758  
(1) Figures as of April 30, 2020 reflect the Company's February 1, 2020 adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases. For additional details, see Note 3(c), "Summary of significant accounting policies — Impact of recently adopted accounting pronouncements."
See notes to unaudited Financial Statements

Phreesia, Inc.
Unaudited statements of operations
(in thousands, except share and per share data)
Three months ended April 30,
Subscription and related services$15,599  $12,683  
Payment processing fees11,707  11,557  
Life sciences6,090  4,070  
Total revenues33,396  28,310  
Cost of revenue (excluding depreciation and amortization)4,734  3,996  
Payment processing expense6,848  6,949  
Sales and marketing9,434  7,702  
Research and development5,005  4,299  
General and administrative8,720  6,245  
Depreciation2,268  2,155  
Amortization1,353  1,219  
Total expenses38,362  32,564  
Operating loss(4,966) (4,255) 
Other income (expense)(715) (1,145) 
Change in fair value of warrant liability  (423) 
Interest income (expense)(320) (804) 
Total other income (expense)(1,035) (2,372) 
Loss before provision for income taxes(6,001) (6,627) 
Provision for income taxes(111) (68) 
Net loss$(6,112) $(6,695) 
Accretion of redeemable preferred stock  (7,863) 
Net loss attributable to common stockholders, basic and diluted$(6,112) $(14,558) 
Net loss per share attributable to common stockholders, basic and diluted$(0.16) $(7.23) 
Weighted-average common shares outstanding, basic and diluted37,308,084  2,013,839  
See notes to unaudited Financial Statements


Phreesia, Inc.
Unaudited statements of redeemable preferred stock and stockholders’ equity (deficit)
(in thousands, except share and per share data)
 Redeemable Preferred StockStockholders' Equity (Deficit)
 Series ASeries BJunior PreferredRedeemable
 Common StockAccumulated
 SharesAmountSharesAmountSharesAmountSharesAmountsTotalSharesAmountAPICDeficitTreasury stockTotal
Balance, February 1, 201913,674,365  $79,311  9,197,142  $51,872  32,746,041  $32,746  42,560,530  $42,561  $206,490  1,994,721  $20    (210,994) $  $(210,974) 
Net loss—  —  —  —  —  —  —  —  —  —  —  —  (6,695) —  (6,695) 
Stock-based compensation expense—  —  —  —  —  —  —  —  —  —  —  599  —  —  599  
Exercise of stock options—  —  —  —  —  —  —  —  —  29,798  —  37  —  —  37  
Issuance of common stock warrants—  —  —  —  —  —  —  —  —  —  —  833  —  —  833  
Accretion of redeemable preferred stock—  5,196  —  2,667  —  —  —  —  7,863  —  —  (1,469) (6,394) —  (7,863) 
Balance, April 30, 201913,674,365  $84,507  9,197,142  $54,539  32,746,041  $32,746  42,560,530  $42,561  $214,353  2,024,519  $20  $  $(224,083) $  $(224,063) 
Balance, February 1, 2020—  $—  —  $—  —  $—  —  $—  $—  36,610,763  $366  $386,383  $(284,485) $(399) $101,865  
Net loss—  —  —  —  —  —  —  —  —  —  —  —  (6,112) —  (6,112) 
Stock-based compensation expense—  —  —  —  —  —  —  —  —  —  —  2,872  —  —  2,872  
Exercise of stock options and vesting of restricted stock units—  —  —  —  —  —  —  —  —  988,678  10  1,726  —  —  1,736  
Treasury stock from vesting of restricted stock units—  —  —  —  —  —  —  —  —  —  —  —  —  (447) (447) 
Balance, April 30, 2020—  $—  —  $—  —  $—  —  $—  $—  37,599,441  $376  $390,981  $(290,597) $(846) $99,914  
See notes to unaudited Financial Statements


Phreesia, Inc.
Unaudited statements of cash flows
(in thousands, except share and per share data)
 Three months ended April 30,
Cash flows from operating activities:
Net loss$(6,112) $(6,695) 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization3,621  3,374  
Stock-based compensation expense2,872  599  
Change in fair value of warrants liability  423  
Amortization of debt discount126  108  
Loss on extinguishment of debt  1,073  
Cost of Phreesia hardware purchased by customers172  84  
Deferred contract acquisition costs amortization525  484  
Non-cash operating lease expense389    
Deferred tax asset56    
Changes in operating assets and liabilities
Accounts receivable(2,245) 137  
Prepaid expenses and other assets1,614  (585) 
Deferred contract acquisition costs(714) (455) 
Accounts payable(998) 1,285  
Accrued expenses and other liabilities1,871  2,297  
Lease liability(502)   
Deferred revenue1,228  (98) 
Net cash provided by operating activities1,903  2,033  
Cash flows used in investing activities:
Capitalized internal-use software(1,160) (1,411) 
Purchase of property and equipment(1,917) (1,314) 
Net cash used in investing activities(3,077) (2,725) 
Cash flows from financing activities:
Proceeds from revolving line of credit  7,376  
Proceeds from term loan  20,000  
Repayment of term loan  (1,042) 
Repayment of loan payable  (20,000) 
Finance lease payments(525) (518) 
Debt extinguishment costs  (300) 
Debt issuance costs  (112) 
Proceeds from issuance of common stock upon exercise of stock options1,736  37  
Payment of offering costs  (378) 
Loan facility fee payment(100)   
Net cash provided by financing activities1,111  5,062  
Net increase (decrease) in cash and cash equivalents(63) 4,370  
Cash and cash equivalents – beginning of period90,315  1,543  
Cash and cash equivalents – end of period$90,252  $5,913  


Supplemental information of non-cash investing and financing information:
Right-of-use assets obtained in exchange for operating lease liabilities$3,185  $  
Property and equipment acquisitions through finance leases$827  $  
Deferred issuance costs included in accounts payable and accrued expenses$  $1,658  
Purchase of property and equipment and capitalized software included in accounts payable$791  $471  
Issuance of warrants related to debt$  $833  
Cash payments for:
Interest$306  $924  
See notes to unaudited Financial Statements


Phreesia, Inc.
Notes to Unaudited Financial Statements
(in thousands, except share and per share data)

1. Background and liquidity
(a) Background
Phreesia, Inc. (the Company) is a leading provider of comprehensive solutions that transform the healthcare experience by engaging patients in their care and enabling healthcare provider organizations to optimize operational efficiency, improve profitability and enhance clinical care. Through the SaaS-based Phreesia Platform (the Phreesia Platform), the Company offers healthcare provider organizations a robust suite of solutions to manage the patient intake process and a leading payments solution for secure processing of patient payments. The Company’s Platform also provides life sciences companies with an engagement channel for targeted and direct communication with patients. The Company was formed in May 2005, and has its corporate headquarters in New York, and operations offices in Raleigh, North Carolina and Ottawa, Canada.

(b) Initial public offering
On July 22, 2019, the Company closed its initial public offering (IPO), in which the Company issued and sold 7,812,500 shares of common stock at a public offering price of $18.00 per share, resulting in net proceeds of $130,781, after deducting underwriting discounts and commissions of $9,844 but before deducting deferred offering costs of $6,412. In addition to the shares of common stock sold by the Company upon the IPO, certain selling stockholders sold an aggregate of 2,868,923 shares of common stock as part of the IPO. In addition, all then outstanding shares of Convertible Preferred stock converted into 25,311,525 shares of common stock and the Company issued 757,625 shares of common stock as a result of the cashless exercise of warrants as of January 31, 2020.
On December 17, 2019, the Company closed its follow-on offering of 7,762,500 shares of common stock sold by certain selling stockholders. The Company did not receive any proceeds from the follow-on offering but did incur $1,047 in transaction costs, recorded as general and administrative expense within the statement of operations.

(c) Liquidity
Since the Company commenced operations, it has not generated sufficient revenue to meet its operating expenses and has continued to incur significant net losses. To date, the Company has primarily relied upon the proceeds from issuances of preferred stock and debt, and most recently with proceeds from the IPO, to fund its operations as well as sales of Company products and services in the normal course of business. Management believes that losses and negative cash flows will continue for at least the next year.
Management believes that the Company’s cash and cash equivalents at April 30, 2020, along with cash generated in the normal course of business, and available borrowing capacity under its February 2019 Credit Facility (See Note 6), are sufficient to fund its operations for at least the next 12 months. The Company will obtain additional financing if needed to successfully implement its long-term strategy. There can be no assurance that additional financing, if needed, can be obtained on terms acceptable to the Company. The ability of the Company to achieve successful operations will depend on, among other things, new business, the retention of customers, and the effectiveness of sales and marketing initiatives. The Company is subject to a number of risks similar to other companies in its stage of business life cycle, including dependence on key individuals, competition in the marketplace, and the need to fund future product and services development.
2. Basis of presentation
(a) Basis of presentation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) and include the accounts of Phreesia, Inc. and its branch operation in Canada.

(b) Fiscal year
The Company’s fiscal year ends on January 31. References to fiscal 2020 and 2019 refer to the fiscal year ended January 31, 2020 and 2019, respectively.


(c) Unaudited interim financial statements
The accompanying financial statements and the related footnote disclosures are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for the fair statement of the Company’s interim financial position as of April 30, 2020 and the results of its operations and its cash flows for the periods ended April 30, 2020 and 2019. The results for the interim periods are not necessarily indicative of results to be expected for the full year, any other interim periods, or any future year or period. The Company’s management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited financial statements and accompanying notes for the year ended January 31, 2020.

(d) Reclassifications
A reclassification was made to reflect the deferred contract acquisition costs as an adjustment to net loss on the statement of cash flows for the three months ended April 30, 2019 to conform and be comparable to the presentation on the statement of cash flows for the three months ended April 30, 2020. In the prior periods, the deferred contract acquisition costs were netted against the change in the assets. The reclassifications had no effect on net earnings or cash flows as previously reported.

3. Summary of significant accounting policies
The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended January 31, 2020. Since the date of those audited financial statements, there have been no changes to the Company’s significant accounting policies, including the status of recent accounting pronouncements, other than those detailed below.

(a) Use of estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments. Although management believes its estimates and assumptions are reasonable under the circumstances at the time they are made, they are based upon information available at the time they are made. Management evaluates the estimates and assumptions on an ongoing basis and, if necessary, makes adjustments. Actual results may differ from those estimates made under different assumptions or circumstances. The most significant assumptions and estimates relate to the allowance, capitalized internal-use software, the determination of the useful lives of property and equipment, the fair value of securities underlying stock-based compensation, the fair value of its business acquisitions, and the realization of deferred tax assets.

(b) Concentrations of credit risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and settlement assets. The Company’s cash and cash equivalents are held by established financial institutions. The Company does not require collateral from its customers and generally requires payment within 30 to 60 days of billing. Settlement assets are amounts due from well-established payment processing companies and normally take one or two business days to settle which mitigates the associated risk of concentration. The Company has one third-party payment processor.
The Company’s customers are primarily physician’s offices located in the United States and pharmaceutical companies. The Company did not have any individual customers that represented more than 10% of total revenues for the three months ended April 30, 2020 and 2019.
As of April 30, 2020, two customers accounted for 15% and 10% of accounts receivable, respectively. As of April 30, 2019, the Company did not have any individual customers that represented more than 10% of accounts receivable.


(c) New accounting pronouncements
Impact of recently adopted accounting pronouncements
On February 1, 2020, the Company adopted the Financial Accounting Standards Board's (FASB) Accounting Standard Update (ASU) No. 2016-02, Leases (Topic 842) (ASC 842) which requires lessees to record most leases on their balance sheets but to recognize the expenses in their statement of operations in a manner similar to the prior standard. Topic 842 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term.
The Company adopted the new lease guidance using a modified retrospective transition method applied to those leases which were not completed as of February 1, 2020. As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required lease disclosures for the periods before the date of adoption.
The Company elected the ‘package of practical expedients,’ which permits the Company not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight practical expedient.
The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all of its leases. This means, for those leases that qualify, the Company will not recognize right-of-use assets or lease liabilities, including existing short-term leases as of the transition date. The Company also elected the practical expedient to not separate lease and non-lease components for its office and computer equipment leases.
Upon adoption of Topic 842 the Company recognized operating lease right-of-use assets and operating lease liabilities related to our office leases of $2,741 and $2,928, respectively. The Company’s accounting for lessee finance and all lessor leases remains substantially unchanged from legacy guidance. The standard did not have a significant impact on our statements of operations or statements of cash flows.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13). ASU 2018-13 updates the disclosure requirements for fair value measurements and is effective for financial statements issued for fiscal years beginning after December 15, 2019. The Company adopted the new guidance effective February 1, 2020, and it did not have a material effect on its financial statements.
Recent accounting pronouncements not yet adopted
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. The updated guidance for emerging growth companies using the extended transition period is effective for interim and annual periods beginning after December 15, 2020, and early adoption is permitted. The guidance provides flexibility in adoption, allowing for either retrospective adjustment or prospective adjustment for all implementation costs incurred after the date of adoption. The Company is currently evaluating the potential impact of this standard on the Company’s financial statements.


4. Composition of certain financial statement captions
(a) Accrued expenses
Accrued expenses as of April 30, 2020 and January 31, 2020 are as follows:
 April 30, 2020January 31, 2020
Payroll-related expenses and taxes$7,529  $5,032  
Payment processing fees liability1,752  2,738  
Other2,093  1,473  
Total$11,374  $9,243  

(b) Property and equipment
Property and equipment as of April 30, 2020 and January 31, 2020 are as follows:
Useful Life
 (years)April 30, 2020January 31, 2020
PhreesiaPads and Arrivals Stations3$27,833  $26,389  
Computer equipment319,612  18,394  
Computer software32,386  2,297  
Hardware development31,024  1,024  
Furniture and fixtures7745  743  
Leasehold improvements21,199  1,191  
Total property and equipment$52,799  $50,038  
Less accumulated depreciation and amortization(37,813) (35,551) 
Property and equipment — net$14,986  $14,487  
Depreciation expense related to property and equipment amounted to $2,268 and $2,155 for the three months ended April 30, 2020 and 2019, respectively. Finance lease depreciation, included in depreciation expense, was $725 for the three months ended April 30, 2020.
Assets under finance leases included in computer equipment were $13,110 and $12,283 as of April 30, 2020 and January 31, 2020. Accumulated amortization of assets under finance leases was $8,449 and $7,724 as of April 30, 2020 and January 31, 2020, respectively.

(c) Capitalized internal use software
For the three months ended April 30, 2020 and 2019, the Company capitalized $1,756 and $1,411, respectively, of costs related to the Phreesia Platform.
During the three months ended April 30, 2020 and 2019, amortization expense of capitalized internal-use software was $1,293 and $1,160, respectively. As of April 30, 2020 and January 31, 2020, the net book value of the Phreesia Platform was $9,198 and $8,735, respectively.

(d) Intangible assets
The following presents the details of intangible assets as of April 30, 2020 and January 31, 2020:

Useful Life
 (years)April 30, 2020January 31, 2020
Acquired technology gross carrying value5$490  $490  
Customer relationship gross carrying value7980  980  
Total intangible assets$1,470  $1,470  
Less accumulated amortization(331) (271) 
Net carrying value$1,139  $1,199  


The remaining useful life for acquired technology in years is 3.6 and 3.9 as of April 30, 2020 and January 31, 2020, respectively. The remaining useful life for customer relationships in years is 5.6 and 5.9 as of April 30, 2020 and January 31, 2020, respectively.
Amortization expense associated with intangible assets amounted to $60 and $60 for the three months ended April 30, 2020 and 2019, respectively.
The estimated amortization expense for intangible assets for the next five years and thereafter is as follows as of April 30, 2020:

April 30, 2020
2021 (Remaining nine months)$179  
Years ending January 31,
2025 - thereafter260  

(e) Accounts receivable
Accounts receivable as of April 30, 2020 and January 31, 2020 are as follows:
 April 30, 2020January 31, 2020
Billed$23,823  $22,245  
Unbilled1,753  676  
Total accounts receivable, gross$25,576  $22,921  
Less accounts receivable allowance(1,353) (943) 
Total accounts receivable$24,223  $21,978  

(f) Prepaid and other current assets
Prepaid and other current assets as of April 30, 2020 and January 31, 2020 are as follows:
 April 30, 2020January 31, 2020
Prepaid software and business systems2,155  $1,611  
Prepaid PhreesiaPads1,534  645  
Prepaid data center expenses587  751  
Prepaid insurance530  1,259  
Other prepaid expenses and other current assets629  891  
Total prepaid and other current assets$5,435  $5,157  


5. Revenue
The Company generates revenue primarily from providing an integrated SaaS-based software and payment platform for the healthcare industry. The Company derives revenue from subscription fees and related services generated from the Company’s provider customers for access to the Phreesia Platform, payment processing fees based on patient payment volume processed through the Phreesia Platform, and from digital patient engagement revenue from life sciences companies to reach, educate and communicate with patients when they are most receptive and actively seeking care.
The amount of subscription and related services revenue recorded pursuant to ASC 842 for the leasing of the Company’s PhreesiaPads and Arrival Stations was $1,554 and $1,328 for the three months ended April 30, 2020 and 2019, respectively.

Contract balances
The following table represents a rollforward of contract assets and contract liabilities:
Contract assets
January 31, 2020$676  $5,401  
Amount transferred to receivables from contract assets(106) —  
Contract asset additions1,183  —  
Revenue recognized that was included in deferred revenue at the beginning of the period—  (2,822) 
Revenue recognized that was not included in deferred revenue at the beginning of the period—  (350) 
Increases due to invoicing prior to satisfaction or performance obligations—  4,400  
April 30, 2020$1,753  $6,629  

Cost to obtain a contract
The Company capitalizes certain incremental costs to obtain customer contract and amortizes these costs over the life of the contracts. Amortization expense is included in sales and marketing expenses in the accompanying statements of operations and totaled $525 and $484 for the three months ended April 30, 2020 and 2019, respectively. The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented.
The following table represents a rollforward of deferred contract acquisition costs:
 April 30, 2020
Beginning balance$3,314  
Additions to deferred contract acquisition costs714  
Amortization of deferred contract acquisition costs(525) 
Ending balance3,503  
Deferred contract acquisition costs, current (to be amortized in next 12 months)1,788  
Deferred contract acquisition costs, non current1,715  
Total deferred contract acquisition costs$3,503  


6. Debt
As of April 30, 2020 and January 31, 2020, the Company had the following outstanding loan balances:
April 30, 2020January 31, 2020
Term loan$20,000  $20,000  
Less deferred financing costs(866) (937) 
Plus accrued interest and payments336  381  
Long term debt$19,470  $19,444  

On February 28, 2019 (the Effective Date), the Company entered into an Amended and Restated Loan and Security Agreement that provides for a $20,000 term loan and a revolving credit facility with up to $25,000 of availability. The Company is also permitted to borrow an additional $10,000 term loan (the Term Loan B Advance) and, subject to the bank’s approval, another $15,000 (the Term Loan C Advance) prior to February 28, 2020. The term loans under the loan agreement bear interest, which is payable monthly, at a floating rate equal to the bank’s prime rate plus 1.50% until such time that EBITDA reaches a defined level, after which time the interest rate is reduced to the prime plus 0.75%. Principal payments due under the term loans are due in 36 equal monthly installments beginning in March 2021. In addition to principal and interest payments due under the term loans, the Company is required to make a final payment to the lenders due upon the earlier of prepayment or maturity of the term loan, which is equal to 2.75% of the original principal amount. The Company accrues the estimated final payment fee using the effective interest method resulting in a charge to interest expense of $257 for the three months ended April 30, 2020. In connection with the New Loan Agreement, the Company issued warrants to the lenders to purchase an aggregate of 150,274 shares of common stock at an exercise price of $8.02 per share. The 75,137 common stock warrants that remain outstanding as of April 30, 2020 expire in February 2029. The fair value of the warrants of $833 was recorded as a debt discount and is being amortized to interest expense over the term of the new term loan and revolving credit facility. If the Company prepays the term loans prior to their respective scheduled maturities, it will also be required to make prepayment fees to the lenders equal to 3% if prepaid on or before the second anniversary of the Effective Date, 2% if prepaid after the second and on or before the third anniversary of funding or 1% if prepaid after the third anniversary of funding of the principal amounts borrowed. Interest expense related to the term loan under the loan agreement was $311, including amortization of deferred financing fees of $39 for the three months ended April 30, 2020. For the three months ended April 30, 2020, the effective interest rate on the term loan was 6.2%. Borrowings under the prior term loan and loans payable were repaid in full with the proceeds from this Amended and Restated Loan and Security Agreement.
During the three months ended April 30, 2019, the Company accounted for the settlement of the previously outstanding loans payable and the term loan as a debt extinguishment and recorded an expense of $1,073, which was included in other income (expense), and is comprised of the write-off of $773 of deferred financing costs related to these facilities and a $300 prepayment fee related to the loans payable. The modification of the revolving line of credit was accounted for as an insubstantial modification. The Company incurred fees of $112 related to the extinguishment and modification.
Borrowings under the revolving credit facility are subject to a borrowing base equal to 80% of eligible accounts receivable plus a percentage of recurring revenue, as defined, not to exceed $25,000 in the aggregate. The Company has $25,000 of availability as of April 30, 2020. Borrowings under the revolving credit facility bear interest, which is payable monthly, at a floating rate equal to the greater of the bank's prime rate less 0.50%, or 5.0% until such time that EBITDA reaches a defined level, after which time the interest rate is reduced to the greater of prime less 0.75%, or 4.75%. In addition to principal and interest due under the revolving credit facility, the Company is required to pay an annual fee of $100 per year during the first three years of the facility and then $75 per year in years four and five. The first facility fee payment of $100 was paid in the three months ended April 30, 2020. Interest expense related to the revolving credit facility under the loan agreement was $36, including amortization of deferred financing fees of $32, for the three months ended April 30, 2020. The Company is required to pay a fee of 0.15% per year for any unused availability and a termination fee of 1.50% if the revolving credit agreement is terminated prior to its scheduled maturity. The revolving credit facility is due five years from the Effective Date, which is February 28, 2024.


The Company’s obligations under the loan agreement are secured by a first priority security interest in substantially all of its assets, other than intellectual property. The loan agreement includes a financial covenant that requires the Company to achieve specified revenue levels, as defined, through January 31, 2020, after which time revenue levels for covenants purposes will be determined by the bank based on the Company’s forecast, subject to certain minimums. The Company is also required to maintain certain liquidity levels, as defined. The Company was in compliance with all covenants related to the loan agreement as of April 30, 2020.
The loan agreement contains events of default, including, without limitation, events of default upon: (i) failure to make payment pursuant to the terms of the agreement; (ii) violation of covenants; (iii) material adverse changes to the Company’s business; (iv) attachment or levy on the Company’s assets or judicial restraint on its business; (v) insolvency; (vi) significant judgments, orders or decrees for payments by the Company not covered by insurance; (vii) incorrectness of representations and warranties; (viii) incurrence of subordinated debt; (ix) revocation of governmental approvals necessary for the Company to conduct its business; and (x) failure by the Company to maintain a valid and perfected lien on the collateral securing the borrowing.

As of April 30, 2020, the Company’s long-term debt is payable as follows: 

April 30, 2020
2021 (Remaining nine months)$  
Year ending January 31,
2025 - thereafter555  
Total long-term debt payments$20,000  

On May 5, 2020, the Company entered into a Second Amended and Restated Loan and Security Agreement. The Second Restated Loan Agreement provides for a revolving line of credit of up to $50,000 that replaces the Company's existing line of credit of up to $25,000 (with options to increase to up to $65,000). The Company used approximately $20,000 of the proceeds to pay off the existing term loan as of April 30, 2020. Refer to Note 16 for further detail.

7. Stockholders' Equity
(a) Common stock
The Company closed an IPO on July 22, 2019 and filed an Amended and Restated Certificate of Incorporation authorizing the issuance of up to 500,000,000 shares of common stock, par value $0.01 per share. As of April 30, 2020 and January 31, 2020 there were