During the years ended December 31, 2022, 2021 and 2020, the Company completed numerous acquisitions to strengthen its current market share in existing markets or to expand into new markets. Each of the Company’s acquisitions was accounted for using the acquisition method pursuant to the requirements of FASB ASC Topic 805, Business Combinations, and are included in the Company’s consolidated financial statements since the respective acquisition date. The goodwill generated from these acquisitions is attributable to expected growth and cost synergies and the expected contribution of each acquisition to the Company’s overall strategy. The goodwill recorded during the year ended December 31, 2022 is not expected to be deductible for tax purposes. The estimated fair values of the net assets of acquired businesses as described below are subject to change resulting from such items as final analysis of valuations and working capital adjustments post-acquisition. As a result, the acquisition accounting for certain acquired businesses could change in subsequent periods resulting in adjustments to goodwill once finalized.


Cash	$	162
Accounts receivable	2,336
Inventory	771
Prepaid and other current assets	16
Equipment and other fixed assets	4,585
Goodwill	12,341
Identifiable intangible assets	500
Deferred tax assets	180
Accounts payable and accrued expenses	(3,130)
Contract liabilities	(134)
Net assets acquired	$	17,627

On February 1, 2021, the Company acquired 100% of the equity interests of AeroCare Holdings, Inc. (AeroCare). AeroCare is a leading national technology-enabled respiratory and home medical equipment distribution platform in the United States and offers a comprehensive suite of direct-to-patient equipment and services including CPAP and BiPAP machines, oxygen concentrators, home ventilators, and other home medical equipment products. The total consideration paid consisted of (i) cash payments of $1.2 billion, (ii) the issuance of 13,992,615 shares of the Company’s Class A Common Stock, (iii) the issuance of 130,474.73 shares of the Company’s Series C Convertible Preferred Stock, and (iv) the issuance of 3,959,892 fully vested options to purchase shares of the Company’s Class A Common Stock in the future, which had a weighted-average exercise price of $6.24 per share and a weighted-average remaining exercise period of approximately 7 years from the date of closing. Refer to Note 11, Stockholders’ Equity, for additional discussion of the Series C Convertible Preferred Stock issued in connection with the acquisition of AeroCare.

On April 30, 2021, the Company acquired 100% of the equity interests of Spiro Health Services, LLC (Spiro). Spiro is a provider of home medical equipment and supplies. The total consideration paid consisted of a cash payment of $65.8 million, the issuance of 244,641 shares of the Company’s Class A Common Stock, and a potential contingent consideration payment of up to $1.0 million, which was determined to be the fair value at the acquisition date and such amount was recorded as a contingent consideration liability in connection with the Company’s acquisition accounting.

On June 1, 2021, the Company acquired 100% of the equity interests of Healthy Living Medical Supply, LLC (Healthy Living). Healthy Living is a provider of continuous glucose monitors and insulin pumps. The total consideration paid consisted of a cash payment of $47.0 million and the issuance of 196,779 shares of the Company’s Class A Common Stock.

On July 1, 2021, the Company acquired 100% of the equity interests of Agilis Med Holdings, LLC (Agilis). Agilis is an e-commerce retailer of sleep apnea and respiratory equipment in the United States. The total consideration paid consisted of a cash payment of $30.8 million, the issuance of 538,079 shares of the Company’s Class A Common Stock, and a potential contingent consideration payment of up to $1.0 million, which was determined to be the fair value at the acquisition date and such amount was recorded as a contingent consideration liability in connection with the Company’s acquisition accounting. In October 2020, the Company acquired a minority interest in Agilis, which was being accounted for under the equity method of accounting prior to the July 2021 transaction. The carrying value of such investment was

$8.1 million at the July 2021 transaction date. The fair value of the equity method investment was $10.0 million at the July 2021 transaction date. In connection with the accounting for the July 2021 transaction, the Company recorded goodwill of $10.0 million and eliminated the carrying value of the equity method investment of $8.1 million and recorded a gain on equity method of investment of $1.9 million, which is included in Other loss (income), net in the accompanying consolidated statements of operations during the year ended December 31, 2021.

On July 1, 2021, the Company acquired 100% of the equity interests of WeCare Medical, LLC (WeCare). WeCare is a distributor of durable medical equipment and supplies in the United States. The total consideration paid consisted of a cash payment of $34.8 million and the issuance of 231,866 shares of the Company’s Class A Common Stock.

On December 30, 2021, the Company acquired 100% of the equity interests of Community Surgical Supply of Toms River, LLC (Community Surgical Supply). Community Surgical Supply is a supply company that provides oxygen, respiratory therapy services, infusion therapy services, and home medical equipment to its customers throughout the northeastern United States. The total consideration paid consisted of a cash payment of $129.4 million and a potential contingent consideration payment of up to $6.5 million. The Company determined that the potential contingent payment had an acquisition date fair value of $5.8 million, which was recorded as a contingent consideration liability in connection with the Company’s acquisition accounting.

In addition, during 2021, the Company acquired 100% of the equity interests of certain providers of home medical equipment and distributors of diabetes management products and supplies, and acquired certain assets of the durable medical equipment businesses of certain providers of home medical equipment. The total consideration paid for these acquisitions consisted of cash payments of $196.7 million, the issuance of 306,569 shares of the Company’s Class A Common Stock, and deferred payment liabilities of $4.5 million.


	AeroCare		Spiro		Healthy Living		Agilis		We Care		Community		Other		Total
Cash	$	1,153,409	$	65,759	$	47,048	$	30,828	$	34,834	$	129,423	$	196,669	$	1,657,970
Equity	1,220,342		7,109		5,057		14,668		6,321		—		7,703		1,261,200
Contingent consideration	—		1,000		—		1,000		—		5,800		—		7,800
Deferred payments	—		—		—		—		—		—		4,478		4,478
Total	$	2,373,751	$	73,868	$	52,105	$	46,496	$	41,155	$	135,223	$	208,850	$	2,931,448

The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, the consideration paid for all acquisitions during 2021 was allocated as follows during the year ended December 31, 2021 (in thousands):


	AeroCare		Spiro		Healthy Living		Agilis		We Care		Community		Other		Total
Cash	$	27,686	$	2,132	$	579	$	1,131	$	458	$	2	$	5,005	$	36,993
Accounts receivable	71,916		$	5,756	5,838		—		2,007		15,798		25,587		126,902
Inventory	26,998		1,733		2,949		2,330		465		5,214		10,663		50,352
Prepaid and other current assets	3,522		152		1,088		—		—		571		2,403		7,736
Equipment and other fixed assets	190,755		6,897		1,188		348		5,254		44,952		24,963		274,357
Operating lease right-of-use assets	52,927		2,581		1,366		490		970		4,412		15,897		78,643
Goodwill	2,083,423		64,380		44,095		55,375		35,971		88,393		164,929		2,536,566
Identifiable intangible assets	122,800		1,000		1,500		500		400		2,300		4,400		132,900
Other assets	1,178		16		—		—		—		2,505		—		3,699
Deferred tax liabilities	(46,234)		—		—		—		(1,228)		—		(308)		(47,770)
Accounts payable and accrued expenses	(82,722)		(5,517)		(3,363)		(3,188)		(1,389)		(13,725)		(21,679)		(131,583)
Contract liabilities	(14,495)		(486)		(102)		—		(783)		(3,156)		(608)		(19,630)
Other current liabilities	(10,021)		—		(1,667)		—		—		(180)		(1,833)		(13,701)
Other long-term liabilities	(1,055)		—		—		—		—		(2,683)		—		(3,738)
Operating lease obligations	(52,927)		(2,581)		(1,366)		(490)		(970)		(4,412)		(15,897)		(78,643)
Finance lease obligations	—		(2,195)		—		—		—		(4,768)		(4,672)		(11,635)
Net assets acquired	$	2,373,751	$	73,868	$	52,105	$	56,496	$	41,155	$	135,223	$	208,850	$	2,941,448

On January 2, 2020, the Company purchased 100% of the equity interests of the Patient Care Solutions business (PCS), which was a subsidiary of McKesson Corporation. PCS is a home medical equipment supplies business. The total consideration paid consisted of a cash payment of $14.0 million.

On March 2, 2020, the Company purchased certain assets of the durable medical equipment business of Advanced Home Care, Inc. (Advanced). The total consideration paid consisted of a cash payment of $58.5 million. The acquisition also included a potential contingent payment of up to $9.0 million. The Company determined that the potential contingent payment had an acquisition date fair value of $5.0 million which was recorded as a contingent consideration liability in connection with the Company’s acquisition accounting.

On July 1, 2020, the Company acquired 100% of the equity interests in Solara Medical Supplies, LLC (Solara). Solara is an independent distributor of continuous glucose monitors (CGM) in the United States and offers a comprehensive suite of direct-to-patient diabetes management supplies to patients throughout the country, including CGMs, insulin pumps and other diabetic supplies. The total consideration paid consisted of a cash payment of $380.7 million and the issuance of 3,906,250 shares of the Company’s Class A Common Stock. The acquisition also included a potential contingent payment based on certain conditions after closing, which was determined to have an acquisition date fair value of $1.3 million, which was recorded as a contingent consideration liability in connection with the Company’s acquisition accounting.

July 1, 2020, the Company acquired 100% of the equity interests of ActivStyle, Inc. (ActivStyle). ActivStyle is a leading direct-to-consumer supply company that provides incontinence and urology products to patients throughout the United States. The total consideration paid consisted of a cash payment of $65.5 million.

On October 1, 2020, the Company acquired 100% of the equity interests of Pinnacle Medical Solutions, Inc. (Pinnacle). Pinnacle is a distributor of insulin pumps, insulin pump supplies, continuous glucose monitoring systems and diabetes test strips in the United States. The total consideration paid consisted of a cash payment of $80.4 million and the issuance of 997,067 shares of the Company’s Class A Common Stock. The acquisition also included a potential contingent payment of up to $15.0 million, which was determined to have an acquisition date fair value of $14.3 million, which was recorded as a contingent consideration liability in connection with the Company’s acquisition accounting.

In addition, during 2020, the Company acquired 100% of the equity interests of certain other providers of home medical equipment and distributors of diabetes management products and supplies, and acquired certain assets of the durable medical equipment businesses of certain providers of home medical equipment. The total consideration paid for these acquisitions consisted of cash payments of $191.4 million, the issuance of 1,023,434 shares of the Company’s Class A Common Stock, and deferred payment liabilities of less than $0.1 million. Certain of the acquisitions also included potential contingent consideration payments of up to $8.0 million in the aggregate, which was determined to have an acquisition date fair value of $6.5 million, which was recorded as contingent consideration liabilities in connection with the Company’s acquisition accounting for such acquisitions.


	PCS		Advanced		Solara		ActivStyle		Pinnacle		Other		Total
Cash	$	14,008	$	58,517	$	380,735	$	65,512	$	80,377	$	191,415	$	790,564
Equity	—		—		73,359		—		28,182		22,346		123,887
Contingent consideration	—		5,000		1,300		—		14,300		6,464		27,064
Deferred payments	—		—		—		—		—		33		33
Total	$	14,008	$	63,517	$	455,394	$	65,512	$	122,859	$	220,258	$	941,548

The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, the consideration paid for all acquisitions during 2020 was allocated as follows during the year ended December 31, 2020 (in thousands):


	PCS		Advanced		Solara		ActivStyle		Pinnacle		Other		Total
Cash	$	61	$	—	$	12,069	$	4,993	$	1,193	$	2,911	$	21,227
Accounts receivable	14,925		7		17,411		5,158		4,174		21,265		62,940
Inventory	—		2,727		14,376		471		101		8,436		26,111
Prepaid and other current assets	943		127		2,113		955		612		4,810		9,560
Equipment and other fixed assets	535		19,783		3,473		992		—		20,886		45,669
Goodwill	988		41,712		347,718		49,643		107,706		184,252		732,019
Intangible assets	—		600		85,700		9,400		15,200		11,200		122,100
Other assets	—		—		—		—		2,921		—		2,921
Deferred tax assets (liabilities)	—						1,240		—		(108)		1,132
Accounts payable and accrued expenses	(2,025)		(35)		(22,464)		(7,155)		(5,777)		(23,740)		(61,196)
Contract liabilities	—		(1,404)		(167)		—		—		(1,773)		(3,344)
Other liabilities	(233)		—		(4,835)		(185)		(350)		(5,675)		(11,278)
Other long-term liabilities	(1,186)		—		—		—		(2,921)		—		(4,107)
Finance lease obligations	—		—		—		—		—		(2,206)		(2,206)
Net assets acquired	$	14,008	$	63,517	$	455,394	$	65,512	$	122,859	$	220,258	$	941,548

The following table presents the amount of Net revenue and Operating income in the period of acquisition since the respective acquisition dates for the acquisitions described above that is included in the Company’s consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020: