BUSINESS AND BASIS OF PRESENTATION	6 Months Ended
Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS AND BASIS OF PRESENTATION	BUSINESS AND BASIS OF PRESENTATION Business Convey Health Solutions Holdings, Inc. (collectively with its subsidiaries, which includes our main operating subsidiary, Convey Health Solutions, Inc., “we”, “us”, “our”, “Convey” or the “Company”) provides technology enabled solutions to payors within the large and growing government sponsored health plan market. Our platform combines proprietary modular technology and end-to-end solutions to serve as an extension of our clients’ operations and core systems. Our clients are primarily Medicare Advantage, Medicare Part D and Employer Group Waiver Plans, as well as Pharmacy Benefit Managers. Convey is a United States (“U.S.”) based holding company incorporated in Delaware. Our principal executive offices are located in Fort Lauderdale, Florida. Plan of Merger, Going Private and Restructuring Charges On June 20, 2022, the Company, Commodore Parent 2022, LLC, a Delaware limited liability company (“Commodore”), and Commodore Merger Sub 2022, Inc., a Delaware corporation and a wholly owned subsidiary of Commodore (“Commodore Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions and on the terms set forth therein, Commodore Merger Sub will merge (the “ Merger”) with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”). Commodore and Commodore Merger Sub are affiliates of TPG Cannes Aggregation, L.P., an affiliate of TPG Global, LLC and the holder of a majority of the outstanding shares of capital stock of the Company (the “TPG Stockholder”). A special committee of the board of directors of the Company (the “Board”) comprised solely of members of the Board that are independent of TPG Stockholder and its respective affiliates, reviewed, evaluated and (i) determined by unanimous vote, that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to, and in the best interests of, the Company and its stockholders (other than the TPG Stockholder and any of its respective affiliates or the Company’s officers and directors) and (ii) recommended that the Board approve the transaction. Acting upon the recommendation of the special committee, the Board approved the transaction. Following the execution of the Merger Agreement, the TPG Stockholder, the holder of approximately 75% of the outstanding shares of common stock, executed a written consent adopting the Merger Agreement and approving the transactions contemplated thereby, including the Merger. No further approval of the stockholders of the Company is required to approve the Merger. The transaction is expected to close in the second half of 2022. Completion of the transaction is subject to customary closing conditions. Upon completion of the transaction, the Company will become a private company and the shares of common stock of the Company will no longer be publicly listed or traded on the New York Stock Exchange. At the effective time of the Merger (the “Effective Time”) each share of common stock of the Company, issued and outstanding immediately prior to the Effective Time, (other than Rollover Shares (as defined below), common stock owned by the Company, the TPG Stockholder and its respective affiliates and common stock with respect to which appraisal rights under Delaware law are properly exercised and not withdrawn) will be converted into the right to receive an amount in cash equal to $10.50 per share, payable to the holder thereof, without interest. Commodore and Commodore Merger Sub have secured commitments (which may be assigned to the Company) for debt financing consisting of an incremental term loan facility in an aggregate principal amount of up to $180.0 million to be provided by certain lenders to the Company under the Company’s existing Credit Agreement (as defined below) on the terms and subject to the conditions set forth in the debt commitment letter. The obligations of such lenders to provide debt financing under the debt commitment letter are subject to a number of customary conditions. In addition, certain of the Company’s directors and officers have entered into a rollover and support agreement with Commodore, pursuant to which, among other matters, such rollover investors have agreed that a certain portion of their shares of common stock (the “Rollover Shares”) will be converted into Surviving Corporation shares. Pursuant to the Merger Agreement, at the Effective Time, each outstanding option to purchase shares of common stock, restricted stock unit and performance-based restricted stock unit, will remain outstanding and continue to be subject to the same terms and conditions as immediately prior to the Effective Time, as set forth in the applicable Company equity plan and award agreement, with certain exceptions. Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company will prepare and file with the SEC, and thereafter mail to its stockholders, a Schedule 14C Information Statement where you can find additional information about the Merger. As part of the assessment of the Merger and the going private transaction, the Company incurred legal and financial advisory fees which are recorded as transaction related costs. In addition, the Company recorded severance costs as restructuring charges as a result of labor force reductions associated with the going private transaction, the closure of the Pompano Beach, Florida distribution center and other labor force reductions initiatives. On June 22, 2022, the Company filed a Workers Adjustment and Retraining Notification (“WARN”) alerting state officials of job cuts driven by closure of the Pompano Beach, Florida distribution center. The closure is to be effective August 31, 2022. The Pompano Beach distribution center operations will be handled through a new distribution center in Las Vegas, Nevada. Restructuring charges are recorded as corporate costs and not allocated to the reportable segments. See Note 14. Transaction Related Costs and Restructuring Charges for cost details. Acquisition On February 1, 2022, Convey’s indirect wholly-owned subsidiary, D-M-S Holdings Parent, LLC (f/k/a Dragon Holdings Parent, LLC), a Delaware limited liability company, acquired all of the issued and outstanding capital stock of D-M-S Holdings, Inc. d/b/a HealthSmart International, a Delaware corporation (“HealthSmart”). HealthSmart provides a diverse portfolio of health, wellness and diagnostic products centered on home based care outcomes. See Note 4. Acquisitions for additional information. Stock Split Prior to the IPO (as defined below), in June 2021, the Board and stockholders approved a forward split of shares of Convey’s common stock, par value $0.01 per share, on a 126-for-1 basis (the “Stock Split”), which became effective as of June 4, 2021. Prior to the Stock Split, we were authorized to issue 1,000,000 shares of common stock of which (i) 915,000 shares were designated as voting common stock and (ii) 85,000 shares were designated as non-voting common stock. In connection with the Stock Split, the total number of authorized shares of common stock was proportionately increased and the par value of the common stock was not adjusted as a result of the Stock Split. In addition, all authorized shares of common stock were designated voting common stock. All references to common stock, options to purchase common stock, per share data and related information contained in our condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Stock Split. Initial Public Offering On June 18, 2021, we closed our initial public offering (“IPO”) of our common stock through an underwritten sale of 13,333,334 shares of our common stock at a price of $14.00 per share. In the offering, we sold 11,666,667 shares and a selling stockholder sold 1,666,667 shares. The aggregate net proceeds to us from the offering after deducting underwriting discounts and commissions and other offering expenses payable by us, were approximately $146.1 million. We used approximately $131.5 million of the net proceeds from the IPO to repay outstanding indebtedness under our credit agreement. We did not receive any of the proceeds from the sale by the selling stockholder. Prior to the closing of the IPO, on June 17, 2021, our Second Amended and Restated Certificate of Incorporation (the “Charter”) and our Second Amended and Restated Bylaws, became effective. The Charter, among other things, provides that our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share and 25,000,000 shares of preferred stock, par value $0.01 per share. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are unaudited and include the accounts of Convey and our wholly-owned subsidiaries. They have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our condensed consolidated statements of operations and comprehensive income (loss), shareholders’ equity, and cash flows for the six months ended June 30, 2022, and 2021, and the condensed consolidated balance sheet as of June 30, 2022, reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results for the periods shown. Our condensed consolidated balance sheet as of December 31, 2021, has been derived from our audited consolidated financial statements as of that date. Our condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2021, which include a complete set of footnote disclosures, including our significant accounting policies, and are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 23, 2022 (“Form 10-K”). The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All significant intercompany balances and transactions have been eliminated in consolidation. COVID-19 Pandemic During the first quarter ended March 31, 2020, concerns related to the spread of novel coronavirus (“COVID-19”) began to create global business disruptions as well as disruptions in our operations. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Governments at the national, state and local level in the U.S., and globally, have implemented varying measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings of people, work from home and supply chain logistical changes. While some of these actions have eased, escalating transmission rates (including of variants of COVID-19), uneven vaccination and vaccination booster rates and further governmental guidance and orders may result in having to reimplement certain of these measures or implementing new and additional ones. The spread of COVID-19 has also caused significant volatility in the U.S. and international markets and has had and continues to have widespread, rapidly evolving and unpredictable impacts on global society, economies, financial markets and business practices. The impact of COVID-19 on our business has resulted in elongated sales cycles, postponement of customer contract renewals, and slower implementation of software solutions for our clients, as well as a reduction in billable hours in one of our reportable segments, the Advisory Services segment. The full extent to which the COVID-19 pandemic and the various responses to the COVID-19 pandemic continues to impact our business, operations or financial condition will depend on numerous evolving factors that we may not be able to accurately predict, including, but not limited to, the duration, severity and scope of the COVID-19 pandemic (including due to new variants); actions by governmental entities, businesses and individuals that have been and continue to be taken in response to the pandemic; the effect on our clients and demand by clients, clients and our clients’ members for and ability to pay for our solutions and services; and disruptions or restrictions on our employees’ ability to work and travel. The impact of these factors and others on our suppliers and clients could persist for some time after governments ease their restrictions and after the overall number of COVID-19 cases in the United States decreases. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. While our current assessment of our estimates did not have a material impact on our condensed consolidated financial statements as of and for the six months ended June 30, 2022, as additional information becomes available to us, our future assessment of our estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods.

Convey Health Solutions Holdings, Inc. (collectively with its subsidiaries, which includes our main operating subsidiary, Convey Health Solutions, Inc., “we”, “us”, “our”, “Convey” or the “Company”) provides technology enabled solutions to payors within the large and growing government sponsored health plan market. Our platform combines proprietary modular technology and end-to-end solutions to serve as an extension of our clients’ operations and core systems. Our clients are primarily Medicare Advantage, Medicare Part D and Employer Group Waiver Plans, as well as Pharmacy Benefit Managers. Convey is a United States (“U.S.”) based holding company incorporated in Delaware. Our principal executive offices are located in Fort Lauderdale, Florida.

On June 20, 2022, the Company, Commodore Parent 2022, LLC, a Delaware limited liability company (“Commodore”), and Commodore Merger Sub 2022, Inc., a Delaware corporation and a wholly owned subsidiary of Commodore (“Commodore Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions and on the terms set forth therein, Commodore Merger Sub will merge (the “ Merger”) with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”). Commodore and Commodore Merger Sub are affiliates of TPG Cannes Aggregation, L.P., an affiliate of TPG Global, LLC and the holder of a majority of the outstanding shares of capital stock of the Company (the “TPG Stockholder”).

A special committee of the board of directors of the Company (the “Board”) comprised solely of members of the Board that are independent of TPG Stockholder and its respective affiliates, reviewed, evaluated and (i) determined by unanimous vote, that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to, and in the best interests of, the Company and its stockholders (other than the TPG Stockholder and any of its respective affiliates or the Company’s officers and directors) and (ii) recommended that the Board approve the transaction. Acting upon the recommendation of the special committee, the Board approved the transaction.

Following the execution of the Merger Agreement, the TPG Stockholder, the holder of approximately 75% of the outstanding shares of common stock, executed a written consent adopting the Merger Agreement and approving the transactions contemplated thereby, including the Merger. No further approval of the stockholders of the Company is required to approve the Merger. The transaction is expected to close in the second half of 2022. Completion of the transaction is subject to customary closing conditions. Upon completion of the transaction, the Company will become a private company and the shares of common stock of the Company will no longer be publicly listed or traded on the New York Stock Exchange.

At the effective time of the Merger (the “Effective Time”) each share of common stock of the Company, issued and outstanding immediately prior to the Effective Time, (other than Rollover Shares (as defined below), common stock owned by the Company, the TPG Stockholder and its respective affiliates and common stock with respect to which appraisal rights under Delaware law are properly exercised and not withdrawn) will be converted into the right to receive an amount in cash equal to $10.50 per share, payable to the holder thereof, without interest. Commodore and Commodore Merger Sub have secured commitments (which may be assigned to the Company) for debt financing consisting of an incremental term loan facility in an aggregate principal amount of up to $180.0 million to be provided by certain lenders to the Company under the Company’s existing Credit Agreement (as defined below) on the terms and subject to the conditions set forth in the debt commitment letter. The obligations of such lenders to provide debt financing under the debt commitment letter are subject to a number of customary conditions. In addition, certain of the Company’s directors and officers have entered into a rollover and support agreement with Commodore, pursuant to which, among other matters, such rollover investors have agreed that a certain portion of their shares of common stock (the “Rollover Shares”) will be converted into Surviving Corporation shares.

Pursuant to the Merger Agreement, at the Effective Time, each outstanding option to purchase shares of common stock, restricted stock unit and performance-based restricted stock unit, will remain outstanding and continue to be subject to the same terms and conditions as immediately prior to the Effective Time, as set forth in the applicable Company equity plan and award agreement, with certain exceptions.

Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company will prepare and file with the SEC, and thereafter mail to its stockholders, a Schedule 14C Information Statement where you can find additional information about the Merger.

In addition, the Company recorded severance costs as restructuring charges as a result of labor force reductions associated with the going private transaction, the closure of the Pompano Beach, Florida distribution center and other labor force reductions initiatives. On June 22, 2022, the Company filed a Workers Adjustment and Retraining Notification (“WARN”) alerting state officials of job cuts driven by closure of the Pompano Beach, Florida distribution center. The closure is to be effective August 31, 2022. The Pompano Beach distribution center operations will be handled through a new distribution center in Las Vegas, Nevada. Restructuring charges are recorded as corporate costs and not allocated to the reportable segments. See Note 14. Transaction Related Costs and Restructuring Charges for cost details.

On February 1, 2022, Convey’s indirect wholly-owned subsidiary, D-M-S Holdings Parent, LLC (f/k/a Dragon Holdings Parent, LLC), a Delaware limited liability company, acquired all of the issued and outstanding capital stock of D-M-S Holdings, Inc. d/b/a HealthSmart International, a Delaware corporation (“HealthSmart”). HealthSmart provides a diverse portfolio of health, wellness and diagnostic products centered on home based care outcomes. See Note 4. Acquisitions for additional information.

Prior to the IPO (as defined below), in June 2021, the Board and stockholders approved a forward split of shares of Convey’s common stock, par value $0.01 per share, on a 126-for-1 basis (the “Stock Split”), which became effective as of June 4, 2021. Prior to the Stock Split, we were authorized to issue 1,000,000 shares of common stock of which (i) 915,000 shares were designated as voting common stock and (ii) 85,000 shares were designated as non-voting common stock. In connection with the Stock Split, the total number of authorized shares of common stock was proportionately increased and the par value of the common stock was not adjusted as a result of the Stock Split. In addition, all authorized shares of common stock were designated voting common stock. All references to common stock, options to purchase common stock, per share data and related information contained in our condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Stock Split.

On June 18, 2021, we closed our initial public offering (“IPO”) of our common stock through an underwritten sale of 13,333,334 shares of our common stock at a price of $14.00 per share. In the offering, we sold 11,666,667 shares and a selling stockholder sold 1,666,667 shares. The aggregate net proceeds to us from the offering after deducting underwriting discounts and commissions and other offering expenses payable by us, were approximately $146.1 million. We used approximately $131.5 million of the net proceeds from the IPO to repay outstanding indebtedness under our credit agreement. We did not receive any of the proceeds from the sale by the selling stockholder.

Prior to the closing of the IPO, on June 17, 2021, our Second Amended and Restated Certificate of Incorporation (the “Charter”) and our Second Amended and Restated Bylaws, became effective. The Charter, among other things, provides that our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share and 25,000,000 shares of preferred stock, par value $0.01 per share.

The accompanying condensed consolidated financial statements are unaudited and include the accounts of Convey and our wholly-owned subsidiaries. They have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our condensed consolidated statements of operations and comprehensive income (loss), shareholders’ equity, and cash flows for the six months ended June 30, 2022, and 2021, and the condensed consolidated balance sheet as of June 30, 2022, reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results for the periods shown.

Our condensed consolidated balance sheet as of December 31, 2021, has been derived from our audited consolidated financial statements as of that date. Our condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2021, which include a complete set of footnote disclosures, including our significant accounting policies, and are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 23, 2022 (“Form 10-K”). The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All significant intercompany balances and transactions have been eliminated in consolidation.

During the first quarter ended March 31, 2020, concerns related to the spread of novel coronavirus (“COVID-19”) began to create global business disruptions as well as disruptions in our operations. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Governments at the national, state and local level in the U.S., and globally, have implemented varying measures in an effort to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings of people, work from home and supply chain logistical changes. While some of these actions have eased, escalating transmission rates (including of variants of COVID-19), uneven vaccination and vaccination booster rates and further governmental guidance and orders may result in having to reimplement certain of these measures or implementing new and additional ones. The spread of COVID-19 has also caused significant volatility in the U.S. and international markets and has had and continues to have widespread, rapidly evolving and unpredictable impacts on global society, economies, financial markets and business practices. The impact of COVID-19 on our business has resulted in elongated sales cycles, postponement of customer contract renewals, and slower implementation of software solutions for our clients, as well as a reduction in billable hours in one of our reportable segments, the Advisory Services segment.

The full extent to which the COVID-19 pandemic and the various responses to the COVID-19 pandemic continues to impact our business, operations or financial condition will depend on numerous evolving factors that we may not be able to accurately predict, including, but not limited to, the duration, severity and scope of the COVID-19 pandemic (including due to new variants); actions by governmental entities, businesses and individuals that have been and continue to be taken in response to the pandemic; the effect on our clients and demand by clients, clients and our clients’ members for and ability to pay for our solutions and services; and disruptions or restrictions on our employees’ ability to work and travel. The impact of these factors and others on our suppliers and clients could persist for some time after governments ease their restrictions and after the overall number of COVID-19 cases in the United States decreases.

We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. While our current assessment of our estimates did not have a material impact on our condensed consolidated financial statements as of and for the six months ended June 30, 2022, as additional information becomes available to us, our future assessment of our estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods.