Merger Details - Merger between Accolade, Inc. and Transcarent, Inc. to be completed on January 8, 2025, with Merger Sub merging into Accolade[15][17] - Each share of Accolade Common Stock to be converted into $7.03 in cash at the Effective Time[28] - Merger Sub shares to be converted into shares of the Surviving Corporation at a 1:1 ratio[29] - Merger Consideration subject to adjustment for stock splits, dividends, or other similar transactions[30] - Closing to occur remotely at 8:00 a.m. Eastern time on the third business day after conditions are met[25] - Certificate of merger to be filed with the Secretary of State of Delaware to finalize the Merger[26] - Surviving Corporation's certificate of incorporation and bylaws to be amended and restated at the Effective Time[27] Board Recommendations and Voting Agreements - Company Board recommends adoption of the Agreement and approval of the Merger[18] - Parent and Merger Sub Board also recommend the Merger[19] - Certain Company Stockholders have entered into Voting Agreements to support the Merger[21] Payment and Conversion Details - Parent will deposit sufficient cash with the Paying Agent to cover the aggregate Merger Consideration, with investments limited to U.S. government obligations, high-rated commercial paper, or bank instruments from banks with capital exceeding $1 billion[31] - Holders of Certificates must surrender them to the Paying Agent to receive the Merger Consideration, while Book-Entry Shares will automatically receive payment upon receipt of an "agent's message"[32] - Payment of Merger Consideration for Certificates requires proper endorsement and payment of transfer taxes if the recipient is not the registered holder[34] - Unclaimed funds in the Payment Fund will be returned to the Surviving Corporation after 12 months, and holders will become general creditors for any unpaid amounts[35] - Dissenting Shares will not receive Merger Consideration but will be entitled to appraisal rights under Section 262 of the DGCL[40] Equity and Stock Options - Vested Company Options with an exercise price below the Merger Consideration will be canceled and converted into cash payments equal to the excess of the Merger Consideration over the exercise price[41] - Vested Company RSUs will be canceled and converted into cash payments equal to the Merger Consideration, less applicable tax withholdings[42] - Unvested Company Options and RSUs will be canceled without payment at the Effective Time[41][42] - Vested Company Option and RSU payments will be made through payroll or the Payment Fund, depending on the holder's employment status[45] - The Company Equity Plans and all awards will terminate at the Effective Time[46] Capital Structure and Shares - The Company has 500,000,000 authorized shares, with 81,678,821 shares issued and outstanding as of the Reference Date[58] - 5,881,600 shares are subject to issuance under Company Options, 4,897,178 shares under Company RSUs, and 1,179,210 shares under Company PSUs as of the Reference Date[60] - 1,886,666 shares are reserved for future issuance under the Company ESPP, and 4,180,469 shares are reserved for issuance pursuant to the Indenture[60] - The Company has no outstanding shares of Company Preferred Stock as of the Reference Date[58] Financial Reporting and Compliance - The Company has maintained a system of internal controls over financial reporting since January 1, 2022, with no significant deficiencies or material weaknesses identified[69] - The Company's consolidated financial statements comply with GAAP and fairly present the financial position of the Company and its subsidiaries[68] - The Company has filed all required SEC documents since January 1, 2022, with no material misstatements or omissions[67] - The company maintains disclosure controls and procedures to ensure timely and accurate reporting of required information under the Exchange Act[70] - The company is not involved in any off-balance sheet arrangements or securitization transactions that would avoid disclosure of material liabilities[71] - There are no outstanding SEC comments or ongoing investigations regarding the company's accounting practices as of the agreement date[72] Assets and Intellectual Property - The company and its subsidiaries hold valid title to all tangible assets necessary for their business operations, free of encumbrances, except for assets sold in the ordinary course of business[76] - The company does not own any real property but leases all real property used in its operations, with no material defaults under any leases[77][78] - The company owns all intellectual property rights free of encumbrances and has obtained valid assignments for any acquired IP[82] - The company has not used government or educational institution resources to create IP that would grant ownership or royalty rights to third parties[83] - The company has taken commercially reasonable steps to protect its confidential information and trade secrets[87] - The company maintains policies and procedures to protect the confidentiality and security of its data and systems, addressing all material security vulnerabilities[91] - The company is in compliance with all applicable privacy, data protection, and security legal requirements since January 1, 2022[92] Contracts and Liabilities - The company has contracts with third-party resellers where amounts in excess of $1,000,000 were received in the most recently completed fiscal year[97] - The company has contracts requiring payment or delivery of cash or other consideration in excess of $1,000,000 for the fiscal year ending February 29, 2024, or the nine-month period ended November 30, 2024[97] - The company has contracts relating to indebtedness in excess of $1,000,000[97] - The company has contracts with government bodies under which payments in excess of $1,000,000 were received in the most recently completed fiscal year[98] - The company has a list of top 20 customers by revenues generated in 2023 and the nine-month period ended September 30, 2024[102] - The company has a list of top 10 suppliers by dollar volume of sales and purchases for 2023 and the nine-month period ended September 30, 2024[103] - The company has no material liabilities except those disclosed in the balance sheet or incurred in the ordinary course of business[104] Legal and Regulatory Compliance - The company is in compliance with all applicable legal requirements and has not received any written notice alleging violations since January 1, 2022[105] - The company has conducted export transactions in compliance with all applicable export, re-export, and anti-boycott legal requirements[106] - The company has established compliance programs and internal controls to ensure adherence to anti-corruption laws[110] - The Company and its Subsidiaries are in compliance with all applicable Environmental Laws since January 1, 2022[147] - All material insurance policies of the Acquired Companies are in full force and effect, with no claims denied as of the date hereof[148] Tax Matters - All material Tax Returns filed by the Acquired Companies are accurate and complete, and all material Taxes have been paid or adequately provisioned in accordance with GAAP[114] - No material Tax deficiencies have been proposed or assessed against any Acquired Company that remain unpaid or unresolved[115] - Each Acquired Company has withheld and paid all material Taxes required for employees, contractors, and other parties[116] - No Acquired Company has material liability under any Tax sharing or indemnification agreements that would continue after the Closing Date[117] - No Acquired Company has been part of an affiliated group filing consolidated U.S. federal income Tax Returns, except for groups where the Company was the common parent[118] - No Acquired Company has been involved in a tax-free stock distribution under Section 355 of the Code in the past two years[119] - No Acquired Company is a tax resident in any country other than its country of organization due to permanent establishments or offices[120] - The Company will not face material income inclusion or deduction exclusion post-Closing Date due to prior accounting changes or agreements[122] Healthcare Compliance - The Acquired Companies have complied with all applicable Healthcare Laws since January 1, 2022, and maintain policies for compliance[135] - No Acquired Company or its personnel have been debarred, excluded, or suspended from participating in any Federal Healthcare Program since January 1, 2022[137] - All claims submitted by Acquired Companies since January 1, 2022, were for services actually performed and supported by sufficient documentation[138] - Acquired Companies have operated in compliance with federal health care program anti-kickback statutes and Stark Law since January 1, 2022[140] - Acquired Companies maintain HIPAA-compliant privacy and security plans, policies, and procedures since January 1, 2022[142] - No breaches of individually identifiable health information have been reported by the Company or any Acquired Company since January 1, 2021[142] - Acquired Companies have created de-identified health information in compliance with HIPAA requirements[143] - Acquired Companies are in material compliance with all applicable Managed Care Laws and licensing requirements[144] - The top five Third-Party Payors for 2023 and the nine-month period ended September 30, 2024, have not terminated or materially modified their relationships with Acquired Companies[146] - No material claims or disputes with Material Payors have occurred in the last three years[146] Fairness Opinion and Financial Advisors - Morgan Stanley provided a Fairness Opinion stating the Merger Consideration is fair to shareholders from a financial perspective[157] - No other financial advisors or brokers are entitled to fees or commissions related to the Transactions except Morgan Stanley[158] Parent and Merger Sub Financials - Parent and Merger Sub have sufficient funds to consummate the Merger, including paying the Required Amount and other obligations[170] - Parent has unrestricted cash on hand equal to the Parent Termination Fee with no conditions preventing payment[171] - Parent and Merger Sub have all necessary corporate authority to execute and perform obligations under the Agreement[164] - The Parent SPA is in full force and effect, with no amendments or withdrawals of commitments as of the date hereof[168] - No pending legal proceedings against Parent or Merger Sub are expected to have a Parent Material Adverse Effect[167] - Parent and Merger Sub have made all necessary filings and obtained approvals required for the Transactions[165] - The Proxy Statement contains no material misstatements or omissions regarding Parent or Merger Sub[166] - Parent and Merger Sub are not party to any arrangements with Company stockholders or management beyond the Voting Agreements[172] - The Surviving Corporation and its Subsidiaries will have sufficient capital to meet their liabilities, including contingent liabilities, as they mature, ensuring solvency post-Merger[173] - Parent and its controlled Affiliates do not own any shares of the Company's capital stock or convertible securities, and no 10b5-1 plan has been enacted for stock purchases[174] - No broker or financial advisor is entitled to fees or commissions related to the Transactions, except for those paid by Parent[175] - Purchaser is not classified as a "foreign person" under the Defense Production Act of 1950, ensuring compliance with CFIUS regulations[176] - Parent and Merger Sub disclaim reliance on any representations or warranties beyond those explicitly stated in the Agreement[177][178] - Parent and Merger Sub conducted an independent investigation of the Acquired Companies and discussed business matters with Company management[179] Pre-Closing Period and Integration - During the Pre-Closing Period, the Company will provide Parent with reasonable access to its properties, books, and records for integration purposes[182] - The Company will deliver a Fairness Opinion to Parent for informational purposes following the execution of the Agreement[183] - The Company will operate its business in the ordinary course during the Pre-Closing Period, preserving assets, contracts, and key relationships[184] - The company may provide salary or wage increases not exceeding 3.5% in aggregate of total base pay for the 2025 fiscal year, excluding Specified Employees with annual base salaries over $250,000[185] - Capital expenditures are capped at $5,000,000 in aggregate during any fiscal year[187] - The company may sell or dispose of assets individually for consideration not exceeding $1,000,000 or in aggregate not exceeding $2,000,000, except for ordinary course transactions[187] - The company may settle legal proceedings involving payments not exceeding $1,000,000 individually or $2,000,000 in aggregate, without imposing injunctive or equitable relief[188] - The company is restricted from entering into new lines of business unrelated to its current operations or forming new subsidiaries[191] Acquisition Proposals and Notifications - The company may engage in discussions with parties making unsolicited acquisition proposals to clarify terms and inform them of the agreement's conditions[196] - The company must notify the parent within 24 hours of receiving any acquisition proposal or inquiry, including details of the proposer and material terms[197] - The company is required to keep the parent informed of the status and developments of any acquisition proposal or inquiry on a prompt basis[197] - The company must provide the parent with copies of any written counterproposals or related documents within 24 hours of delivery or receipt[197] - The company is prohibited from entering agreements that restrict providing information to the parent regarding acquisition proposals[197] - The company may disclose positions or make required disclosures to stockholders under applicable legal requirements without constituting a breach[198] - Actions taken by acquired companies or their representatives that breach the agreement will be deemed a breach by the company[199]

Core Viewpoint - Transcarent is acquiring Accolade for $7.03 per share in cash, totaling approximately $621 million, to create a leading health and care platform focused on consumer empowerment and personalized experiences [1][6]. Company Overview - Transcarent aims to simplify access to high-quality, affordable health and care through its generative AI-powered WayFinding and comprehensive care experiences [1][9]. - Accolade specializes in health advocacy, expert medical opinions, and primary care, providing personalized healthcare solutions to millions [12]. Strategic Benefits - The merger will integrate Transcarent's AI-driven WayFinding with Accolade's advocacy and care services, enhancing the overall member experience and reducing healthcare costs [2][3]. - The combined platform will offer a single point of access for various health needs, improving care quality and lowering costs for consumers, employers, and payers [2][4]. Market Position - The transaction is expected to create an industry-leading platform with over 1,400 employer and payer clients, emphasizing a shared focus on consumer empowerment [1][2]. - The acquisition is anticipated to accelerate the growth of both companies by providing a comprehensive solution to the complexities of healthcare [3][5]. Financial Details - The acquisition price of $7.03 per share represents a 110% premium over Accolade's closing stock price prior to the announcement [6]. - Transcarent will finance the acquisition through fully-committed equity financing led by General Catalyst and Glen Tullman’s 62 Ventures [6]. Integration and Future Plans - The transaction is expected to close in the second quarter of 2025, pending stockholder and regulatory approvals [7]. - Upon completion, Accolade will become a privately held company, and its stock will no longer be listed on Nasdaq [7].

Core Viewpoint - Accolade, Inc. is set to release its fiscal third quarter 2025 financial results on January 9, 2024, after market close, followed by a conference call to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for the fiscal third quarter 2025 will be announced on January 9, 2024 [1]. - A conference call to review the results will take place at 4:30 p.m. E.T. on the same day [1]. Group 2: Conference Call Details - Pre-registration is required to listen via telephone, with a link provided for registration [2]. - The conference call will also be accessible through a live audio webcast on the company's investor relations website [2]. Group 3: Replay Information - A replay of the conference call will be available for one year via webcast shortly after the call concludes [3]. Group 4: Company Overview - Accolade, Inc. is a Personalized Healthcare company that aims to provide exceptional healthcare experiences to millions [4]. - The company's solutions include virtual primary care, mental health services, expert medical opinions, and care navigation, all designed to improve health outcomes and reduce costs [4]. - Accolade has consistently received consumer satisfaction ratings exceeding 90% [4].

Tax Loss Selling and Investment Strategy - Investors sell underperforming stocks late in the year for tax benefits, further driving down already beaten-down stocks [1] - This period is considered an opportune time to buy stocks in anticipation of the January Effect, which bets on a recovery [1] Portfolio Composition and Performance - Stock returns from the analyst's articles have averaged over 31% over a one-year period [1] - The analyst's portfolio consists of 50-75% deep value stocks, primarily small caps [1] Analyst Background and Disclosure - The analyst was the Credit Manager for a mid-sized publicly traded bank and retired early in 2013 due to success in the stock market [1] - Despite never working in the industry, the analyst passed the CFA Level 1 exam [1] - The analyst usually writes about stocks that are their best ideas and have a position in [1] - The analyst has a beneficial long position in the shares of ACCD through stock ownership, options, or other derivatives [2]

Core Viewpoint - Accolade (ACCD) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years, highlighting the importance of earnings revisions in stock valuation [1][4]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, with institutional investors using these estimates to determine fair value [4][5]. Recent Developments for Accolade - Accolade is projected to earn -$0.92 per share for the fiscal year ending February 2025, representing a year-over-year change of 30.8% [8]. - Over the past three months, the Zacks Consensus Estimate for Accolade has increased by 17.4%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade to Zacks Rank 2 places Accolade in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10][11].

Core Viewpoint - Accolade (ACCD) has experienced a significant downtrend with a 15.6% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Stock Performance and Indicators - The stock's Relative Strength Index (RSI) is at 23.45, indicating it is oversold, which may lead to a price reversal as selling pressure exhausts [3]. - A consensus among sell-side analysts has resulted in a 17.4% increase in the earnings per share (EPS) estimate for the current year over the last 30 days, typically correlating with price appreciation [3]. Group 2: Analyst Ratings and Market Position - ACCD holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [4].

Core Insights - Accolade, Inc. has partnered with Renalogic to enhance chronic kidney disease (CKD) management and reduce dialysis costs for self-insured employers [1][3] - The average cost for employer-sponsored healthcare is projected to reach $16,000 per employee by 2025, with late-stage CKD patients incurring disproportionately high costs [1][3] - Renalogic's solutions aim to improve health outcomes and provide significant cost savings, with dialysis costs averaging $250,000 per member per year [3] Partnership Details - Renalogic will join Accolade's Trusted Partner Ecosystem, focusing on CKD risk management and dialysis cost containment [1][3] - The partnership will facilitate warm handoffs from Accolade Care Advocates to Renalogic's clinical team, promoting awareness of Renalogic's services at no additional cost [3][4] Cost Management Solutions - Renalogic's ImpactIQ uses proprietary data algorithms to identify both diagnosed and undiagnosed CKD members, improving the identification of high-cost claims [2] - The ImpactAdvocate program reduces emergent dialysis starts by 30-50%, potentially saving up to $50,000 per emergent start [2] - Renalogic's ImpactProtect advises on fair market rates for dialysis services, achieving savings of 50-80% on dialysis claims costs, translating to net savings of $75,000 - $125,000 per member annually [2] Company Background - Accolade is a Personalized Healthcare company that provides comprehensive healthcare solutions, achieving consumer satisfaction ratings over 90% [7] - Renalogic, founded in 2002, specializes in managing the costs associated with CKD and dialysis treatment, helping clients save hundreds of millions of dollars [8]

Core Viewpoint - Accolade (ACCD) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates which is expected to positively influence its stock price [1][2]. Earnings Outlook - The Zacks rating system focuses on changes in earnings estimates, which are crucial for stock price movements. The recent upgrade reflects an improved earnings outlook for Accolade [1][3]. - For the fiscal year ending February 2025, Accolade is projected to earn -$1.09 per share, representing an 18.1% change from the previous year's reported figure [5]. Earnings Estimate Revisions - Over the past three months, the Zacks Consensus Estimate for Accolade has increased by 1.8%, indicating a positive trend in earnings estimates [5]. - The Zacks Rank system, which categorizes stocks based on earnings estimate revisions, has shown that stocks in the top 20% can outperform the market [7]. Investment Implications - The upgrade to Zacks Rank 2 places Accolade in the top 20% of Zacks-covered stocks, suggesting potential for higher stock price movement in the near term [7]. - The Zacks Rank system has a strong historical performance, with Zacks Rank 1 stocks averaging a +25% annual return since 1988, highlighting the effectiveness of tracking earnings estimate revisions for investment decisions [4].

Accolade, Inc. (NASDAQ:ACCD) Q2 2025 Earnings Conference Call October 8, 2024 8:00 AM ET Company Participants Todd Friedman - Senior Vice President of Investor Relations Rajeev Singh - Chief Executive Officer Steve Barnes - Chief Financial Officer Conference Call Participants Dan Clark - Leerink Partners Craig Hettenbach - Morgan Stanley Jailendra Singh - Truist Securities Jeff Garro - Stephens Inc. Richard Close - Canaccord Genuity Jessica Tassan - Piper Sandler Jared Haase - William Blair Stephanie Davis ...

October 2024 NASDAQ: ACCD Accolade Inc. Investor Presentation | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...