UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
|||
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
|
☒ |
|
Non-accelerated filer |
|
☐ |
|
Smaller reporting company |
|
|
|
|
|
|
Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes
As of November 6, 2023, the registrant had
CareMax, Inc.
Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 2023
Table of Contents
|
|||
|
1 |
||
|
|
2 |
|
|
|
Condensed Consolidated Statements of Changes in Stockholders' Equity |
3 |
|
|
4 |
|
|
|
6 |
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 |
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
44 |
|
45 |
||
47 |
|||
|
Item 1. |
Legal Proceedings |
47 |
|
Item 1A. |
Risk Factors |
47 |
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
47 |
|
Item 3. |
Defaults Upon Senior Securities |
47 |
|
Item 4. |
Mine Safety Disclosures |
47 |
|
Item 5. |
Other Information |
47 |
|
Item 6. |
Exhibits |
47 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CAREMAX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)
|
|
September 30, |
|
|
December 31, |
|
||
ASSETS |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Risk settlement receivables |
|
|
|
|
|
|
||
Related party receivables |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Total Current Assets |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Goodwill, net |
|
|
|
|
|
|
||
Intangible assets, net |
|
|
|
|
|
|
||
Deferred debt issuance costs |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total Assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued expenses |
|
|
|
|
|
|
||
Risk settlement liabilities |
|
|
|
|
|
|
||
Related party liabilities |
|
|
|
|
|
|
||
Related party debt, net |
|
|
|
|
|
|
||
Current portion of third-party debt, net |
|
|
|
|
|
|
||
Current portion of operating lease liabilities |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total Current Liabilities |
|
|
|
|
|
|
||
Derivative warrant liabilities |
|
|
|
|
|
|
||
Long-term debt, net |
|
|
|
|
|
|
||
Long-term operating lease liabilities |
|
|
|
|
|
|
||
Contingent earnout liability |
|
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
Total Liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Preferred stock ( |
|
|
|
|
|
|
||
Class A common stock ($ |
|
|
|
|
|
|
||
Additional paid-in-capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total Stockholders' Equity |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Total Liabilities and Stockholders' Equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
(1)
CAREMAX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share data)
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
||||
Medicare risk-based revenue |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Medicaid risk-based revenue |
|
|
|
|
|
|
|
|
|
|
|
||||
Government value-based care revenue |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Other revenue |
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
External provider costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of care |
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill impairment |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Acquisition related costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Operating loss |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Nonoperating income (expense) |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Change in fair value of derivative warrant liabilities |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Gain on remeasurement of contingent earnout liabilities |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss before income tax |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average basic shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average diluted shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Diluted |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
(2)
CAREMAX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands, except share data)
|
|
Three Months Ended September 30, 2023 and 2022 |
|
|||||||||||||||||||||
|
|
Class A Common Stock |
|
|
Preferred |
|
|
Additional |
|
|
Retained Earnings |
|
|
Total |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Stock |
|
|
Paid-in-capital |
|
|
(Deficit) |
|
|
Equity |
|
||||||
BALANCE - JUNE 30, 2023 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Issuance of shares upon vesting of stock-based compensation awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE - SEPTEMBER 30, 2023 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
BALANCE - JUNE 30, 2022 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Cancellation of shares and return of cash held in escrow |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE - SEPTEMBER 30, 2022 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
Nine Months Ended September 30, 2023 and 2022 |
|
|||||||||||||||||||||
|
|
Class A Common Stock |
|
|
Preferred |
|
|
Additional |
|
|
Retained Earnings |
|
|
Total |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Stock |
|
|
Paid-in-capital |
|
|
(Deficit) |
|
|
Equity |
|
||||||
BALANCE - DECEMBER 31, 2022 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Issuance of shares upon vesting of stock-based compensation awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Reclassification of contingent consideration previously liability classified |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE - SEPTEMBER 30, 2023 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
BALANCE - DECEMBER 31, 2021 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
|
|
|||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Issuance of shares upon vesting of stock-based compensation awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Cancellation of shares and return of cash held in escrow |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Vesting of Series B Warrants under Advisory Agreement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE - SEPTEMBER 30, 2022 |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
(3)
CAREMAX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to cash and cash equivalents: |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
|
|
|
||
Amortization of debt issuance costs and discounts |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Income tax provision |
|
|
|
|
|
|
||
Change in fair value of derivative warrant liabilities |
|
|
( |
) |
|
|
|
|
Gain on remeasurement of contingent earnout liabilities |
|
|
( |
) |
|
|
|
|
Loss on extinguishment of debt |
|
|
|
|
|
|
||
Payment-in-kind interest expense |
|
|
|
|
|
|
||
Provision for credit losses |
|
|
|
|
|
|
||
Goodwill impairment |
|
|
|
|
|
|
||
Amortization of right-of-use assets |
|
|
|
|
|
|
||
Other non-cash, net |
|
|
|
|
|
( |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
( |
) |
|
Other current assets |
|
|
|
|
|
( |
) |
|
Risk settlement receivables and liabilities |
|
|
|
|
|
( |
) |
|
Other assets |
|
|
( |
) |
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses |
|
|
( |
) |
|
|
|
|
Related party receivables and payables |
|
|
( |
) |
|
|
|
|
Other liabilities |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
||||