Delaware |
001-39289 |
98-1524224 | ||
(State or Other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Audrey S. Leigh Goodwin Procter LLP The New York Times Building 620 Eighth Avenue New York, NY 10018 (212) 813-8800 |
David Armstrong General Counsel Cano Health, Inc. 9725 NW 117th Avenue Miami, FL 33178 (855) 226-6633 |
☒ | Accelerated filer | ☐ | ||||
Non-Accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
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F-1 |
• | “Jaws” are to Jaws Acquisition Corp., a Delaware corporation, prior to the Closing; |
• | “Board” are to the board of directors of the Company; and |
• | “Business Combination” or “Transactions” are to the Merger and other transactions contemplated by the Business Combination Agreement, collectively. |
• | Under most of our agreements with health plans, we assume some or all of the risk that the cost of providing services will exceed our compensation. |
• | Our revenues and operations are dependent upon a limited number of key existing payors and our continued relationship with those payors, and disruptions in those relationships (including renegotiation, non-renewal or termination of capitation agreements) or the inability of such payors to maintain their contracts with the Centers for Medicare and Medicaid Services could adversely affect our business. |
• | COVID-19 or other pandemic, epidemic, or outbreak of an infectious disease may have an adverse effect on our business, results of operations, financial condition and cash flows, the nature and extent of which are highly uncertain and unpredictable. |
• | Reductions in the quality ratings of the health plans we serve could have a material adverse effect on our business, results of operations, financial condition and cash flows. |
• | Our medical centers are concentrated in certain geographic regions, which makes us sensitive to regulatory, economic, environmental and competitive conditions in those regions. |
• | We primarily depend on reimbursements by third-party payors, which could lead to delays and uncertainties in the reimbursement process. |
• | We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability. |
• | We depend on our senior management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business. |
• | If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service and member satisfaction or adequately address competitive challenges. |
• | We may not be able to identify suitable de novo expansion opportunities, engage with payors in new markets to continue extension of financial risk-sharing model agreements that have proved successful in our existing markets or cost-effectively develop, staff and establish such new medical centers in new markets. |
• | We conduct business in a heavily regulated industry, and if we fail to comply with applicable state and federal healthcare laws and government regulations or lose governmental licenses, we could incur financial penalties, become excluded from participating in government healthcare programs, be required to make significant operational changes or experience adverse publicity, which could harm our business. |
• | We may not be able to identify suitable acquisition candidates, complete acquisitions or successfully integrate acquisitions, and acquisitions may not produce the intended results or may expose us to unknown or contingent liabilities. |
• | Reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program, including changes to Medicare Advantage, Accountable Care Organizations, Direct Contracting Entities (including the transition to ACO REACH program), and traditional Medicare programs, could have a material adverse effect on our financial condition and results of operations. |
• | Our business could be harmed if the Affordable Care Act, or ACA, is overturned or by any legislative, regulatory or industry change that reduces healthcare spending or otherwise slows or limits the transition to more assumption of risk by healthcare providers. |
• | Our use, disclosure, and other processing of personally identifiable information, including health information, is subject to the regulations implementing the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, or HIPPA, and other federal and state privacy and security regulations. If we suffer a data breach or unauthorized disclosure, we could incur significant liability including government and private investigations and claims of privacy and security non-compliance. We could also suffer significant reputational harm as a result and, in turn, a material adverse effect on our member base and revenue. |
• | The Restatement (as defined below) may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings. |
• | We may be subject to legal proceedings and litigation, including intellectual property, privacy and medical malpractice disputes, which are costly to defend and could materially harm our business and results of operations. |
• | Our existing indebtedness could adversely affect our business and growth prospects. The terms of the Credit Agreement (as defined herein) and our Senior Notes (as defined herein) restrict our current and future operations, particularly our ability to respond to changes or to take certain actions. |
• | We are heavily dependent upon the current state and federal healthcare programs, primarily Medicare Advantage and Medicaid managed care, in heavily competitive and segmented markets that are constantly changing. |
Shares of Class A common stock offered by us | 265,041,612 shares of our Class A common stock, which consists of (i) up to an aggregate of 231,508,279 shares of our Class A common stock underlying an equal number of shares of Class B common stock, (ii) up to an aggregate of 10,533,333 shares of our Class A common stock that may be issued upon exercise of the private placement warrants to purchase shares of Class A common stock that were issued to the Sponsor as part of the private placement units, which are substantially identical to the public warrants, subject to certain limited exceptions and (iii) up to an aggregate of 23,000,000 shares of our Class A common stock that may be issued upon exercise of public warrants to purchase shares of Class A common stock. | |
Class A common stock outstanding prior to the exercise of warrants | 207,747,333 shares as of the date of this prospectus. | |
Class A common stock outstanding after the exercise of warrants | 241,280,666 shares, based on total shares outstanding as of the date of this prospectus. | |
Resale of Class A Common Stock and Warrants |
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Shares of Class A common stock offered by the Selling Securityholders | 339,291,612 shares of our Class A common stock, including (i) up to an aggregate of 248,758,279 shares of our Class A common stock that may be sold by the Selling Securityholders, (ii) up to an aggregate of 10,533,333 shares of our Class A common stock that may be issued upon exercise of the private warrants and (iii) up to an aggregate of 80,000,000 PIPE Shares. | |
Warrants offered by the Selling Securityholders | 10,533,333 private warrants. | |
Use of proceeds |
All of the shares of Class A common stock and warrants offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will not receive any of the proceeds from these sales, except with respect to amounts received by us upon exercise of the warrants to the extent such warrants are exercised for cash. | |
Market for our Class A common stock and warrants |
Our Class A common stock and warrants are listed on the NYSE under the symbols “CANO” and “CANO WS”, respectively. |
• | the benefits of the Business Combination and the acquisitions described in this prospectus; |
• | our financial and business performance; |
• | changes in our strategy, future operations, financial position, estimated revenues, forecasts, projected costs, prospects and plans; |
• | changes in applicable laws or regulations, including with respect to health plans and payors and our relationships with such plans and payors, and provisions that impact Medicare and Medicaid programs; |
• | our ability to realize expected results with respect to patient membership, revenue and earnings; |
• | our ability to grow market share in existing markets or enter into new markets and success of acquisitions; |
• | the risk that we may not be able to procure sufficient space as we continue to grow and open additional medical centers; |
• | our predictions about the need for our wellness centers after the coronavirus disease 2019, or COVID-19 pandemic, including the attractiveness of our offerings and member retention rates; |
• | competition in our industry, the advantages of our products and technology over competing products and technology existing in the market, and competitive factors including with respect to technological capabilities, cost and scalability; |
• | the impact of the COVID-19 pandemic or any other pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide on our business, financial condition and results of operations and the actions we may take in response thereto; |
• | our future capital requirements and sources and uses of cash; |
• | our business, expansion plans and opportunities; |
• | anticipated financial performance, including gross margin, and the expectation that our future results of operations will fluctuate on a quarterly basis for the foreseeable future; |
• | our expected capital expenditures, cost of revenue and other future expenses, and the sources of funds to satisfy liquidity needs; |
• | our ability to maintain proper and effective internal controls; |
• | our ability to implement remediation plans to address our material weaknesses that are described herein; and |
• | the outcome of any known and unknown litigation and regulatory proceedings. |
• | the ability to maintain the listing of our Class A common stock and warrants on NYSE; |
• | the price of our securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which we operate, variations in performance across competitors, changes in laws and regulations affecting our business and changes in our capital structure; |
• | the risk of downturns and the possibility of rapid change in the highly competitive industry in which we operate; |
• | the risk that we will need to raise additional capital to execute our business plan, which may not be available on acceptable terms or at all; |
• | the risk that we experience difficulties in managing our growth and expanding operations; and |
• | other risks and uncertainties described in this prospectus, including those under the section entitled “Risk Factors.” |
• | the health status of our members; |
• | higher levels of hospitalization among our members; |
• | higher than expected utilization of new or existing healthcare services or technologies; |
• | an increase in the cost of healthcare services and supplies, whether as a result of inflation or otherwise; |
• | changes to mandated benefits or other changes in healthcare laws, regulations and practices; |
• | increased costs attributable to specialist physicians, hospitals and ancillary providers; |
• | changes in the demographics of our members and medical trends; |
• | contractual or claims disputes with providers, hospitals or other service providers within and outside a health plan’s network; |
• | the occurrence of catastrophes, major epidemics or pandemics, including COVID-19 and any variants thereof, or acts of terrorism; and |
• | the reduction of health plan premiums. |
• | requiring us to change or increase our products and services provided to members; |
• | increasing the regulatory, including compliance, burdens under which we operate, which, in turn, may negatively impact the manner in which we provide services and increase our costs of providing services; |
• | adversely affecting our ability to market our products or services through the imposition of further regulatory restrictions regarding the manner in which plans and providers market to Medicare Advantage or traditional Medicare enrollees; or |
• | adversely affecting our ability to attract and retain members. |
• | we may not be able to successfully enter into contracts with local payors on terms favorable to us or at all, including as a result of competition for payor relationships with other potential players, some of whom may have greater resources than we do, which competition may intensify due to the ongoing consolidation in the healthcare industry; |
• | we may not be able to enroll or retain a sufficient number of new members to execute our growth strategy, and we may incur substantial costs to enroll new members and we may be unable to enroll a sufficient number of new members to offset those costs; |
• | we may not be able to hire sufficient numbers of physicians and other staff and may fail to integrate our employees, particularly our medical personnel, into our care model; |
• | per-member revenue in new markets may be lower than in our existing markets, including as a result of geographic cost index-based adjustments by CMS; |
• | we may not be able to hire sufficient numbers of physicians and other staff and may fail to integrate our employees, particularly our medical personnel, into our care model; |
• | when expanding our business into new states, we may be required to comply with laws and regulations that may differ from states in which we currently operate; and |
• | depending upon the nature of the local market, we may not be able to implement our business model in every local market that we enter; for example, we may be unable to offer all services that we offer in our current markets (e.g., transportation), which could negatively impact our revenues and financial condition. |
• | managing a larger combined company and consolidating corporate and administrative infrastructures; |
• | the inability to realize any expected synergies and cost-savings; |
• | difficulties in managing geographically dispersed operations, including risks associated with entering markets in which we have no or limited prior experience; |
• | underperformance of any acquired business relative to our expectations and the price we paid; |
• | negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges; |
• | the assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash; |
• | the issuance of equity securities to finance or as consideration for any acquisitions that dilute the ownership of our stockholders; |
• | claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction; |
• | problems maintaining uniform procedures, controls and policies with respect to our financial accounting systems; |
• | unanticipated issues in integrating information technology, communications and other systems; and |
• | risks associated with acquiring intellectual property, including potential disputes regarding acquired companies’ intellectual property. |
• | develop and enhance our member services; |
• | continue to expand our organization; |
• | hire, train and retain employees; |
• | respond to competitive pressures or unanticipated working capital requirements; or |
• | pursue acquisition opportunities. |
• | Medicare and Medicaid reimbursement rules and regulations; |
• | federal Anti-Kickback Statute, which, subject to certain exceptions known as “safe harbors,” prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid. A person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act, or the FCA; |
• | the federal physician self-referral law, commonly referred to as the Stark Law, and analogous state self-referral prohibition statutes, which, subject to limited exceptions, prohibit physicians from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with an entity, and prohibit the entity from billing Medicare or Medicaid for such “designated health services.” The Stark Law excludes certain ownership interests in an entity from the definition of a financial relationship, including ownership of investment securities that could be purchased on the open market when the designated health services referral was made and when the entity had stockholder equity exceeding $75 million at the end of the corporation’s most recent fiscal year or on average during the previous three fiscal years. “Stockholder equity” is the difference in value between a corporation’s total assets and total liabilities; |
• | federal civil and criminal false claims laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; |
• | the Civil Monetary Penalty statute and associated regulations, which authorizes the government agent to impose civil money penalties, an assessment, and program exclusion for various forms of fraud and abuse involving the Medicare and Medicaid programs; |
• | the criminal healthcare fraud provisions of HIPAA, and related rules that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it; |
• | federal and state laws regarding telemedicine services, including necessary technological standards to deliver such services, coverage restrictions associated with such services, the amount of reimbursement for such services, the licensure of individuals providing such services; |
• | federal and state laws and policies related to the prescribing and dispensing of pharmaceuticals and controlled substances; |
• | federal and state laws related to the advertising and marketing of services by healthcare providers; |
• | state laws regulating the operations and financial condition of risk bearing providers, which may include capital requirements, licensing or certification, governance controls and other similar matters; |
• | state and federal statutes and regulations that govern workplace health and safety; |
• | federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs and, in some cases, to re-enroll in these programs when changes in direct or indirect ownership occur; |
• | state laws pertaining to kickbacks, fee splitting, self-referral and false claims, some of which are not consistent with comparable federal laws and regulations, including, for example, not being limited in scope to relationships involving government health care programs; |
• | state insurance laws governing what healthcare entities may bear financial risk and the allowable types of financial risks, including direct primary care programs, provider-sponsored organizations, Accountable Care Organizations, Independent Physician Associations, and provider capitation; |
• | federal and state laws pertaining to the provision of services by nurse practitioners and physician assistants in certain settings, physician supervision of those services, and reimbursement requirements that depend on the types of services provided and documented and relationships between physician supervisors and nurse practitioners and physician assistants; and |
• | federal and state laws pertaining to the privacy and security of protected health information, or PHI, and other patient information. |
• | suspension or termination of our participation in government payment programs; |
• | refunds of amounts received in violation of law or applicable payment program requirements dating back to the applicable statute of limitation periods; |
• | loss of our required government certifications or exclusion from government payment programs; |
• | loss of our licenses required to operate healthcare medical centers or administer pharmaceuticals in the states in which we operate; |
• | criminal or civil liability, fines, damages, exclusion from participation in federal and state health care programs and/or monetary penalties for violations of healthcare fraud and abuse laws, including the federal Anti-Kickback Statute, Civil Monetary Penalties Law, Stark Law and FCA, state laws and regulations, or other failures to meet regulatory requirements; |
• | enforcement actions by governmental agencies and/or state law claims for monetary damages by patients who believe their PHI has been used, disclosed or not properly safeguarded in violation of federal or state patient privacy laws, including HIPAA and the Privacy Act of 1974; |
• | mandated changes to our practices or procedures that significantly increase operating expenses; |
• | imposition of and compliance with corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our billing and business practices which could lead to potential fines, among other things; |
• | termination of various relationships and/or contracts related to our business, including payor agreements, joint venture arrangements, medical director agreements, real estate leases and consulting agreements with physicians; |
• | changes in and reinterpretation of rules and laws by a regulatory agency or court, such as state corporate practice of medicine laws, that could affect the structure and management of our business and its affiliated physician practice corporations; |
• | negative adjustments to government payment models including, but not limited to, Medicare Parts A, B, C and D and Medicaid; and |
• | harm to our reputation which could negatively impact our business relationships, affect our ability to attract and retain members and physicians, affect our ability to obtain financing and decrease access to new business opportunities, among other things. |
• | administrative or legislative changes to base rates or the bases of payment; |
• | limits on the services or types of providers for which Medicare will provide reimbursement; |
• | changes in methodology for member assessment and/or determination of payment levels; |
• | the reduction or elimination of annual rate increases; or |
• | an increase in co-payments or deductibles payable by beneficiaries. |
• | refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from payors; |
• | state or federal agencies imposing fines, penalties and other sanctions on us; |
• | temporary suspension of payment for new patients to the facility or agency; |
• | decertification or exclusion from participation in the Medicare or Medicaid programs or one or more payor networks; |
• | self-disclosure of violations to applicable regulatory authorities; |
• | damage to our reputation; |
• | the revocation of a facility’s or agency’s license; and |
• | loss of certain rights under, or termination of, our contracts with payors. |
• | limiting funds otherwise available for financing our working capital, capital expenditures, acquisitions, investments and other general corporate purposes by requiring us to dedicate a portion of our cash flows from operations to the repayment of indebtedness and the interest on this indebtedness; |
• | making it more difficult for us to satisfy our obligations with respect to our indebtedness; |
• | increasing our vulnerability to general adverse economic and industry conditions; |
• | exposing us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest; |
• | limiting our flexibility in planning for and reacting to changes in the industry in which we compete; and |
• | making us more vulnerable in the event of a downturn in our business. |
• | incur or guarantee additional indebtedness; |
• | incur liens; |
• | pay dividends and distributions on, or redeem, repurchase or retire our capital stock; |
• | make investments, acquisitions, loans, or advances; |
• | engage in mergers, consolidations, liquidations or dissolutions; |
• | sell, transfer or otherwise dispose of assets, including capital stock of subsidiaries; |
• | engage in certain transactions with affiliates; |
• | change of the nature of our business; |
• | prepay, redeem or repurchase certain indebtedness; and |
• | designate restricted subsidiaries as unrestricted subsidiaries. |
• | limited in how we conduct our business; |
• | unable to raise additional debt or equity financing to operate during general economic or business downturns; or |
• | unable to compete effectively or to take advantage of new business opportunities. |
• | pay certain dividends on, repurchase, or make distributions in respect of capital stock or make other restricted payments; |
• | issue or sell capital stock of restricted subsidiaries; |
• | incur or guarantee certain indebtedness; |
• | make certain investments; |
• | sell or exchange certain assets; |
• | enter into transactions with affiliates; |
• | create certain liens; and |
• | consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis. |
• | limited in how we conduct our business; |
• | unable to raise additional debt or equity financing to operate during general economic or business downturns; or |
• | unable to compete effectively or to take advantage of new business opportunities. |
• | We failed to establish controls to ensure the completeness and accuracy of information used to estimate and record certain accruals or make other closing adjustments in the financial statement close process. |
• | We failed in the process of accounting for business combinations related to the design and operation of controls to record and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interests recognized as part of a business combination. |
• | Furthermore, we did not have a sufficient complement of personnel with an appropriate level of knowledge, experience, and oversight commensurate with its financial reporting requirements to ensure proper selection and application of U.S. generally accepted accounting principles, or GAAP. |
• | market conditions in our industry or the broader stock market; |
• | actual or anticipated fluctuations in our quarterly financial and operating results; |
• | issuances of new or changed securities analysts’ reports or recommendations; |
• | sales, or anticipated sales, of large blocks of our stock; |
• | additions or departures of key personnel; |
• | regulatory, legislative or political developments; |
• | litigation and governmental investigations; |
• | changing economic conditions; |
• | investors’ perception of us; |
• | events beyond our control such as weather and war; and |
• | any default on our indebtedness. |
• | a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; |
• | the ability of our Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | the limitation of the liability of, and the indemnification of, our directors and officers; |
• | the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board; |
• | the requirement that directors may only be removed from our Board for cause; |
• | the requirement that a special meeting of stockholders may be called only by a majority of our directors, whether not there exists any vacancies or unfilled seats, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | controlling the procedures for the conduct and scheduling of our Board and stockholder meetings; |
• | the requirement for the affirmative vote of holders of (i) (a) at least 66-2/3%, in case of certain provisions, or (b) a majority, in case of other provisions, of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal certain provisions of our Certificate of Incorporation, and (ii) (a) at least 66-2/3%, in case of certain provisions, or (b) a majority, in case of other provisions, of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal certain provisions of our Bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; |
• | the ability of our Board to amend the Bylaws, which may allow our Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company. |
• | allow us to authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without shareholder approval, and which may include super majority voting, special approval, dividend, or other rights or preferences superior to the rights of shareholders; |
• | provide for a classified board of directors with staggered three-year terms; |
• | provide that any amendment, alteration, rescission or repeal of our Bylaws or certain provisions of our Certificate of Incorporation by our shareholders will require the affirmative vote of the holders of a majority of at least two-thirds (2/3) of the outstanding shares of capital stock entitled to vote thereon as a class; and |
• | establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by shareholders at shareholder meetings. |
• | Business Combination: |
• | Significant Acquisition: |
• | Tax Receivable Agreement: |
• | Debt Paydown: |
Jaws (Historical) Period from January 1, 2021 to June 3, 2021 |
Cano Health, Inc. (Historical) |
Pro Forma Transaction Accounting Adjustments |
Note 3 |
Jaws and Cano Health, Inc. Pro Forma Consolidated |
University (Historical) Period from January 1, 2021 to June 11, 2021 |
University Pro Forma Transaction Accounting Adjustments |
Note 3 |
Pro Forma Combined |
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Revenue |
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Capitated revenue |
$ | — | $ | 1,529,120 | $ | — | $ | 1,529,120 | $ | 149,711 | $ | — | $ | 1,678,831 | ||||||||||||||||||||||
Fee-for-service |
— | 80,249 | — | 80,249 | 4,740 | — | 84,989 | |||||||||||||||||||||||||||||
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Total revenue |
— | 1,609,369 | — | 1,609,369 | 154,451 | — | 1,763,820 | |||||||||||||||||||||||||||||
Operating expenses: |
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Third-party medical costs |
— | 1,231,047 | — | 1,231,047 | 126,594 | — | 1,357,641 | |||||||||||||||||||||||||||||
Direct patient expense |
— | 179,353 | — | 179,353 | 6,839 | — | 186,192 | |||||||||||||||||||||||||||||
Operating costs and formation costs |
2,808 | — | — | 2,808 | — | — | 2,808 | |||||||||||||||||||||||||||||
Selling, general and administrative expenses |
— | 252,133 | — | (d | ) | 252,133 | 7,941 | — | 260,074 | |||||||||||||||||||||||||||
Depreciation and amortization expense |
— | 49,441 | — | 49,441 | 223 | 14,125 | (a1 | ) | 63,789 | |||||||||||||||||||||||||||
Transaction costs and other |
— | 44,262 | — | (c | ) | 44,262 | — | — | (c | ) | 44,262 | |||||||||||||||||||||||||
Fair value adjustment – continent consideration |
— | (11,680 | ) | — | (11,680 | ) | — | — | (11,680 | ) | ||||||||||||||||||||||||||
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Total operating expenses |
2,808 | 1,744,556 | — | 1,747,364 | 141,597 | 14,125 | 1,903,086 | |||||||||||||||||||||||||||||
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Income / (loss) from operations |
(2,808 | ) | (135,187 | ) | — | (137,995 | ) | 12,854 | (14,125 | ) | (139,266 | ) | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Interest expense |
— | (51,291 | ) | 18,099 | (a2 | ) | (33,192 | ) | — | (7,458 | ) | (a2 | ) | (40,650 | ) | |||||||||||||||||||||
Interest income |
112 | 4 | (112 | ) | (a3 | ) | 4 | — | — | 4 | ||||||||||||||||||||||||||
Loss on extinguishment of debt |
— | (13,115 | ) | — | (13,115 | ) | — | — | (13,115 | ) | ||||||||||||||||||||||||||
Other income |
— | (48 | ) | — | (48 | ) | 1,540 | — | 1,492 | |||||||||||||||||||||||||||
Fair value adjustment - warrant liability |
(72,518 | ) | 82,914 | — | 10,396 | — | — | 10,396 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total other income / (expense) |
(72,406 | ) | 18,464 | 17,987 | (35,955 | ) | 1,540 | (7,458 | ) | (41,873 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income / (loss) before income tax expense |
(75,214 | ) | (116,723 | ) | 17,987 | (173,950 | ) | 14,394 | (21,583 | ) | (181,139 | ) | ||||||||||||||||||||||||
Income tax expense |
— | 14 | — | 14 | — | — | 14 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income / (loss) |
(75,214 | ) | (116,737 | ) | 17,987 | (173,964 | ) | 14,394 | (21,583 | ) | (181,153 | ) | ||||||||||||||||||||||||
Net loss attributable to non-controlling interests |
— | (98,717 | ) | (9,654 | ) | (a4 | ) | (108,371 | ) | — | (4,479 | ) | (a4 | ) | (112,850 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net income / (loss) attributable to Cano Health, Inc. |
— | (18,020 | ) | $ | (27,641 | ) | $ | (65,593 | ) | $ | 14,394 | $ | (17,104 | ) | $ | (68,303 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Weighted average Class A shares outstanding, basic |
69,000,000 | 170,507,194 | (69,000,000 | ) | (b | ) | — | — | 1,788,952 | (b | ) | 172,296,146 | ||||||||||||||||||||||||
Basic net loss per share, Class A |
— | $ | (0.11 | ) | — | — | — | — | $ | (0.40 | ) | |||||||||||||||||||||||||
Weighted average Class A shares outstanding, diluted |
69,000,000 | 475,697,225 | (69,000,000 | ) | (b | ) | $ | — | — | 1,788,952 | (b | ) | 477,486,177 | |||||||||||||||||||||||
Diluted net loss per share, Class A |
— | $ | (0.28 | ) | — | — | — | — | $ | (0.38 | ) | |||||||||||||||||||||||||
Weighted average shares outstanding of Class B non-redeemable ordinary shares |
17,250,000 | — | (17,250,000 | ) | (b | ) | — | — | — | (b | ) | — | ||||||||||||||||||||||||
Basic and diluted net loss per share, Class B |
(4.36 | ) | — | — | — | — | — | — |
Shares Outstanding |
% |
|||||||
Seller |
297,385,981 | 62.3 | % | |||||
PIPE Investors |
80,000,000 | 16.8 | % | |||||
Jaws Shareholders |
68,993,491 | 14.4 | % | |||||
Sponsor and its affiliates |
17,250,000 | 3.6 | % | |||||
University Sellers |
4,055,698 | 0.8 | % | |||||
Other acquisitions/exchanges |
9,814,362 | 2.1 | % | |||||
|
|
|
|
|||||
Closing shares |
477,499,532 | 100 | % | |||||
|
|
|
|
a. | The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021 are as follows: |
(1) | Adjustment to include amortization expense related to the intangible assets of University acquired by Cano Health, Inc.: |
Year ended December 31, 2021 |
||||
|
|
|||
Elimination of University historical amortization expense |
$ | (35 | ) | |
Amortization expense for University intangible assets acquired by Cano Health, Inc. |
14,160 | |||
|
|
|||
Total pro forma amortization expense |
$ | 14,125 | ||
|
|
(2) | Adjustments to interest expense for the PCIH’s debt refinancing related to the Business Combination and the issuance of additional debt to finance the University acquisition: |
Year Ended December 31, 2021 |
||||
|
|
|||
Elimination of PCIH historical interest expense |
$ | (20,340 | ) | |
Interest expense associated with the remaining balance of the Term Loan |
1,765 | |||
Amortization expense on the Term Loan |
476 | |||
|
|
|||
Net Pro Forma adjustment to interest expense Post-Business Combination |
$ |
(18,099 |
) | |
Interest expense associated with Term Loan issued for University acquisition |
7,458 | |||
|
|
|||
Total net Pro Forma adjustment to interest expense |
$ |
(10,641 |
) | |
|
|
Year Ended December 31, 2021 |
||||
|
|
|||
Variable interest rate +1/8% |
$ | 40,855 | ||
Variable interest rate -1/8% |
$ | 40,449 |
(3) | Adjustments for the elimination of interest income held in the Trust Account |
Year Ended December 31, 2021 |
||||
Elimination of interest income |
$ | 112 | ||
|
|
|||
Net Pro Forma adjustment to interest income |
$ | 112 | ||
|
|
(4) | Adjustments for the non-controlling interest in the Business Combination and the University acquisition: |
December 31, 2021 |
||||
NCI (62.3%) |
||||
Jaws + PCIH net pro forma loss before income taxes |
$ | (173,950 | ) | |
|
|
|||
Non-controlling interest pro forma adjustment |
(9,654 | ) | ||
|
|
|||
Jaws + PCIH pro forma loss attributable to non-controlling interest |
$ |
(108,371 |
) | |
|
|
|||
University net pro forma loss before income taxes |
$ | (7,189 | ) | |
|
|
|||
Non-controlling interest pro forma adjustment |
(4,479 | ) | ||
|
|
|||
University pro forma loss attributable to non-controlling interest |
$ |
(4,479 |
) | |
|
|
|||
Total net pro forma loss before income taxes |
$ | (181,139 | ) | |
|
|
|||
Total non-controlling interest pro forma adjustment |
(14,133 | ) | ||
|
|
|||
Total pro forma loss attributable to non-controlling interest |
$ |
(112,850 |
) | |
|
|
b. | Adjustments for earnings per share included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021: |
For the year ended December 31, 2021 |
||||||||||||||||
Jaws (Historical) |
Cano Health, Inc. (Historical) |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||
(in thousands, except share and per share data) |
|
|||||||||||||||
Net loss attributable to Cano Health |
$ | (75,214 | ) | $ | (18,020 | ) | $ | 24,931 | $ | (68,303 | ) | |||||
Diluted net loss attributable to Cano Health |
$ | — | $ | — | $ | — | $ | (181,153 | ) | |||||||
Weighted average shares outstanding of Class A redeemable ordinary shares, basic |
69,000,000 | 170,507,194 | (67,211,048 | ) | 172,296,146 | |||||||||||
Basic net loss per share, Class A 1 |
— | $ | (0.11 | ) | — | $ | (0.40 | ) | ||||||||
Weighted average shares outstanding of Class A redeemable ordinary shares, diluted |
69,000,000 | 475,697,225 | (67,211,048 | ) | 477,486,177 | |||||||||||
Diluted net loss per share, Class A 1 |
— | $ | (0.28 | ) | — | $ | (0.38 | ) | ||||||||
Weighted average shares outstanding of Class B non-redeemable ordinary shares2 |
17,250,000 | — | (17,250,000 | ) | — | |||||||||||
Basic and diluted net loss per share, Class B |
(4.36 | ) | — | — | — |
c. | Given transaction costs incurred in connection with the Business Combination and the University acquisition of $19.7 million are included in the historical statements of operations of the Company for the year ended December 31, 2021, no further adjustment to the transaction costs and other expenses caption is required. |
d. | Given the acceleration of profit unit interests incurred in connection with the Business Combination for $1.0 million are included in the historical statement of operations of the Company for the year ended December 31, 2021, no further adjustment to the selling, general and administrative expenses caption is required. |
e. | Given the write-off of the unamortized debt issuance costs and debt extinguishment of $13.2 million is included in the historical statement of operations of the Company for the year ended December 31, 2021, no further adjustment is required. |
• | suspension or termination of our participation in government and/or private payment programs; |
• | refunds of amounts received in violation of law or applicable payment program requirements dating back to the applicable statute of limitation periods; |
• | loss of our licenses required to operate healthcare medical centers, dispense pharmaceuticals, or provide ancillary services in the states in which we operate; |
• | criminal or civil liability, fines, damages, exclusion from participating in federal and state healthcare programs and/or monetary penalties for violations of healthcare fraud and abuse laws, including, but not limited to, the federal Anti-Kickback Statute, Civil Monetary Penalties Law of the Social Security Act, or the CMPL, the federal physician self-referral law, commonly referred to as the Stark Law, the False Claims Act, or the FCA, and/or state analogs to these federal enforcement authorities, or other regulatory requirements; |
• | enforcement actions by governmental agencies and/or state law claims for monetary damages by patients who believe their health information has been used, disclosed or not properly safeguarded in violation of federal or state patient privacy laws, including the regulations implementing the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, or HIPAA; |
• | mandated changes to our practices or procedures that significantly increase operating expenses or decrease our revenue; |
• | imposition of and compliance with corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our billing and business practices which could lead to potential fines, among other things; |
• | termination of various relationships and/or contracts related to our business, including joint venture arrangements, contracts with payors, real estate leases and provider employment arrangements; |
• | changes in and reinterpretation of rules and laws by a regulatory agency or court, such as state corporate practice of medicine laws, that could affect the structure and management of our business and its affiliated physician practice corporations; |
• | negative adjustments or insufficient inflationary adjustments to government payment models including, but not limited to, Medicare Parts A, B, C and D and Medicaid; and |
• | harm to our reputation, which could negatively impact our business relationships, the terms of payor contracts, our ability to attract and retain patients and physicians, our ability to obtain financing and our access to new business opportunities, among other things. |
• | Affiliated Physician Agreements |
• | Management Services Agreements |
• | Marketing Arrangements. |
• | Joint Venture Arrangements. |
• | Administrative Services Agreements. |
• | Acquisitions. |
• | knowingly presents or causes to be presented to the federal government a false or fraudulent claim for payment or approval; |
• | knowingly makes, uses or causes to be made or used a false record or statement material to a false or fraudulent claim; |
• | knowingly makes, uses or causes to be made or used a false record or statement material to an obligation to pay the government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the federal government; or |
• | conspires to commit the above acts. |
• | presenting, or causing to be presented, claims for payment to Medicare, Medicaid or other third-party payors that the individual or entity knows or should know are for an item or service that was not provided as claimed or is false or fraudulent; |
• | offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive health care items or services from a particular provider; |
• | arranging contracts with an entity or individual excluded from participation in the federal healthcare programs; |
• | violating the federal Anti-Kickback Statute; |
• | making, using or causing to be made or used a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a federal healthcare program; |
• | making, using or causing to be made any false statement, omission or misrepresentation of a material fact in any application, bid or contract to participate or enroll as a provider of services or a supplier under a federal healthcare program; |
• | failing to report and return an overpayment owed to the federal government; |
• | being convicted of fraud, theft, embezzlement, breach of fiduciary responsibility or any other financial misconduct relating to health care; |
• | being convicted of illegally manufacturing, distributing, prescribing or dispensing a controlled substance; |
• | being convicted of any crime related to the Medicare program; |
• | being convicted of fraud in connection with non-health care programs; |
• | being convicted of obstructing an audit or investigation; |
• | having an entity controlled by a sanctioned individual or by a family or household member of an excluded individual where there has been a transfer of ownership/control; |
• | filing claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of health care; and |
• | making false statement or misrepresentations of material fact. |
• | Patients low-income communities, including large minority and immigrant populations, with complex care needs, many of whom previously had very limited or no access to quality healthcare. We are proud of the impact we have made in these underserved communities. |
• | Providers pre-authorizations, referrals, billing and coding. Our physicians receive ongoing training through regular clinical meetings to review the latest findings in primary care medicine. In addition, our physicians are eligible to receive a bonus based upon patient results, including reductions in patient emergency room visits and hospital admissions, among other metrics. |
• | Payors |
• | Primary Care Physicians and related entities Class A-4 Units of PCIH and $2.6 million in other closing payments. Primary Care Physicians is comprised of eleven primary care centers and a managed services organization serving populations in the Broward County region of South Florida. |
• | HP Enterprises II, LLC and related entities Class A-4 Units of PCIH and $16.1 million in deferred payments. Healthy Partners is comprised of sixteen primary care centers and a management services organization serving populations across Florida, including the Miami-Dade, Broward, Palm Beach, Treasure Coast and Central Florida areas. |
• | University Health Care and its affiliates add-ons based on additional acquired entities. University is comprised of thirteen primary care centers, a managed services organization and a pharmacy serving populations throughout various locations in South Florida. |
• | Doctor’s Medical Center, LLC and its affiliates |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Membership |
227,005 | 105,707 | 41,518 | |||||||||
Medical centers |
130 | 71 | 35 |
Years Ended December 31, |
||||||||||||
($ in thousands) |
2021 |
2020 (as Revised) |
2019 (as Revised) |
|||||||||
Revenue: |
||||||||||||
Capitated revenue |
$ | 1,529,120 | $ | 796,373 | $ | 340,901 | ||||||
Fee-for-service |
80,249 | 35,203 | 20,483 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
1,609,369 | 831,576 | 361,384 | |||||||||
Operating expenses: |
||||||||||||
Third-party medical costs |
1,231,047 | 564,987 | 242,572 | |||||||||
Direct patient expense |
179,353 | 101,358 | 42,100 | |||||||||
Selling, general, and administrative expenses |
252,133 | 103,962 | 59,148 | |||||||||
Depreciation and amortization expense |
49,441 | 18,499 | 6,822 | |||||||||
Transaction costs and other |
44,262 | 42,945 | 17,583 | |||||||||
Change in fair value of contingent consideration |
(11,680 | ) | 65 | 2,845 | ||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
1,744,556 | 831,816 | 371,070 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(135,187 | ) | (240 | ) | (9,686 | ) | ||||||
Other income and expense: |
||||||||||||
Interest expense |
(51,291 | ) | (34,002 | ) | (10,163 | ) | ||||||
Interest income |
4 | 320 | 319 | |||||||||
Loss on extinguishment of debt |
(13,115 | ) | (23,277 | ) | — | |||||||
Change in fair value of embedded derivative |
— | (12,764 | ) | — | ||||||||
Change in fair value of warrant liabilities |
82,914 | — | — | |||||||||
Other expenses |
(48 | ) | (450 | ) | (250 | ) | ||||||
|
|
|
|
|
|
|||||||
Total other income (expense) |
18,464 | (70,173 | ) | (10,094 | ) | |||||||
|
|
|
|
|
|
|||||||
Net loss before income tax expenses |
(116,723 | ) | (70,413 | ) | (19,780 | ) | ||||||
Income tax expense |
14 | 651 | — | |||||||||
|
|
|
|
|
|
|||||||
Net loss |
(116,737 | ) | (71,064 | ) | $ | (19,780 | ) | |||||
Net loss attributable to non-controlling interests |
(98,717 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Net loss attributable to Class A common stockholders |
$ | (18,020 | ) | $ | — | $ | — | |||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
(% of revenue) |
2021 |
2020 (as Revised) |
2019 (as Revised) |
|||||||||
Revenue: |
||||||||||||
Capitated revenue |
95.0 | % | 95.8 | % | 94.3 | % | ||||||
Fee-for-service |
5.0 | % | 4.2 | % | 5.7 | % | ||||||
|
|
|
|
|
|
|||||||
Total revenue |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Third-party medical costs |
76.5 | % | 67.9 | % | 67.1 | % | ||||||
Direct patient expense |
11.1 | % | 12.2 | % | 11.6 | % | ||||||
Selling, general, and administrative expenses |
15.7 | % | 12.5 | % | 16.4 | % | ||||||
Depreciation and amortization expense |
3.1 | % | 2.2 | % | 1.9 | % | ||||||
Transaction costs and other |
2.8 | % | 5.2 | % | 4.9 | % | ||||||
Change in fair value of contingent consideration |
(0.7 | )% | 0.0 | % | 0.8 | % | ||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
108.5 | % | 100.0 | % | 102.7 | % | ||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(8.5 | )% | 0.0 | % | (2.7 | )% | ||||||
Other income and expense: |
||||||||||||
Interest expense |
(3.2 | )% | (4.1 | )% | (2.8 | )% | ||||||
Interest income |
0.0 | % | 0.0 | % | 0.1 | % | ||||||
Loss on extinguishment of debt |
(0.8 | )% | (2.8 | )% | 0.0 | % | ||||||
Change in fair value of embedded derivative |
0.0 | % | (1.5 | )% | 0.0 | % | ||||||
Change in fair value of warrant liabilities |
5.2 | % | 0.0 | % | 0.0 | % | ||||||
Other expenses |
0.0 | % | (0.1 | )% | (0.1 | )% | ||||||
|
|
|
|
|
|
|||||||
Total other income (expense) |
1.2 | % | (8.5 | )% | (2.8 | )% | ||||||
|
|
|
|
|
|
|||||||
Net loss before income tax expenses |
(7.3 | )% | (8.5 | )% | (5.5 | )% | ||||||
Income tax expense (benefit) |
0.0 | % | 0.1 | % | 0.0 | % | ||||||
|
|
|
|
|
|
|||||||
Net loss |
(7.3 | )% | (8.4 | )% | (5.5 | )% | ||||||
Net loss attributable to non-controlling interests |
(6.1 | )% | — | % | — | % | ||||||
|
|
|
|
|
|
|||||||
Net loss attributable to Class A common stockholders |
(1.2 | )% | — | % | — | % | ||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||||||||||
2021 |
2020 (as Revised) |
2019 (as Revised) |
||||||||||||||||||||||
($ in thousands) |
Revenue $ |
Revenue % |
Revenue $ |
Revenue % |
Revenue $ |
Revenue % |
||||||||||||||||||
Capitated revenue |
||||||||||||||||||||||||
Medicare |
$ | 1,334,308 | 82.9 | % | $ | 672,588 | 80.9 | % | $ | 279,788 | 77.4 | % | ||||||||||||
Other capitated revenue |
194,812 | 12.1 | % | 123,785 | 14.9 | % | 61,113 | 16.9 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total capitated revenue |
1,529,120 | 95.0 | % | 796,373 | 95.8 | % | 340,901 | 94.3 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fee-for-service |
||||||||||||||||||||||||
Fee-for-service |
25,383 | 1.6 | % | 9,504 | 1.1 | % | 5,769 | 1.6 | % | |||||||||||||||
Pharmacy |
36,306 | 2.3 | % | 23,079 | 2.8 | % | 12,897 | 3.6 | % | |||||||||||||||
Other |
18,560 | 1.1 | % | 2,620 | 0.3 | % | 1,817 | 0.5 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total fee-for-service |
80,249 | 5.0 | % | 35,203 | 4.2 | % | 20,483 | 5.7 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenue |
$ | 1,609,369 | 100.0 | % | $ | 831,576 | 100.0 | % | $ | 361,384 | 100.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
2021 |
2020 |
% Change |
||||||||||
Members: |
||||||||||||
Medicare Advantage |
118,348 | 74,644 | 58.5 | % | ||||||||
Medicare DCE |
7,651 | — | 100.0 | % | ||||||||
Medicaid |
66,500 | 19,314 | 244.3 | % | ||||||||
ACA |
34,506 | 11,749 | 193.7 | % | ||||||||
|
|
|
|
|||||||||
Total members |
227,005 | 105,707 | 114.7 | % | ||||||||
|
|
|
|
|||||||||
Member months: |
||||||||||||
Medicare Advantage |
1,167,848 | 708,505 | 64.8 | % | ||||||||
Medicare DCE |
69,707 | — | 100.0 | % | ||||||||
Medicaid |
518,335 | 193,849 | 167.4 | % | ||||||||
ACA |
286,005 | 125,319 | 128.2 | % | ||||||||
|
|
|
|
|||||||||
Total member months |
2,041,895 | 1,027,673 | 98.7 | % | ||||||||
|
|
|
|
|||||||||
Per Member Per Month, or PMPM: |
(as Revised |
) |
||||||||||
Medicare Advantage |
$ | 1,066 | $ | 949 | 12.3 | % | ||||||
Medicare DCE |
$ | 1,276 | $ | — | 100.0 | % | ||||||
Medicaid |
$ | 355 | $ | 623 | (43.0 | )% | ||||||
ACA |
$ | 39 | $ | 24 | 62.5 | % | ||||||
Total PMPM |
$ | 749 | $ | 775 | (3.4 | )% | ||||||
Owned medical centers |
130 | 71 |
Years Ended December 31, |
||||||||||||||||
($ in thousands) |
2021 |
2020 (as Revised) |
$ Change |
% Change |
||||||||||||
Revenue: |
||||||||||||||||
Capitated revenue |
$ | 1,529,120 | $ | 796,373 | $ | 732,746 | 92.0 | % | ||||||||
Fee-for-service |
80,249 | 35,203 | 45,046 | 128.0 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Total revenue |
$ | 1,609,369 | $ | 831,576 | $ | 777,792 | ||||||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
($ in thousands) |
2021 |
2020 (as Revised) |
$ Change |
% Change |
||||||||||||
Operating expenses: |
||||||||||||||||
Third-party medical costs |
$ | 1,231,047 | $ | 564,987 | $ | 666,060 | 117.9 | % | ||||||||
Direct patient expense |
179,353 | 101,358 | 77,995 | 77.0 | % | |||||||||||
Selling, general, and administrative expenses |
252,133 | 103,962 | 148,171 | 142.5 | % | |||||||||||
Depreciation and amortization expense |
49,441 | 18,499 | 30,942 | 167.3 | % | |||||||||||
Transaction costs and other |
44,262 | 42,945 | 1,317 | 3.1 | % | |||||||||||
Change in fair value of contingent consideration |
(11,680 | ) | 65 | (11,745 | ) | N/A | ||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses |
$ | 1,744,556 | $ | 831,816 | $ | 912,740 | ||||||||||
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||||||
($ in thousands) |
2021 |
2020 (as Revised) |
$ Change |
% Change |
||||||||||||
Other income and expense: |
||||||||||||||||
Interest expense |
$ | (51,291 | ) | $ | (34,002 | ) | $ | (17,289 | ) | 50.8 | % | |||||
Interest income |
4 | 320 | (316 | ) | (98.8 | )% | ||||||||||
Loss on extinguishment of debt |
(13,115 | ) | (23,277 | ) | 10,162 | (43.7 | )% | |||||||||
Change in fair value of embedded derivative |
— | (12,764 | ) | 12,764 | (100.0 | )% | ||||||||||
Change in fair value of warrant liabilities |
82,914 | — | 82,914 | 100.0 | % | |||||||||||
Other expenses |
(48 | ) | (450 | ) | 402 | (89.3 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Total other income (expense) |
$ | 18,464 | $ | (70,173 | ) | $ | 88,637 | |||||||||
|
|
|
|
|
|
• | On June 3, 2021, the Business Combination with Jaws closed. In aggregate, the Company generated approximately $935.4 million in net cash proceeds after transaction costs and advisory fees paid and distributions to PCIH shareholders. |
• | On June 4, 2021, the Company utilized $400.0 million of the net proceeds from the Business Combination to pay down the Company’s debt under Term Loan 3 and the remainder of the net proceeds was held on the balance sheet for general corporate purposes. |
• | See further discussion related to the Business Combination in Note 1, “Nature of Business and Operations” in our audited consolidated financial statements. |
• | In June 2021, we borrowed the remaining availability under our Delayed Draw Term Loan Facility of $175.0 million and entered into the Third Amendment and Incremental Facility Amendment to the Credit Agreement pursuant to which we borrowed $295.0 million and made certain other amendments to our Credit Agreement. |
• | See further discussion of the Credit Agreement with Credit Suisse AG, Cayman Islands Branch, in Note 9, “Long-term debt”, under Term Loan 3, in our audited consolidated financial statements. |
• | On July 2, 2021, we entered into the Bridge Loan Agreement with certain lenders and Credit Suisse AG, Cayman Islands Branch, as administrative agent, pursuant to which the lenders provided a $250.0 million unsecured bridge term loan. We used the bridge term loan to acquire DMC. |
• | On September 30, 2021, we issued senior unsecured notes for a principal amount of $300.0 million, or the Senior Notes, in a private offering. Proceeds from the Senior Notes were used to repay in full the $250.0 million bridge term loan under the Bridge Loan Agreement. The Senior Notes bear interest at 6.25% per annum, payable semi-annually on April 1st and October 1st of each year, commencing April 1, 2022. |
• | Further, on September 30, 2021, the Credit Agreement was amended to increase the Term Loan 3 by an additional $100.0 million and to increase the Revolving Credit Facility by an additional $30.0 million, bringing the aggregate amount of commitments under the Revolving Credit Facility to $60.0 million. |
• | On December 10, 2021, Credit Agreement was further amended to increase the Revolving Credit Facility by an additional $60.0 million for an aggregate amount of commitments of $120.0 million. |
Years Ended December 31, |
||||||||
($ in thousands) |
2021 |
2020 (as Revised) |
||||||
Net cash used in operating activities |
$ | (128,527 | ) | $ | (9,235 | ) | ||
Net cash used in investing activities |
(1,131,248 | ) | (268,366 | ) | ||||
Net cash provided by financing activities |
1,389,138 | 282,216 | ||||||
|
|
|
|
|||||
Net increase in cash, cash equivalents and restricted cash |
129,363 | 4,615 | ||||||
Cash, cash equivalents and restricted cash at beginning of year |
33,807 | 29,192 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash at end of period |
$ | 163,170 | $ | 33,807 | ||||
|
|
|
|
• | Increase in net loss after adjusting for the $82.91 million gain from the change in the fair value of the warrant liabilities for the year ended December 31, 2021 was $199.7 million compared to a net loss for the year ended December 31, 2020 of $71.1 million; |
• | Increases in accounts receivable, net was $15.1 million for the year ended December 31, 2021 compared to $30.3 million for the year ended December 31, 2020 due to timing of collections; |
• | Increases in prepaid expenses and other current assets and other non-current assets of $28.2 million for the year ended December 31, 2021 compared to $7.9 million for the year ended December 31, 2020 due to higher prepaid insurance payments and prepaid bonus incentives; |
• | Increases in accounts payable was $33.7 million for the year ended December 31, 2021 compared to an increase of $27.3 million for the year ended December 31, 2020 due to the addition of MSO provider payments related to the Company’s acquisitions and an increase in accrued salaries, bonuses, and interest, and accruals relates to various professional services. |
• | allow investors to evaluate our performance from management’s perspective, resulting in greater transparency with respect to supplemental information used by us in our financial and operational decision making; |
• | provide better transparency as to the measures used by management and others who follow our industry to estimate the value of our company; and |
• | allow investors to view our financial performance and condition in the same manner that our significant lenders and landlords require us to report financial information to them in connection with determining our compliance with financial covenants. |
• | although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; |
• | Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) the change in the fair value of our warrant liabilities, ; or (4) net interest expense/income; and |
• | other companies, including companies in our industry, may calculate EBITDA and/or Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure. |
Years Ended December 31, |
||||||||||||
($ in thousands) |
2021 |
2020 (as Revised) |
2019 (as Revised) |
|||||||||
Net loss |
$ |
(116,737 |
) |
$ |
(71,064 |
) |
$ |
(19,780 |
) | |||
Interest income |
(4 | ) | (320 | ) | (319 | ) | ||||||
Interest expense |
51,291 | 34,002 | 10,163 |
Income tax expense |
14 | 651 | — | |||||||||
Depreciation and amortization expense |
49,441 | 18,499 | 6,822 | |||||||||
|
|
|
|
|
|
|||||||
EBITDA |
$ |
(15,995 |
) |
$ |
(18,232 |
) |
$ |
(3,114 |
) | |||
|
|
|
|
|
|
|||||||
Stock-based compensation |
27,983 | 528 | 182 | |||||||||
De novo losses (1) |
40,562 | 8,662 | 5,523 | |||||||||
Acquisition transaction costs (2) |
48,303 | 43,333 | 17,909 | |||||||||
Restructuring and other |
7,883 | 2,435 | 299 | |||||||||
Change in fair value of contingent consideration |
(11,680 | ) | 65 | 2,845 | ||||||||
Loss on extinguishment of debt |
13,115 | 23,277 | — | |||||||||
Change in fair value of embedded derivative |
— | 12,764 | — | |||||||||
Change in fair value of warrant liabilities |
(82,914 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ |
27,257 |
$ |
72,832 |
$ |
23,644 |
||||||
|
|
|
|
|
|
(1) | De novo losses include those costs associated with the ramp up of new medical centers and that are not expected to be incurred past the first 12 months after opening. These costs collectively are higher than comparable expenses incurred once such a facility has been opened and generating revenue, and would not have been incurred unless a new facility was being opened. |
(2) | Acquisition transaction costs included $4.0 million, $0.4 million and $0.3 million of corporate development payroll costs for the years ended December 31, 2021, 2020 and 2019, respectively. Corporate development payroll costs include those expenses directly related to the additional staff needed to support our increased acquisition activity. |
• | the amounts involved exceeded or will exceed $120,000; and |
• | any of our directors, executive officers, or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest. |
Name |
Age |
Position | ||||
Executive Officers: |
||||||
Dr. Marlow Hernandez |
37 | Chief Executive Officer and President | ||||
Brian D. Koppy |
52 | Chief Financial Officer | ||||
Dr. Richard B. Aguilar |
65 | Chief Clinical Officer | ||||
David Armstrong |
56 | General Counsel, Chief Compliance Officer and Secretary | ||||
Mark Novell |
58 | Chief Accounting Officer |
Name |
Age |
Position | ||||
Directors: |
||||||
Dr. Marlow Hernandez |
37 | Chairman | ||||
Elliot Cooperstone |
60 | Director | ||||
Dr. Lewis Gold |
65 | Director | ||||
Jacqueline Guichelaar |
49 | Director | ||||
Angel Morales |
48 | Director | ||||
Dr. Alan Muney |
68 | Director | ||||
Kim. M Rivera |
53 | Director | ||||
Barry S. Sternlicht |
61 | Director | ||||
Solomon Trujillo |
70 | Director |
• | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
• | full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications; |
• | compliance with laws, rules and regulations; |
• | prompt internal reporting of violations of the code to appropriate persons identified in the code; and |
• | accountability for adherence to the Code of Business Conduct and Ethics. |
• | selecting a qualified firm to serve as the independent registered public accounting firm to audit the Company’s financial statements; |
• | helping to ensure the independence and performance of the independent registered public accounting firm; |
• | discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and the independent registered public accounting firm, the Company’s interim and year-end financial statements; |
• | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
• | reviewing and overseeing the Company’s policies on risk assessment and risk management, including enterprise risk management; |
• | assisting the Board in fulfilling its oversight responsibilities relating to the Company’s internal controls over financial reporting and its other processes to manage and control risk; and |
• | approving or, as required, pre-approving, all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm. |
• | reviewing, approving and determining the compensation of the Company’s officers and key employees; |
• | reviewing and recommending compensation and benefits, including equity awards, to directors for service on the Board or any committee thereof; |
• | administering the Company’s equity compensation plans; |
• | reviewing, approving and making recommendations to the Board regarding incentive compensation and equity compensation plans; and |
• | reviewing and making recommendations to the Board regarding policies and procedures for the grant of equity-based awards. |
• | identifying, evaluating and selecting, or making recommendations to the Board regarding, nominees for election to the Board and its committees; |
• | evaluating the performance of the Board and of individual directors; |
• | considering, and making recommendations to the Board regarding the composition of the Board and its committees; and |
• | review, evaluate and recommend to the Board corporate governance guidelines; and |
• | periodically review those guidelines and recommend any changes. |
Name |
Position | |
Dr. Marlow Hernandez | Chief Executive Officer | |
Brian Koppy | Chief Financial Officer | |
Dr. Richard Aguilar | Chief Clinical Officer | |
David Armstrong | Chief Compliance Officer and General Counsel | |
Mark Novell | Chief Accounting Officer |
• | Attracting, Motivating and Retaining the Right Talent |
• | Pay for Performance at-risk and directly aligned with Company performance. |
• | Alignment with Stockholder Interests |
CEO 2021 Target Pay Mix |
Other NEOs Average 2021 Target Pay Mix | |
2021 CEO Pay IPO-related Awards, Target Total Direct Compensation (TDC),Earned TDC and Realized Pay ($ ’000) |
What We Do |
What We Don’t Do | |||||
✓ | Pay for performance by providing a significant percentage of target annual compensation in the form of variable, at-risk compensation |
☒ | No automatic or guaranteed annual salary increases or annual cash incentive payments | |||
✓ | Pre-established performance goals that are aligned with creation of stockholder value |
☒ | No “single-trigger” automatic acceleration of equity awards upon a change of control | |||
✓ | Market comparison of executive compensation against a relevant peer group of companies | ☒ | No option repricing, backdating, or spring-loading | |||
✓ | Use of an independent compensation consultant reporting to the Compensation Committee and providing no other services to the Company | ☒ | No excessive perquisites to our named executive officers | |||
✓ | Annual say-on-pay |
☒ | No supplemental executive retirement plans | |||
☒ | No excise tax gross-ups |
Compensation Committee |
• Determines base salaries, annual cash incentive compensation and equity incentive compensation, considers compensation for comparable positions in the market, the historical compensation levels of our named executive officers, and individual performance as compared to our expectations and objectives • Approves incentive compensation programs and performance goals for the Annual Incentive Plan, or AIP • Approves all compensation actions for the named executive officers | |
Board of Directors |
• Reviews and ratifies compensation for the named executive officers | |
Independent Committee Consultant — FW Cook (December 2021—present) |
• Provides independent advice, research, and analytical services with respect to executive compensation matters to the Compensation Committee | |
• Participates in Compensation Committee meetings as requested and communicates with the Chair of the Compensation Committee between meetings | ||
• Reports to the Compensation Committee, does not perform any other services for the Company, and has no economic or other ties to the Company or the management team that could compromise its independence or objectivity • Our Compensation Committee has assessed the independence of FW Cook consistent with NYSE listing standards and has concluded that the engagement of FW Cook does not raise any conflict of interest | ||
CEO and Management |
• Management, including the CEO, develops preliminary recommendations regarding compensation matters with respect to named executive officers and other senior executives, and provides these recommendations to the Compensation Committee • In contemplation of becoming a public company, the Company retained KPMG International Limited, or KPMG International, a national compensation consulting firm, to assist in the structure and design of Cano Health’s go-forward workforce planning, executive compensation and equity compensation plans• Responsible for the administration of the compensation programs once Compensation Committee decisions are finalized |
1Life Healthcare | Oak Street Health | Teladoc Health | ||
Addus HomeCare | Sonida Senior Living | The Joint Corp. | ||
Apollo Medical Holdings | Star Equity Holdings | U.S. Physical Therapy | ||
CorVel | SunLink Health Systems |
1Life Healthcare (ONEM) | Encompass Health (EHC) | RadNet (RDNT) | ||
Acadia Healthcare (ACHC) | LHC Group (LHCG) | Surgery Partners (SGRY) | ||
Addus HomeCare (ADUS) | MEDNAX (MD) | Teladoc Health (TDOC) | ||
Amedisys (AMED) | National HealthCare (NHC) | The Ensign Group (ENSG) | ||
Apollo Medical Holdings (AMEH) | Oak Street Health (OSH) | U.S. Physical Therapy (USPH) | ||
CorVel (CRVL) |
2021 Base Salary |
||||
Dr. Marlow Hernandez |
$ | 350,000 | ||
Brian Koppy |
$ | 325,000 | ||
Dr. Richard Aguilar |
$ | 300,000 | * | |
David Armstrong |
$ | 235,000 | ||
Mark Novell |
$ | 245,000 |
* | For the 2021 fiscal year, Dr. Aguilar’s annual base salary was initially equal to $275,000. However, in recognition of Dr. Aguilar’s role and contribution to the Company, Dr. Aguilar’s base salary was increased to $300,000 in September 2021. |
2021 Target Annual Incentive |
2021 Target Annual Incentive as Percent of Base Salary |
|||||||
Dr. Marlow Hernandez |
$ | 175,000 | 50 | % | ||||
Brian Koppy |
$ | 195,000 | 60 | % | ||||
Dr. Richard Aguilar |
$ | 120,000 | 40 | % | ||||
David Armstrong |
$ | 70,500 | 30 | % | ||||
Mark Novell |
$ | 61,250 | 25 | % |
Metric |
Weighting |
Rationale for Metric |
Payout Range |
|||||
Revenue * |
50% | Key top-line financial metric of our performance |
0 - 200 |
% | ||||
Adjusted EBITDA ** |
50% | Key measure to assess the financial performance of our business in order to make decisions on allocation of resources | 0 - 200 |
% |
* | For 2021, Revenue was adjusted to include the projected payment of certain Medicare Risk Adjustments. |
** | Adjusted EBITDA is Earnings before Interest, Income Taxes, Depreciation and Amortization (EBITDA) adjusted to add back the effect of certain expenses, such as stock based compensation expense, de novo losses (consisting of losses incurred in the twelve months after the opening of a new facility), acquisition transaction costs (consisting of transaction costs, fair value adjustments to contingent consideration, management fees and corporate development payroll costs), restructuring and other charges, loss on extinguishment of debt, and changes in fair value to an embedded derivative and to warrant liabilities. For 2021, Adjusted EBITDA was further adjusted to include the projected payment of certain Medicare Risk Adjustments and other non-cash items. |
Threshold ($ million) |
Target ($ million) |
Maximum ($ million) |
Actual Performance ($ million) |
Actual Performance (% of Target Achieved) |
Payout % |
|||||||||||||||||||
Payout% |
50 | % | 100 | % | 200 | % | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Revenue* |
$ | 1,160 | $ | 1,450 | $ | 1,740 | $ | 1,720.5 | 118.7 | % | 193.3 | % | ||||||||||||
Adjusted EBITDA* |
$ | 76 | $ | 99 | $ | 114 | $ | 123.5 | 124.7 | % | 200 | % | ||||||||||||
Weighted Average Payout: 196.6% |
* | Please refer to the notes on page 152 for a description of certain adjustments to the metrics. |
Earned AIP |
Value of AIP Paid in Cash |
Value of AIP Delivered in RSUs |
Number of RSUs (#) |
|||||||||||||||||
Dr. Marlow Hernandez |
$ | 344,116 | $ | 0 | $ | 344,116 | 61,079 | |||||||||||||
Brian Koppy |
$ | 283,643 | * | $ | 144,246 | $ | 139,397 | 24,742 | ||||||||||||
Dr. Richard Aguilar |
$ | 235,966 | $ | 120,000 | $ | 115,966 | 20,583 | |||||||||||||
David Armstrong |
$ | 138,630 | $ | 70,000 | $ | 68,630 | 12,181 | |||||||||||||
Mark Novell |
$ | 76,884 | * | $ | 39,099 | $ | 37,785 | 6,707 |
* | Reflects proration based on start date. |
Target Value of 2021 LTIP |
||||
Dr. Marlow Hernandez |
$ | 2,700,000 | ||
Brian Koppy |
$ | 962,000 | ||
Dr. Richard Aguilar |
$ | 724,000 | ||
David Armstrong |
$ | 543,000 | ||
Mark Novell |
$ | 196,000 |
Equity Award |
Target LTIP Weight |
Key Features | ||
Performance-Adjusted RSU (PARSU) |
80% | • PARSUs link granted equity compensation value to the achievement of critical financial objectives and align executives’ interests with those of our stockholders. • Grant of PARSUs was conditioned on the achievement of pre-established 2021 financial goals and a total stockholder return (TSR) modifier; failure to achieve the minimum performance would have resulted in no PARSU grants.• Financial goals consisted of Revenue (key top-line metric) and Adjusted EBITDA (key bottom-line metric). Please refer to page 152 for a description of certain adjustments to the metrics.• The achievement of the financial goals was further modified by absolute TSR performance, to align the earned value with stock price performance during the performance period. • Earned PARSUs were granted on March 15, 2022 (following completion of the 2021 performance period) and will vest annually over a two-year period commencing December 31, 2022, subject generally to continued employment on each vesting date. |
Time-Based Stock Options |
20% | • Stock options align our executives’ interests with the interests of our stockholders because options only have financial value to the recipient if the price of our stock at the time of exercise exceeds the stock price on the date of grant. • Stock options were granted on March 15, 2022 (following completion of the 2021 performance period) and will vest annually over a four-year period commencing March 15, 2023, subject generally to continued employment on each vesting date. | ||
Adjustment RSUs |
— | • Incremental time-based RSU awards to reward the 47.5% share increase from $10/share (being the Jaws Acquisition Corp. deal signing price) to $14.75/share (which was the stock price at deal closing). • The adjustment RSUs were granted on March 15, 2022 and will vest annually over a two-year period commencing December 31, 2022, subject generally to continued employment on each vesting date. |
Step 1: Measure Performance Against Financial Goals |
||||||||||||||||||||||||
Threshold ($million) |
Target ($million) |
Maximum ($million) |
Actual Performance ($million) |
Actual Performance (% of Target Achieved) |
Initial Earned Value (% of Target) |
|||||||||||||||||||
Initial Earned % |
50 | % | 100 | % | 200 | % | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Revenue* (50%) |
$ | 1,160 | $ | 1,450 | $ | 1,740 | $ | 1,720.5 | 118.7 | % | 193.3 | % | ||||||||||||
Adjusted EBITDA* (50%) |
$ | 76 | $ | 99 | $ | 114 | $ | 123.5 | 124.7 | % | 200 | % | ||||||||||||
Step 2: Calculate TSR Modifier |
||||||||||||||||||||||||
Average Trading Price on first day of performance period (A) |
Average Trading Price on last day of performance period (B) |
Applicable TSR (calculated as (B/A) -1) |
TSR Modifier (calculated as Applicable TSR + 100%, subject to 50% minimum and 500% maximum) |
|||||||||||||||||||||
Stock Price |
$ | 14.63 | $ | 9.25 | -36.8 | % | 63.2% |
Step 3: Calculate Final Earned LTI Percentage |
||||||||||||||||||
Initial Earned (% of Target) |
TSR Multiplier |
Adjusted Value (% of Target) |
Final Earned LTI Percentage |
|||||||||||||||
Revenue* (50%) |
193.3 |
% |
63.2 |
% |
122.2 |
% |
} | 124.3 |
% | |||||||||
|
|
|
|
|
|
|||||||||||||
Adjusted EBITDA* (50%) |
200 | % | 63.2 | % | 126.4 | % |
* | Please refer to the notes on page 152 for description of certain adjustments to the metrics. |
PARSUs |
Stock Options |
Adjustment RSUs |
||||||||||||||||||||||
LTI Value ($) |
Award (#) |
LTI Value ($) |
Award (#) |
Value ($) |
Award (#) |
|||||||||||||||||||
Dr. Marlow Hernandez |
$ | 2,683,984 | 476,390 | $ | 540,000 | 139,175 | $ | 524,302 | 86,949 | |||||||||||||||
Brian Koppy |
$ | 707,395 | * | 125,558 | $ | 142,323 | * | 36,681 | $ | 186,809 | 30,980 | |||||||||||||
Dr. Richard Aguilar |
$ | 719,705 | 127,743 | $ | 144,800 | 37,320 | $ | 140,589 | 23,315 | |||||||||||||||
David Armstrong |
$ | 539,779 | 95,807 | $ | 108,600 | 27,990 | $ | 105,441 | 17,486 | |||||||||||||||
Mark Novell |
$ | 124,376 | * | 22,076 | $ | 25,024 | * | 6,449 | — | — |
* | Reflects proration based on start date. |
• | The PARSUs were granted on March 15, 2022, with the number of RSUs calculated by dividing the applicable earned value by $5.63 the average closing price of our Class A common stock during the 20-trading days prior to the grant date. (An average price was used to smooth single-day price volatility in our share price.) |
• | The stock options were granted on March 15, 2022 with the number of options calculated based on the Black-Scholes value on the date of grant; the exercise price was $6.03, the closing price of our Class A common stock on the date of grant. |
Time- Based RSUs (#) |
Performance Stock Options (#) |
Recognition RSUs (#) |
||||||||||||||
Dr. Marlow Hernandez |
— | 2,820,000 | 1,339,500 | As a result of the substantial price-vesting hurdles (as described below), none of the IPO Performance Stock Options are currently “in-the-money.” IPO Recognition RSUs are subject to a four-year vesting period. | ||||||||||||
Brian Koppy |
373,972 | 400,000 | 190,000 | |||||||||||||
Dr. Richard Aguilar |
200,000 | 600,700 | 285,333 | |||||||||||||
David Armstrong |
50,000 | 600,700 | 285,333 | |||||||||||||
Mark Novell |
— | 61,100 | 29,023 |
Per Share Stock Price Hurdle |
Price Appreciation Percentage* |
Percentage of Options Earned |
||||||
Below $20 |
— | 0 | ||||||
$20 |
35.5 | % | 25 | % | ||||
$25 |
69.5 | % | 25 | % | ||||
$30 |
103.4 | % | 25 | % | ||||
$40 or above |
171.2 | % | 25 | % |
* | From $14.75/share strike price. |
CEO IPO Related Equity Awards |
Name and Principal Position |
Year |
Salary (1) ($) |
Bonus ($) |
Stock Awards (2) ($) |
Option Awards (3) ($) |
Non-Equity Incentive Plan Compensation (4) ($) |
All Other Compensation (5) ($) |
Total ($) |
||||||||||||||||||||||||
Dr. Marlow Hernandez |
2021 | 350,000 | — | 19,074,480 | 11,914,500 | 344,116 | 2,900 | 31,685,996 | ||||||||||||||||||||||||
Chief Executive Officer |
2020 | 350,000 | 700,000 | — | — | — | 2,808 | 1,052,808 | ||||||||||||||||||||||||
Brian Koppy |
2021 | 237,500 | 600,000 | (6) |
7,705,606 | 1,690,000 | 283,643 | 1,375 | 10,518,124 | |||||||||||||||||||||||
Chief Financial Officer |
||||||||||||||||||||||||||||||||
Dr. Richard Aguilar |
2021 | 289,423 | — | 7,013,142 | 2,537,958 | 235,966 | — | 10,076,489 | ||||||||||||||||||||||||
Chief Clinical Officer |
2020 | 275,000 | 75,000 | — | — | — | — | 350,000 | ||||||||||||||||||||||||
David Armstrong |
2021 | 235,000 | — | 4,800,642 | 2,537,958 | 138,630 | 1,808 | 7,714,038 | ||||||||||||||||||||||||
Chief Compliance Officer and General Counsel |
2020 | 235,000 | 70,000 | — | 20,880 | — | — | 325,880 | ||||||||||||||||||||||||
Mark Novell |
2021 | 153,596 | — | 413,288 | 258,148 | 76,884 | — | 901,916 | ||||||||||||||||||||||||
Chief Accounting Officer |
(1) | For each of Mr. Koppy and Mr. Novell, the amounts reported as salary for the 2021 fiscal year reflect the salary earned in 2021 following the commencement of employment with us. |
(2) | Amounts shown reflect the grant date fair value of RSUs granted during the fiscal year ended December 31, 2021. The grant date fair value was computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or FASB ASC Topic 718, excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see “Note 14” to our audited consolidated financial statements for the year ended December 31, 2021 in our Annual Report on Form 10-K. The amounts reported in this column reflect the accounting cost for these RSUs and do not correspond to the actual economic value that may be received by the named executive officers upon the vesting or settlement of the RSUs. |
(3) | Amounts shown reflect the grant date fair value of stock options granted during the fiscal year ended December 31, 2021, and the grant date fair value of Class B Units of Primary Care (ITC) Holdings, LLC, or the Seller, granted during the fiscal year ended December 31, 2020. The grant date fair value was computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. As such option awards granted in 2021 are earned based on market-based conditions, the fair value was estimated using a Monte Carlo Simulation model. See discussion in the CD&A under “IPO Related Equity Awards following Business Combination” for a description of the performance conditions applicable to the 2021 stock option grants. For information regarding assumptions underlying the valuation of equity awards, see “Note 14” to our audited consolidated financial statements for the year ended December 31, 2021 in our Annual Report on Form 10-K. The amounts reported in this column reflect the accounting cost for these stock options and Class B Units, as applicable, and do not correspond to the actual economic value that may be received by the named executive officers upon the vesting or settlement of the Class B Units or the exercise of the stock options or sale of the shares of common stock underlying such stock options, as applicable. |
(4) | For the 2021 fiscal year, in order to conserve the Company’s cash, 100% of the earned annual incentive plan compensation for Dr. Hernandez and approximately 49% of the earned annual incentive plan compensation for each other named executive officer, was delivered in the form of RSUs subject to a further two-year vesting requirement. See discussion in the CD&A under “Annual Incentive Plan” for a summary of the RSU awards granted in lieu of the annual cash bonus. |
(5) | Amount shown represents an employer matching contribution under our 401(k) Plan. |
(6) | Amounts represents a $600,000 signing bonus paid in connection with Mr. Koppy’s commencement of employment with us as our Chief Financial Officer. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (2) |
|||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position |
Grant Date |
Approval Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
All Other Stock Awards: Number of Shares of Stock or Units (3) (#) |
Exercise Price of Option Awards (4) ($/Sh) |
Grant Date Fair Value of Stock and Option Awards (5) ($) |
|||||||||||||||||||||||||||||||||
Dr. Marlow Hernandez |
— | 5/24/2021 | 87,500 | 175,000 | 350,000 | |||||||||||||||||||||||||||||||||||||||
Chief Executive Officer |
|
6/3/2021 9/21/2021 |
|
|
5/24/2021 8/24/2021 |
|
705,000 | — | 2,820,000 | 1,339,500 | 14.75 | |
11,914,500 19,074,480 |
| ||||||||||||||||||||||||||||||
Brian Koppy |
— | 5/24/2021 | 97,500 | 195,000 | 390,000 | |||||||||||||||||||||||||||||||||||||||
Chief Financial Officer |
|
4/5/2021 6/3/2021 |
(6) |
|
3/17/2021 5/24/2021 |
|
100,000 | — | 400,000 | 373,972 | 14.75 | |
5,000,006 1,690,000 |
| ||||||||||||||||||||||||||||||
9/21/2021 | 8/24/2021 | 190,000 | 2,705,600 | |||||||||||||||||||||||||||||||||||||||||
Dr. Richard Aguilar |
— | 5/24/2021 | 60,000 | 120,000 | 240,000 | |||||||||||||||||||||||||||||||||||||||
Chief Clinical Officer |
|
6/3/2021 6/3/2021 |
(7) |
|
5/24/2021 5/24/2021 |
|
150,175 | — | 600,700 | 200,000 | 14.75 | |
2,537,958 2,950,000 |
| ||||||||||||||||||||||||||||||
9/21/2021 | 8/24/2021 | 285,333 | 4,063,142 | |||||||||||||||||||||||||||||||||||||||||
David Armstrong |
— | 5/24/2021 | 35,250 | 70,500 | 141,000 | |||||||||||||||||||||||||||||||||||||||
Chief Compliance Officer and General Counsel |
|
6/3/2021 6/3/2021 9/21/2021 |
(7) |
|
5/24/2021 5/24/2021 8/24/2021 |
|
150,175 | — | 600,700 | |
50,000 285,333 |
|
14.75 | |
2,537,958 737,500 4,063,142 |
| ||||||||||||||||||||||||||||
Mark Novell |
— | 5/24/2021 | 30,625 | 61,250 | 122,500 | |||||||||||||||||||||||||||||||||||||||
Chief Accounting Officer |
|
6/3/2021 9/21/2021 |
|
|
5/24/2021 8/24/2021 |
|
15,275 | — | 61,100 | 29,023 | 14.75 | |
258,148 413,288 |
|
(1) | In order to conserve the Company’s cash, 100% of the earned annual incentive plan compensation for Dr. Hernandez and approximately 49% of the earned annual incentive plan compensation for each other named executive officer, was delivered in the form of RSUs subject to a further two-year vesting requirement. |
(2) | Each stock option award is earned based on achievement of specified stock price hurdles prior to the third anniversary of the closing of our business combination and each named executive officer’s continued employment, as described in the footnotes to the “Outstanding Equity Awards at 2021 Year-End Table” below. See also discussion in the CD&A under “IPO Related Equity Awards following Business Combination” for a description of the 2021 stock option grants. |
(3) | Each RSU is subject to time-based vesting, as described in the footnotes to the “Outstanding Equity Awards at 2021 Year-End Table” below. See also discussion in the CD&A under “IPO Related Equity Awards following Business Combination” for a description of the recognition RSU grants. |
(4) | Based on the closing price of our Class A common stock as reported on the NYSE on the date of grant. |
(5) | The amounts reported in this column represent the aggregate grant date fair value of the RSUs and stock options, as applicable, granted to the named executive officer in the fiscal year ended December 31, 2021, calculated in accordance with FASB ASC Topic 718. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service-vesting conditions and are based on the probable outcome of performance-vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see “Note 14” to our audited consolidated financial statements for the year ended December 31, 2021 in our Annual Report on Form 10-K. The amounts reported in this column reflect the accounting cost for these RSUs and stock options, as applicable, and do not correspond to the actual economic value that may be received by the named executive officers upon the vesting or settlement of the RSUs or the exercise of the stock options or sale of the shares of Class A common stock underlying such stock options, as applicable. |
(6) | The Company commenced expensing this award on June 3, 2021, the closing of our business combination, but this award was granted effective upon the date of the filing of the Form S-8. |
(7) | The Company commenced expensing this award on June 3, 2021, the closing of our business combination, but this award was granted effective upon the date of the filing of the Form S-8. |
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||
Name |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) (1) |
||||||||||||||||||||||||
Dr. Marlow Hernandez |
6/3/2021 | — | — | 2,820,000 | (2) |
14.75 | 6/3/2031 | |||||||||||||||||||||||||
9/21/2021 | 1,339,500 | (3) |
11,934,945 | |||||||||||||||||||||||||||||
Brian Koppy |
4/5/2021 | 373,972 | (4) |
3,332,091 | ||||||||||||||||||||||||||||
6/3/2021 | — | — | 400,000 | (2) |
14.75 | 6/3/2031 | ||||||||||||||||||||||||||
9/21/2021 | 190,000 | (3) |
1,682,900 | |||||||||||||||||||||||||||||
Dr Richard Aguilar |
6/3/2021 | — | — | 600,700 | (2) |
14.75 | 6/3/2031 | |||||||||||||||||||||||||
6/3/2021 | 200,000 | (5) |
1,782,000 | |||||||||||||||||||||||||||||
9/21/2021 | 285,333 | (3) |
2,542,317 | |||||||||||||||||||||||||||||
David Armstrong |
6/3/2021 | — | — | 600,700 | (2) |
14.75 | 6/3/2031 | |||||||||||||||||||||||||
6/3/2021 | 50,000 | (5) |
445,500 | |||||||||||||||||||||||||||||
9/21/2021 | 285,333 | (3) |
2,542,317 | |||||||||||||||||||||||||||||
Mark Novell |
6/3/2021 | — | — | 61,100 | (2) |
14.75 | 6/3/2031 | |||||||||||||||||||||||||
9/21/2021 | 29,023 | (3) |
258,595 |
(1) | This column represents the aggregate fair market value of the shares underlying the RSUs as of December 31, 2021, based on the closing price of our Class A common stock as reported on the NYSE of $8.91 per share on December 31, 2021. |
(2) | This stock option is earned in equal 25% portions if our stock price equals or exceeds $20/share, $30/share, $35/share or $40/share, in each case for at least 20 consecutive trading days prior to the third anniversary of the closing of our business combination. Once a stock price hurdle is satisfied, 50% of the earned portion of the stock option vests on the first anniversary of such date and the remaining 50% vests on the second anniversary of such date, subject to the named executive officer’s continued employment on each vesting date or the named executive officer’s termination by us without “cause” (as defined in each named executive officer’s employment agreement) or due to the named executive officer’s death or disability. |
(3) | This RSU award vests in four equal annual installments, commencing on August 24, 2022, subject generally to each named executive officer’s continued employment. |
(4) | The Company commenced expensing this award on April 5, 2021, the effective date of Mr. Koppy’s employment agreement, but this RSU award was granted effective upon the date of the filing of the Form S-8. This RSU award vests in four equal annual installments, commencing on April 5, 2022, subject to Mr. Koppy’s continued employment. |
(5) | The Company commenced expensing this award on June 3, 2021, the closing of our business combination, but this award was granted effective upon the date of the filing of the Form S-8. This RSU award vests in four equal annual installments, commencing on the first anniversary of the closing of our business combination, subject generally to continued employment. |
Option Awards |
||||||||
Name |
Number of Shares Acquired on Exercise (#) (1) |
Value Realized on Exercise ($) (2) |
||||||
Dr. Marlow Hernandez |
— | — | ||||||
Brian Koppy |
— | — | ||||||
Dr Richard Aguilar |
— | — | ||||||
David Armstrong |
18,063 | 5,681,891 | ||||||
Mark Novell |
— | — |
(1) | Amounts reflect outstanding Class B Units of Seller intended to constitute profits interests for federal income tax purposes. Despite the fact that the Class B Units do not require the payment of an exercise price, they are most similar economically to stock options. Accordingly, they are classified as “options” under the definition provided in Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature”. |
(2) | Amounts reflect the aggregate estimated fair market value of Class B Units of Seller on each vesting date, based on the cash and aggregate estimated value of Class A common units of Primary Care (ITC) Intermediate Holdings, LLC, or PCIH, distributed with respect to such Class B Units of Seller at the closing of our business combination. Each Class A common unit of PCIH may be exchanged for one share of Company Class A common stock, and the aggregate estimated fair market value of such Class A common units reflects the closing price of our Class A common stock on June 3, 2021, the closing of our business combination. |
Qualifying Termination Not in Connection with a Change in Control (1) |
Qualifying Termination in Connection with a Change in Control (2) |
|||||||||||||||||||||||||||||||
Name |
Cash Severance ($) |
Continued Benefits ($) (3) |
Equity Acceleration ($) |
Total ($) |
Cash Severance ($) |
Continued Benefits ($) (3) |
Equity Acceleration ($) (4) |
Total ($) |
||||||||||||||||||||||||
Dr. Marlow Hernandez |
525,000 | (5) |
6,721 | — | 531,721 |
1,469,116 | (8) |
6,721 | 14,618,929 | 16,094,766 |
||||||||||||||||||||||
Brian Koppy |
520,000 | (5) |
3,309 | — | 523,309 |
1,235,000 | (8) |
3,309 | 5,732,386 | 6,970,695 |
||||||||||||||||||||||
Dr. Richard Aguilar |
420,000 | (5) |
6,571 | — | 426,571 |
1,030,966 | (8) |
6,571 | 5,044,022 | 6,081,559 |
||||||||||||||||||||||
David Armstrong |
235,000 | (6) |
6,592 | — | 241,592 |
749,630 | (8) |
6,592 | 3,527,596 | 4,283,818 |
||||||||||||||||||||||
Mark Novell |
122,500 | (7) |
2,745 | — | 125,245 |
122,500 | (7) |
2,745 | 124,376 | 249,621 |
(1) | A “qualifying termination” means a termination of employment by either the Company without “cause” (as defined in each named executive officer’s employment agreement) or by the named executive officer for “good reason” (as defined in each named executive officer’s employment agreement), and “not in connection with a change in control” means prior to, or more than 12 months after, a “sale event” (as defined in our 2021 Plan). |
(2) | A “qualifying termination” means a termination of employment by either the Company without “cause” (as defined in each named executive officer’s employment agreement) or by the named executive officer for “good reason” (as defined in each named executive officer’s employment agreement), and “in connection with a change in control” means within 12 months after a “sale event” (as defined in our 2021 Plan). |
(3) | Represents 12 months (6 months for Mr. Novell) of our contribution toward health insurance, based on our actual costs to provide health insurance to the named executive officer as of the date of termination. |
(4) | Represents the sum of (i) the value of unvested RSUs held by each executive as of December 31, 2021, and (ii) the value of each named executive officer’s PARSUs for the 2021 fiscal year. In addition, in the event that these equity awards are not substituted, assumed or continued in connection with a “sale event” (as defined in our 2021 Plan), each award will accelerate in full immediately prior to such sale event. |
(5) | Represents the sum of (i) 12 months of the named executive officer’s base salary, and (ii) a pro-rated portion of the named executive officer’s target bonus for the year in which termination occurs. |
(6) | Represents 12 months of the named executive officer’s base salary. |
(7) | Represents 6 months of the named executive officer’s base salary. |
(8) | Represents (i) two-times the sum of (x) the named executive officer’s base salary and (y) the average annual incentive compensation paid in each of the two completed years prior to the year of his date of termination; and (ii) a pro-rated portion of the named executive officer’s target bonus for the year in which termination occurs. |
Termination due to death |
||||||||||||||||
Name |
Cash Severance ($) |
Continued Benefits ($) |
Equity Acceleration ($) (1) |
Total ($) |
||||||||||||
Dr. Marlow Hernandez |
— | — | 2,683,984 | 2,683,984 |
||||||||||||
Brian Koppy |
— | — | 707,395 | 707,395 |
||||||||||||
Dr. Richard Aguilar |
— | — | 719,705 | 719,705 |
||||||||||||
David Armstrong |
— | — | 539,779 | 539,779 |
||||||||||||
Mark Novell |
— | — | 124,376 | 124,376 |
(1) | Represents the value of each named executive officer’s PARSUs for the 2021 fiscal year. |
Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted Average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for future issuance under equity compensation plan (excluding securities referenced in column (a)) (c) |
|||||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
Equity compensation plans approved by security holders |
17,871,220 | (1) |
14.75 | (2) |
37,752,657 | (3) | ||||||
Total |
17,871,220 | 37,752,657 |
(1) | Amount includes 12,703,698 shares of Class A common stock issuable upon the exercise of outstanding options granted under the 2021 Plan and 5,167,522 shares of Class A common stock issuable upon vesting of restricted stock units granted under the 2021 Plan. |
(2) | Since restricted stock units do not have any exercise price, such units are not included in the weighted average exercise price calculation. |
(3) | Includes 34,128,780 shares available for issuance under the 2021 Plan and 3,623,877 shares available for issuance under the ESPP. The ESPP provides that the number of shares reserved and available for issuance under the plan will automatically increase on January 1, 2022 and each January 1 thereafter by the least of one percent (1%) of the number of shares of Class A common stock of the Company outstanding on the immediately preceding December 31, (ii) 15,000,000 shares, or (iii) such lesser number as determined by the administrator. Amount does not include the 15,000,000 shares which were added to the number of shares reserved and available for issuance under the ESPP on January 1, 2022 as a result of such automatic annual increase. |
Member Annual Fee ($) |
||||
Annual service on our Board of Directors |
50,000 | |||
Additional retainer for Lead Independent Director |
35,000 |
Name |
Fees Earned or Paid in Cash ($) (1) |
Total ($) (2) |
||||||
Elliot Cooperstone |
30,410 | 30,410 | ||||||
Dr. Lewis Gold |
30,410 | 30,410 | ||||||
Jacqueline Guichelaar |
30,410 | 30,410 | ||||||
Angel Morals |
30,410 | 30,410 | ||||||
Dr. Alan Muney |
30,410 | 30,410 | ||||||
Kim Rivera |
30,410 | 30,410 | ||||||
Barry S. Sternlicht |
30,410 | 30,410 | ||||||
Solomon Trujillo |
51,697 | 51,697 |
(1) | Cash retainer fees for the fiscal year ended December 31, 2021 were pro-rated based on the duration of each director’s service following the closing of our business combination. |
(2) | As of December 31, 2021, none of our non-employee directors serving on that date held any outstanding RSUs. However, in January 2021, each of our non-employee directors serving on that date was granted RSUs pursuant to our non-employee director compensation policy in the following amounts based on their service on our Board of Directors following the closing of our business combination. Each such RSU award will vest in full on the date of this year’s Annual Meeting, subject to each director’s continued service as a director through such vesting date. |
Name |
Shares (#) |
|||
Elliot Cooperstone |
14,825 | |||
Dr. Lewis Gold |
14,825 | |||
Jacqueline Guichelaar |
14,825 | |||
Angel Morales |
14,825 | |||
Dr. Alan Muney |
14,825 | |||
Kim Rivera |
14,825 | |||
Barry S. Sternlicht |
14,825 | |||
Solomon Trujillo |
14,825 |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption, or the 30-day redemption period, to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) on each of 20 trading days within a 30-trading day period ending on the third business day before we send to the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | for a number of shares of Class A common stock to be determined by reference to the table below, based on the redemption date and the “fair market value” (as defined below) of our Class A common stock except as otherwise described below; |
• | upon a minimum of 30 days’ prior written notice of redemption; and |
• | if, and only if, the last sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted per share splits, share dividends, reorganizations, reclassifications, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the warrant holders. |
Redemption Date |
Fair Market Value of Class A Common Stock |
|||||||||||||||||||||||||||||||||||
(period to expiration of warrants) |
$10.00 |
$11.00 |
$12.00 |
$13.00 |
$14.00 |
$15.00 |
$16.00 |
$17.00 |
$18.00 |
|||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | one percent (1%) of the total number of shares of Class A common stock then outstanding; or |
• | the average weekly reported trading volume of the Class A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | each person or group known to us who beneficially owns more than 5% of our common stock; |
• | each of our directors and director nominees; |
• | each of our named executive officers; and |
• | all of our directors and executive officers as a group. |
Name of Beneficial Owner |
Shares of Class A Common Stock Beneficially Owned |
Shares of Class B Common Stock Beneficially Owned (1) |
% of Total Voting Power (2) |
|||||||||||||||||
Greater than 5% Holders: |
Number | % of Class |
Number | % of Class |
||||||||||||||||
Suvretta Master Fund, Ltd. (3) |
10,324,453 | 5.0 | % | — | — | 2.1 | % | |||||||||||||
Suvretta Capital Management, LLC (4) |
10,547,556 | 5.1 | % | — | — | 2.2 | % | |||||||||||||
Third Point LLC (5) |
11,500,000 | 5.5 | % | — | — | 2.4 | % | |||||||||||||
The Vanguard Group (6) |
12,135,543 | 5.8 | % | — | — | 2.5 | % | |||||||||||||
FMR, LLC (7) |
32,989,715 | 15.9 | % | — | — | 6.8 | % | |||||||||||||
ITC Rumba, LLC (8) |
— | — | 159,780,988 | 57.7 | % | 33.0 | % | |||||||||||||
Directors and Executive Officers: |
||||||||||||||||||||
Dr. Marlow Hernandez (9) |
2,140,515 | 1.0 | % | 22,104,622 | 8.0 | % | 5.0 | % | ||||||||||||
Brian D. Koppy |
132,859 | * | — | — | * | |||||||||||||||
Richard Aguilar (10) |
279,606 | * | 11,560,023 | 4.2 | % | 2.4 | % | |||||||||||||
David Armstrong |
45,017 | * | 874,453 | * | * | |||||||||||||||
Elliot Cooperstone (11) |
14,825 | — | 159,780,988 | 57.7 | % | 33.0 | % | |||||||||||||
Dr. Lewis Gold (12) |
1,706,760 | * | 1,391,935 | * | * | |||||||||||||||
Jacqueline Guichelaar |
14,825 | — | — | — | — | |||||||||||||||
Angel Morales (13) |
14,825 | — | 6,968,507 | 2.5 | % | 1.4 | % | |||||||||||||
Dr. Alan Muney |
14,825 | — | — | — | — | |||||||||||||||
Kim M. Rivera |
14,825 | — | — | — | — | |||||||||||||||
Barry S. Sternlicht (14) |
42,691,312 | 20.5 | % | — | — | 8.8 | % | |||||||||||||
Solomon D. Trujillo (15) |
111,825 | * | 13,680,443 | 4.9 | % | 2.8 | % | |||||||||||||
All Directors and Executive Officers as a Group |
47,182,019 | 22.7 | % | 216,360,971 | 78.2 | % | 54.4 | % |
* | Less than one percent. |
(1) | Class B common stock will entitle the holder thereof to one vote per share. Subject to the terms of the Second Amended and Restated Limited Liability Company Agreement of Primary Care (ITC) Intermediate Holdings, LLC, or PCIH, the common limited liability company units of PCIH, together with an equal number of shares of Class B common stock, are exchangeable for shares of Class A common stock on a one-for-one basis. |
(2) | Based on 207,747,333 shares of Class A common stock and 276,722,704 shares of Class B common stock issued and outstanding as of March 28, 2022. The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act and the information is not necessarily indicative of beneficial ownership for any other purpose. Under that rule, beneficial ownership includes any shares as to which the individual or entity has voting power or investment power and any shares that the individual or entity has the right to acquire within 60 days of March 28, 2022, through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes or table, each individual or entity has sole voting and investment power, or shares such powers with his or her spouse, with respect to the shares shown as beneficially owned. |
(3) | Suvretta Master Fund, Ltd. has shared voting power over 10,324,453 shares of Class A common stock and shared dispositive power over 10,324,453 shares of Class A common stock. This information is based on a Schedule 13G/A filed with the SEC on February 11, 2022. Suvretta Master Fund, Ltd.’s address is c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands. Suvretta Capital Management, LLC has shared voting power over 10,547,556 shares of Class A common stock and shared dispositive power over 10,547,556 shares of Class A common stock. This information is based on a Schedule 13G/A filed with the SEC on February 11, 2022. Aaron Cowen has beneficial ownership by virtue of his role as a control person of Suvretta Capital Management, LLC. Suvretta Capital Management, LLC’s address is 540 Madison Avenue, 7th Floor, New York, New York 10022. |
(4) | Suvretta Capital Management, LLC has shared voting power over 10,547,556 shares of Class A common stock and shared dispositive power over 10,547,556 shares of Class A common stock. This information is based on a Schedule 13G/A filed with the SEC on February 11, 2022. Aaron Cowen has beneficial ownership by virtue of his role as a control person of Suvretta Capital Management, LLC. Suvretta Capital Management, LLC’s address is 540 Madison Avenue, 7 th Floor, New York, New York 10022. |
(5) | Third Point LLC has shared voting power over 11,500,000 shares of Class A common stock and shared dispositive power over 11,500,000 shares of Class A common stock. Daniel S. Loeb, Chief Executive Officer of Third Point LLC, has shared voting power over 11,500,000 shares of Class A common stock and shared dispositive power over 11,500,000 shares of Class A common stock. This information is based on a Schedule 13G/A filed with the SEC on February 14, 2022. The address of Third Point LLC and Daniel S. Loeb is 55 Hudson Yards, New York, New York 10001. |
(6) | The Vanguard Group, Inc. has shared voting power over 57,899 shares of Class A common stock, sole dispositive power over 11,937,096 shares of Class A common stock and shared dispositive power over 198,447 shares of Class A common stock. This information is based on a Schedule 13G/A filed with the SEC on February 9, 2022. The Vanguard Group’s address is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. Reported ownership includes shares held by subsidiaries listed in the filing. |
(7) | FMR, LLC has sole voting power over 3,087,584 shares of Class A common stock and sole power to dispose or to direct the disposition of 32,989,715 shares of Class A common stock. This information is based on a Schedule 13G/A filed with the SEC on February 9, 2022. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B stockholders have entered into a stockholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the stockholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, as amended, or the Investment Company Act, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act, or Fidelity Funds, advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ boards of trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ boards of trustees. The address of FMR, LLC is 245 Summer Street, Boston, Massachusetts 02210. |
(8) | Elliot Cooperstone is the Founder and Managing Partner of ITC Rumba, LLC and therefore is a beneficial owner of these shares. The business address of ITC Rumba, LLC is 444 Madison Avenue, 35th Floor, New York, New York 10022. |
(9) | Represents (1) 1,552,462 shares of Class A common stock and 473,469 public warrants to purchase Class A common stock held by Dr. Hernandez; (2) (i) 22,034,622 shares of Class B common stock held by Hernandez Borrower Holdings LLC and (ii) 70,000 shares of Class B common stock held by Dr. Hernandez; and (3) 67,597 shares of Class A common stock and 46,987 public warrants to purchase Class A common stock held by the Marlow B. Hernandez 2020 Family Trust. Dr. Hernandez has sole voting and dispositive power with respect to all of these shares and therefore is a beneficial owner of these shares. Hernandez Borrower Holdings LLC has pledged all its shares to a certain lender in connection with a financing arrangement. |
(10) | Represents (1) 232,896 shares of Class A common stock, (2) 46,710 public warrants to purchase Class A common stock and (3) 675,940 shares of Class B common stock held by Dr. Aguilar. Also consists of 10,884,083 shares of Class B common stock held by Aguilar Borrower Holdings LLC. Dr. Aguilar is the sole member of Aguilar Borrower Holdings LLC and is therefore the beneficial owners of these shares. Aguilar Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(11) | Represents (1) 14,825 RSUs held by Elliot Cooperstone that will vest within 60 days of March 28, 2022 and (2) 159,780,988 shares of Class B common stock held by ITC Rumba, LLC. Elliot Cooperstone is the Founder and Managing Partner of ITC Rumba, LLC and therefore is a beneficial owner of these shares. The business address of ITC Rumba, LLC is 444 Madison Avenue, 35th Floor, New York, New York 10022. |
(12) | Consists of (1) 14,825 RSUs held by Dr. Lewis Gold that will vest within 60 days of March 28, 2022, (2) 158,850 shares of Class A common stock held by EG Advisors, LLC, (3) 1,233,085 shares of Class A common stock held by EGGE, LLC, (4) 158,850 shares of Class B common stock held by EG Advisors, LLC and (5) 1,233,085 shares of Class B common stock held by EGGE, LLC. |
(13) | Consists of (1) 14,825 RSUs held by Mr. Morales that will vest within 60 days of March 28, 2022 and (2) 6,968,507 shares of Class B common stock held by Morales Borrower Holdings LLC. Mr. Morales’s spouse and mother have shared voting and dispositive power with respect to these shares and are therefore the beneficial owners of these shares. Mr. Morales expressly disclaims beneficial ownership as to any of these shares, except to the extent of his pecuniary interest therein. Morales Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(14) | Consists of (1) 14,825 RSUs held by Mr. Sternlicht that will vest within 60 days of March 28, 2022, (2) 34,831,848 shares of Class A common stock and (3) 7,844,639 public warrants to purchase Class A common stock held by JAWS Equity Owner 146, L.L.C. Mr. Sternlicht controls JAWS Equity Owner 146, L.L.C. and is therefore deemed to be the beneficial owner of such securities, provided that, Mr. Sternlicht disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. |
(15) | Consists of (1) 111,825 shares of Class A common stock held by Mr. Trujillo and (2) 13,680,443 shares of Class B common stock held by Trujillo Group, LLC. Mr. Trujillo is the sole member of Trujillo Group, LLC and therefore is a beneficial owner of these shares. |
Before the Offering |
After the Offering |
|||||||||||||||||||||||||||||||
Name of Selling Securityholder (1) |
Number of Shares of Common Stock |
Number of Warrants |
Number of Shares of Common Stock Being Offered |
Number of Warrants Being Offered |
Number of Shares of Common Stock |
Percentage of Outstanding Shares of Common Stock |
Number of Warrants |
Percentage of Outstanding Warrants |
||||||||||||||||||||||||
Alyeska Master Fund, L.P. 2 |
2,000,000 | 181,098 | 2,000,000 | — | — | — | 181,098 | * | ||||||||||||||||||||||||
Angel Morales 3 |
6,968,507 | — | 6,968,507 | — | — | — | — | — | ||||||||||||||||||||||||
ArrowMark Partners 4 |
3,150,000 | — | 3,150,000 | — | — | — | — | — | ||||||||||||||||||||||||
Citadel Multi-Strategy Equities Master Fund Ltd. 5 |
6,305,038 | 83,804 | 1,000,000 | — | 5,305,038 | 3.2 | 83,804 | * | ||||||||||||||||||||||||
David Armstrong 6 |
874,453 | — | 874,453 | — | — | — | — | — | ||||||||||||||||||||||||
EGGE, LLC 7 |
2,466,170 | — | 2,466,170 | — | — | — | — | — | ||||||||||||||||||||||||
Entities advised by Capital Research and Management Company 8 |
8,545,275 | — | 8,500,000 | — | 45,275 | — | — | — | ||||||||||||||||||||||||
Funds associated with BlackRock, Inc. 9 |
8,500,000 | — | 8,500,000 | — | — | — | — | — | ||||||||||||||||||||||||
Funds associated with FMR LLC 10 |
25,000,000 | — | 25,000,000 | — | — | — | — | — | ||||||||||||||||||||||||
Fund associated with HealthCor Management L.P. 11 |
2,000,000 | — | 2,000,000 | — | — | — | — | — | ||||||||||||||||||||||||
Ghisallo Master Fund, LP 12 |
750,000 | — | 750,000 | — | — | — | — | — | ||||||||||||||||||||||||
ITC Rumba, LLC 13 |
159,780,988 | — | 159,780,988 | — | — | — | — | — | ||||||||||||||||||||||||
Jane Street Global Trading, LLC 14 |
1,194,029 | 6,736 | 1,000,000 | — | 194,029 | * | 6,736 | * | ||||||||||||||||||||||||
Jason Conger 15 |
2,936,761 | — | 2,936,761 | — | — | — | — | — | ||||||||||||||||||||||||
Jaws Equity Owner 146, LLC 16 |
4,865,517 | — | 4,865,517 | — | — | — | — | — | ||||||||||||||||||||||||
Barry Sternlicht 17 |
25,501,487 | 7,844,639 | 25,501,487 | 7,844,639 | — | — | — | — | ||||||||||||||||||||||||
Joel Lago 18 |
15,483,805 | — | 4,910,930 | — | 10,572,875 | 6.4 | — | — | ||||||||||||||||||||||||
Dr. Marlow Hernandez 19 |
22,104,622 | — | 22,034,622 | — | 70,000 | * | — | — | ||||||||||||||||||||||||
Maverick Fund USA, Ltd. 20 |
6,281,705 | — | 6,281,705 | — | — | — | — | — | ||||||||||||||||||||||||
Maverick Fund II, Ltd. 21 |
2,068,295 | — | 2,068,295 | — | — | — | — | — | ||||||||||||||||||||||||
Owl Creek Investments III, LLC 22 |
1,250,000 | — | 1,250,000 | — | — | — | — | — | ||||||||||||||||||||||||
Dr. Richard Aguilar 23 |
11,560,023 | — | 10,884,083 | — | 675,940 | * | — | — | ||||||||||||||||||||||||
Rick Sanchez 24 |
5,812,990 | — | 5,812,990 | — | — | — | — | — | ||||||||||||||||||||||||
Solomon Trujillo 25 |
13,680,491 | — | 13,680,491 | — | — | — | — | — | ||||||||||||||||||||||||
Suvretta Master Fund, Ltd. and Suvretta Long Master Fund, Ltd. 26 |
7,615,721 | 667,883 | 2,000,000 | — | 5,615,721 | 3.3 | 667,883 | 2.0 | ||||||||||||||||||||||||
TOMS Capital Investment Management LP 27 |
2,500,000 | — | 2,500,000 | — | — | — | — | — | ||||||||||||||||||||||||
TP Trading II LLC 28 |
9,000,000 | 9,000,000 | — | — | — | — | — | |||||||||||||||||||||||||
Selling securityholders of less than one percent 29 |
1,367,767 | — | 1,367,767 | — | — | — | — | — |
* | Less than one percent |
(1) | Unless otherwise noted, the business address of each of those listed in the table above is 9725 NW 117th Avenue, Miami, FL 33178. |
(2) | Consists of 2,000,000 shares of Class A common stock held by Alyeska Master Fund, L.P., a Cayman Islands limited partnership (“Alyeska”). All such shares of Class A common stock have been pledged to Goldman Sachs in accordance with a bona fide margin agreement. Also consists of 181,098 public warrants not being offered by this prospectus. Alyeska Investment Group, L.P., the investment manager of Alyeska, has voting and investment control of the shares held by Alyeska. Mr. Anand Parekh is the Chief Executive Officer of Alyeska Investment Group, L.P. and may be deemed to be the beneficial owner of such shares. Mr. Parekh, however, disclaims any beneficial ownership of the shares held by Alyeska Master Fund, L.P. The address of Alyeska is 77 West Wacker Drive, Suite 700, Chicago, Illinois 60601. |
(3) | Consists of 6,968,507 shares of Class B common stock held by Morales Borrower Holdings LLC. Mr. Morales’s spouse and mother have shared voting and dispositive power with respect to these shares and are therefore the beneficial owners of these shares. Mr. Morales expressly disclaims beneficial ownership as to any of these shares, except to the extent of his pecuniary interest therein. Morales Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(4) | Consists of 350,000 shares of Class A common stock held by ArrowMark Fundamental Opportunity Fund LP, 1,680,000 shares of Class A common stock held by Meridian Growth Fund and 1,120,000 shares of Class A common stock held by Meridian Small Cap Growth Fund. Chad Meade is a Portfolio Manager for ArrowMark Partners. The address of ArrowMark Partners is 100 Fillmore Street, Suite 325, Denver, CO 80206. |
(5) | Consists of 6,305,038 shares of Class A common stock (1,000,000 of which are being offered by this prospectus) held by Citadel Multi-Strategy Equities Master Fund Ltd. Pursuant to a portfolio management agreement, Citadel Advisors LLC, an investment advisors registered under the U.S. Investment Advisors Act of 1940 (“CAL”), holds the voting and dispositive power with respect to the shares held by Citadel Multi-Strategy Equities Master Fund Ltd. Citadel Advisors Holdings LP (“CAH”) is the sole member of CAL. Citadel GP LLC is the general partner of CAH. Kenneth Griffin (“Griffin”) is the President and Chief Executive Officer of and sole member of Citadel GP LLC. Citadel GP LLC and Griffin may be deemed to be the beneficial owners of the stock through their control of CAL and/or certain other affiliated entities. The address of Citadel Multi-Strategy Equities Master Fund Ltd. is c/o Citadel Enterprise Americas LLC, 131 South Dearborn Street, Chicago, IL 60603. |
(6) | Consists of 874,453 shares of Class B common stock held by David Armstrong. The address of David Armstrong is 1816 SE 1st Street, Deerfield Beach, FL 334411. |
(7) | Consists of 2,466,170 shares of Class B common stock held by EGGE, LLC. Lewis Gold and Mitchell Eisenberg are managers of EGGE, LLC. The address of Lewis Gold is 7204 Queenferry Cir, Boca Raton, FL 33496. The address of Mitchell Eisenberg is 1235 Spanish River RdBoca Raton, FL 33432. |
(8) | Consists of (i) 5,979,714 shares of Class A common stock held by SMALLCAP World Fund, Inc. (“SCWF”), (ii) 2,491,548 shares of Class A common stock held by The New Economy Fund (“NEF”), (iii) 39,907 shares of Class A common stock held by Capital Group New Economy Fund (LUX) (“CGNELU” and, together with SCWF and NEF, the “CRMC Stockholders”), and (iv) 34,106 shares of Class A common stock held by Capital Group New Economy Trust (US) (“TNEF”). Capital Research and Management Company (“CRMC”) is the investment adviser for each CRMC Stockholder. Capital Bank and Trust Company (“CB&T”) is the discretionary trustee and investment adviser for TNEF, and CRMC has been retained by CB&T as investment adviser to CB&T. For purposes of the reporting requirements of the Exchange Act, CRMC or Capital World Investors (“CWI”) may be deemed to be the beneficial owner of the common shares held by each CRMC Stockholder; however, each of CRMC and CWI expressly disclaims that each is, in fact, the beneficial owner of such securities. For purposes of the reporting requirements of the Exchange Act, CB&T, CRMC or CWI may be deemed to be the beneficial owner of the common shares held by TNEF; however, each of CB&T, CRMC and CWI expressly disclaims that it is, in fact, the beneficial owner of such securities. Brady L. Enright, Julian N. Abdey, Jonathan Knowles, Gregory W. Wendt, Peter Eliot, Bradford F. Freer, Leo Hee, Roz Hongsaranagon, Harold H. La, Dimitrije Mitrinovic, Aidan O’Connell, Samir Parekh, Andraz Razen, Renaud H. Samyn, Michael Beckwith, and Arun Swaminathan, as portfolio managers, have voting and investment powers over the shares held by SCWF. Timothy D. Armour, Harold H. La, Mathews Cherian, Tomoko Fortune, Caroline Jones, Reed Lowenstein, and Richmond Wolf, as portfolio managers, have voting and investment powers over the shares held by NEF. Timothy D. Armour, Harold H. La, Mathews Cherian, Tomoko Fortune, Caroline Jones, Reed Lowenstein, and Richmond Wolf, as portfolio managers, have voting and investment powers over the shares held by CGNELU. Timothy D. Armour, Harold H. La, Mathews Cherian, Tomoko Fortune, Caroline Jones, Reed Lowenstein, and Richmond Wolf, as portfolio managers, have voting and investment powers over the shares held by TNEF. The address for each of the CRMC Stockholders and TNEF is c/o Capital Research and Management Company, 333 S. Hope St., 50th Floor, Los Angeles, California 90071. Each of the CRMC Stockholders and TNEF acquired the securities being registered hereby in the ordinary course of its business. |
(9) | Consists of 538,968 shares of Class A common stock held by Master Total Return Portfolio of Master Bond LLC, 277,311 shares of Class A common stock held by BlackRock Capital Allocation Trust, 1,500,000 shares of Class A common stock held by BlackRock Global Funds—World Healthscience Fund, 915,804 shares of Class A common stock held by BlackRock Strategic Income Opportunities Portfolio of BlackRock Funds V, 148,500 shares of Class A common stock held by Blackrock Health Sciences Trust, 2,174,189 shares of Class A common stock held by Blackrock Health Sciences Trust II, 2,900,000 shares of Class A common stock held by BlackRock Health Sciences Opportunities Portfolio, and 45,228 shares of Class A common stock held by BlackRock Global Long/Short Credit Fund of BlackRock Funds IV. The registered holders of the referenced shares to be registered are the following funds and accounts under management by subsidiaries of BlackRock, Inc.: BlackRock Strategic Income Opportunities Portfolio of BlackRock Funds V; Master Total Return Portfolio of Master Bond LLC; BlackRock Capital Allocation Trust; BlackRock Global Long/Short Credit Fund of BlackRock Funds IV; BlackRock Global Funds—Word Healthscience Fund; BlackRock Health Opportunities Portfolio, a Series of BlackRockFunds; BlackRock Health Sciences Trust; BlackRock Health Sciences Trust II. BlackRock, Inc. is the ultimate parent holding company of such subsidiaries. On behalf of such subsidiaries, the applicable portfolio managers, as managing directors (or in other capacities) of such entities, and/or the applicable investment committee members of such funds and accounts, have voting and investment power over the shares held by the funds and accounts which are the registered holders of the referenced shares. Such portfolio managers and/or investment committee members expressly disclaim beneficial ownership of all shares held by such funds and accounts. The address of such funds and accounts, such subsidiaries and such portfolio managers and/or investment committee members is 55 East 52nd Street, New York, NY 10055 and 60 State Street, Boston, MA 02109. Shares shown include only the securities being registered for resale and may not incorporate all shares deemed to be beneficially held by the registered holders or BlackRock, Inc. |
(10) | Consists of 5,743,745 shares of Class A common stock held by Fidelity Contrafund: Fidelity Contrafund, 1,593,848 shares of Class A common stock held by Fidelity Contrafund Commingled Pool, By: Fidelity Management Trust Company, as Trustee, 711,826 shares of Class A common stock held by Fidelity Contrafund: Fidelity Contrafund K6, 854,638 shares of Class A common stock held by Fidelity Contrafund: Fidelity Advisor New Insights Fund—Sub A, 254,767 shares of Class A common stock held by Fidelity Insights Investment Trust, By its manager Fidelity Investments Canada ULC, 1,002 shares of Class A common stock held by Fidelity Contrafund: Fidelity Flex Opportunistic Insights Fund, 305,884 shares of Class A common stock held by Fidelity Contrafund: Fidelity Series Opportunistic Insights Fund, 534,290 shares of Class A common stock held by Variable Insurance Products Fund II: VIP Contrafund Portfolio—Subportfolio A, 4,023,300 shares of Class A common stock held by Fidelity Select Portfolios: Health Care Portfolio, 1,800,000 shares of Class A common stock held by Fidelity Central Investment Portfolios LLC: Fidelity U.S. Equity Central Fund, 2,487,400 shares of Class A common stock held by Fidelity Advisor Series VII: Fidelity Advisor Health Care Fund, 475,900 shares of Class A common stock held by Variable Insurance Products Fund IV: Health Care Portfolio, 4,012,311 shares of Class A common stock held by Fidelity Advisor Series I: Fidelity Advisor Growth Opportunities Fund, 601,200 shares of Class A common stock held by Variable Insurance Products Fund III: Growth Opportunities Portfolio, 159,668 shares of Class A common stock held by Fidelity Advisor Series I: Fidelity Advisor Series Growth Opportunities Fund, 39,063 shares of Class A common stock held by Fidelity U.S. Growth Opportunities Investment Trust by its manager Fidelity Investments Canada ULC, 187,758 shares of Class A common stock held by Fidelity NorthStar Fund by its manager Fidelity Investments Canada ULC, 463,400 shares of Class A common stock held by Fidelity Select Portfolios: Health Care Services Portfolio and 750,000 shares of Class A common stock held by Fidelity Contrafund: Fidelity Advisor New Insights Fund- Subportfolio B. These accounts are managed by direct or indirect subsidiaries of FMR LLC. Abigail P. Johnson is a Director, the Chairman, the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address of FMR, LLC is 245 Summer Street, Boston, Massachusetts 02210. |
(11) | Consists of 1,632,518 shares of Class A common stock held by HealthCor Sanatate Offshore Master Fund, L.P. and 367,482 shares of Class A common stock held by HealthCor Offshore Master Fund, L.P. Joseph Healey and Arthur Cohen are Investment Managers of HealthCor Management, L.P. The address of HealthCor Management, L.P. is 55 Hudson Yards 28th Floor, New York, NY 10001. |
(12) | Consists of 750,000 shares of Class A common stock held by Ghisallo Master Fund LP, a Cayman Islands limited partnership. Ghisallo Capital Management LLC is the investment manager of Ghisallo Master Fund. Michael Germino is the authorized signatory of Ghisallo Capital Management LLC. The address of Ghisallo Master Fund LP is 27 Hospital Road, Grand Cayman KYI-9008. |
(13) | Consists of 159,780,988 shares of Class B common stock held by ITC Rumba, LLC. Elliot Cooperstone is the Managing Partner of ITC Rumba, LLC. The address of Elliot Cooperstone is 50 Egypt Close, East Hampton, NY 11937. |
(14) | Consists of 1,194,029 shares of Class A common stock (1,000,000 of which are being offered by this prospectus) held by Jane Street Global Trading, LLC, a Delaware limited liability company. Also consists of 6,736 public warrants not being offered by this prospectus. Jane Street Global Trading, LLC is a wholly owned subsidiary of Jane Street Group, LLC. Michael A. Jenkins and Robert. A. Granieri are the members of the Operating Committee of Jane Street Group, LLC. The address of Jane Street Global Trading, LLC is 250 Vesey Street, 3rd Floor, New York, NY 10281. |
(15) | Consists of 2,936,761 shares of Class B common stock held by Conger Borrower Holdings LLC. Mr. Conger is the sole member of Conger Borrower Holdings LLC and is therefore the beneficial owner of these shares. Conger Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(16) | Consists of 4,865,517 shares of Class A common stock held by Jaws Equity Owner 146, LLC (“Jaws Equity Owner”). Jaws Equity Owner, a Delaware limited liability company, is wholly owned and controlled by Barry Sternlicht and, as such, Mr. Sternlicht may be deemed to have beneficial ownership of the securities held directly by Jaws Equity Owner. The address of Jaws Equity Owner is 1601 Washington Avenue, Suite 800, Miami Beach, Florida 33139. |
(17) | Includes (i) 17,656,848 shares of Class A common stock and 7,844,639 shares of Class A common stock issuable upon exercise of the private placement warrants and (ii) 7,844,639 private placement warrants. |
(18) | Consists of 4,910,930 shares of Class B common stock held by Mr. Lago. Mr. Lago also is the beneficial owner of 10,572,875 shares of Class B common stock held by Physician Partners Group Owner, Inc. Mr. Lago is the sole shareholder of Physician Partners Group Owner, Inc. |
(19) | Consists of 22,034,622 shares of Class B common stock held by Hernandez Borrower Holdings LLC and 70,000 shares of Class B common stock held by Dr. Hernandez. Dr. Hernandez has voting and dispositive power with respect to these shares and is therefore the beneficial owner of these shares. Hernandez Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(20) | Consists of 6,281,705 shares of Class A common stock held by Maverick Fund USA, Ltd. (“Maverick Fund USA”). Maverick Capital, Ltd. is the investment manager of Maverick Fund USA and as such, may be deemed to have beneficial ownership of the stock through the investment discretion it exercises over its clients’ accounts. Maverick Capital Management, LLC is the General Partner of Maverick Capital, Ltd. Lee S. Ainslie III is the manager of Maverick Capital Management, LLC. The address of Maverick Fund USA is 1900 N. Pearl St. 20th Floor, Dallas, TX 75201. |
(21) | Consists of 2,068,295 shares of Class A common stock held by Maverick Fund II, Ltd. (“Maverick Fund II”). Maverick Capital, Ltd. is the investment manager of Maverick Fund II and as such, may be deemed to have beneficial ownership of the stock through the investment discretion it exercises over its clients’ accounts. Maverick Capital Management, LLC is the General Partner of Maverick Capital, Ltd. Lee S. Ainslie III is the manager of Maverick Capital Management, LLC. The address of Maverick Fund II is 1900 N. Pearl St. 20th Floor, Dallas, TX 75201. |
(22) | Consists of 1,250,000 shares of Class A common stock held by Owl Creek Investments III, LLC (“OC III”). Owl Creek Asset Management, L.P., as manager of OC III, may be deemed to control OC III. Owl Creek GP, L.L.C., as general partner of Owl Creek Asset Management, L.P., may be deemed to control Owl Creek Asset Management, L.P. Jeffrey A. Altman, as managing member of Owl Creek GP, LLC may be deemed to control such entity. All persons have the following address: c/o Owl Creek Asset Management, L.P. 640 Fifth Ave, New York, NY 10019. |
(23) | Consists of 10,884,083 shares of Class B common stock held by Aguilar Borrower Holdings LLC and 675,940 shares of Class B common stock held by Dr. Aguilar. Dr. Aguilar is the sole member of Aguilar Borrower Holdings LLC and is therefore the beneficial owner of these shares. Aguilar Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(24) | Consists of 5,182,990 shares of Class B common stock held by Sanchez Borrower Holdings LLC. Mr. Sanchez and his spouse have shared voting and dispositive power with respect to these shares and are therefore the beneficial owners of these shares. Sanchez Borrower Holdings LLC has pledged all such shares to a certain lender in connection with a financing arrangement. |
(25) | Consists of 13,680,491 shares of Class B common stock held by Trujillo Group LLC. Solomon Trujillo is the sole member of Trujillo Group, LLC and therefore is a beneficial owner of these shares. The address of Mr. Trujillo is 8400 E Crescent Parkway, #600 Greenwood Village, CO 80111. |
(26) | Consists of 7,569,290 shares of Class A common stock and 665,453 public warrants held by Suvretta Master Fund, Ltd., a Cayman Islands exempted company, and 46,431 shares of Class A common stock and 2,430 public warrants held by Suvretta Long Master Fund, Ltd., a Cayman Islands exempted company. Suvretta Master Fund, Ltd. is offering 1,988,000 shares of Class A common stock and Suvretta Long Master Fund, Ltd. is offering 12,000 shares of Class A common stock. Aaron Cowen as control person of Suvretta Capital Management, LLC, the investment manager of Suvretta Master Fund, Ltd. and Suvretta Long Master Fund, Ltd. may be deemed to beneficially own the shares held by them. The address of the foregoing entities is 540 Madison Ave, 7th Floor New York, NY 10022. |
(27) | Consists of 85,797 shares of Class A common stock held by TCIM ICAV, 1,432,160 shares of Class A common stock held by TCIM Master Fund Ltd., 166,395 shares of Class A common stock held by Brown Cayman I, 732,564 shares of Class A common stock held by TOMS Capital Investments LLC and 83,084 shares of Class A common stock held by Ulysses Partners LP. Benjamin Pass is the CIO of TOMS Capital Investment Management LP, the investment manager of TCIM ICAV, TCIM Master Fund Ltd., Brown Cayman I, TOMS Capital Investments LLC and Ulysses Partners LP. The address of TOMS Capital Investment Management LP is c/o TOMS Capital Investment Management LP, 450 West 14th Street, 13th Floor, New York, NY 10014. |
(28) | Consists of 9,000,000 shares of Class A common stock held by TP Trading II LLC (“TP Trading II”). The securities of the Company set forth herein are directly beneficially owned by TP Trading II. TP Trading II is an affiliate of Third Point LLC (“Third Point”). Daniel S. Loeb is the Chief Executive Officer of Third Point. Third Point and Mr. Loeb may be deemed to be the beneficial owners of the securities beneficially owned by TP Trading II. Third Point and Mr. Loeb hereby disclaim beneficial ownership of all such securities, except to the extent of any indirect pecuniary interest therein. The address of TP Trading II is 55 Hudson Yards 51st Fl, New York, NY 10001. |
(29) | Consists of selling stockholders not otherwise listed in this table whom within the groups indicated collectively own less than 1% of our common stock. |
• | financial institutions or financial services entities; |
• | broker-dealers; |
• | governments or agencies or instrumentalities thereof; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | expatriates or former long-term residents of the U.S.; |
• | persons that actually or constructively own five percent or more of our voting shares; |
• | insurance companies; |
• | dealers or traders subject to a mark-to-market |
• | persons holding the securities as part of a “straddle,” hedge, integrated transaction or similar transaction; |
• | partnerships or other pass-through entities for U.S. federal income tax purposes and any beneficial owners of such entities; |
• | tax-exempt entities; |
• | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | persons that hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; and |
• | U.S. expatriates. |
• | a non-resident alien individual; |
• | a corporation or any other organization taxable as a corporation for U.S. federal income tax purposes that is created or organized in or under laws other than the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate, the income of which is not subject to U.S. federal income tax on a net income basis, unless such income is from a source within the United States or is effectively connected with a U.S. trade or business; or |
• | a trust (1) that (a) has not made an election to be treated as a U.S. person under applicable U.S. Treasury regulations and (b) either (i) is not subject to the primary supervision of a court within the United States or (ii) is not subject to the substantial control of one or more U.S. persons or (2) the income of which is not subject to U.S. federal income tax on a net income basis. |
• | the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); |
• | the non-U.S. holder is a nonresident alien individual who is present in the United States for a period or periods aggregating 183 days or more in the taxable year of the disposition and certain other conditions are met; or |
• | we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held our common stock, and, in the case where shares of our common stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of our common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. holder’s holding period for the shares of our common stock. Although there can be no assurance, we do not believe that we are, or have been, a “United States real property holding corporation” for U.S. federal income tax purposes, or that we are likely to become one in the future. There can be no assurance that our common stock will be treated as regularly traded on an established securities market for this purpose. |
• | purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; |
• | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | an over-the-counter |
• | through trading plans entered into by a Selling Securityholder pursuant to Rule 10b5-1 under the Exchange Act that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; |
• | through one or more underwritten offerings on a firm commitment or best efforts basis; |
• | settlement of short sales entered into after the date of this prospectus; |
• | agreements with broker-dealers to sell a specified number of the securities at a stipulated price per share or warrant; |
• | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; |
• | directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions; |
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
• | through the distribution of securities by any Selling Securityholder to its partners, members or securityholders; |
• | through a combination of any of the above methods of sale; or |
• | any other method permitted pursuant to applicable law. |
• | the specific securities to be offered and sold; |
• | the names of the selling securityholders; |
• | the respective purchase prices and public offering prices, the proceeds to be received from the sale, if any, and other material terms of the offering; |
• | settlement of short sales entered into after the date of this prospectus; |
• | the names of any participating agents, broker-dealers or underwriters; and |
• | any applicable commissions, discounts, concessions and other items constituting compensation from the selling securityholders. |
Accounting for capitated revenue | ||
Description of the Matter |
As described in Note 2 to the consolidated financial statements, for the year ended December 31, 2021, the Company recorded $1.5 billion in capitated revenue, which was the most significant portion of total revenue for the Company. Capitated revenue is generated from arrangements made with various Medicare Advantage, Medicaid and Medicare Direct Contracting managed care payors whereby the Company receives a fixed payment per member per month (“PMPM”) for a defined member population and is then financially responsible for the cost of healthcare services required by that member population. Due to the nature of the agreements, revenues are based upon estimated PMPM amounts that the Company expects to be entitled to receive from the health plans or the Centers for Medicare & Medicaid Services (“CMS”), including adjustments to the premiums received based on final risk score determination. The Company estimates the Medicare Risk Adjustments (“MRA’s”) receivable, which is an estimate derived from adjustments based on the health status of members and demographic characteristics of the plan. The health status of members is used to determine a risk score which is determined by comparing what was received from the third-party health plan or CMS to what should have been received based on the health status of the enrolled member. The Company engages a third-party actuary to determine an independent range of the revenue generated from risk-score adjustments expected to be received in the subsequent fiscal year. This amount of estimation represents $21.1 million as of December 31, 2021. | |
How We Addressed the Matter in Our Audit |
Auditing the Company’s accounting for the estimated portion of capitated revenue was complex and required significant auditor judgment due to the significant estimation uncertainty related to the estimated risk score and the related MRA receivables described above. | |
To test the estimated portion of capitated revenue, our audit procedures included, among others, understanding the significant assumptions used by the independent actuary in estimating the capitated revenue relating to the risk score and the related MRA receivables. This included obtaining a sample of the underlying data utilized in the actuarial estimate directly from the third-party health plans and reviewing and recalculating a sample of individual member risk score calculations. We engaged internal actuarial specialists to evaluate the methodology and significant assumptions of the independent third-party actuarial analysis that management utilizes to record the estimate. Our testing also included performing a predictive analytic, for a sample of health plans, of the capitated revenue relating to the risk score. To facilitate this analytic, for the sample selected, we agreed historical MRA settlements to the service fund reports and confirmed data directly with third-party health plans. We also performed a comparison of cash collected to the prior year estimate. |
Accounting for medical costs and unpaid service provider costs | ||
Description of the Matter |
As described in Note 2 to the consolidated financial statements, as of December 31, 2021, the Company had $129.1 million in liabilities for unpaid claims for medical services provided to its members by third parties. The Company develops an accrual for medical costs incurred but not reported (“IBNR”), which includes estimates for claims that have not been processed by the third-party health plan or CMS, using a process that is consistently applied and centrally controlled to develop PMPM medical cost estimates that are consistent with the most recently completed periods. IBNR amounts are estimated using accumulated historical data, adjusted for current experience. Management compares its estimate to that of an independent third-party actuarial analysis that management obtained to corroborate its estimate and records adjustments if there are material differences. | |
How We Addressed the Matter in Our Audit |
Auditing management’s estimate of the liability for unpaid service provider costs involved auditor judgment because the liability requires the Company to estimate medical services incurred but not reported, which involves judgment in the selection of assumptions (time from date of service to claim processing, health care professional contract rate changes, medical care utilization and other medical cost trends) used in the estimation process. These assumptions have a significant effect on the estimate for the liability for unpaid service provider costs. | |
To test the Company’s liability for unpaid claims, our audit procedures included, among others, obtaining directly from the third-party health plan a sample of historical claims paid and membership data provided by the health plans used in developing the Company’s actuarial estimate of the liability for unpaid service provider costs. In addition, we engaged our internal actuarial specialists to assist in evaluating the key assumptions and methodologies in the calculation and to independently calculate a range of reasonable reserve estimates for the liability for unpaid service provider costs to compare to what was recorded by the Company. We reviewed IBNR estimates made by the Company as compared to total paid claims activity for prior completed months. | ||
Accounting for business combinations | ||
Description of the Matter |
As described in Notes 2 and 3 to the consolidated financial statements, for the year ended December 31, 2021, the Company paid $1.1 billion for businesses acquired during the period. In determining the appropriate purchase price allocation, the Company must determine the enterprise value (fair value) of the acquired entities. This determination requires significant subjective assumptions, particularly in regard to the use of prospective financial information, which includes projecting revenue growth rates and operating expenses of the acquired entities. Further, the Company must also identify and value any intangible assets acquired, which also involves the use of projected financial information. | |
How We Addressed the Matter in Our Audit |
Auditing management’s assumptions used in determining enterprise value and the valuation of intangible assets involved auditor judgment because of the forward-looking and subjective nature of the assumptions. These assumptions have a significant effect on the determination of enterprise value and the recorded purchase price allocation. |
To test the Company’s assumptions, our audit procedures included, among others, comparing the prospective financial information used, including future revenues growth rates and cash flows, to the historical performance of the acquired businesses. We also compared the future cash flows of intangible assets to certain similar intangible assets and other historical acquisitions. Additionally, we engaged our internal specialists to assist in evaluating the key assumptions and methodologies in the calculation and to independently calculate ranges for certain of these assumptions in order to set our expectations for the Company’s assigned purchase price allocation for material acquisitions. |
(in thousands, except share data) |
December 31, 2021 |
December 31, 2020 |
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Assets |
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Current assets: | ||||||||
Cash, cash equivalents and restricted cash |
$ | $ | ||||||
Accounts receivable, net of unpaid service provider costs (Related parties comprised $ |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net (Related parties comprised $ |
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Operating lease right-of-use |
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Goodwill |
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Payor relationships, net |
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Other intangibles, net |
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Other assets |
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|
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Total assets |
$ | $ | ||||||
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|
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Liabilities and stockholders’ equity / members’ capital |
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Current liabilities: | ||||||||
Current portion of notes payable |
$ | $ | ||||||
Current portion of equipment loans |
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Current portion of finance lease liabilities |
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Current portion of contingent consideration |
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Accounts payable and accrued expenses (Related parties comprised $ |
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Deferred revenue (Related parties comprised $ |
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Current portions due to sellers |
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Current portion of operating lease liabilities |
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Other current liabilities |
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Total current liabilities |
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Notes payable, net of current portion and debt issuance costs |
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Long term portion of operating lease liabilities |
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Warrant liabilities |
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Equipment loans, net of current portion |
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Long term portion of finance lease liabilities |
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Deferred revenue, net of current portion (Related parties comprised of $ |
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Due to sellers, net of current portion |
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Contingent consideration |
Other liabilities (Related parties comprised $ |
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|
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Total liabilities |
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Stockholders’ Equity / Members’ Capital |
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Shares of Class A common stock $ |
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Shares of Class B common stock $ |
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Members’ capital |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Notes receivable, related parties |
( |
) | ||||||
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|
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Total Stockholders’ Equity / Members’ Capital attributable to Class A common stockholders |
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Non-controlling interests |
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Total Stockholders’ Equity / Members’ Capital |
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Total Liabilities and Stockholders’ Equity / Members’ Capital |
$ | $ | ||||||
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|
|
|
Years Ended December 31, |
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(in thousands, except share and per share data) |
2021 |
2020 |
2019 |
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Revenue: |
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Capitated revenue (Related parties comprised $ |
$ | $ | $ | |||||||||
Fee-for-service |
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Total revenue |
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Operating expenses: |
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Third-party medical costs (Related parties comprised $ |
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Direct patient expense (Related parties comprised $ |
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Selling, general, and administrative expenses (Related parties comprised $ |
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Depreciation and amortization expense |
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Transaction costs and other (Related parties comprised $ |
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Change in fair value of contingent consideration |
( |
) | ||||||||||
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Total operating expenses |
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Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
Other income and expense: |
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Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Interest income (Related parties comprised $ |
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Loss on extinguishment of debt |
( |
) | ( |
) | ||||||||
Change in fair value of embedded derivative |
( |
) | ||||||||||
Change in fair value of warrant liabilities |
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Other expenses |
( |
) | ( |
) | ( |
) | ||||||
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Total other income (expense) |
( |
) | ( |
) | ||||||||
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Net loss before income tax expense |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense |
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Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net loss attributable to non-controlling interests |
( |
) | ||||||||||
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Net loss attributable to Class A common stockholders |
$ | ( |
) | $ | — | $ | — | |||||
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Net loss per share attributable to Class A common stockholders, basic |
$ | ( |
) | N/A | N/A | |||||||
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Net loss per share attributable to Class A common stockholders, diluted |
$ | ( |
) | N/A | N/A | |||||||
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Weighted-average shares outstanding: |
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Basic |
N/A | N/A | ||||||||||
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Diluted |
N/A | N/A | ||||||||||
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(in thousands, except shares) |
Members’ Capital |
Class A Shares |
Class B Shares |
Additional Paid-in Capital |
Notes Receivable |
Accumulated Deficit |
Non-Controlling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||
BALANCE - December 31, 2018 |
— | $ | — | $ | — | — | $ | — | $ | — | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||
Members’ contributions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of securities by Primary Care (ITC) Holdings, LLC in connection with acquisitions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Profit interest units relating to equity-based compensation |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Repurchase of securities by Primary Care (ITC) Holdings, LLC |
— | ( |
) | — | — | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||
Issuance of securities by Primary Care (ITC) Holdings, LLC in connection with payment on due to seller balance |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Notes receivable-related parties |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Members’ distributions |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
BALANCE - December 31, 2019 |
— | $ | — | $ | — | — | $ | — | $ | — | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||||||
Members’ contributions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of securities by Primary Care (ITC) Holdings, LLC in connection with acquisitions |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Profit interest units relating to equity-based compensation |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of securities by Primary Care (ITC) Holdings, LLC in connection with payment on due to seller balance |
— | — | — | — | — | — | — | — | — |
Purchase of non-controlling interests by Primary Care (ITC) Holdings, LLC |
— | — | — | — | — | — | — | ( |
) | ( |
) | — | ||||||||||||||||||||||||||||||||
Notes receivable-related parties |
— | — | — | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Members’ distributions |
— | ( |
) | — | — | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||
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|
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|
|
|
|
|
|||||||||||||||||||||||
BALANCE—December 31, 2020 |
$ | — | $ | — | — | $ | — | $ | — | $ | ( |
) | $ | ( |
) | $ | — | $ | ||||||||||||||||||||||||||
Retrospective application of reverse recapitalization |
( |
) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|||||||||||||||||||||||
ADJUSTED BALANCE—December 31, 2020 |
$ | — | $ | — | — | $ | — | $ | |
$ | ( |
) | $ | ( |
) | $ | — | $ | ||||||||||||||||||||||||||
Net loss prior to business combination |
— | — | — | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||||||
Business combination and PIPE financing |
( |
) | ( |
) | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for acquisitions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exchange of Class B common stock for Class A common stock |
— | — | ( |
) | ( |
) | — | — | ( |
) | — | |||||||||||||||||||||||||||||||||
Impact of transactions affecting non-controlling interests |
— | — | — | — | — | — | ( |
) | — | — | — | |||||||||||||||||||||||||||||||||
Settlement of notes receivable, net |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
BALANCE—December 30, 2021 |
— | $ | — | $ | $ | $ | $ | — | $ | ( |
) | $ | $ | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
||||||||||||
(in thousands) |
2021 |
2020 |
2019 |
|||||||||
Cash Flows from Operating Activities: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
Depreciation and amortization expense |
||||||||||||
Change in fair value of contingent consideration |
( |
) | ||||||||||
Change in fair value of embedded derivative |
||||||||||||
Change in fair value of warrant liabilities |
( |
) | ||||||||||
Loss on extinguishment of debt |
||||||||||||
Amortization of debt issuance costs |
||||||||||||
Non-cash lease expense |
||||||||||||
Write off of other receivables |
||||||||||||
Stock-based compensation |
||||||||||||
Paid in kind interest expense |
||||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable, net (Related parties comprised $ |
( |
) | ( |
) | ( |
) | ||||||
Inventory |
( |
) | ( |
) | ( |
) | ||||||
Other assets |
( |
) | ( |
) | ( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ( |
) | ||||||
Accounts payable and accrued expenses (Related parties comprised $ |
||||||||||||
Interest accrued due to seller |
||||||||||||
Payment of paid in kind interest on extinguishment of debt |
( |
) | ||||||||||
Deferred rent (Related parties comprised $ |
||||||||||||
Deferred revenue (Related parties comprised $ |
||||||||||||
Other liabilities (Related parties comprised $( |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash used in operating activities |
( |
) | ( |
) | ( |
) | ||||||
Cash Flows from Investing Activities: |
||||||||||||
Purchase of property and equipment (Related parties comprised $( |
( |
) | ( |
) | ( |
) | ||||||
Acquisitions of subsidiaries including non-compete intangibles, net of cash acquired |
( |
) | ( |
) | ( |
) | ||||||
Payments (to) from sellers |
( |
) | ( |
) |
Other (Related parties comprised $ |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Cash Flows from Financing Activities: |
||||||||||||
Contributions from member |
||||||||||||
Distributions to member |
( |
) | ( |
) | ||||||||
Business combination and PIPE financing |
||||||||||||
Payments of long-term debt |
( |
) | ( |
) | ( |
) | ||||||
Debt issuance costs |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from long-term debt |
||||||||||||
Prepayment fees on extinguishment of debt |
( |
) | ||||||||||
Proceeds from revolving credit facility |
||||||||||||
Repayments of revolving credit facility |
( |
) | ( |
) | ||||||||
Proceeds from insurance financing arrangements |
||||||||||||
Payments of principal on insurance financing arrangements |
( |
) | ( |
) | ( |
) | ||||||
Repayments of equipment loans |
( |
) | ( |
) | ( |
) | ||||||
Repayments of capital lease obligations |
( |
) | ( |
) | ( |
) | ||||||
Employee stock purchase plan contributions |
||||||||||||
Other |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
||||||||||||
Net increase in cash, cash equivalents and restricted cash |
||||||||||||
Cash, cash equivalents and restricted cash at beginning of year |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Supplemental cash flow information: |
||||||||||||
Interest paid |
||||||||||||
Income taxes paid |
||||||||||||
Non-cash investing and financing activities: |
||||||||||||
Right-of-use |
||||||||||||
Issuance of securities by Cano Health, Inc. in connection with acquisitions |
||||||||||||
Issuance of securities in PCIH in connection with acquisitions |
||||||||||||
Contingent consideration in connection with acquisitions |
||||||||||||
Due to sellers in connection with acquisitions |
||||||||||||
Addition to construction in process funded through accounts payable |
||||||||||||
Humana Affiliate Provider clinic leasehold improvements |
||||||||||||
Capital lease obligations entered into for property and equipment |
||||||||||||
Equipment loan obligations entered into for property and equipment |
||||||||||||
Issuance of security in exchange for balance due to sellers |
(in thousands) |
Recapitalization |
|||
Cash - Jaws’ trust and cash, net of redemptions |
$ | |||
Cash - PIPE financing |
||||
Less: transaction costs and advisory fees paid |
( |
) | ||
Less: Distribution to PCIH shareholders |
( |
) | ||
|
|
|||
Net Business Combination and PIPE financing |
||||
Plus: Non-cash net assets assumed |
||||
Plus: Accrued transaction costs |
||||
Less: Capitalized transaction costs |
( |
) | ||
Less: Warrant liability assumed |
( |
) | ||
|
|
|||
Net contributions from Business Combination and PIPE financing |
$ | |||
|
|
Class A common stock |
Class B common stock |
|||||||
Common stock outstanding prior to Business Combination |
||||||||
Less: redemption of Jaws shares |
( |
) | ||||||
|
|
|
|
|||||
Ordinary shares of Jaws |
||||||||
Jaws Sponsor Shares |
||||||||
Shares issued in PIPE financing |
||||||||
|
|
|
|
|||||
Business Combination and PIPE financing shares |
||||||||
Shares to PCIH shareholders |
||||||||
|
|
|
|
|||||
Total shares of common stock outstanding immediately after the Business Combination |
||||||||
|
|
|
|
2021 |
2020 |
2019 |
||||||||||||||||||||||
(in thousands) |
Revenue $ |
Revenue % |
Revenue $ |
Revenue % |
Revenue $ |
Revenue % |
||||||||||||||||||
Capitated revenue |
||||||||||||||||||||||||
Medicare |
$ | % | $ | % | $ | % | ||||||||||||||||||
Other capitated |
% | % | % | |||||||||||||||||||||
Total capitated revenue |
% | % | % | |||||||||||||||||||||
Fee-for-service |
||||||||||||||||||||||||
Fee-for-service |
% | % | % | |||||||||||||||||||||
Pharmacy |
% | % | % | |||||||||||||||||||||
Other |
% | % | % | |||||||||||||||||||||
Total fee-for-service |
% | % | % | |||||||||||||||||||||
Total revenue |
$ | % | $ | % | $ | % | ||||||||||||||||||
As of and for the years ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Revenues |
% | % | % | |||||||||
Accounts receivable |
% | % | % |
As of, |
||||||||
(in thousands) |
December 31, 2021 |
December 31, 2020 |
||||||
Accounts receivable |
$ | $ | ||||||
Medicare risk adjustment |
||||||||
Unpaid service provider costs |
( |
) | ( |
) | ||||
Accounts receivable, net |
$ | $ | ||||||
(in thousands) |
2021 |
2020 |
||||||
Balance as of January 1, |
$ |
$ |
||||||
Incurred related to: |
||||||||
Current year |
||||||||
Prior years |
||||||||
Paid related to: |
||||||||
Current year |
||||||||
Prior years |
||||||||
Balance as of December 31, |
$ |
$ |
||||||
(in thousands) |
||||
Accounts receivable, net of unpaid service provider costs |
$ | |||
Property and equipment, net |
||||
Other assets |
||||
Favorable leasehold interest |
||||
Non-compete intangibles |
||||
Trade name |
||||
Payor relationships |
||||
Goodwill |
||||
Accounts payable and accrued expenses |
( |
) | ||
Total purchase price, including non-compete intangibles |
$ | |||
(in thousands) |
||||
Accounts receivable, net of unpaid service provider costs |
$ | |||
Inventory |
||||
Property and equipment, net |
||||
Payor relationships |
||||
Non-compete intangibles |
||||
Other acquired intangibles |
||||
Other assets |
||||
Goodwill |
||||
Accounts payable and accrued expenses |
( |
) | ||
Total purchase price, including non-compete intangibles |
$ | |||
(in thousands) |
||||
Property and equipment |
$ | |||
Non-compete intangibles |
||||
Acquired intangibles |
||||
Goodwill |
||||
Other assets |
||||
Total purchase price, including non-compete intangibles |
$ | |||
(in thousands) |
||||
Cash and cash equivalents |
$ | |||
Accounts receivable |
||||
Inventory |
||||
Property and equipment |
||||
Non-compete intangibles |
||||
Acquired intangibles |
||||
Goodwill |
||||
Accounts payable |
( |
) | ||
Total purchase price, including non-compete intangibles |
$ | |||
(in thousands) |
||||
Accounts receivable |
$ | |||
Property and equipment |
||||
Non-compete intangibles |
||||
Acquired intangibles |
||||
Goodwill |
||||
Other assets |
||||
Total Purchase Price |
$ | |||
Years Ended December 31, |
||||||||||||
(in thousands) |
2021 |
2020 |
2019 |
|||||||||
Assets acquired |
||||||||||||
Accounts receivable |
$ | $ | $ | |||||||||
Other assets |
||||||||||||
Property and equipment |
||||||||||||
Goodwill |
||||||||||||
Intangibles |
||||||||||||
Total assets acquired |
||||||||||||
Liabilities Assumed |
||||||||||||
Amounts due to seller |
||||||||||||
Other liabilities |
||||||||||||
Total liabilities assumed |
||||||||||||
Net Assets Acquired |
||||||||||||
Issuance of equity in connection with acquisitions |
||||||||||||
Acquisitions of subsidiaries, including non-compete intangibles, net of cash acquired |
$ | $ | $ | |||||||||
Years Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Revenue |
$ | $ | ||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
4. |
Assets Classification |
Useful Life |
2021 |
2020 |
|||||||
Leasehold improvements |
Lesser of lease term or |
$ | $ | |||||||
Medical equipment |
||||||||||
Vehicles |
||||||||||
Computer equipment |
||||||||||
Furniture and fixtures |
||||||||||
Construction in progress |
||||||||||
Total |
||||||||||
Less: Accumulated depreciation and amortization |
( |
) | ( |
) | ||||||
Property and equipment, net |
$ | $ | ||||||||
5. |
(in thousands) |
Weighted-Average Amortization Period |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||
Intangibles: |
||||||||||||||||
Trade names |
$ | $ | ( |
) | $ | |||||||||||
Brand |
( |
) | ||||||||||||||
Non-compete |
( |
) | ||||||||||||||
Customer relationships |
( |
) | ||||||||||||||
Payor relationships |
( |
) | ||||||||||||||
Provider relationships |
( |
) | ||||||||||||||
Total intangibles, net |
$ | $ | ( |
) | $ | |||||||||||
(in thousands) |
Weighted-Average Amortization Period |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||
Intangibles: |
||||||||||||||||
Trade names |
$ | $ | ( |
) | $ | |||||||||||
Brand |
( |
) | ||||||||||||||
Non-compete |
( |
) | ||||||||||||||
Customer relationships |
( |
) | ||||||||||||||
Payor relationships |
( |
) | ||||||||||||||
Provider relationships |
( |
) | ||||||||||||||
Total intangibles, net |
$ | $ | ( |
) | $ | |||||||||||
Years ended December 31, |
Amount (in thousands) |
|||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total |
$ | |||
2021 |
||||
ROU assets |
||||
Operating leases |
$ | |||
Finance leases |
||||
$ | ||||
Lease liabilities |
||||
Operating leases |
$ | |||
Finance leases |
||||
$ | ||||
2021 |
||||
Operating lease cost |
$ | |||
Short-term lease cost |
||||
Variable lease cost |
||||
Finance lease cost |
||||
Amortization of right-of-use |
$ | |||
Interest on lease liabilities |
||||
Total finance lease cost |
$ | |||
2021 |
||||
Cash paid for amounts included in the measurement of lease liabilities |
||||
Operating cash flows from finance leases |
$ | |||
Operating cash flows from operating leases |
||||
Financing cash flows from finance leases |
||||
Right-of-use |
||||
Operating leases |
$ | |||
Finance leases |
2021 |
||||
Weighted average remaining lease term—Finance |
||||
Weighted average remaining lease term—Operating |
||||
Weighted average discount rate—Finance |
% | |||
Weighted average discount rate—Operating |
% |
Years ended December 31, |
Operating |
Finance |
Total |
|||||||||
2022 |
$ | $ | $ | |||||||||
2023 |
||||||||||||
2024 |
||||||||||||
2025 |
||||||||||||
2026 |
||||||||||||
Thereafter |
||||||||||||
Total minimum lease payments |
||||||||||||
Less: amount representing interest |
( |
) | ( |
) | ( |
) | ||||||
Lease liabilities |
$ | $ | $ | |||||||||
Years ended December 31, |
Operating |
Capital |
Total |
|||||||||
2021 |
$ | $ | $ | |||||||||
2022 |
||||||||||||
2023 |
||||||||||||
2024 |
||||||||||||
2025 |
||||||||||||
Thereafter |
||||||||||||
Total minimum lease payments |
||||||||||||
Less: amount representing interest |
( |
) | ( |
) | ||||||||
Lease liabilities |
$ | $ | $ | |||||||||
7. |
(in thousands) |
2021 |
2020 |
||||||
Notes payable bearing interest at |
$ | $ | ||||||
Notes payable bearing interest at |
||||||||
Notes payable bearing interest at |
||||||||
Notes payable bearing interest at |
||||||||
Notes payable bearing interest at |
||||||||
Notes payable bearing interest at |
||||||||
Total equipment loans |
$ | $ | |
|||||
Less: current portion |
( |
) | ( |
) | ||||
Total equipment loans, net of current portion |
$ | |
$ | |||||
8. |
(in thousands) |
Deferred revenue |
|||
Balance as at December 31, 2019 |
$ |
|||
Increases due to amounts collected |
||||
Revenues recognized from current period increases |
( |
) | ||
Balance as at December 31, 2020 |
||||
Increases due to amounts collected |
||||
Revenues recognized from current period increases |
( |
) | ||
Balance as at December 31, 2021 |
$ |
|||
Years ended December 31, |
Amount (in thousands) |
|||
$ | ||||
Total |
$ |
9. |
(in thousands) |
2021 |
2020 |
||||||
Term loan 3 |
$ | $ | ||||||
Senior Notes |
||||||||
Less: Current portion of notes payable |
( |
) | ( |
) | ||||
Less: debt issuance costs |
( |
) | ( |
) | ||||
Notes payable, net of current portion and debt issuance costs |
$ | $ | ||||||
(in thousands) |
||||
Year ending December 31, |
Amount |
|||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total |
$ | |||
10. |
11. |
• | Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. | ||
• | Level 2 | Inputs to the valuation methodology include: | ||
• quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive markets; • inputs other than quoted prices that are observable for the asset or liability; • inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. | ||||
• | Level 3 | Inputs to the valuation methodology are unobservable and significant to the fairvalue measurement. |
Range as of | ||||
Unobservable Input |
June 1, 2020 |
November 23, 2020 | ||
Probability of change of control |
N/A | |||
Probability of issuance of debt |
||||
Expected date of event |
||||
Discount rate |
As of |
||||||||
Unobservable Input |
June 3, 2021 |
December 31, 2021 |
||||||
Exercise price |
$ | $ | ||||||
Stock price |
$ | $ | ||||||
Term (years) |
||||||||
Volatility |
% | N/A | ||||||
Risk free interest rate |
% | % | ||||||
Dividend yield |
||||||||
Public warrant price |
$ | $ |
(in thousands) |
Carrying Value |
Quoted Prices in Active Markets for Identical Items (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Liabilities measured at fair value on a recurring basis: |
||||||||||||||||
Contingent consideration |
$ | $ | $ | $ | ||||||||||||
Public Warrant Liabilities |
||||||||||||||||
Private Placement Warrant Liabilities |
||||||||||||||||
Total liabilities measured at fair value |
$ | $ | $ | $ | ||||||||||||
(in thousands) |
Carrying Value |
Quoted Prices in Active Markets for Identical Items (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Liabilities measured at fair value on a recurring basis: |
||||||||||||||||
Contingent consideration |
$ | $ | $ | $ | ||||||||||||
Total liabilities measured at fair value |
$ | $ | $ | $ | ||||||||||||
Years Ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Opening balance as at January 1, |
$ | $ | $ | |||||||||
Embedded derivative recognized under Term Loan 2 |
||||||||||||
Change in fair value of embedded derivative |
||||||||||||
Embedded derivative derecognized due to extinguishment of Term Loan 2 |
( |
) | ||||||||||
Change in fair value of contingent consideration |
( |
) | ||||||||||
Contingent consideration recognized due to acquisitions |
||||||||||||
Warrants acquired in the Business Combination |
||||||||||||
Change in fair value of warrants |
( |
) | ||||||||||
Contingent consideration reclassified to due to seller |
( |
) | ( |
) | ||||||||
Contingent consideration settled through equity |
( |
) | ||||||||||
Contingent consideration payments |
( |
) | ( |
) | ||||||||
Closing balance as of December 31, |
$ | $ | $ | |||||||||
12. |
As of December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Total Assets |
$ | $ | ||||||
Total Liabilities |
$ | $ | ||||||
Years Ended December 31, |
||||||||||||
(in thousands) |
2021 |
2020 |
2019 |
|||||||||
Total revenue |
$ | $ | $ | |||||||||
Operating expenses: |
||||||||||||
Third-party medical costs |
||||||||||||
Direct patient expense |
||||||||||||
Selling, general and administrative expenses |
||||||||||||
Depreciation and amortization expense |
||||||||||||
Total operating expenses |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | |||||
13. |
14. |
As of June 3, 2021 |
||||
Closing Cano share price as of valuation date |
$ | |||
Risk-free interest rate |
% | |||
Expected volatility |
% | |||
Expected dividend yield |
% | |||
Expected cost of equity |
% |
Shares |
Weighted Average Grant Date Fair Value |
|||||||
Balance, January 1, 2021 |
||||||||
Granted |
$ | |||||||
Vested |
||||||||
Forfeitures |
( |
) | ||||||
Balance, December 31, 2021 |
$ |
Shares |
Weighted Average Grant Date Fair Value |
|||||||||||
Balance, January 1, 2021 |
||||||||||||
Granted |
$ | $ | ||||||||||
Vested |
||||||||||||
Forfeitures |
( |
) | ||||||||||
Balance, December 31, 2021 |
$ | $ |
15. |
COMMITMENTS AND CONTINGENCIES |
16. |
(in thousands) |
2021 |
2020 |
||||||
Jurisdictional earnings: |
||||||||
U.S. losses |
$ | ( |
) | $ | ( |
) | ||
Foreign income (losses) |
( |
) | ||||||
Total losses |
( |
) | ( |
) | ||||
Current: |
||||||||
U.S. Federal |
||||||||
U.S. State and local |
( |
) | ||||||
Foreign |
||||||||
Total current tax expense |
||||||||
Deferred: |
||||||||
U.S. Federal |
||||||||
U.S. State and local |
||||||||
Foreign |
( |
) | ||||||
Total deferred tax (benefit) expense |
( |
) | ||||||
Total tax expense |
$ | $ | ||||||
(in thousands) |
2021 |
2020 |
||||||
Deferred tax assets: |
||||||||
Pass-through income (loss) |
$ | $ | ||||||
Net operating loss |
||||||||
Stock compensation expense |
||||||||
Interest expense carryforward |
||||||||
Other |
||||||||
Total gross deferred tax |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Net deferred tax assets |
||||||||
Deferred tax liabilities |
||||||||
Unremitted earnings |
( |
) | ||||||
Deferred tax liability, net |
$ | $ | ( |
) | ||||
2021 |
2020 |
|||||||
Percent |
Percent |
|||||||
Income tax benefit computed at statutory rate |
% | % | ||||||
Permanent items |
% | % | ||||||
Net income attributable to noncontrolling interest |
( |
)% | ( |
)% | ||||
State benefit, net of federal benefit |
% | % | ||||||
Valuation allowance |
( |
)% | ( |
)% | ||||
Foreign rate differential |
% | % | ||||||
Other, net |
% | ( |
)% | |||||
Total tax expense |
( |
)% | ( |
)% | ||||
17. |
Years Ended December 31, |
||||||||||||
(in thousands, except shares and per share data) |
2021 |
2020 |
2019 |
|||||||||
Numerator: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ( |
) | ||||
Less: net loss attributable to non-controlling interests |
( |
) | — | — | ||||||||
Net loss attributable to Class A common stockholders |
( |
) | — | — | ||||||||
Dilutive effect of warrants on net income to Class A common stockholders |
( |
) | N/A | N/A | ||||||||
Dilutive effect of Class B common stock |
( |
) | N/A | N/A | ||||||||
Net loss attributable to Class A common stockholders - Diluted |
( |
) | N/A | N/A | ||||||||
Basic and Diluted Earnings Per Share denominator: |
||||||||||||
Weighted average common stock outstanding - basic |
N/A | N/A | ||||||||||
Net loss per share - basic |
$ | ( |
) | N/A | N/A | |||||||
Diluted Earnings Per Share: |
||||||||||||
Dilutive effect of warrants on weighted average common stock outstanding |
N/A | N/A | ||||||||||
Dilutive effect of Class B common stock on weighted average common stock outstanding |
N/A | N/A | ||||||||||
Weighted average common stock outstanding - diluted |
N/A | N/A | ||||||||||
Net loss per share - diluted |
$ | ( |
) | N/A | N/A | |||||||
As of December 31, 2021 |
||||
Class B common stock |
||||
Public Warrants |
||||
Private Placement Warrants |
||||
Restricted Stock Units |
||||
Stock Options |
||||
Contingent Shares Issued in Connection with Acquisitions |
||||
ESPP Shares |
||||
Potential Common Stock Equivalents |
||||
18. |
19. |
2021 |
||||||||||||||||||||||||||||||||||||
Third Quarter (as Restated) |
Adjustments |
Third Quarter (As Restated and adjusted) |
Second Quarter (as Restated) |
Adjustments |
Second Quarter (as Restated and adjusted) |
First Quarter (as Restated) |
Adjustments |
First Quarter (as Restated and adjusted) |
||||||||||||||||||||||||||||
Revenue |
$ | |
$ | $ | |
$ | |
$ | $ | |
$ | |
$ | $ | |
|||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Total other income (expenses) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Net income (loss) before income tax (benefit) expense |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Income tax (benefit) expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||
Net loss per share - basic |
$ | ( |
) | $ | — | $ | ( |
) | $ | $ | — | $ | N/A | — | N/A | |||||||||||||||||||||
Net loss per share - diluted |
$ | ( |
) | $ | — | $ | ( |
) | $ | ( |
) | $ | — | $ | ( |
) | N/A | — | N/A | |||||||||||||||||
20. |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
||||||||||||||||||||||||||||||||||
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Accounts receivable, net of unpaid service provider costs 1 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Inventory |
||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets 2 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Total current assets |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Property and equipment, net |
||||||||||||||||||||||||||||||||||||
Goodwill 3 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Payor relationships, net |
||||||||||||||||||||||||||||||||||||
Other intangibles, net |
||||||||||||||||||||||||||||||||||||
Other assets |
||||||||||||||||||||||||||||||||||||
Total assets |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
Liabilities and stockholders’ equity / members’ capital |
||||||||||||||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||||||||||||||
Current portion of notes payable |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Current portion of equipment loans |
||||||||||||||||||||||||||||||||||||
Current portion of finance lease liabilities |
||||||||||||||||||||||||||||||||||||
Current portion of contingent consideration |
||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses 4 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Deferred revenue |
||||||||||||||||||||||||||||||||||||
Current portions due to sellers 5 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Other current liabilities 6 |
||||||||||||||||||||||||||||||||||||
Total current liabilities |
( |
) | $ | ( |
) | $ | $ | ( |
) | $ |
1 |
Reflects a reduction to accounts receivable and capitated revenue as a result of the reduced MRA estimate. |
2 |
Corrects insurance payments originally recorded as prepaid insurance but subsequently recorded in selling, general and administrative expense. |
3 |
Reflect the correction of an error in the purchase price allocation for the University acquisition to reduce goodwill and other current liabilities. |
4 |
Reflects reductions to accounts payable and accrued expenses and direct patient expense as a result of the decrease in estimated provider payments corresponding to the reduced MRA estimate. |
5 |
Corrects accrual for compensation-related costs due to sellers of acquired businesses recorded in transaction costs and other. |
6 |
Reflects a reclassification from accounts receivable, net of unpaid service provider costs for plans that are in a net deficit position to other current liabilities. |
Notes payable, net of current portion and debt issuance costs |
||||||||||||||||||||||||||||||||||||
Warrant liabilities |
||||||||||||||||||||||||||||||||||||
Equipment loans, net of current portion |
||||||||||||||||||||||||||||||||||||
Long term portion of finance lease liabilities |
||||||||||||||||||||||||||||||||||||
Deferred rent |
||||||||||||||||||||||||||||||||||||
Deferred revenue, net of current portion |
||||||||||||||||||||||||||||||||||||
Due to sellers, net of current portion |
||||||||||||||||||||||||||||||||||||
Contingent consideration |
||||||||||||||||||||||||||||||||||||
Other liabilities |
||||||||||||||||||||||||||||||||||||
Total liabilities |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Stockholders’ Equity / Members’ Capital |
||||||||||||||||||||||||||||||||||||
Shares of Class A common stock |
||||||||||||||||||||||||||||||||||||
Shares of Class B common stock |
||||||||||||||||||||||||||||||||||||
Members’ capital |
||||||||||||||||||||||||||||||||||||
Additional paid-in capital |
( |
) | ||||||||||||||||||||||||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Notes receivable, related parties |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Total Stockholders’ Equity / Members’ Capital attributable to Class A common stockholders |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Non-controlling interests |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Total Stockholders’ Equity / Members’ Capital |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity / Members’ Capital |
$ | $ | ( |
) | $ | |
$ | |
$ | ( |
) | $ | |
$ | $ | ( |
) | $ | ||||||||||||||||||
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
||||||||||||||||||||||||||||||||||
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
||||||||||||||||||||||||||||
Revenue: |
||||||||||||||||||||||||||||||||||||
Capitated revenue 1 |
$ | |
$ | ( |
) | $ | |
$ | |
$ | ( |
) | $ | |
$ | |
$ | ( |
) | $ | |
|||||||||||||||
Fee-for-service 2 |
||||||||||||||||||||||||||||||||||||
Total revenue |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||||||
Third-party medical costs 3 |
||||||||||||||||||||||||||||||||||||
Direct patient expense 4 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Selling, general and administrative expenses 5 |
||||||||||||||||||||||||||||||||||||
Depreciation and amortization expense |
||||||||||||||||||||||||||||||||||||
Transaction costs and other 6 |
( |
) | ||||||||||||||||||||||||||||||||||
Total operating expenses |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Income (loss) from operations |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||||||||||||||
Other income and expense: |
||||||||||||||||||||||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Interest income |
||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Change in fair value of warrant liabilities |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Other income (expense) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Total other income (expense) |
( |
) | ( |
) | ( |
) | ( |
) |
1 |
Reflects a decrease to capitated revenue and accounts receivable as a result of the reduced MRA estimate. |
2 |
Reflects a reclassification of sublease income to fee-for-service |
3 |
Reflects an increase to third-party medical costs and reduction of accounts receivable. |
4 |
Reflects reductions to direct patient expense and accounts payable and accrued expenses as a result of the decrease in estimated provider payments corresponding to the reduced MRA estimate. |
5 |
Corrects stock-based compensation expense with a corresponding increase in additional paid in capital and the reclassification of sublease income to fee-for-service |
6 |
Corrects a professional fee accrual offset by an accrual for certain other compensation-related costs due to sellers of acquired businesses. |
Net income (loss) before income tax expense (benefit) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Income tax expense (benefit) |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||
Net loss attributable to non-controlling interests |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net income (loss) attributable to Class A common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) per share attributable to Class A common stockholders, basic |
$ | ( |
) | $ | ( |
) | $ | $ | N/A | N/A | ||||||||||||||||||||||||||
Net loss per share attributable to Class A common stockholders, diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | N/A | N/A | ||||||||||||||||||||||
Weighted-average shares used in computation of earnings per share: |
||||||||||||||||||||||||||||||||||||
Basic |
N/A | N/A | ||||||||||||||||||||||||||||||||||
Diluted |
N/A | N/A |
Nine Months Ended September 30, 2021 |
Six Months Ended June 30, 2021 |
|||||||||||||||||||||||
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
|||||||||||||||||||
Revenue: |
||||||||||||||||||||||||
Capitated revenue 1 |
$ | |
$ | ( |
) | $ | |
$ | |
$ | ( |
) | $ | |
||||||||||
Fee-for-service 2 |
$ | $ | $ | $ | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenue |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Third-party medical costs 3 |
||||||||||||||||||||||||
Direct patient expense 4 |
( |
) | ( |
) | ||||||||||||||||||||
Selling, general and administrative expenses 5 |
||||||||||||||||||||||||
Depreciation and amortization expense |
||||||||||||||||||||||||
Transaction costs and other 6 |
( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
( |
) | ( |
) | ||||||||||||||||||||
Income (loss) from operations |
( |
) | $ | ( |
) | $ | ( |
) | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
Other income and expense: |
||||||||||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Interest income |
||||||||||||||||||||||||
Loss on extinguishment of debt |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Change in fair value of warrant liabilities |
||||||||||||||||||||||||
Other income (expense) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other income (expense) |
( |
) | $ | $ | ( |
) | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss before income tax expense (benefit) |
( |
) | $ | ( |
) | $ | ( |
) | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
Income tax benefit |
( |
) | $ | $ | ( |
) | ( |
) | $ | $ | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Net loss attributable to non-controlling interests |
( |
) | $ | ( |
) | $ | ( |
) | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to Class A common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to Class A common stockholders, basic |
$ | ( |
) | $ | ( |
) | $ | $ | ||||||||
Net loss per share attributable to Class A common stockholders, diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Weighted-average shares used in computation of earnings per share: |
||||||||||||||||
Basic |
||||||||||||||||
Diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
1 |
Reflects a decrease to capitated revenue and accounts receivable as a result of the reduced MRA estimate. |
2 |
Reflects a reclassification of sublease income to fee-for-service |
3 |
Reflects an increase to third-party medical costs and a reduction of accounts receivable. |
4 |
Reflects reductions to direct patient expense and accounts payable and accrued expenses as a result of the decrease in estimated provider payments corresponding to the reduced MRA estimate. |
5 |
Corrects stock-based compensation expense with a corresponding increase in additional paid in capital and the reclassification of sublease income to fee-for-service |
6 |
Corrects a professional fee accrual offset by an accrual for certain other compensation-related costs due to sellers of acquired businesses. |
Nine Months Ended September 30, 2021 |
Six Months Ended June 30, 2021 |
Three Months Ended March 31, 2021 |
||||||||||||||||||||||||||||||||||
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
As Previously Reported |
Adjustments |
As Restated |
||||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||||||||||||||||||||||
Net income (loss) 1 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||
Equity-based compensation 2 |
||||||||||||||||||||||||||||||||||||
Accounts receivable, net 3 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Prepaid expenses and other current assets 4 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Accounts payable and accrued expenses 5 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Interest accrued due to seller 7 |
||||||||||||||||||||||||||||||||||||
Other liabilities 6 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net cash used in operating activities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||||||||||||||||||||||||||
Acquisitions of subsidiaries including non-compete intangibles, net of cash acquired8 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||||||||||||||||||||||||||
Proceeds from insurance financing arrangements 9 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Payments of principal on insurance financing arrangements 9 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Interest accrued due to seller 7 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net cash used in / provided by financing activities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of year |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Reflects the cumulative impact on net loss of the adjustments detailed within the statement of operations. |
2 |
Corrects stock-based compensation expense. |
3 |
Reflects changes to accounts receivable as a result of the reduced MRA estimate. |
4 |
Corrects insurance payments originally recorded as prepaid insurance. |
5 |
Reflects changes to accounts payable and accrued expenses as a result of the change in estimated provider payments corresponding to the reduced MRA estimate. |
6 |
Reflects a reclassification from accounts receivable, net of unpaid service provider costs for plans that are in a net deficit position. |
7 |
To reclass interest accrued due to sellers from financing activities to operating activities. |
8 |
Reflect the correction of an error in the purchase price allocation for the University acquisition. |
9 |
To reflect adjustment to financed insurance. |
21. |
|
December 31, 2020 |
||||||||||||
As Previously Reported |
Adjustments |
As Revised |
||||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Cash, cash equivalents and restricted cash |
$ | $ | $ | |||||||||
Accounts receivable, net of unpaid service provider costs 1 |
( |
) | ||||||||||
Inventory |
||||||||||||
Prepaid expenses and other current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total current assets |
( |
) | ||||||||||
Property and equipment, net |
||||||||||||
Goodwill |
||||||||||||
Payor relationships, net |
||||||||||||
Other intangibles, net |
||||||||||||
Other assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total assets |
$ | |
$ | ( |
) | $ | |
|||||
Liabilities and stockholders’ equity / members’ capital |
||||||||||||
Current liabilities: |
||||||||||||
Current portion of notes payable |
$ | $ | $ |
Current portion of equipment loans |
||||||||||||
Current portion of finance lease liabilities |
||||||||||||
Current portion of contingent consideration |
||||||||||||
Accounts payable and accrued expenses 2 |
( |
) | ||||||||||
Deferred revenue |
1 |
Reflects a reduction to accounts receivable and capitated revenue as a result of the reduced MRA estimate. |
2 |
Reflects reductions to accounts payable and accrued expenses and direct patient costs as a result of the decrease in estimated provider payments corresponding to the reduced MRA estimate. |
Current portions due to sellers 3 |
( |
) | ||||||||||
Current portion of operating lease liabilities |
||||||||||||
Other current liabilities 4 |
||||||||||||
Total current liabilities |
( |
) | ||||||||||
Notes payable, net of current portion and debt issuance costs |
||||||||||||
Equipment loans, net of current portion |
||||||||||||
Long term portion of finance lease liabilities |
||||||||||||
Deferred revenue, net of current portion |
||||||||||||
Due to sellers, net of current portion |
||||||||||||
Contingent consideration |
||||||||||||
Other liabilities |
||||||||||||
Total liabilities |
( |
) | ||||||||||
Stockholders’ Equity / Members’ Capital |
||||||||||||
Members’ capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Notes receivable, related parties |
( |
) | ( |
) | ||||||||
Total member’s capital |
( |
) | ||||||||||
Total liabilities and members’ Capital |
$ | |
$ | ( |
) | $ | ||||||
3 |
Corrects the accrual for compensation-related costs due to sellers of acquired businesses recorded in transaction costs and other. |
4 |
Reflects a reclassification from accounts receivable, net of unpaid service provider costs for plans that are in a net deficit position to other current liabilities. |
December 31, 2020 |
December 31, 2019 |
|||||||||||||||||||||||
As Previously Reported |
Adjustments |
As Revised |
As Previously Reported |
Adjustments |
As Revised |
|||||||||||||||||||
Revenue: |
||||||||||||||||||||||||
Capitated revenue 1 |
$ | |
$ | $ | |
$ | $ | ( |
) | $ | |
|||||||||||||
Fee-for-service |
||||||||||||||||||||||||
Total revenue |
( |
) | ||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Third-party medical costs |
||||||||||||||||||||||||
Direct patient expense 2 |
( |
) | ( |
) | ||||||||||||||||||||
Selling, general and administrative expenses |
||||||||||||||||||||||||
Depreciation and amortization expense |
||||||||||||||||||||||||
Transaction costs and other 3 |
( |
) | ||||||||||||||||||||||
Change in fair value of contingent consideration |
||||||||||||||||||||||||
Total operating expenses |
( |
) | ||||||||||||||||||||||
Income (loss) from operations |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Other income and expense: |
||||||||||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Interest income |
||||||||||||||||||||||||
Loss on extinguishment of debt |
( |
) | ( |
) | ||||||||||||||||||||
Change in fair value of embedded derivative |
( |
) | ( |
) | ||||||||||||||||||||
Change in fair value of warrant liabilities |
||||||||||||||||||||||||
Other income (expense) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Total other income (expense) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Net loss before income tax benefit (expense) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Income tax expense (benefit) |
||||||||||||||||||||||||
Net income (loss) |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
1 |
Reflects a decrease to capitated revenue and accounts receivable as a result of the reduced MRA. |
2 |
Reflects reductions to direct patient expense and accounts payable and accrued expenses as a result of the decrease in estimated provider payments corresponding to the reduced MRA estimate. |
3 |
Corrects compensation-related costs due to sellers of acquired businesses with a corresponding increase in additional paid in capital. |
2020 |
2019 |
|||||||||||||||||||||||
As Previously Reported |
Adjustments |
As Revised |
As Previously Reported |
Adjustments |
As Revised |
|||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||||||||||
Net loss 1 |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||
Equity-based compensation |
||||||||||||||||||||||||
Accounts receivable, net 2 |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Accounts payable and accrued expenses 3 |
( |
) | ( |
) | ||||||||||||||||||||
Other liabilities 4 |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash used in operating activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||||||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||||||||||||||
Net cash provided by financing activities |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
||||||||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of year |
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | $ | $ | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Reflects the cumulative impact on net loss of the adjustments detailed within the statement of operations. |
2 |
Reflects changes to accounts receivable as a result of the reduced MRA estimate. |
3 |
Reflects changes to accounts payable and accrued expenses as a result of the change in estimated provider payments corresponding to the reduced MRA estimate. |
4 |
Reflects a reclassification from accounts receivable, net of unpaid service provider costs for plans that are in a net deficit position and corrects accrual for compensation-related costs due to sellers of acquired businesses. |
22. |
|
Ernst & Young LLP 2 Miami Central Suite 1500 700 NW 1st Avenue Miami, FL 33136 |
Tel: +1 305 358 4111 Fax: +1 305 415 1411 ey.com |
December 31, |
||||||||
2020 |
2019 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 3,502,876 | $ | 1,356,673 | ||||
Accounts receivable |
17,572,225 | 16,589,715 | ||||||
Debt and equity securities |
798,155 | 678,575 | ||||||
Prepaid expenses and other current assets |
2,830,566 | 1,945,600 | ||||||
Due from related parties |
100,000 | 180,000 | ||||||
|
|
|
|
|||||
Total current assets |
24,803,822 | 20,750,563 | ||||||
Property and equipment, net |
1,881,471 | 1,753,715 | ||||||
Goodwill |
4,593,320 | 1,796,696 | ||||||
Intangibles, net |
739,890 | 36,954 | ||||||
Other assets |
115,759 | 115,759 | ||||||
|
|
|
|
|||||
Total Assets |
$ | 32,134,262 | $ | 24,453,687 | ||||
|
|
|
|
|||||
Liabilities and Members’ Capital |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
1,360,397 | 1,705,727 | ||||||
Current portion of capital lease obligations |
12,274 | 69,712 | ||||||
Current portion of vehicle loans |
317,321 | 204,830 | ||||||
Loans from stockholder |
5,737,257 | 1,522,257 | ||||||
Due to seller |
1,624,274 | — | ||||||
|
|
|
|
|||||
Total current liabilities |
9,051,523 | 3,502,526 | ||||||
Capital lease obligations, net of current portion |
— | 12,274 | ||||||
Deferred rent |
500,955 | 465,255 | ||||||
Vehicle loans, net of current portion |
290,334 | 284,492 | ||||||
PPP loan |
1,344,200 | — | ||||||
|
|
|
|
|||||
Total liabilities |
11,187,012 | 4,264,547 | ||||||
Commitments and Contingencies (Note 11) |
||||||||
Owners’ Capital |
||||||||
Owners’ Capital |
20,947,250 | 20,189,140 | ||||||
|
|
|
|
|||||
Total Liabilities and Owners’ Capital |
$ | 32,134,262 | $ | 24,453,687 | ||||
|
|
|
|
|||||
Refer to accompanying Notes to Financial Statements |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Revenue |
||||||||
Capitated revenue |
$ | 345,241,215 | $ | 343,193,489 | ||||
Fee for service and other revenue |
10,338,430 | 10,238,907 | ||||||
|
|
|
|
|||||
Total revenue |
355,579,645 | 353,432,396 | ||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Third-party medical costs |
275,702,995 | 290,880,163 | ||||||
Direct patient expense |
11,399,763 | 10,920,585 | ||||||
Selling, general and administrative expense |
23,424,467 | 21,443,025 | ||||||
Depreciation and amortization expense |
540,334 | 529,009 | ||||||
|
|
|
|
|||||
Total operating expenses |
311,067,559 | 323,772,782 | ||||||
|
|
|
|
|||||
Income from operations |
44,512,086 | 29,659,614 | ||||||
|
|
|
|
|||||
Other income |
291,647 | 228,161 | ||||||
|
|
|
|
|||||
Net income |
44,803,733 | 29,887,775 | ||||||
|
|
|
|
|||||
Other comprehensive income: |
||||||||
Unrealized (loss) / gain on debt securities |
(669 | ) | 4,864 | |||||
|
|
|
|
|||||
Total other comprehensive income |
(669 | ) | 4,864 | |||||
|
|
|
|
|||||
Total comprehensive income |
$ | 44,803,064 | $ | 29,892,639 | ||||
|
|
|
|
|||||
Refer to accompanying Notes to Financial Statements |
Owners’ units |
Retained earnings |
Accumulated other comprehensive income |
Owners’ capital |
|||||||||||||
Balance December 31, 2018 |
$ |
1,200 |
$ |
19,995,503 |
$ |
(74,961 |
) |
$ |
19,921,742 |
|||||||
Cumulative adjustment |
— | (74,961 | ) | 74,961 | — | |||||||||||
Net income |
— | 29,887,775 | — | 29,887,775 | ||||||||||||
Other comprehensive income |
— | — | 4,864 | 4,864 | ||||||||||||
Distributions |
— | (29,625,241 | ) | — | (29,625,241 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2019 |
1,200 |
20,183,076 |
4,864 |
20,189,140 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
— | 44,803,733 | — | 44,803,733 | ||||||||||||
Other comprehensive income |
— | — | (669 | ) | (669 | ) | ||||||||||
Distributions |
— | (44,044,954 | ) | — | (44,044,954 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2020 |
$ |
1,200 |
$ |
20,941,855 |
$ |
4,195 |
$ |
20,947,250 |
||||||||
|
|
|
|
|
|
|
|
|||||||||
Refer to accompanying Notes to Financial Statements |
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net income |
$ | 44,803,733 | $ | 29,887,775 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation |
507,430 | 480,071 | ||||||
Amortization of intangible assets |
32,904 | 48,938 | ||||||
Unrealized loss/(gain) on equity securities |
(156,513 | ) | (124,606 | ) | ||||
Net loss on disposal of property and equipment |
— | 1,156 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(982,510 | ) | 400,221 | |||||
Other assets |
— | (55,057 | ) | |||||
Prepaid expenses and other current assets |
(924,966 | ) | (982,689 | ) | ||||
Due from related parties |
80,000 | (10,900 | ) | |||||
Accounts payable and accrued expenses |
(345,330 | ) | 219,189 | |||||
Deferred rent |
35,700 | 46,878 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
43,050,448 | 29,910,976 | ||||||
Cash Flows from Investing Activities: |
||||||||
Purchase of property and equipment |
(593,377 | ) | (859,274 | ) | ||||
Purchase of investments |
(64,491 | ) | (229,871 | ) | ||||
Proceeds on sale of investments |
100,756 | 278,955 | ||||||
Acquisitions of subsidiaries, net of cash acquired |
(1,910,000 | ) | (325,000 | ) | ||||
Payment of seller note |
— | (20,000 | ) | |||||
|
|
|
|
|||||
Net cash used in investing activities |
(2,467,112 | ) | (1,155,190 | ) | ||||
Cash Flows from Financing Activities: |
||||||||
Distributions |
(44,044,954 | ) | (29,625,241 | ) | ||||
Repayments of capital lease obligations |
(69,712 | ) | (95,531 | ) | ||||
Repayment of vehicle loans |
(274,386 | ) | (126,828 | ) | ||||
Proceeds from vehicle loans |
392,719 | 326,638 | ||||||
Repayment of stockholder loans |
(145,000 | ) | (1,378,837 | ) | ||||
Proceeds from stockholder loans |
4,360,000 | 1,424,942 | ||||||
Proceeds from PPP loan |
1,344,200 | — | ||||||
|
|
|
|
|||||
Net cash used in financing activities |
(38,437,133 | ) | (29,474,857 | ) | ||||
|
|
|
|
|||||
Increase / (decrease) in cash and cash equivalents |
2,146,203 | (719,071 | ) | |||||
Cash and cash equivalents at beginning of period |
1,356,673 | 2,075,744 | ||||||
|
|
|
|
|||||
Cash and cash equivalents, end of period |
$ | 3,502,876 | $ | 1,356,673 | ||||
|
|
|
|
|||||
Refer to accompanying Notes to Financial Statements |
1. |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
• | University Health Care Westchester, Inc. |
• | University Health Care Hialeah, Inc. |
• | University Health Care Homestead, Inc. |
• | University Health Care Flagler, Inc. |
• | University Health Care Coral Gables, Inc. |
• | University Health Care Kendall, Inc. |
• | University Health Care North Shore, Inc. |
• | University Health Care East Hialeah, Inc. |
• | University Health Care West Kendall, Inc. |
• | University Health Care Miami Lakes, Inc. |
• | University Health Care Bird Road, Inc. |
• | DGM Medical Center Margate, Inc. |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3. |
BUSINESS ACQUISITIONS |
Fixed assets |
$ | 13,000 | ||
Intangible assets |
24,007 | |||
Goodwill |
187,993 | |||
|
|
|||
Total purchase price |
$ | 225,000 | ||
|
|
Fixed assets |
$ | 34,000 | ||
Intangible assets |
21,340 | |||
Goodwill |
144,660 | |||
|
|
|||
Total purchase price |
$ | 200,000 | ||
|
|
Fixed assets |
$ | 6,810 | ||
Payor relationships |
700,000 | |||
Other intangible assets |
14,500 | |||
Other assets |
1,000 | |||
Goodwill |
2,651,964 | |||
|
|
|||
Total purchase price |
$ | 3,374,274 | ||
|
|
4. |
PROPERTY AND EQUIPMENT, NET |
Assets Classification |
Useful Life |
2020 |
2019 |
|||||||
Leasehold improvements |
Lesser of lease term or est. useful life | $ | 1,356,763 | $ | 1,346,968 | |||||
Transportation equipment |
5 years | 1,821,756 | 1,442,181 | |||||||
Medical equipment |
5 years | 728,850 | 666,785 | |||||||
Furniture, fixture and equipment |
5 – 7 years | 1,228,776 | 1,045,025 | |||||||
|
|
|
|
|||||||
Total |
5,136,145 |
4,500,959 |
||||||||
Less: Accumulated depreciation |
3,254,674 | 2,747,244 | ||||||||
|
|
|
|
|||||||
Property and equipment, net |
$ |
1,881,471 |
$ |
1,753,715 |
||||||
|
|
|
|
5. |
GOODWILL AND INTANGIBLES, NET |
Weighted-Average Amortization Period |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
|||||||||||||
Brand |
1.00 years | $ | 1,058 | $ | (799 | ) | $ | 259 | ||||||||
Non-competition agreements |
3.00 years | 115,770 | (79,075 | ) | 36,695 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total intangibles |
$ | 116,828 | $ | (79,874 | ) | $ | 36,954 | |||||||||
|
|
|
|
|
|
Weighted-Average Amortization Period |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
|||||||||||||
Brand |
1.00 years | $ | 10,440 | $ | (927 | ) | $ | 9,513 | ||||||||
Non-competition agreements |
2.94 years | 79,970 | (49,311 | ) | 30,659 | |||||||||||
Payor relationships |
20.00 years | 700,000 | (282 | ) | 699,718 | |||||||||||
|
|
|
|
|
|
|||||||||||
Total intangibles, net |
$ | 790,410 | $ | (50,520 | ) | $ | 739,890 | |||||||||
|
|
|
|
|
|
Year ended December 31, |
Amount |
|||
2021 |
$ | 63,373 | ||
2022 |
39,351 | |||
2023 |
35,000 | |||
2024 |
35,000 | |||
2025 |
35,000 | |||
|
|
|||
Total |
$ |
207,724 |
||
|
|
2020 |
2019 |
|||||||
Beginning of period |
$ | 1,796,696 | $ | 1,608,703 | ||||
Additions |
2,796,624 | 187,993 | ||||||
|
|
|
|
|||||
End of period |
$ |
4,593,320 |
$ |
1,796,696 |
||||
|
|
|
|
6. |
LOAN PAYABLE—VEHICLES |
Year ending December 31, |
Amount |
|||
2021 |
$ | 334,811 | ||
2022 |
220,952 | |||
2023 |
68,377 | |||
2024 |
13,315 | |||
2025 |
— | |||
|
|
|||
Total loan payable—vehicles |
637,455 | |||
|
|
|||
Less: amount representing interest |
(29,800 | ) | ||
|
|
|||
607,655 | ||||
|
|
|||
Less: current portion |
(317,321 | ) | ||
|
|
|||
Net of current portion |
$ | 290,334 | ||
|
|
7. |
GOVERNMENT ASSISTANCE |
8. |
FAIR VALUE MEASUREMENTS |
• Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. |
• Level 2 | Inputs to the valuation methodology include: |
• | quoted prices for similar assets or liabilities in active markets; |
• | quoted prices for identical or similar assets or liabilities in inactive markets; |
• | inputs other than quoted prices that are observable for the asset or liability; |
• | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
December 31, 2020 |
||||||||||||
Quoted Prices in Active Markets for Identical Items (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||
Assets measured at fair value on a recurring basis: |
||||||||||||
Exchange Traded |
$ | 691,870 | $ | — | $ | — | ||||||
Corporate Bonds |
— | 106,285 | — | |||||||||
|
|
|
|
|
|
|||||||
Total Assets |
$ |
691,870 |
$ |
106,285 |
$ |
— |
||||||
|
|
|
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December 31, 2019 |
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Quoted Prices in Active Markets for Identical Items (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
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Assets measured at fair value on a recurring basis: |
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Exchange Traded |
$ | 470,866 | $ | — | $ | — | ||||||
Corporate Bonds |
— | 207,709 | — | |||||||||
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Total Assets |
$ | 470,866 | $ | 207,709 | $ | — | ||||||
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9. |
OWNERS’ EQUITY |
10. |
RELATED PARTY TRANSACTIONS |
11. |
COMMITMENTS AND CONTINGENCIES |
Year ended December 31, |
Amount |
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2021 |
$ | 2,162,644 | ||
2022 |
1,652,357 | |||
2023 |
1,512,614 | |||
2024 |
1,221,418 | |||
2025 |
1,125,287 | |||
Thereafter |
3,127,158 | |||
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Total |
$ |
10,801,478 |
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12. |
EMPLOYEE BENEFIT PLAN |
13. |
SUBSEQUENT EVENTS |
ITEM 13. |
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. |
Amount |
||||
SEC registration fee |
$ | 449,411 | ||
Accounting fees and expenses |
$ | 225,000 | ||
Legal fees and expenses |
$ | 500,000 | ||
Miscellaneous fees and expenses |
$ | 20,000 | ||
Total expenses |
$ | 1,194,411 | ||
ITEM 14. |
INDEMNIFICATION OF DIRECTORS AND OFFICERS. |
ITEM 15. |
RECENT SALES OF UNREGISTERED SECURITIES. |
ITEM 16. |
Exhibits and Financial Statement Schedules. |
Exhibit Index | ||
Exhibit Number |
Description |
* | Filed herewith. | |
** | To be filed, if necessary, subsequent to the effectiveness of this registration statement by an amendment to this registration statement or incorporated by reference pursuant to a Current Report on Form 8-K in connection with the offering of securities.. | |
+ | Indicates a management contract or any compensatory plan, contract or arrangement. |
ITEM 17. |
Undertakings. |
A. | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
B. | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
C. | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
D. | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
E. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
CANO HEALTH, INC. | ||
By: | /s/ Dr. Marlow Hernandez | |
Name: | Dr. Marlow Hernandez | |
Title: | Chief Executive Officer and President |
Signature |
Title |
Date | ||
/s/ Dr. Marlow Hernandez Dr. Marlow Hernandez |
Chief Executive Officer and President (Principal Executive Officer) |
April 6, 2022 | ||
/s/ Brian D. Koppy Brian D. Koppy |
Chief Financial Officer (Principal Financial Officer) |
April 6, 2022 | ||
/s/ Mark Novell Mark Novell |
Chief Accounting Officer (Principal Accounting Officer) |
April 6, 2022 | ||
/s/ Elliot Cooperstone Elliot Cooperstone |
Director | April 6, 2022 | ||
/s/ Lewis Gold Lewis Gold |
Director | April 6, 2022 | ||
/s/ Jacqueline Guichelaar Jacqueline Guichelaar |
Director | April 6, 2022 | ||
/s/ Angel Morales Angel Morales |
Director | April 6, 2022 | ||
/s/ Alan Muney Alan Muney |
Director | April 6, 2022 | ||
/s/ Kim M. Rivera Kim M. Rivera |
Director | April 6, 2022 | ||
/s/ Barry S. Sternlicht Barry S. Sternlicht |
Director | April 6, 2022 | ||
/s/ Solomon Trujillo Solomon Trujillo |
Director | April 6, 2022 |