Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 11, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | CareMax, Inc. | ||
Entity Central Index Key | 0001813914 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity File Number | 001-39391 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 85-0992224 | ||
Entity Address, Address Line One | 1000 NW 57th Court | ||
Entity Address, Address Line Two | Suite 400 | ||
Entity Address, City or Town | Miami | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33126 | ||
City Area Code | 786 | ||
Local Phone Number | 360-4768 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 226,149,828 | ||
Entity Interactive Data Current | Yes | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s fiscal year ended December 31, 2023 . | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Firm ID | 238 | ||
Auditor Location | Miami, Florida | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 3,802,883 | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | ||
Trading Symbol | CMAX | ||
Security Exchange Name | NASDAQ | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 | ||
Warrants | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants, each whole warrant exercisable for 1/30th of oneshare of Class A common stock | ||
Trading Symbol | CMAXW | ||
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Current Assets | |||
Cash and cash equivalents | $ 65,528 | $ 41,626 | |
Accounts receivable, net | 114,754 | 151,743 | |
Other current assets | 3,066 | 3,968 | |
Total Current Assets | 183,348 | 197,336 | |
Property and equipment, net | 47,918 | 21,006 | |
Operating lease right-of-use assets | 109,215 | 108,937 | |
Goodwill, net | 156,841 | 700,643 | |
Intangible assets, net | 101,243 | 123,585 | |
Deferred debt issuance costs | 0 | 1,685 | |
Other assets | 24,737 | 17,550 | |
Total Assets | 623,301 | 1,170,743 | |
Current Liabilities | |||
Accounts payable | 6,275 | 7,687 | |
Accrued expenses | 16,224 | 16,854 | |
Risk settlement liabilities | 42,602 | 14,171 | |
Related party liabilities | 190 | 1,777 | |
Related party debt, net | 0 | 30,277 | |
Current portion of third-party debt, net | 364,380 | 253 | |
Current portion of operating lease liabilities | 8,975 | 5,512 | |
Other current liabilities | 165 | 790 | |
Total Current Liabilities | 438,812 | 77,322 | |
Derivative warrant liabilities | 22 | 3,974 | |
Long-term debt, net | 21,443 | 230,725 | |
Long-term operating lease liabilities | 97,136 | 96,539 | |
Contingent earnout liability | 0 | 134,561 | |
Other liabilities | 4,443 | 8,075 | |
Total Liabilities | 561,856 | 551,196 | |
COMMITMENTS AND CONTINGENCIES (NOTE 16) | |||
STOCKHOLDERS' EQUITY | |||
Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of December 31, 2023 and December 31, 2022, respectively) | |||
Class A common stock ($0.0001 par value; 250,000,000 shares authorized; 112,341,960 and 111,332,584 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively) | [1] | 11 | 11 |
Additional paid-in-capital | 782,371 | 657,126 | |
Accumulated deficit | (720,938) | (37,590) | |
Total Stockholders' Equity | 61,444 | 619,547 | |
Total Liabilities and Stockholders' Equity | $ 623,301 | $ 1,170,743 | |
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | 12 Months Ended | ||
Dec. 31, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares outstanding | 1 | 1 | |
Preferred stock, shares issued | 1 | 1 | |
Reverse stock split, conversion ratio | 0.0333 | ||
Class A Common Stock | |||
Common stock, par value | $ / shares | [1] | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | [1] | 8,333,333 | 8,333,333 |
Common stock, shares issued | [1] | 3,744,732 | 3,711,086 |
Common stock, shares outstanding | [1] | 3,744,732 | 3,711,086 |
Reverse stock split, conversion ratio | 0.0333 | ||
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenue | |||
Total revenue | $ 751,102 | $ 631,132 | |
Operating Expenses | |||
External provider costs | 572,329 | 424,182 | |
Cost of care | 164,872 | 126,648 | |
Sales and marketing | 14,274 | 11,761 | |
Corporate, general and administrative | 80,684 | 75,824 | |
Depreciation and amortization | 27,787 | 21,719 | |
Goodwill impairment | 547,200 | 70,000 | |
Acquisition related costs | 108 | 13,165 | |
Total operating expenses | 1,407,254 | 743,297 | |
Operating loss | (656,152) | (112,165) | |
Nonoperating income (expense) | |||
Interest expense | (54,434) | (20,455) | |
Change in fair value of derivative warrant liabilities | 3,952 | 4,401 | |
Gain on remeasurement of contingent earnout liabilities | 19,916 | 76,295 | |
Loss on extinguishment of debt | 0 | (6,172) | |
Other income, net | 2,507 | 759 | |
Total nonoperating expenses | (28,059) | 54,828 | |
Loss before income tax | (684,211) | (57,337) | |
Income tax benefit | (863) | (19,542) | |
Net loss | $ (683,348) | $ (37,796) | |
Weighted average basic shares outstanding | [1] | 3,727,725 | 3,026,644 |
Weighted average diluted shares outstanding | [1] | 3,727,725 | 3,026,644 |
Net loss per share | |||
Basic | $ (183.31) | $ (12.49) | |
Diluted | $ (183.31) | $ (12.49) | |
Medicare | |||
Revenue | |||
Total revenue | $ 519,834 | $ 486,718 | |
Medicaid | |||
Revenue | |||
Total revenue | 105,893 | 96,534 | |
Government Value | |||
Revenue | |||
Total revenue | 67,708 | 6,389 | |
Other Revenue | |||
Revenue | |||
Total revenue | $ 57,667 | $ 41,492 | |
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) | 12 Months Ended | |
Jan. 31, 2024 | Dec. 31, 2023 | |
Reverse stock split, conversion ratio | 0.0333 | |
Subsequent Event | ||
Reverse stock split, conversion ratio | 0.0333 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Total | Common Stock Class A Common Stock | Additional Paid-in-Capital | Retained Earnings (Deficit) | ||
Beginning balance at Dec. 31, 2021 | $ 505,370 | $ 9 | [1] | $ 505,327 | $ 33 | |
Beginning balance (in shares) at Dec. 31, 2021 | [1] | 2,912,266 | ||||
Stock-based compensation expense | 10,271 | 10,271 | ||||
Issuance of shares upon vesting of stock-based compensation awards | [1] | 17,854 | ||||
Initial Share Consideration to acquire Steward Value-Based Care | 134,420 | $ 2 | [1] | 134,418 | ||
Initial Share Consideration to acquire Steward Value-Based Care (in shares) | [1] | 783,333 | ||||
Cancellation of shares and return of cash held in escrow | (481) | (481) | ||||
Cancellation of shares and return of cash held in escrow (in shares) | [1] | (2,367) | ||||
Vesting of Series B Warrants under Advisory Agreement | 7,590 | 7,590 | ||||
Other | 173 | 173 | ||||
Net income (loss) | (37,796) | (37,796) | ||||
Ending balance at Dec. 31, 2022 | 619,547 | $ 11 | [1] | 657,126 | (37,590) | |
Ending balance (in shares) at Dec. 31, 2022 | [1] | 3,711,086 | ||||
Stock-based compensation expense | 10,599 | 10,599 | ||||
Issuance of shares upon vesting of stock-based compensation awards | [1] | 33,646 | ||||
Reclassification of contingent consideration previously liability classified | 114,645 | 114,645 | ||||
Net income (loss) | (683,348) | (683,348) | ||||
Ending balance at Dec. 31, 2023 | $ 61,444 | $ 11 | [1] | $ 782,371 | $ (720,938) | |
Ending balance (in shares) at Dec. 31, 2023 | [1] | 3,744,732 | ||||
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | |
Reverse stock split, conversion ratio | 0.0333 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (683,348) | $ (37,796) |
Adjustments to reconcile net loss to cash and cash equivalents: | ||
Depreciation and amortization expense | 27,787 | 21,719 |
Amortization of debt issuance costs and discounts | 8,314 | 2,382 |
Stock-based compensation expense | 10,599 | 10,271 |
Income tax benefit | (863) | (19,542) |
Change in fair value of derivative warrant liabilities | (3,952) | (4,401) |
Gain on remeasurement of contingent earnout liabilities | (19,916) | (76,295) |
Loss on extinguishment of debt | 0 | 6,172 |
Payment-in-kind interest expense | 12,064 | 5,277 |
Non-cash finance lease expense | 419 | 0 |
Provision for credit losses | (1,588) | 1,243 |
Goodwill impairment | 547,200 | 70,000 |
Amortization of right-of-use assets | 11,527 | 0 |
Other non-cash, net | 1,488 | 853 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 25,941 | (66,561) |
Other current assets | 902 | 2,505 |
Risk settlement liabilities | 32,560 | 6,775 |
Other assets | (6,501) | (3,127) |
Operating lease liabilities | (5,897) | 4,386 |
Accounts payable | 413 | 1,730 |
Accrued expenses | (2,601) | 4,722 |
Related party liabilities | (1,069) | 0 |
Other liabilities | (393) | 1,470 |
Net cash used in operating activities | (46,913) | (68,216) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (14,611) | (7,450) |
Return of cash held in escrow | 0 | 785 |
Acquisition of businesses, net of cash acquired | 0 | (55,837) |
Net cash used in investing activities | (14,611) | (62,502) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from borrowings | 122,000 | 229,241 |
Proceeds from related party borrowings | 0 | 29,876 |
Principal payments of related party debt | (35,510) | (121,977) |
Principal payments of third-party debt | (253) | 0 |
Payments of debt issuance costs | (810) | (7,272) |
Collateral for letters of credit | 0 | (5,439) |
Net cash provided by financing activities | 85,427 | 124,428 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 23,903 | (6,290) |
Cash and cash equivalents - beginning of period | 41,626 | 47,917 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 65,528 | 41,626 |
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES: | ||
Equity and warrant consideration issued to The Related Companies, L.P. | 0 | 7,590 |
Equity consideration issued in acquisitions | 0 | 134,420 |
Contingent consideration issued in business combination | 0 | 210,856 |
Additions to property and equipment funded through accounts payable | 1,039 | 2,847 |
Cancellation of shares held in escrow | 0 | 821 |
Accrued purchase consideration | 0 | 1,225 |
Financed property and equipment purchases | 957 | 607 |
Reclassification of contingent consideration previously liability classified | 114,645 | 0 |
Decrease in right-of-use assets and lease liabilities due to lease remeasurements | 3,747 | 0 |
Right-of-use assets obtained in exchange for operating lease obligations | 16,745 | 44,184 |
Right-of-use assets obtained in exchange for finance lease obligations | 19,193 | 0 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | $ 34,307 | $ 12,797 |
Description of Business and Goi
Description of Business and Going Concern | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Going Concern | Note 1. DESCRIPTION of business AND GOING CONCERN CareMax, Inc. (“CareMax” or the “Company”), formerly Deerfield Healthcare Technology Acquisitions Corp. (“DFHT”), is a Delaware corporation, which announced its initial public offering in July 2020 (the "IPO") as a publicly traded special purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination involving one or more businesses. CareMax provides high-quality, value-based care and chronic disease management through physicians and health care professionals committed to the overall health and wellness continuum of care for its patients. As of December 31, 2023 , the Company operated 56 centers and managed affiliated providers across 10 states that offer a comprehensive suite of healthcare and social services, and a proprietary software and services platform that provides data, analytics, and rules-based decision tools/workflows for physicians across the United States. The Business Combination and Acquisitions On December 18, 2020, DFHT entered into a Business Combination Agreement (the “Business Combination Agreement”) with CareMax Medical Group, L.L.C., a Florida limited liability company (“CMG”), and entities listed in the Business Combination Agreement (the “CMG Sellers”), IMC Medical Group Holdings, LLC, a Delaware limited liability company (“IMC”), IMC Holdings, LP, a Delaware limited partnership (“IMC Parent”), and Deerfield Partners, L.P. (“Deerfield Partners”). The Business Combination (as defined below) closed on June 8, 2021 (the “Closing Date”), whereby DFHT acquired 100 % of the equity interests in CMG and 100 % of the equity interests in IMC, with CMG and IMC becoming wholly owned subsidiaries of DFHT. Immediately upon completion (the “Closing”) of the transactions contemplated by the Business Combination Agreement and the related financing transactions (the “Business Combination”), the name of the combined company was changed to CareMax, Inc. Unless the context otherwise requires, “the Company,” “we,” “us,” and “our” refer, for periods prior to the completion of the Business Combination, to CMG and its subsidiaries, and, for periods upon or after the completion of the Business Combination, to CareMax, Inc. and its subsidiaries. Subsequent to consummation of the Business Combination, primarily during the second half of 2021, the Company acquired Senior Medical Associates, LLC ("SMA"), Stallion Medical Management, LLC ("SMM"), Unlimited Medical Services of Florida, LLC ("DNF"), Advantis Physician Alliance, LLC ("Advantis"), Business Intelligence & Analytics LLC ("BIX"), and three additional businesses (together with the acquisitions of SMA, SMM, DNF, Advantis and BIX, the "Acquisitions"). In November 2022, the Company acquired the Medicare value-based care business of Steward Health Care System (“Steward Value-Based Care”), further described in Note 4, Acquisitions . Refer to Note 6, Goodwill and Other Intangible Assets , for information about measurement period adjustments. Going Concern The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has generated recurring losses and negative cash flows from operations since completion of the Business Combination, and based on projections following its fourth quarter 2023 results, management believes that, absent the Company successfully taking certain measures to reduce operating expenses and/or divest certain assets or businesses, as set forth below, the Company will continue to incur net losses and negative cash flows for the foreseeable future. The Company obtained a limited waiver of certain breaches of financial covenants under the Credit Agreement through May 15, 2024, subject to an earlier termination of the waiver upon the occurrence of certain specified events, as further explained in Note 18, Subsequent Events . Further, as of the date hereof, the Company has failed to pay rent under certain of its lease agreements. Although the Company had $ 65.5 million in cash and cash equivalents and $ 114.8 million of accounts receivable, net, at December 31, 2023, absent the Company successfully implementing management’s plans as set forth below, the Company believes it will not be able to comply with the minimum liquidity requirement and maximum leverage ratio covenants contained in its Credit Agreement once the current limited waiver expires. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for one year after the date these consolidated financial statements are issued, and these financial statements do not include any adjustments that may result from the outcome of this uncertainty. Management’s plans that are intended to mitigate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern include selling certain assets, exiting certain markets and reducing operating expenses. The Company's efforts to reduce operating expenses may include lowering external provider costs, exiting nonprofitable centers, consolidating certain medical centers, delaying capital expenditures and reducing non-essential spending. The Company may also seek to raise additional capital or refinance its indebtedness to provide additional liquidity to fund its losses until its operations become cash flow positive. There is no guarantee that the Company will be able to implement its operational plans or raise additional equity or debt financing on acceptable terms, if at all. Reverse Stock Split As previously disclosed in the Company's Current Report on Form 8-K filed with the SEC on February 5, 2024, on January 31, 2024 (the "Effective Date"), the Company effected a 1-for-30 reverse stock split of the Company's Class A common stock, par value $ 0.0001 (the "Reverse Split"). As a result of the Reverse Split, every thirty shares of the Class A Common Stock issued and outstanding as of the Effective Date automatically converted into one share of Class A Common Stock. No fractional shares were issued in connection with the Reverse Split. In lieu of issuing fractional shares, stockholders of record who otherwise would have been entitled to receive fractional shares were entitled to rounding up of the fractional share to the nearest whole number. The Reverse Split automatically and proportionately adjusted, based on a 1-for-30 split ratio, all issued and outstanding shares of the Company's common stock, as well as the terms of warrants outstanding at the time of the effectiveness of the Reverse Split. Proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock. There was no change in the par value of our Common Stock or Preferred Stock. References to number of shares of Class A Common Stock and per share data (except par value) in the accompanying financial statements and notes thereto for periods ended prior to January 31, 2024 have been adjusted to reflect the Reverse Split on a retroactive basis for all periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions to Form 10-K and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. Certain amounts in the prior year's consolidated financial statements have been reclassified to conform to the current year presentation. Variable Interest Entities The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a variable interest entity ("VIE"). These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. The Company considers itself to control an entity if it is the majority owner of or has voting control over such entity. The Company also assesses control through means other than voting rights and determines which business entity is the primary beneficiary of the VIE. The Company consolidates VIEs when it is determined that the Company is the primary beneficiary of the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively. Refer to Note 17, Variable Interest Entities , for additional information. Emerging Growth Company Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to nonemerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Additionally, as an emerging growth company, the Company is exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm is not required to evaluate and report on the effectiveness of internal control over financial reporting. Segment Financial Information The Company’s chief operating decision maker (“CODM” ), who is the Company's Chief Executive Officer, regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company identifies operating segments based on this review by its CODM and operates in and reports as a single operating segment, which is to care for its patients’ needs. For the periods presented, all of the Company’s long-lived assets were located in the United States, and all revenue was earned in the United States. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas where significant estimates are used in the accompanying financial statements include, but are not limited to, revenues and related receivables from risk adjustments, costs of our services and related liabilities, purchase price allocations, including fair value estimates of intangibles and contingent consideration, the valuation and related impairment testing of long-lived assets, including goodwill and intangible assets, the valuation of derivative warrant liabilities, and the estimated useful lives of fixed assets and intangible assets, including internally developed software. Actual results could differ from those estimates. Business Combinations The Company accounts for business combinations under the acquisition method of accounting, in accordance with ASC 805, Business Combinations , which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date. Any excess of the fair value of purchase consideration over the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The fair values of the assets acquired and liabilities assumed are determined based upon the valuation of the acquired business and involves management making significant estimates and assumptions. The Company's acquisitions, at times, have included earn-out provisions, also referred to as contingent consideration, which provide for additional consideration to be paid to the seller if certain conditions are met. These provisions are recorded as liabilities or as equity at fair value on the acquisition date and re-assessed for balance sheet classification and re-measured at fair value each reporting period until they expire or settle. Cash and Cash Equivalents Cash and cash equivalents consist of currency on hand with banks and financial institutions and investments in money market funds. The Company considers all short-term, highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company’s cash balances with individual banking institutions are in excess of federally insured limits from time to time. The Company believes it is not exposed to any significant concentrations of credit risk from these financial instruments. The Company has not experienced any losses on its deposits of cash and cash equivalents. Medicare and Medicaid Risk-Based Revenue Medicare and Medicaid Risk-Based Revenue consists primarily of fees for medical services provided under capitated arrangements directly with various Medicare Advantage and Medicaid managed care payors. The Company receives a fixed fee per patient under what is typically known as a “risk contract.” Risk contracting, or full risk capitation, refers to a model in which the Company receives from the third-party payor a fixed payment of at-risk premium less an administrative charge for reporting on enrollees on a per patient per month basis (“PMPM” payment) for a defined patient population, and the Company is then responsible for providing healthcare services required by that patient population. PMPM fees can fluctuate throughout the contract based on the health status (acuity) of each individual enrollee. In certain contracts, PMPM fees also include “risk adjustments” for items such as performance incentives, performance guarantees and risk shares. The capitated revenues are recognized based on the estimated PMPM fees earned net of projected performance incentives, performance guarantees, risk shares and rebates because we are able to reasonably estimate the ultimate PMPM payment of these contracts. We recognize revenue in the month in which eligible members are entitled to receive healthcare benefits. Subsequent changes in PMPM fees and the amount of revenue to be recognized are reflected through subsequent period adjustments to properly recognize the ultimate capitation amount. For enrolled members in which we control healthcare services, we act as the principal and the gross fees under these contracts are reported as revenue and the cost of third-party medical care is included in external provider costs. The Company generates management services organization (“MSO”) revenue for services it renders to independent physician associations (the “IPAs”) under administrative service contracts. The MSO revenue is recognized in the month in which the eligible members are entitled to receive healthcare benefits during the contract term. For MSO contracts in which the Company acts as a principal in coordinating and controlling the range of services provided (other than clinical decisions) and, thus, accepts full financial risk for members attributed to the IPA and is therefore responsible for the cost of all healthcare services required by those members, the fees are recognized on a gross basis, consistent with ASC 606, Revenue From Contracts with Customers ("ASC 606"). The related revenue is recorded in Medicare risk-based or Medicaid risk-based revenue. Government Value-Based Care Revenue Government Value-Based Care Revenue consists primarily of revenue derived from the Medicare Shared Savings Program (“MSSP”). The MSSP is sponsored by the Center for Medicare and Medicaid Services (“CMS”). The MSSP allows accountable care organizations (“ACOs”) to receive a share of cost savings they generate in connection with the managing of costs and quality of medical services rendered to Medicare beneficiaries. Payments to ACO participants, if any, are calculated annually and paid once a year by CMS on cost savings generated by the ACO participant relative to the ACO participants’ CMS benchmark. Under the MSSP, an ACO must meet certain qualifications to receive the full amount of its allocable cost savings or they either receive nothing or are responsible for shared losses. The MSSP rules require CMS to develop a benchmark for savings to be achieved by each ACO if the ACO is to receive shared savings. An ACO that meets the MSSP’s quality performance standards will be eligible to receive a share of the savings to the extent its assigned beneficiary medical expenditures are below the medical expenditure benchmark provided by CMS. A Minimum Savings Rate (“MSR”) must be achieved before the ACO can receive a share of the savings. Once the MSR is surpassed, all the savings below the benchmark provided by CMS will be shared at a certain percentage with the ACO. The MSR varies depending on the number of beneficiaries assigned to the ACO. The promised services under the Company's MSSP arrangements are to provide the population health services to beneficiaries for a given performance period. As part of these arrangements, the Company stands ready to provide the population with health services throughout the performance period. The Company estimates the variable consideration that constitutes the transaction price of these arrangements by utilizing third-party data and historical experience. As the Company’s performance obligation is met, revenue is recorded over time using its estimation methods and consideration is made, to the extent possible, that it is probable that a significant reversal will not occur once any uncertainty associated with the variable consideration is subsequently resolved. Since the Company has determined it only has one performance obligation under each of these arrangements, it allocates the full transaction price towards each arrangement’s individual performance obligation. From time to time, but at least annually, we assess our estimates with an independent actuarial expert to ensure our estimates are reasonable given the data available to us at the time the estimates are made. Government Value-Based Care Revenue is recognized on a net basis, because the Company does not control the range of services provided and, thus, accepts partial financial risk. Other Revenue Other Revenue primarily represents partial and no risk capitation, MSO and pharmacy revenue. Capitation revenue represents a fixed amount of money PMPM paid in advance for the delivery of primary care services only, whereby the Company is not liable for medical costs in excess of the fixed payment. Capitated revenues are typically prepaid monthly to the Company based on the number of patients selecting us as their primary care provider. Our capitated rates are fixed, contractual rates. Incentive payments for Healthcare Effectiveness Data and Information Set (“HEDIS”) and any services paid on a fee for service basis by a health plan are also included in other revenue. Other revenue also includes ancillary fees earned under contracts with certain payors for the provision of certain care coordination and other care management services. These services are provided to patients covered by these payors regardless of whether those patients receive their care from our affiliated medical groups. Revenue for primary care services for patients in a partial risk or upside-only contracts is reported in other revenue. For MSO contracts in which the Company does not control the range of services provided and, thus, accepts partial or no financial risk for members attributed to the IPA, the revenue is recognized on a net basis, consistent with ASC 606, and is recorded in Other revenue. External Provider Costs External Provider Costs represents cost of care for our at-risk patients and for third-party healthcare service providers that provide medical care to our patients for which we are contractually obligated to pay (through our full-risk capitation arrangements). The estimated reserve for a liability for unpaid claims is included in "Accounts receivable, net" in the consolidated balance sheets. Actual claims expense will differ from the estimated liability due to differences in estimated and actual member utilization of health care services, the amount of charges and other factors. From time to time, but at least annually, we assess our estimates with an independent actuarial expert to ensure our estimates represent the best, most reasonable estimate given the data available to us at the time the estimates are made. Certain third-party payor contracts include a Medicare Part D payment related to pharmacy claims, which is subject to risk sharing through accepted risk corridor provisions. Under certain agreements the fund risk allocation is established whereby we, as the contracted provider, receive only a portion of the risk and the associated surplus or deficit. We estimate and recognize an adjustment to medical expenses for Part D claims related to these risk corridor provisions based upon pharmacy claims experience to date, as if the annual risk contract were to terminate at the end of the reporting period. External provider costs are included in “Accounts Receivable, net” or “other assets” in the consolidated balance sheets, based on the expected collectability time from financial statement date. Accounts Receivable Accounts receivable are carried at the amounts the Company deems collectible, which are expected to be collected within twelve months or less. Accordingly, an allowance is provided based on credit losses expected over the contractual term. This allowance is netted against the receivable balance with the loss being recognized within general and administrative expenses in the consolidated statements of operations. Accounts receivables are written off or reserved for when they are deemed uncollectible. As of December 31, 2023 and 2022 , the Company's provision for credit losses was $ 3.1 million and $ 1.2 million, respectively. Accounts receivable include MRA receivables which are accrued and estimated based on the health status (acuity) and demographic characteristics of members. These estimates are continually evaluated and adjusted by management based upon our historical experience and other factors. Amounts are only included as MRA receivables to the extent it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. Risk Settlement Liabilities Risk settlement liabilities represents net accruals from health plan agreements, for which the Company is financially responsible under its at-risk revenue arrangements, and accruals for payments to be made to providers as distributions pursuant to service agreements. These liabilities are expected to be paid within twelve months or less. Fair Value of Financial Instruments Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: • Level 1 - defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. • Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. • Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Derivative Instruments We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480, Distinguishing Liabilities from Equity , and ASC 815-15, Derivatives and Hedging - Embedded Derivatives. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company issued common stock warrants in connection with our initial public offering and private placements, which are recognized as derivative liabilities in accordance with ASC 815-40, Contracts in Entity's Own Equity . Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Private Placement warrants issued has been estimated using Monte Carlo simulations at each measurement date. Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired. We test goodwill for impairment at least annually on December 31 st or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale, disposition of a significant portion of the business or other factors. ASC 350, Intangibles—Goodwill and Other , allows entities to first use a qualitative approach to test goodwill for impairment by determining whether it is more likely than not (a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying value. If the qualitative assessment supports that it is more likely than not that the fair value of the asset exceeds its carrying value, a quantitative impairment test is not required. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying value, the Company will perform the quantitative goodwill impairment test, in which we compare the fair value of the reporting unit, determined using an income approach based on the present value of expected future cash flows, a market approach, or combination of both, given each assessment period’s specific facts and circumstances, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, then goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. Goodwill impairment testing involves judgment, including the identification of reporting units, qualitative evaluation of facts and circumstances to determine if it is more likely than not that an impairment exists, and, if necessary, the estimation of the fair value of the applicable reporting unit. During the years ended December 31, 2023 and 2022, we performed impairment testing and recognized goodwill impairment charges of $ 547.2 million and $ 70.0 million, respectively. Because our total shareholders’ equity exceeded our market capitalization at each goodwill impairment testing date, we estimated the fair value of our single reporting unit primarily on the basis of the Company's market capitalization after considering reasonable control premiums which could be expected in transactions with third-party market participants. As a result, the goodwill impairments in each period were primarily driven by the reduction of the market value of our stock price. The Company does not have indefinite-lived intangibles. Our definite-lived intangibles primarily consist of risk-based contracts and provider networks. Risk-based contracts and provider networks represent the estimated values of customer relationships or provider networks, respectively, of acquired businesses and have definite lives. We amortize our intangibles on a straight-line basis over their estimated useful lives ranging from two to eleven years , except for certain risk contracts, which are amortized using the accelerated method. The determination of fair values and useful lives requires us to make significant estimates and assumptions. These estimates include, but are not limited to, future expected cash flows from acquired capitation arrangements from a market participant perspective, patient attrition rates, discount rates, and costs and years to replicate acquired provider networks. Refer to Note 6, Goodwill and Other Intangible Assets , for further information. Property and Equipment Property and equipment is recorded at cost, net of accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Depreciation is calculated using a straight-line method over the estimated useful life of each class of depreciable asset. Leasehold improvements are depreciated over the lesser of the length of the related lease plus any expected renewal options or the estimated life of the assets. A summary of estimated useful lives is as follows: Leasehold Improvements Lesser of lease term or asset life Assets under finance leases Lease term Furniture and Equipment 5 to 7 Years Vehicles 5 Years Software 1 to 5 Years Impairment of Long-lived Assets Long-lived assets, such as property and equipment, right-of-use assets, prepaid warrants and definite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the use and eventual disposition of the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value. The evaluation of long-lived assets is performed at the lowest level of identifiable cash flows. The determination of the fair value of the asset group requires management to estimate a number of factors including anticipated future undiscounted cash flows. Although we believe these estimates are reasonable, actual results could differ from those estimates due to uncertainty in the estimates being used. Debt The Company records debt in the consolidated balance sheets at carrying value, net of unamortized discounts and debt issuance costs. The Company incurs specific incremental costs, other than those paid to lenders, in connection with the issuance of the Company’s debt instruments. Those deferred financing costs include loan origination costs and other direct costs payable to third parties and are recorded as a direct deduction from the carrying value of the associated debt liability in the consolidated balance sheets when the debt is drawn. The Company amortizes the deferred financing costs as interest expense over the term of the related debt using the effective interest method in the consolidated statements of operations. Leases The Company leases operating facilities, office space, vehicles and IT equipment. These leases generally have initial lease terms from two years to twenty years , with options to extend , which are included in the lease term when it is reasonably certain that the Company will exercise that option. Our lease payments often include annual fixed rent escalators ranging between 2 % and 3 % or a consumer price index. Variable lease expense represents the payment of real estate taxes, insurance, and common area maintenance. The payment of variable real estate taxes, insurance and common area maintenance is generally based on the Company’s pro-rata share of the total property, a portion of which is leased by the Company. The Company determines if an arrangement is a lease at inception and evaluates the lease classification (i.e., operating or finance) at that time. Lease arrangements with an initial term of 12 months or less are considered short-term leases. The Company recognizes lease expense for short-term leases on a straight-line basis over the term of the lease within corporate, general and administrative expenses. Finance leases are generally those leases that allow the Company to substantially utilize or pay for the entire asset over its estimated life. Finance lease right-of-use assets are recorded in Property and equipment, net. All other leases are categorized as operating leases. Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly secured borrowings available to the Company. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from Other assets upon lease commencement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. Costs associated with operating lease assets are recognized on a straight-line basis over the term of the lease within corporate, general and administrative expenses. Finance lease assets are amortized on a straight-line basis over the lease term within corporate, general and administrative expenses, except for the interest component, which is included in interest expense and is recognized using the effective interest method over the lease term. The Company uses its incremental borrowing rate on the commencement date for determining the present value of lease payments. The Company considers the likelihood of exercising options to extend or terminate the lease when determining the lease term. In addition, where applicable, the Company includes rent escalation provisions into the calculation of the expected lease payments. The Company has lease agreements with lease and non-lease components. The Company has elected the package of practical expedients, which, among other things, allows us to account for the lease and non-lease components as a single lease component for all leases. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes ("ASC 740"). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2023 and 2022 . Stock-Based Compensation Expense The Company periodically issues Restricted Stock Units ("RSUs"), Performance Share Units ("PSUs"), and Stock Options ("Options") as share-based compensation to employees and non-employees in non-capital raising transactions for services. The Company accounts for such grants issued and vesting based on FASB ASC 718, Compensation – Stock Compensation ("ASC 718"), whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 718. Measurement of share-based payment transactions with non-employees are recognized as compensation expense in the financial statements based on their fair values at grant date. That expense is recognized over the period during which a non-employee or consultant is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The fair value of the Company’s Options and PSUs are estimated using the Black-Scholes-Merton Option Pricing model and a Monte Carlo simulation, respectively, which use certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or stock, and future dividends. The assumptions used in the Black-Scholes Merton Option Pricing model and Monte Carlo Simulation could materially affect compensation expense recorded in future periods. The assumptions used in the model and related impact are discussed in Note 10, Stock-Based Compensation . The fair value of the Company’s RSUs are estimated using the market value of the underlying common stock on the grant date. The Company has elected to account for any forfeitures in the period that they occur. Any awards modified are accounted for in the periods of the modification and in accordance with ASC 718. The Company recognizes the fair value of stock-based compensation within its statements of operations. Net Loss Per Share Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company follows the provisions of ASC 260, Earnings Per Share, for determining whether contingently issuable shares are included for purposes of calculating net income (loss) per share and dete |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 3. ACCOUNTS RECEIVABLE The Company's accounts receivable are presented net of the unpaid external provider costs. A right of offset exists when all of the following conditions are met: 1) each of the two parties owed the other determinable amounts; 2) the reporting party has the right to offset the amount owed with the amount owed to the other party; 3) the reporting party intends to offset; and 4) the right of offset is enforceable by law. The Company believes all of the aforementioned conditions existed as of December 31, 2023 and 2022. Composition of the Company's accounts receivable, net, and risk settlement liabilities was as follows: As of December 31, 2023 2022 Risk-based accounts receivable $ 170,397 $ 267,971 IBNR claims liability ( 58,027 ) ( 121,823 ) Other receivables 2,384 5,595 Accounts receivable, net $ 114,754 $ 151,743 As of December 31, 2023 2022 Risk-based accounts receivable (liability) $ 381 $ ( 5,993 ) IBNR claims liability ( 37,401 ) — Distribution liabilities ( 5,583 ) ( 8,178 ) Risk settlement liabilities $ ( 42,602 ) $ ( 14,171 ) The Company re-evaluated key assumptions and estimates and based on this analysis, the Company identified changes in estimates to revenue, external provider costs, short-term and long-term accounts receivable, net, and risk settlement liabilities. Accordingly, the Company recognized the following changes in prior year estimates in each respective period ( in thousands ): Years Ended December 31, Increase (decrease) 2023 2022 Revenue $ ( 42,934 ) $ 9,046 External provider costs 900 9,662 Short-term and long-term accounts receivable, net ( 34,542 ) ( 616 ) Risk settlement liabilities 9,292 — For the year ended December 31, 2023, the decrease in revenue related to the prior year dates of service was primarily driven by updated information from MSO Medicare health plans, lower than expected revenue in our centers population from Medicare risk adjustment, an unseasonably early 2022-2023 flu season, and more current data from one Medicaid health plan. For the year ended December 31, 2022, the developments related to the prior year dates of service were driven by claims development from COVID-related utilization. Concentration of Credit Risk Composition of the Company's revenues and accounts receivable balances for the payors comprising 10% or more of revenue was as follows (n/a - indicates balance or activity that is less than 10%): Revenue Years Ended December 31, 2023 2022 Payor A 23 % 29 % Payor B n/a 18 % Payor C 21 % 18 % Payor D 13 % 14 % Payor E 15 % 14 % Short-Term and Long-Term Accounts Receivable, net December 31, 2023 December 31, 2022 Payor A 10 % 13 % Payor B 10 % 11 % Payor C n/a 13 % Payor D n/a 13 % Payor E n/a n/a |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4. ACQUISITIONS Share amounts below have been restated to reflect the Reverse Split described in Note 1, Description of Business and Going Concern . Steward Acquisition On November 10, 2022, the Company completed its previously announced acquisition, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), by and among (i) the Company, (ii) Sparta Merger Sub I Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub I”), (iii) Sparta Merger Sub II Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub II”), (iv) Sparta Merger Sub III Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub III” and, together with Merger Sub I and Merger Sub II, “Merger Subs” and each a “Merger Sub”), (v) Sparta Merger Sub I LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger LLC I”), (vi) Sparta Merger Sub II LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger LLC II”), (vii) Sparta Merger Sub III LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger LLC III” and, together with Merger LLC I and Merger LLC II, “Merger LLCs” and each a “Merger LLC”), (viii) Sparta Sub Inc., a Delaware corporation ("SACN Holdco"), (ix) SNCN Holdco Inc. a Delaware corporation ("SNCN Holdco"), (x) SICN Holdco Inc., a Delaware corporation ("SICN Holdco" and, collectively with SACN Holdco, SNCN Holdco, Steward National Care Network, Inc. (n/k/a Steward National Care Network, LLC, “SNCN”), Steward Integrated Care Network, Inc., and Steward Accountable Care Network, Inc. (n/k/a as Steward Accountable Care Network, LLC, “SACN”), each a "target" and, collectively, the "Targets"), (xi) Sparta Holding Co. LLC, a Delaware limited liability company (the “Seller”), and (xii) Steward Health Care System LLC, a Delaware limited liability company (referred to collectively with the Seller, the “Seller Parties”), pursuant to which the Company acquired Steward Value-Based Care (such transaction, the “Steward Acquisition”). The aggregate consideration paid to the Seller under the Merger Agreement on November 10, 2022, the date of the closing of the Steward Acquisition (the “Steward Closing”), consisted of (i) a cash payment of $ 25.0 million, (ii) 783,333 shares, after giving the effect to the Reverse Split (the “Initial Share Consideration”), of the Company’s Class A common stock, par value $ 0.0001 per share (the “Class A Common Stock”) and (iii) a cash payment of $ 35.5 million, an amount equal to the estimated value of the Targets’ accounts receivable attributable to Medicare value-based payments for the period between January 1, 2022 and the Steward Closing, minus the amount of such payments payable to the affiliate physicians of the Targets (the “Financed Net Pre-Closing Medicare AR”). In addition, the Merger Agreement provides that, following the Steward Closing, upon 100,000 Medicare lives from and/or attributable to the Seller Parties’ Medicare network participating in risk-based, value-based care arrangements contracted through the Company with a Medical Expense Ratio of less than 85 % for two consecutive calendar quarters, the Company will issue the Seller, for immediate distribution to its equity holders, a number of shares of Class A Common Stock (the “Earnout Share Consideration” and together with the Initial Share Consideration, the “Share Consideration”) that, when added to the Initial Share Consideration, would have represented 41 % of the issued and outstanding shares of the Company’s Class A Common Stock as of the Steward Closing, in each case after giving effect to issuances of Class A Common Stock between the Steward Closing and June 30, 2023 in connection with the exercise of warrants to purchase Class A Common Stock outstanding as of the Steward Closing, the potential earnout under the Company’s June 2021 Business Combination and any forfeitures, surrenders or other dispositions to the Company of Class A Common Stock outstanding as of the Steward Closing. If not previously issued, the Earnout Share Consideration will also be issuable upon a Change in Control (as defined in the Merger Agreement) of the Company. Refer to Note 9, Stockholders' Equity , for additional information. The following summarizes the consideration transferred at the Steward Closing ( in thousands ): Cash consideration $ 25,000 Initial Share Consideration (1) 134,420 Earnout Share Consideration (2) 212,355 Other consideration, net (3) 27,219 Total Steward Acquisition consideration $ 398,994 (1) Represents issuance of 0.8 million shares of Class A Common Stock of the Company using the closing price as of the date of the Steward Closing of $ 171.6 per share. (2) Calculated as the 1.3 million shares of Class A Common Stock the Company estimated that it will be obligated to issue to the Seller Parties upon achievement of certain milestones as Earnout Share Consideration, multiplied by CareMax's closing stock price as of the date of the Steward Closing of $ 171.6 per share and the estimated probability of payout of 99 %. Refer to Note 9, Stockholders' Equity , for additional information. (3) Represents funding of the Financed Net Pre-Closing Medicare AR of $ 35.5 million, offset by the Sellers' reimbursement to the Company of the interest and original issue discount of $ 6.8 million related to the Loan and Security Agreement (as defined in Note 8, Debt and Related Party Debt ) and by non-cash purchase price adjustment of $ 1.5 million. The acquired assets and assumed liabilities of Steward Value-Based Care were recorded at their estimated fair values. The goodwill recorded as part of the acquisition included the expected synergies and other expected contribution to the Company's overall growth strategy. None of the goodwill recognized as part of the Steward Acquisition is deductible for income tax purposes. Refer to Note 6, Goodwill and Other Intangible Assets , for additional information. The following table summarizes the initial and final fair values of the assets acquired and liabilities assumed at Steward Closing, with respective adjustments identified during the measurement period. At Steward Closing (preliminary) Measurement Period Adjustments At Steward Closing (final) Accounts receivable $ 43,060 $ ( 9,069 ) $ 33,991 Other working capital adjustments ( 21,584 ) 518 ( 21,066 ) Distribution liabilities ( 7,032 ) 5,153 ( 1,879 ) Intangible asset - Risk contracts 37,500 — 37,500 Intangible asset - Provider network 42,900 — 42,900 Net assets acquired 94,844 ( 3,397 ) 91,446 Purchase consideration 398,994 — 398,994 Goodwill $ 304,150 $ 3,397 $ 307,547 The operating results of Steward Value-Based Care from the date of the Steward Closing to December 31, 2022, consisted of government value-based care revenue of $ 7.0 million and cost of care of $ 1.1 million, are included in the consolidated statements of operations of the Company for the year ended December 31, 2022. Transaction Costs The Company incurred $ 13.2 million for the year ended December 31, 2022, in advisory, legal, accounting and management fees in conjunction with the Steward Acquisition, which were included in acquisition related costs in the consolidated statements of operations. As of December 31, 2023 and 2022, we have accrued $ 5.0 million, payment of which is contingent upon the Company's issuance of the Earnout Share Consideration to the Seller Parties. Unaudited Pro Forma Information The financial information in the table below summarizes the combined results of operations of the Company and Steward Value-Based Care, on a pro forma basis, as if the acquisition occurred on January 1, 2022. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2022 or of results that may occur in the future. ( in thousands ) Year Ended December 31, 2022 Revenue $ 669,319 Net loss ( 34,315 ) These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. The pro forma results include adjustments primarily related to the purchase accounting. Other Acquisitions During the year ended December 31, 2022, we a cquired a number of small medical practices for total consideration of $ 3.3 million and recognized goodwill of $ 2.9 million and intangible assets of $ 0.4 million. There were no acquisitions during the year ended December 31, 2023 . |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2023 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | NOTE 5. REINSURANCE The Company purchased stop loss insurance on catastrophic costs to limit the exposure on patient losses. Premiums and policy recoveries are reported in external provider costs in the accompanying consolidated statements of operations. The intent of the Company’s stop loss coverage is to limit the benefits paid for any individual patient. The Company’s stop loss limits are defined within each respective health plan contract or other third party contract and range typically from $ 30,000 to $ 200,000 per patient per year. Premium expense incurred was $ 31.4 million for the year ended December 31, 2023 and $ 19.4 million for the year ended December 31, 2022. Physicians under capitation arrangements typically have stop loss coverage so that a physician’s financial risk for any single member is limited to a maximum amount on an annual basis. The Company monitors the financial performance and solvency of its stop loss providers. However, the Company remains financially responsible for health care services to its members in the event the health plans or other third parties are unable to fulfill their obligations under stop loss contractual terms. Recoveries recognized were $ 29.6 million for the year ended December 31, 2023 and $ 27.8 million for the year ended December 31, 2022 . Estimated recoveries under stop loss policies are reported within the accounts receivable, net, or risk settlement liabilities as the counterparty responsible for the payment of the claims and the stop loss is the respective health plan. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table shows changes in the carrying amount of goodwill ( in thousands ): Carrying Amount Balance at December 31, 2021 $ 464,566 Goodwill acquired 307,062 Measurement period adjustments ( 985 ) Impairment ( 70,000 ) Balance at December 31, 2022 700,643 Measurement period adjustments 3,397 Impairment ( 547,200 ) Balance at December 31, 2023 $ 156,841 During the years ended December 31, 2023 and 2022 , the Company recorded goodwill impairment charges of $ 547.2 million and $ 70.0 million, respectively. Because our total shareholders’ equity exceeded our market capitalization at each goodwill impairment testing date, we estimated the fair value of our single reporting unit primarily on the basis of the Company's market capitalization after considering reasonable control premiums which could be expected in transactions with third-party market participants. As a result, the goodwill impairments in each period were primarily driven by the reduction of the market value of our stock price. The Company's cumulative goodwill impairment was $ 617.2 million and $ 70.0 million as of December 31, 2023 and 2022, respectively. Intangible Assets The following tables summarize the gross carrying amounts, accumulated amortization and net carrying amounts of intangible assets by major class ( in thousands ): Gross Carrying Accumulated Net Carrying Weighted-Average December 31, 2023 Risk contracts $ 102,070 $ ( 39,394 ) $ 62,676 8 Provider network 42,900 ( 6,980 ) 35,920 7 Non-compete agreements 4,170 ( 2,343 ) 1,827 5 Trademarks 1,862 ( 1,491 ) 371 2 Other 693 ( 244 ) 449 5 Total $ 151,695 $ ( 50,452 ) $ 101,243 Gross Carrying Accumulated Net Carrying Weighted-Average December 31, 2022 Risk contracts $ 102,070 $ ( 24,217 ) $ 77,853 8 Provider network 42,900 ( 851 ) 42,049 7 Non-compete agreements 4,170 ( 1,518 ) 2,652 5 Trademarks 1,862 ( 1,352 ) 510 2 Other 693 ( 171 ) 522 5 Total $ 151,695 $ ( 28,109 ) $ 123,585 Amortization expense, excluding amortization related to the finance lease right-of-use asset, totaled $ 22.3 million and $ 16.8 million for the years ended December 31, 2023 and 2022, respectively. The estimated amortization for the intangible assets for each of the succeeding five years and thereafter was as follows ( in thousands ): Year Amount 2024 $ 20,613 2025 19,062 2026 17,641 2027 14,786 2028 11,854 Thereafter 17,287 Total $ 101,243 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 7. PROPERTY AND EQUIPMENT Property and equipment at December 31, 2023 and 2022 consisted of the following ( in thousands ): December 31, 2023 December 31, 2022 Leasehold improvements $ 19,200 $ 10,661 Vehicles 2,892 3,743 Furniture and equipment 12,765 8,871 Software 3,865 3,725 Assets under finance leases (1) 18,552 — Construction in progress 5,074 4,621 Total 62,349 31,620 Less: Accumulated depreciation and amortization (2) ( 14,431 ) ( 10,614 ) Total Property and equipment, net $ 47,918 $ 21,006 (1) Refer to Note 14, Leases , for information. (2) Includes accumulated amortization related to finance lease right-of-use assets of $ 0.6 million and $ 0 as of December 31, 2023 and 2022, respectively. Construction in progress primarily consists of leasehold improvements at the Company's centers which have not opened. Depreciation expense and amortization of the finance lease right-of-use assets, totaled $ 5.4 million and $ 4.9 million for the years ended December 31, 2023 and 2022 , respectively. |
Debt and Related Party Debt
Debt and Related Party Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Related Party Debt | NOTE 8. DEBT AND RELATED PARTY DEBT Credit Agreement In May 2022, the Company entered into a credit agreement (the “Credit Agreement”) that provided for an aggregate of up to $ 300.0 million in term loans, comprised of (i) initial term loans in the aggregate principal amount of $ 190.0 million (the “Initial Term Loans”) and (ii) a delayed term loan facility in the aggregate principal amount of $ 110.0 million (the “Delayed Draw Term Loans”). The Credit Agreement permits the Company to enter into certain incremental facilities subject to compliance with the terms, conditions and covenants set forth therein. In May 2022, the Company drew $ 190.0 million of the Initial Term Loans and used approximately $ 121 million of the net proceeds from this borrowing to repay its outstanding obligations under the credit agreement dated June 8, 2021, as amended, and recognized related debt extinguishment losses of $ 6.2 million. On March 8, 2023 (the “Amendment Closing Date”), the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement. The Second Amendment amended the Credit Agreement to, among other things, (i) provide for a new incremental delayed draw term loan B facility in an aggregate principal amount of $ 60.0 million (the “Delayed Draw Term Loan B Facility”); (ii) revise the commitment expiration date for the Company’s existing $ 110.0 million Delayed Draw Term Loan to forty-five days following the Amendment Closing Date; (iii) extend the commencement of amortization payments on loans under the Credit Agreement from March 31, 2024 to May 31, 2025; (iv) reduce the amount of interest that the Company may elect to capitalize from 4.00 % to 3.50 % beginning on the second anniversary of the execution date of the Credit Agreement, 3.00 % beginning on the third anniversary of the execution date of the Credit Agreement, and 1.50 % beginning on December 10, 2025; (v) increase the amount of the super-priority revolving credit facility that is permitted to be added to the Credit Agreement to $ 45.0 million and provide that the entirety of such facility may be used for general corporate purposes; and (vi) amend the prepayment provisions of the Credit Agreement, including to have such provisions run as of the Amendment Closing Date. During the years ended December 31, 2023 and 2022 , the Company drew $ 125.0 million and $ 45.0 million of the Delayed Draw Term Loans, respectively. Based on the elections made by the Company, as of December 31, 2023 , borrowings under the Credit Agreement bore interest of Term SOFR (calculated as the Secured Overnight Financing Rate published on the Federal Reserve Bank of New York’s website, plus the applicable credit spread adjustment based on the elected interest period), plus an applicable margin rate of 9.00 %. As permitted under the Credit Agreement, the Company elected to capitalize 4.00 % of the interest as principal amount. As a result of this election, the cash interest component of the applicable margin increased by 0.50 %. The Credit Agreement contains certain covenants that limit, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, liens or encumbrances, to make certain investments, to enter into sale-leaseback transactions or sell certain assets, to make certain restricted payments or pay dividends, to enter into consolidations, to transact with affiliates and to amend certain agreements, subject in each case to the exceptions and other qualifications as provided in the Credit Agreement. The Credit Agreement also contains covenants that require the Company to satisfy a minimum liquidity requirement of $ 50.0 million, which may be decreased to $ 25.0 million if the Company achieves a certain adjusted EBITDA, and maintain a maximum total leverage ratio based on the Company’s consolidated EBITDA, as defined in the Credit Agreement, with de novo losses excluded from the calculation of such ratio for up to 36 months after the opening of a de novo center, which maximum total leverage ratio was initially 8.50 to 1.00, commencing with the fiscal quarter ended September 30, 2022 and is subject to a series of step-downs. For the fiscal quarters ending September 30, 2026 and thereafter the Company must maintain a maximum total leverage ratio no greater than 5.50 to 1.00. Loan and Security Agreement - Related Party Debt In November 2022, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”), by and among Sparta Merger Sub I Inc., a Delaware corporation and wholly-owned subsidiary of the Company, Sparta Merger Sub II Inc., a Delaware corporation and wholly-owned subsidiary of the Company, Sparta Merger Sub I LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Merger LLC I”), Sparta Merger Sub II LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (together with Merger LLC I, the “Guarantors”), Steward Accountable Care Network, Inc. (n/k/a as Steward Accountable Care Network, LLC) and Steward National Care Network, Inc. (n/k/a Steward National Care Network, LLC), as borrowers (the “Borrowers”), CAJ Lending LLC (“CAJ”) and Deerfield Partners L.P., as lenders (the “Lenders”), and CAJ, as administrative agent and collateral agent (in such capacity, the “Agent”). Mr. Carlos A. de Solo, a director of the Company and the Company’s President and Chief Executive Officer, Mr. Alberto de Solo, the Company’s Executive Vice President and Chief Operating Officer, and Mr. Joseph N. De Vera, the Company’s Senior Vice President and Legal Counsel, have interests in CAJ. Pursuant to the Loan and Security Agreement, the Lenders provided the Borrowers a term loan (the “Term Loan”) in the aggregate principal amount of $ 35.5 million. The Company used the proceeds of the Term Loan to fund the Financed Net Pre-Closing Medicare AR acquired in connection with the Steward Acquisition. The Term Loan bore fixed interest at a rate of 12.0 % per annum. In addition, the Borrowers paid a facility fee equal to 3.0 % of the aggregate principal amount of the Term Loan, which was accounted for as a debt discount. Any additional interest (if applicable) accrued and owing during the term of the Loan and Security Agreement was paid in-kind and capitalized to principal monthly in arrears. From and after the occurrence and during the continuance of an event of default, the Term Loan bore interest at a rate equal to 4.0 % above the interest rate applicable immediately prior to the occurrence of the event of default. Pursuant to the Steward Acquisition Merger Agreement, the Seller agreed to pay the costs of financing the Financed Net Pre-Closing Medicare AR and, at the Steward Closing, paid to the Borrowers $ 6.8 million, representing all scheduled payments of interest and fees from the Steward Closing Date up to and including November 30, 2023, which amount was then paid in advance by the Borrowers to the Lenders. In October 2023, the Company paid off all outstanding indebtedness of $ 35.5 million due under the Loan and Security Agreement with the proceeds of the MSSP payment from the federal government, and the Loan and Security Agreement was terminated. Elevance Health In October 2022, in connection with the collaboration agreement with Elevance Health (formerly known as Anthem), which was announced in August 2021, the Company entered into a promissory note for an amount of $ 1.0 million due in October 2032 . This borrowing bears a fixed interest rate of 6.25 % per annum. Finance Leases Refer to Note 14, Leases , for information about the Company's finance leases. As of December 31, 2023 and 2022, debt consisted of the following ( in thousands ): December 31, 2023 December 31, 2022 Indebtedness under the Credit Agreement $ 377,340 $ 240,277 Indebtedness under the Loan and Security Agreement - Related party debt — 35,510 Finance lease obligations, interest averaging 13.5 % and maturing at various dates through 2043 as of December 31, 2023 ( no ne as of December 31, 2022). 19,612 — Other 2,220 1,657 Less: Unamortized discounts and debt issuance costs ( 13,349 ) ( 16,188 ) 385,823 261,256 Less: Current portion ( 364,380 ) ( 30,530 ) Long-term portion $ 21,443 $ 230,725 Future maturities of the indebtedness outstanding at December 31, 2023 were as follows ( in thousands ): Year Amount 2024 $ 389 2025 3,487 2026 4,080 2027 370,721 2028 730 Thereafter 153 Total $ 379,560 In the table above, the future maturities are presented consistent with the contractual terms. As of December 31, 2023, we were not in compliance with a financial covenant under our Credit Agreement, but received a limited waiver from the lenders thereunder. A breach of any of the covenants under the Credit Agreement or the occurrence of other events specified in the Credit Agreement could result in an event of default under the same and give rise to the lenders’ right to accelerate our debt obligations thereunder and pursue other remedial actions under such agreement and/or trigger a cross default under our other long-term leases. Accordingly, as of December 31, 2023, the full balance of the outstanding indebtedness related to the Credit Agreement was classified as a current liability in our consolidated balance sheet. Refer to Note 1, Description of Business and Going Concern , for going concern considerations and refer to Note 18, Subsequent Events , for details related to the limited waiver of certain breaches of covenants contained in the Credit Agreement obtained subsequent to December 31, 2023. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 9. STOCKHOLDERS’ EQUITY Share amounts below have been restated to reflect the Reverse Split described in Note 1, Description of Business and Going Concern . Related Advisory Agreement On July 13, 2021, the Company entered into an exclusive real estate advisory agreement (the "Advisory Agreement") with Related CM Advisor, LLC (the “Advisor”), a Delaware limited liability company and a subsidiary of The Related Companies, L.P. (“Related”) (the “Advisory Agreement”), pursuant to which the Advisor has agreed to provide certain real estate advisory services to the Company on an exclusive basis. The services include identifying locations for new centers nationwide as part of the Company’s de novo growth strategy, including, but not limited to, locations within and proximate to affordable housing communities that may be owned by Related. In connection with the Advisory Agreement, the Company and Advisor entered into a subscription agreement (the “Subscription Agreement”), whereby the Advisor purchased 16,666 shares (the “Initial Shares”) of the Company’s Class A Common Stock for an aggregate purchase price of $ 5.0 million and the Company issued to the Advisor (i) a warrant (the “Series A Warrant”) to purchase 66,666 shares of Class A Common Stock (the “Series A Warrant Shares”), which vested immediately upon issuance, is exercisable for a period of five years and is not redeemable by the Company and (ii) a warrant (the “Series B Warrant” and together with the Series A Warrant, the “Warrants”) to purchase up to 200,000 shares of Class A Common Stock (the “Series B Warrant Shares” and, together with the Series A Warrant Shares, the “Warrant Shares”), pursuant to which 16,666 Series B Warrant Shares will vest and become exercisable from time to time upon the opening of each center under the Advisory Agreement for which the Advisor provides services, other than two initial centers. The Company assessed the substance of the Subscription Agreement and determined that all instruments referenced in the Subscription Agreement should be assessed under the guidance of ASC 718 as non-employee awards issued to Related in exchange for real estate advisory services to be rendered per the Advisory Agreement. As a result, the Company recorded the Series A Warrants as a component of additional paid-in-capital using the fair value as of July 13, 2021. The Series B Warrant is exercisable, to the extent vested, until the later of five years from the date of issuance or one year from vesting of the applicable Series B Warrant Shares and is redeemable with respect to vested Warrant Shares at a price of $ 0.3 per Warrant Share if the price of the Class A Common Stock equals or exceeds $ 540.00 per share, or $ 3.00 per Warrant Share if the price of the Class A Common Stock equals or exceeds $30 0.00 per share, in each case when such price conditions are satisfied for any 20 trading days within a 30-trading day period and subject to certain adjustments and conditions as described in the Series B Warrant. In the event that the Series B Warrant is called for redemption by the Company, the Advisor may pay the exercise price for the Series B Warrant Shares for six months following the notice of redemption by the Company. Series B Warrants are recognized at their grant date fair value once vesting becomes probable. No warrants vested during the year ended December 31, 2023. During the year ended December 31, 2022 , the Company recorded $ 7.6 million, in other current assets, to reflect vesting of 50,000 Series B Warrant Shares. Upon adoption of ASC 842 and commencement of the related leases, the balances were reclassified to right-of-use assets. Refer to Note 13, Related Party Transactions , for additional information. Balances associated with the Warrant Shares are recorded in the right-of-use assets for commenced leases, and other assets for leases that have not yet commenced except for the portion that represents amortization expected to be recognized over the next 12 months, which is recorded in other current assets. The portion of the Warrant Shares recorded in other current assets as of December 31, 2023, and 2022 was $ 0.4 million and $ 0.6 million , respectively. Redeemable Warrants - Public Warrants In July 2020, in connection with the IPO, DFHT sold 95,834 Public Warrants. Each whole Public Warrant entitles the registered holder to purchase one thirtieth (1/30th) of one share of Class A Common Stock at a price of $ 345.00 per whole share, subject to adjustment, at any time commencing on the later of 12 months from the closing of the IPO and 30 days after the completion of the Business Combination , provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of Class A Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreements entered into at the time of the IPO, a warrant holder may exercise its Public Warrants only for a whole number of shares of Class A Common Stock. This means only a whole Public Warrant may be exercised at a given time by a warrant holder. No fractional warrants were issued upon separation of the units issued in connection with the IPO and only whole Public Warrants will trade. The Company may redeem the Public Warrants when the price per share of Class A Common Stock equals or exceeds certain threshold prices. Redeemable Warrants - Private Placement Warrants Also in connection with the IPO, DFHT issued the 97,223 Private Placement Warrants at a purchase price of $ 45.00 per warrant. The Private Placement Warrants (including the Class A Common Stock issuable upon exercise of the Private Placement Warrants) are not transferable, assignable or salable until 30 days after the completion of the Business Combination (except, among other limited exceptions to DFHT’s officers and directors and other persons or entities affiliated with the initial purchasers of the Private Placement Warrants) and they will not be redeemable by CareMax for cash so long as they are held by the initial stockholders or their permitted transferees. With some exceptions, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. Contingent Consideration - Business Combination Pursuant to the Business Combination Agreement, the CMG Sellers and IMC Parent, who received Class A Common Stock in connection with the Business Combination, became entitled to receive contingent consideration to be paid out in the form of Class A Common Stock. The Business Combination Agreement provided that u p to an additional 116,667 and 96,667 shares of Class A Common Stock (the "Earnout Shares") would have become payable to the CMG Sellers and IMC Parent, respectively, after the Closing: (i) if within the first year after the Closing, the volume weighted average trading price of Class A Common Stock equaled or exceeded $ 375.00 on any 20 trading days in any 30-day trading period (the “First Share Price Trigger”), then 58,333 and 48,333 Earnout Shares would have become issuable to the CMG Sellers and IMC Parent, respectively, and (ii) if within the two years after the Closing (the “Second Earnout Period”), the volume weighted average trading price of Class A Common Stock equals or exceeds $ 450.00 on any 20 trading days in any 30-day trading period (the “Second Share Price Trigger” and together with the First Share Price Trigger, the “Share Price Triggers”), then 58,333 and 48,333 Earnout Shares would have become issued and paid to the former owners of CMG and IMC, respectively. If prior to (i) the satisfaction of the Share Price Triggers, and (ii) the end of the Second Earnout Period, the Company entered into a change in control transaction as described in the Business Combination Agreement, and the price per share of the Company’s Class A Common Stock payable to the stockholders of the Company in such change in control transaction was greater than the Share Price Triggers that have not been satisfied during the Earnout Period, then at the closing of such change in control transaction, the Share Price Triggers would have been deemed to have been satisfied and the Company would have issued, as of such closing, all of the Earnout Shares. The contingent consideration was classified as a liability for the period ended June 30, 2021. On July 9, 2021, the volume weighted average trading price of Class A Common Stock exceeded $ 375.00 on 20 or more days resulting in the satisfaction of the First Share Price Trigger. After the First Share Price Trigger was achieved on July 9, 2021, the estimated fair value of the Earnout Shares was recorded as an equity-classified instrument as a component of stockholders' equity, with the change in fair value from the prior reporting period recorded in earnings. Accordingly, 58,333 and 48,333 Earnout Shares were issued and paid to the CMG Sellers and IMC Parent, respectively. The Second Earnout Period expired on June 9, 2023 and the Second Share Price Trigger was not achieved. Contingent Consideration - Steward Acquisition Pursuant to the Merger Agreement signed in connection with Steward Acquisition, upon 100,000 Medicare lives from and/or attributable to the seller parties' Medicare network participating in risk-based, value-based care arrangements contracted through the Company with a Medical Expense Ratio of less than 85 % for two consecutive calendar quarters, the Company will issue the seller, for immediate distribution to its equity holders, a number of shares of Class A Common Stock (the “Earnout Share Consideration” and together with the Initial Share Consideration, the “Share Consideration”) that, when added to the initial share consideration issued as part of the Steward Acquisition, would have represented 41 % of the issued and outstanding shares of the Company’s Class A Common Stock as of November 10, 2022 (the "Steward Closing"), in each case after giving effect to issuances of Class A Common Stock between the Steward Closing and June 30, 2023 in connection with the exercise of warrants to purchase Class A Common Stock outstanding as of the Steward Closing, the potential earnout under the Company’s Business Combination and any forfeitures, surrenders or other dispositions to the Company of Class A Common Stock outstanding as of the Steward Closing. If not previously issued, the Earnout Share Consideration will also be issuable upon a Change in Control (as defined in the Merger Agreement) of the Company. Prior to June 30, 2023, the Company accounted for the Earnout Share Consideration as a liability, due to, among other terms, a variable settlement amount, based on the provisions summarized above. On June 30, 2023, the settlement amount became fixed in accordance with the terms of the Merger Agreement, and accordingly, the f air value of the Earnout Share Consideration of $ 114.6 million as of June 30, 2023, was reclassified from contingent earnout liability into additional paid-in-capital. Preferred Stock The Company's third amended and restated certificate of incorporation authorizes the Company to issue up to 1,000,000 shares of preferred stock, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors (the "Board"). During the year ended December 31, 2022, the Company issued one share of Series A Preferred Stock to the seller of Steward Value-Based Care (refer to Note 4, Acquisitions , for information about the Steward Acquisition). This share of Series A Preferred Stock has a stated par value of $ 0.0001 and has no economic rights. The holder of the outstanding share of Series A Preferred Stock is entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to the Special Matters (as defined in the Certificate of Designation of Series A Preferred Stock filed by the Company with the Secretary of State of the State of Delaware on November 10, 2022), and has no other voting rights. In any such vote, the share of Series A Preferred Stock will be entitled to 1,241,393 votes. The voting rights under the share of Series A Preferred Stock last until the earlier of (i) the two year anniversary of the Steward Closing or (ii) the issuance of the Earnout Share Consideration in connection with the Steward Acquisition. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 10. STOCK-BASED COMPENSATION Share amounts below have been restated to reflect the Reverse Split described in Note 1, Description of Business and Going Concern . The Company's 2021 Long-term Incentive Plan (the “2021 Plan”) permits grants of equity-based awards to officers, directors, employees and other service providers. The initial share pool of 233,333 shares of Class A Common Stock available for grants under the 2021 Plan is automatically increased on January 1st of each calendar year commencing after the Closing Date and ending on (and including) January 1, 2031, by a number of shares of Class A Common Stock equal to the lesser of (i) four percent of the aggregate number of shares of Class A Common Stock outstanding on December 31st of the immediately preceding calendar year, excluding for this purpose any such outstanding shares of Class A Common Stock that were granted under the 2021 Plan and remain unvested and subject to forfeiture as of the relevant December 31st, or (ii) a lesser number of shares of Class A Common Stock as determined by the Board or the Compensation Committee of the Board prior to the relevant January 1 st . Our outstanding stock-based compensation awards consist of time-based share awards (restricted stock units, or the "RSUs"), performance-based share awards (the "PSUs") and options. Our equity awards generally vest over a three-year period, subject to continued provision of services to the Company through the applicable vesting date. RSUs The following table summarizes the RSU activity for the year ended December 31, 2023: Number of shares Weighted-Average Grant Date Fair Value (per share) Outstanding as of December 31, 2022 89,107 $ 243.30 Granted 84,079 111.00 Vested ( 34,189 ) ( 242.66 ) Forfeited ( 27,028 ) ( 173.10 ) Outstanding as of December 31, 2023 111,969 $ 162.60 As of December 31, 2023 and 2022 , total unrecognized compensation expense related to unvested RSUs was $ 12.8 million and $ 17.4 million, respectively, expected to be recognized over a weighted-average period of 1.8 years and 2.1 years, respectively. PSUs For the PSUs, which are issued to executives, the performance-based vesting will be satisfied with respect to a percentage of the recipient’s PSUs, as and when the specified price per share of Class A Common Stock is achieved through the applicable award expiration date, subject to the executive's continued employment with the Company through the applicable vesting date. T he following table summarizes the PSU activity for the year ended December 31, 2023: Number of shares Weighted-Average Grant Date Fair Value (per share) Outstanding as of December 31, 2022 6,972 $ 171.30 Granted 10,267 111.90 Vested ( 2,188 ) ( 181.50 ) Forfeited — — Outstanding as of December 31, 2023 15,050 $ 129.36 As of December 31, 2023 and 2022, total unrecognized compensation expense related to unvested PSUs was $ 0.9 million and $ 0.7 million, respectively, exp ected to be recognized over a weighted-average period of 1.4 years and 2.0 years, respectively. The fair-value of the PSUs was determined on the respective grant dates using a Monte Carlo model with the following assumptions: Years Ended December 31, 2023 2022 Underlying stock price $ 111.60 $ 250.20 Performance Period (years) 2.0 2.0 Risk-free interest rate 4.5 % 2.4 % Volatility 70.8 % 55.0 % Dividend yield 0.0 % 0.0 % The risk-free interest rate utilized is based on a term-matched zero-coupon U.S. Treasury security yield at the time of grant. Expected volatility is based on annualized standard deviation of daily continuously compounded returns of the Company's peers using the Guideline Public Companies method. Options Options provide an option to purchase a defined number of shares at a strike price of $ 300.00 per share. The following table summarizes the options activity for the year ended December 31, 2023: Number of shares Weighted-Average Grant Date Fair Value (per share) Outstanding as of December 31, 2022 12,452 $ 181.80 Granted 17,200 87.90 Vested ( 4,640 ) ( 180.98 ) Forfeited — — Outstanding as of December 31, 2023 25,012 $ 117.34 As of December 31, 2023 and 2022 , total unrecognized compensation expense related to unvested options was $ 2.0 million and $ 1.7 million, respectively, expected to be recognized over a weighted-average period of 2.0 years and 2.1 years, respectively. The fair-value of options was determined on the respective grant dates using a Black-Scholes-Merton Option Pricing model with the following assumptions: Years Ended December 31, 2023 2022 Underlying stock price $ 111.60 $ 250.20 Performance Period (years) 10.0 10.0 Risk-free interest rate 3.7 % 2.4 % Volatility 71.5 % 65.5 % Dividend yield 0.0 % 0.0 % The risk-free interest rate utilized is based on a term-matched zero-coupon U.S. Treasury security yield at the time of grant. Expected volatility is based on annualized standard deviation of daily continuously compounded returns of the Company's peers using the Guideline Public Companies method. The Company has recorded stock-based compensation expense totaling $ 10.6 million and $ 10.3 million for the years ended December 31, 2023 and 2022 , respectively. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 11. NET LOSS PER SHARE Share amounts below have been restated to reflect the Reverse Split described in Note 1, Description of Business and Going Concern . The following table sets forth the calculation of basic and diluted net loss per share for the periods indicated based on the weighted-average number of common share outstanding ( in thousands, except share and per share data ): Years Ended December 31, 2023 2022 Net loss attributable to CareMax, Inc. Class A common stockholders $ ( 683,348 ) $ ( 37,796 ) Weighted-average basic shares outstanding 3,727,725 3,026,644 Weighted-average diluted shares outstanding 3,727,725 3,026,644 Net loss per share Basic $ ( 183.31 ) $ ( 12.49 ) Diluted $ ( 183.31 ) $ ( 12.49 ) The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive or because issuance of shares underlying such securities is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Years Ended December 31, 2023 2022 Series A and Series B Warrants 266,667 266,667 Public and Private Placement Warrants 193,055 193,055 Contingent consideration 1,276,667 1,356,667 Unvested restricted stock units 120,726 89,107 Unvested performance stock units (assumes 100 % target payout) 13,578 6,972 Unvested options 21,872 12,452 Total 1,892,564 1,924,920 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 12. FAIR VALUE MEASUREMENTS Share amounts below have been restated to reflect the Reverse Split described in Note 1, Description of Business and Going Concern . Financial Instruments that are Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value ( in thousands ): Fair Value December 31, 2023 Quoted Prices Significant other Significant other Description Carrying Value (Level 1) (Level 2) (Level 3) Derivative warrant liabilities - Public Warrants $ 22 $ 22 $ — $ — Derivative warrant liabilities - Private Placement Warrants 1 — — 1 Total liabilities measured at fair value $ 22 $ 22 $ — $ 1 Fair Value December 31, 2022 Quoted Prices Significant other Significant other Description Carrying Value (Level 1) (Level 2) (Level 3) Derivative warrant liabilities - Public Warrants $ 1,495 $ 1,495 $ — $ — Derivative warrant liabilities - Private Placement Warrants 2,479 — — 2,479 Contingent earnout liability 134,561 — — 134,561 Total liabilities measured at fair value $ 138,535 $ 1,495 $ — $ 137,040 Fair value of Public Warrants is measured using the listed market price of such warrants. Fair value of the Private Placement Warrants is estimated using a Monte Carlo simulation model at each measurement date. Inherent in a Monte Carlo simulation are assumptions related to expected stock price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. During the year ended December 31, 2023 , the Company recognized a benefit resulting from a decrease in the fair value of the derivative warrant liabilities of $ 4.0 million (a loss of $ 4.4 million during the year ended December 31, 2022). As of December 31, 2022 , fair value of contingent earnout liability was calculated using 1.3 million shares, which will be issuable to the seller of Steward Value-Based Care upon achievement of certain performance metrics, the closing price of the Company's Class A Common Stock of $ 109.5 per share, and a 99 % probability of payout. On June 30, 2023, fair value of the contingent earnout consideration was reclassified from liabilities into additional paid-in-capital. Refer to Note 9, Stockholders' Equit y, for further information. Transfers between level 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the years ended December 31, 2023 or 2022. Activity of the Level 3 liabilities measured at fair value was as follows (in thousands): Balance as of December 31, 2022 $ 137,040 Change in fair value of derivative warrant liabilities ( 2,479 ) Change in fair value of contingent earnout liability ( 19,916 ) Reclassification of contingent earnout consideration previously liability classified ( 114,645 ) Balance as of December 31, 2023 $ 1 The following table provides quantitative information regarding Level 3 fair value measurement inputs used in measurement of fair value of the Private Placement Warrants: December 31, 2023 December 31, 2022 Exercise price $ 345.00 $ 345.00 Underlying stock price $ 15.00 $ 109.50 Volatility 58.3 % 69.1 % Expected life of the options to convert (years) 2.44 3.44 Risk-free rate 4.81 % 4.08 % Dividend yield 0.0 % 0.0 % Financial Instruments that are not Measured at Fair Value on a Recurring Basis December 31, 2023 Fair Value Carrying Value Quoted Prices Significant other Significant other (in thousands) (Level 1) (Level 2) (Level 3) Liabilities Fixed rate debt (a) $ 913 $ — $ — $ 747 Floating rate debt (a) 377,340 — — 375,240 Total $ 378,253 $ — $ — $ 375,987 Fair Value December 31, 2022 Carrying Value Quoted Prices Significant other Significant other (in thousands) (Level 1) (Level 2) (Level 3) Liabilities Fixed rate debt (a) $ 36,498 $ — $ — $ 32,820 Floating rate debt (a) 240,277 — — 240,280 Total $ 276,775 $ — $ — $ 273,100 (a) The debt amounts above do not include the impact of debt issuance costs or discounts. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13. RELATED PARTY TRANSACTIONS Share amounts below have been restated to reflect the Reverse Split described in Note 1, Description of Business and Going Concern . The Related Companies Refer to Note 9, Stockholders' Equity, for details on the transactions the Company entered into with Related. During the years ended December 31, 2023 and 2022, the Company recognized expense related to the amortization of the Advisory Agreement Warrants Shares of $ 0.4 million and $ 0.5 million, respectively, in corporate, general and administrative expenses. As of December 31, 2023, and 2022 , the Company recorded $ 0.4 million and $ 0.6 million in other current assets, respectively, related to the Advisory Agreement Warrants Shares. In addition, during the year ended December 31, 2022 , we recorded $ 0.4 million in construction in progress representing construction advisory services provided to us by Related . No construction advisory services were provided to us by Related in 2023. On July 13, 2021, the Board appointed Mr. Bryan Cho, Executive Vice President of Related, to serve as a Class III director of the Company. The appointment of Mr. Cho was made in connection with the Advisory Agreement, which provides the Advisor with the right to designate a director to serve on the Board, subject to the continuing satisfaction of certain conditions, including that the Advisor and its affiliates maintain ownership of at least 16,667 shares of Class A Common Stock. As a director of the Company, Mr. Cho receives compensation in the same manner as the Company’s other non-employee directors. Steward Health Care System, LLC Dr. Ralph de la Torre serves on the Board. Dr. de la Torre is also the Chairman, Chief Executive Officer and principal equity holder of Steward Health Care System, LLC. As a director of the Company, Dr. de la Torre receives compensation in the same manner as the Company’s other non-employee directors. As part of the Steward Acquisition, as described in Note 4, Acquisitions , the Company issued 783,333 shares of the Company's Class A Common Stock to the Seller Parties. In addition, the Company entered into a Transition Services Agreement (the "TSA") with Steward Health Care System, LLC. During the years ended December 31, 2023 and 2022 , the Company incurred TSA expenses of $ 1.5 million and $ 1.2 million, respectively, within corporate, general and administrative expenses. As of December 31, 2023 and 2022 , the Company had associated related party liabilities of $ 0.2 million. Additionally, as described in Note 4, Acquisitions , the Company was required to remit to the Seller Parties an amount equal to the value of the accounts receivable of Steward Value-Based Care attributable to dates of service between January 1, 2022 and the Steward Closing, partially offset for the cash already remitted of $ 35.5 million at transaction close. As of December 31, 2023 and 2022 , the Company had associated related party receivables , net, of $ 0.0 and related party liabilities and $ 0.5 million, respectively. As further described in Note 9, Stockholders' Equity , as of December 31, 2023 and 2022 , the Company recorded contingent earnout liability of $ 0 and $ 134.6 million, respectively. On June 30, 2023, the contingent consideration of $ 114.6 million was reclassified from contingent earnout liability into additional paid-in-capital. CAJ and Deerfield In November 2022, the Company entered into the Loan and Security Agreement, described in Note 8, Debt and Related Party Debt , whereby CAJ and Deerfield are the lenders. Mr. Carlos A. de Solo, a director of the Company and the Company’s President and Chief Executive Officer, Mr. Alberto de Solo, the Company’s Executive Vice President and Chief Operating Officer, and Mr. Joseph N. De Vera, the Company’s Senior Vice President and Legal Counsel, have interests in CAJ. Mr. Kevin Berg, who is on the Board, is a Senior Advisor with Deerfield. As a director of the Company, Mr. Berg receives compensation in the same manner as the Company’s other non-employee directors. Refer to Note 8, Debt and Related Party Debt , for updated information. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | NOTE 14. LEASES The Company has entered into operating and finance lease agreements for centers and office space expiring at various times through 2043 , inclusive of renewal options that the Company is reasonably certain to exercise. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. The following table presents the location of the finance lease right-of-use assets and lease liabilities in the Company’s consolidated balance sheets ( in thousands ): Consolidated Balance Sheet Location December 31, 2023 December 31, 2022 Finance lease right-of-use assets, net Property and equipment, net $ 18,552 $ — Current finance lease liabilities Current portion of third-party debt, net — — Long-term finance lease liabilities Long-term debt, net 19,612 — Lease costs were as follows ( in thousands ): Years Ended December 31, (in thousands) Statement of Operations Location 2023 2022 Operating lease cost Corporate, general and administrative $ 18,235 $ 13,769 Finance lease cost: Amortization of lease assets Depreciation and amortization 641 — Interest on lease liabilities Interest expense 1,729 — Variable lease cost Corporate, general and administrative 3,268 1,897 Short-term lease cost Corporate, general and administrative 1,239 1,145 Total lease cost $ 25,112 $ 16,810 As of December 31, 2023, maturities of operating and finance lease liabilities were as follows ( in thousands ): Year Operating Leases Finance Leases 2024 $ 12,217 $ 2,200 2025 15,702 2,499 2026 15,182 2,549 2027 14,255 2,625 2028 13,179 2,704 Thereafter 101,499 48,944 Total undiscounted lease obligations 172,034 61,521 Less: Present value discount ( 65,923 ) ( 41,909 ) Present value of lease liabilities $ 106,112 $ 19,612 Other information related to lease agreements was as follows: (in thousands) December 31, 2023 December 31, 2022 Weighted-average remaining lease term (years) Operating leases 11.7 11.0 Finance leases 19.3 — Weighted-average discount rate Operating leases 8.16 % 6.33 % Finance leases 13.46 % — Cash paid for amounts included in measurement of liabilities Operating cash flows for operating leases 12,605 — Operating cash flows for finance leases 1,310 — At December 31, 2023 , the Company was party to leases that have not yet commenced with aggregated estimated future lease payments of approximately $ 56.8 million, which are not included in the above tables. These leases relate to properties that are being constructed by the future lessors. These leases are expected to commence through 2025 , with initial lease terms ranging from 15 to 20 years. The Company's finance leases, and one of the operating leases, contain various covenants, that require the Company, among other things, to maintain minimum consolidated stockholder's equity of $ 100.0 million and minimum cash balance of $ 25.0 million. In addition, these leases are subject to provisions that provide for a cross default in the event any of covenant violations under the Company's Credit Agreement. Refer to Note 18, Subsequent Events , for further information regarding an event of default related to such leases that happened subsequent to December 31, 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15. INCOME TAXES The components of income tax benefit were as follows ( in thousands ): Years Ended December 31, 2023 2022 Current income tax benefit Federal $ — $ — State — — Total current income tax benefit — — Deferred income tax benefit Federal ( 600 ) ( 15,536 ) State ( 264 ) ( 4,006 ) Total deferred income tax benefit ( 863 ) ( 19,542 ) Total income tax benefit $ ( 863 ) $ ( 19,542 ) The reconciliation between the effective tax rate and the statutory tax rate was as follows: Years Ended December 31, 2023 2022 Federal statutory rate 21.0 % 21.0 % State statutory rate, net of federal benefit 2.6 % 7.7 % Transaction costs 0.0 % ( 2.2 %) Earnout liability adjustments 0.6 % 27.9 % Nondeductible amortization ( 11.5 %) ( 17.2 %) Other ( 0.2 %) ( 0.2 %) Change in valuation allowance ( 12.4 %) ( 2.9 %) Effective tax rate 0.1 % 34.1 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets and liabilities consisted of the following ( in thousands ): Years Ended December 31, 2023 2022 Deferred tax assets: Accrued expenses $ 4,405 $ 6,738 Derivative warrant liabilities 6 1,053 Goodwill and other intangibles, net 26,891 — Federal and state net operating carryforwards 52,875 24,184 Business expense limitation 22,944 11,682 Lease liabilities 33,242 27,033 Property and equipment 620 312 Total deferred tax assets 140,982 71,002 Less: Valuation allowances ( 108,508 ) ( 25,793 ) Total deferred tax assets, net 32,474 45,209 Deferred tax liabilities: Goodwill and other intangibles, net — ( 18,524 ) Prepaid expenses ( 12 ) ( 7 ) Right of use lease assets ( 33,789 ) ( 28,868 ) Total deferred tax liabilities ( 33,801 ) ( 47,399 ) Total deferred tax liability, net $ ( 1,327 ) $ ( 2,190 ) The application of GAAP requires us to evaluate the recoverability of our net deferred income tax assets, including those associated with net operating loss ("NOL") carryforwards, and establish a valuation allowance, if necessary, to reduce our deferred income tax asset to an amount that is more likely than not to be realizable. Considerable judgment and the use of estimates are required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance, we consider many factors, including: the nature and character of the deferred income tax assets and liabilities; taxable income in prior carryback years, if any; future reversals of existing temporary differences; the length of time carryovers can be utilized; and any tax planning strategies we would employ to avoid a tax benefit from expiring unused. We determined that it was more likely than not that the net deferred income tax asset would not be realized. As of December 31, 2023 and 2022, the deferred tax assets were fully offset by the valuation allowance, except for a portion attributable to a “naked credit” deferred tax liability. For the years ended December 31, 2023 and 2022 , the income tax valuation allowance increased by $ 82.7 million and decreased by $ 0.3 million, respectively. As of December 31, 2023 and 2022 , we had federal and state tax loss carryforwards of 199.8 million and 198.1 million, and $ 91.3 million and $ 90.7 million, respectively. Federal net operating losses of $ 9.0 million, generated prior to December 31, 2017, will expire in 2037 . Federal net operating losses generated after January 1, 2018, will have an indefinite carryforward period. We anticipate approximately $ 43.9 million in losses and $ 26.2 million in business expense limitation carried over from the Business Combination with IMC on June 8, 2021 will be subject to potential Section 382 limitations. As of December 31, 2023 and 2022 , we did no t have any uncertain tax positions. The Company files a federal income tax return and various state and local returns. As of December 31, 2023 , all tax years from 2017 remain open to examination by Internal Revenue Service and other taxing authorities. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16. COMMITMENTS AND CONTINGENCIES Compliance The health care industry is subject to numerous laws and regulations of federal, state, and local governments. These laws and regulations include, but are not limited to, matters such as licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with imposition of significant fines and penalties, as well as significant repayments for patient services billed. Compliance with these laws and regulations, specifically those related to the Medicare and Medicaid programs, can be subject to government review and interpretation, as well as regulatory actions unknown and not yet asserted at this time. Management believes that the Company is in substantial compliance with current laws and regulations. Litigation The Company is involved in various legal actions arising in the normal course of business. Management has not identified any legal actions during the years ended December 31, 2023 or 2022 that were deemed to be material. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | NOTE 17. VARIABLE INTEREST ENTITIES The Company has Administrative Service Agreements (the "ASAs") with Medical Care of NY, P.C., Medical Care of Tennessee, PLLC and Medical Care of Texas, PLLC (together, the "PCs"), which were established to employ healthcare providers to deliver healthcare services to patients in New York, Tennessee, and Texas, and with Care Optical, LLC ("Care Optical), which provides optometry services in the state of Florida. The Company concluded that it has variable interest in the PCs and Care Optical on the basis of its ASAs which provide for a management fee payable to the Company from the PCs and Care Optical in exchange for providing management and administrative services which creates risk and a potential return to the Company. The PCs' and Care Optical's equity at risk, as defined by GAAP, is insufficient to finance their activities without additional support, and therefore, the PCs and Care Optical are considered to be VIEs. In order to determine whether the Company has a controlling financial interest in the PCs and Care Optical, and, thus, is the PCs' and Care Optical's primary beneficiary, the Company considered whether it has (i) the power to direct the activities of PCs and Care Optical that most significantly impacts their economic performance and (ii) the obligation to absorb losses of the PCs and Care Optical or the right to receive benefits from the PCs and Care Optical that could potentially be significant to them. The Company concluded that the member and employees of the PCs and Care Optical have no individual power to direct activities of the PCs and Care Optical that most significantly impact their economic performance. Under the ASAs, the Company is responsible for providing services that impact the growth of the patient population of the PCs and Care Optical, the management of the respective population's healthcare needs, the provision of required healthcare services to those patients, and the PCs' and Care Optical's ability to receive revenue from health plans. In addition, the Company's variable interest in the PCs and Care Optical provides the Company with the right to receive benefits that could potentially be significant to them. The single members of the PCs and Care Optical are employees of the Company. Based on this analysis, the Company concluded that it is the primary beneficiary of the PCs and Care Optical and therefore consolidates the balance sheet, results of operations and cash flow of the PCs and Care Optical. Furthermore, as a direct result of nominal initial equity contributions by the single members of the PCs and Care Optical, the financial support CareMax provides to the PCs and Care Optical (e.g. loans) and the provisions of the arrangements described above, the interest held by the single member lacks economic substance and does not provide the member with the ability to participate in the residual profits or losses generated by the PCs and Care Optical. Therefore, all income and expenses recognized by the PCs and Care Optical are allocated to CareMax. The following tables summarize the financial position and operations of the PCs and Care Optical ( in thousands ): Years Ended December 31, 2023 2022 Total assets $ 1,200 $ 1,097 Total liabilities $ 9,896 $ 2,961 Years Ended December 31, 2023 2022 Revenues $ 2,254 $ 1,515 Operating expenses $ 7,027 $ 3,551 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18. SUBSEQUENT EVENTS On January 31, 2024, the Company completed a 1-for-30 Reverse Split further described in Note 1, Description of Business and Going Concern. The effects of the Reverse Split were retroactively reflected in these consolidated financial statements and notes thereto for all periods presented. In March 2024, the Company failed to make rent payments due pursuant to certain leases on centers that it generally does not intend to operate, which constitutes an event of default under the terms of the related lease agreements. Upon an event of default, remedies available to our landlords generally include, without limitation, terminating such lease agreement, repossessing and reletting the leased properties and requiring us to remain liable for all obligations under such lease agreement, including the difference between the rent under such lease agreement and the rent payable as a result of reletting the leased properties, or requiring us to pay the rent due for the balance of the term of such lease agreement, less proceeds from re-letting, if any. On March 15, 2024 (the “Third Amendment Effective Date”), we entered into a Waiver and Third Amendment to Credit Agreement (the “Third Amendment”) among us, certain of our subsidiaries, as guarantors, the lenders party thereto and Jefferies Finance LLC, as administrative agent and collateral agent. The Third Amendment amended the Credit Agreement to, among other things, (i) waive certain events of default under the Credit Agreement in the limited manner set forth therein through May 15, 2024 (the “Third Amendment Specified Period”), subject to an earlier termination of the waiver upon the occurrence of certain specified events, (ii) increase the applicable margin rate by 2.00 % during the Third Amendment Specified Period, which additional interest we may elect to capitalize as principal amount on the outstanding loans and (iii) modify certain covenants contained in the Credit Agreement, including, but not limited to, reducing the minimum liquidity requirement to $ 10 million during the Third Amendment Specified Period and providing for additional reporting to the lenders. See Note 1, Basis of Presentation and Significant Accounting Policies and Going Concern , to the consolidated financial statements that appear elsewhere in this Annual Report on Form 10-K for details regarding our going concern consideration. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions to Form 10-K and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. Certain amounts in the prior year's consolidated financial statements have been reclassified to conform to the current year presentation. |
Variable Interest Entities | Variable Interest Entities The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a variable interest entity ("VIE"). These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. The Company considers itself to control an entity if it is the majority owner of or has voting control over such entity. The Company also assesses control through means other than voting rights and determines which business entity is the primary beneficiary of the VIE. The Company consolidates VIEs when it is determined that the Company is the primary beneficiary of the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively. Refer to Note 17, Variable Interest Entities , for additional information. |
Emerging Growth Company | Emerging Growth Company Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to nonemerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Additionally, as an emerging growth company, the Company is exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and the Company’s independent registered public accounting firm is not required to evaluate and report on the effectiveness of internal control over financial reporting. |
Segment Financial Information | Segment Financial Information The Company’s chief operating decision maker (“CODM” ), who is the Company's Chief Executive Officer, regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company identifies operating segments based on this review by its CODM and operates in and reports as a single operating segment, which is to care for its patients’ needs. For the periods presented, all of the Company’s long-lived assets were located in the United States, and all revenue was earned in the United States. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas where significant estimates are used in the accompanying financial statements include, but are not limited to, revenues and related receivables from risk adjustments, costs of our services and related liabilities, purchase price allocations, including fair value estimates of intangibles and contingent consideration, the valuation and related impairment testing of long-lived assets, including goodwill and intangible assets, the valuation of derivative warrant liabilities, and the estimated useful lives of fixed assets and intangible assets, including internally developed software. Actual results could differ from those estimates. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting, in accordance with ASC 805, Business Combinations , which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date. Any excess of the fair value of purchase consideration over the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The fair values of the assets acquired and liabilities assumed are determined based upon the valuation of the acquired business and involves management making significant estimates and assumptions. The Company's acquisitions, at times, have included earn-out provisions, also referred to as contingent consideration, which provide for additional consideration to be paid to the seller if certain conditions are met. These provisions are recorded as liabilities or as equity at fair value on the acquisition date and re-assessed for balance sheet classification and re-measured at fair value each reporting period until they expire or settle. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of currency on hand with banks and financial institutions and investments in money market funds. The Company considers all short-term, highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company’s cash balances with individual banking institutions are in excess of federally insured limits from time to time. The Company believes it is not exposed to any significant concentrations of credit risk from these financial instruments. The Company has not experienced any losses on its deposits of cash and cash equivalents. |
Medicare and Medicaid Risk-Based Revenue | Medicare and Medicaid Risk-Based Revenue Medicare and Medicaid Risk-Based Revenue consists primarily of fees for medical services provided under capitated arrangements directly with various Medicare Advantage and Medicaid managed care payors. The Company receives a fixed fee per patient under what is typically known as a “risk contract.” Risk contracting, or full risk capitation, refers to a model in which the Company receives from the third-party payor a fixed payment of at-risk premium less an administrative charge for reporting on enrollees on a per patient per month basis (“PMPM” payment) for a defined patient population, and the Company is then responsible for providing healthcare services required by that patient population. PMPM fees can fluctuate throughout the contract based on the health status (acuity) of each individual enrollee. In certain contracts, PMPM fees also include “risk adjustments” for items such as performance incentives, performance guarantees and risk shares. The capitated revenues are recognized based on the estimated PMPM fees earned net of projected performance incentives, performance guarantees, risk shares and rebates because we are able to reasonably estimate the ultimate PMPM payment of these contracts. We recognize revenue in the month in which eligible members are entitled to receive healthcare benefits. Subsequent changes in PMPM fees and the amount of revenue to be recognized are reflected through subsequent period adjustments to properly recognize the ultimate capitation amount. For enrolled members in which we control healthcare services, we act as the principal and the gross fees under these contracts are reported as revenue and the cost of third-party medical care is included in external provider costs. The Company generates management services organization (“MSO”) revenue for services it renders to independent physician associations (the “IPAs”) under administrative service contracts. The MSO revenue is recognized in the month in which the eligible members are entitled to receive healthcare benefits during the contract term. For MSO contracts in which the Company acts as a principal in coordinating and controlling the range of services provided (other than clinical decisions) and, thus, accepts full financial risk for members attributed to the IPA and is therefore responsible for the cost of all healthcare services required by those members, the fees are recognized on a gross basis, consistent with ASC 606, Revenue From Contracts with Customers ("ASC 606"). The related revenue is recorded in Medicare risk-based or Medicaid risk-based revenue. Government Value-Based Care Revenue Government Value-Based Care Revenue consists primarily of revenue derived from the Medicare Shared Savings Program (“MSSP”). The MSSP is sponsored by the Center for Medicare and Medicaid Services (“CMS”). The MSSP allows accountable care organizations (“ACOs”) to receive a share of cost savings they generate in connection with the managing of costs and quality of medical services rendered to Medicare beneficiaries. Payments to ACO participants, if any, are calculated annually and paid once a year by CMS on cost savings generated by the ACO participant relative to the ACO participants’ CMS benchmark. Under the MSSP, an ACO must meet certain qualifications to receive the full amount of its allocable cost savings or they either receive nothing or are responsible for shared losses. The MSSP rules require CMS to develop a benchmark for savings to be achieved by each ACO if the ACO is to receive shared savings. An ACO that meets the MSSP’s quality performance standards will be eligible to receive a share of the savings to the extent its assigned beneficiary medical expenditures are below the medical expenditure benchmark provided by CMS. A Minimum Savings Rate (“MSR”) must be achieved before the ACO can receive a share of the savings. Once the MSR is surpassed, all the savings below the benchmark provided by CMS will be shared at a certain percentage with the ACO. The MSR varies depending on the number of beneficiaries assigned to the ACO. The promised services under the Company's MSSP arrangements are to provide the population health services to beneficiaries for a given performance period. As part of these arrangements, the Company stands ready to provide the population with health services throughout the performance period. The Company estimates the variable consideration that constitutes the transaction price of these arrangements by utilizing third-party data and historical experience. As the Company’s performance obligation is met, revenue is recorded over time using its estimation methods and consideration is made, to the extent possible, that it is probable that a significant reversal will not occur once any uncertainty associated with the variable consideration is subsequently resolved. Since the Company has determined it only has one performance obligation under each of these arrangements, it allocates the full transaction price towards each arrangement’s individual performance obligation. From time to time, but at least annually, we assess our estimates with an independent actuarial expert to ensure our estimates are reasonable given the data available to us at the time the estimates are made. Government Value-Based Care Revenue is recognized on a net basis, because the Company does not control the range of services provided and, thus, accepts partial financial risk. Other Revenue Other Revenue primarily represents partial and no risk capitation, MSO and pharmacy revenue. Capitation revenue represents a fixed amount of money PMPM paid in advance for the delivery of primary care services only, whereby the Company is not liable for medical costs in excess of the fixed payment. Capitated revenues are typically prepaid monthly to the Company based on the number of patients selecting us as their primary care provider. Our capitated rates are fixed, contractual rates. Incentive payments for Healthcare Effectiveness Data and Information Set (“HEDIS”) and any services paid on a fee for service basis by a health plan are also included in other revenue. Other revenue also includes ancillary fees earned under contracts with certain payors for the provision of certain care coordination and other care management services. These services are provided to patients covered by these payors regardless of whether those patients receive their care from our affiliated medical groups. Revenue for primary care services for patients in a partial risk or upside-only contracts is reported in other revenue. For MSO contracts in which the Company does not control the range of services provided and, thus, accepts partial or no financial risk for members attributed to the IPA, the revenue is recognized on a net basis, consistent with ASC 606, and is recorded in Other revenue. |
External Provider Costs | External Provider Costs External Provider Costs represents cost of care for our at-risk patients and for third-party healthcare service providers that provide medical care to our patients for which we are contractually obligated to pay (through our full-risk capitation arrangements). The estimated reserve for a liability for unpaid claims is included in "Accounts receivable, net" in the consolidated balance sheets. Actual claims expense will differ from the estimated liability due to differences in estimated and actual member utilization of health care services, the amount of charges and other factors. From time to time, but at least annually, we assess our estimates with an independent actuarial expert to ensure our estimates represent the best, most reasonable estimate given the data available to us at the time the estimates are made. Certain third-party payor contracts include a Medicare Part D payment related to pharmacy claims, which is subject to risk sharing through accepted risk corridor provisions. Under certain agreements the fund risk allocation is established whereby we, as the contracted provider, receive only a portion of the risk and the associated surplus or deficit. We estimate and recognize an adjustment to medical expenses for Part D claims related to these risk corridor provisions based upon pharmacy claims experience to date, as if the annual risk contract were to terminate at the end of the reporting period. External provider costs are included in “Accounts Receivable, net” or “other assets” in the consolidated balance sheets, based on the expected collectability time from financial statement date. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at the amounts the Company deems collectible, which are expected to be collected within twelve months or less. Accordingly, an allowance is provided based on credit losses expected over the contractual term. This allowance is netted against the receivable balance with the loss being recognized within general and administrative expenses in the consolidated statements of operations. Accounts receivables are written off or reserved for when they are deemed uncollectible. As of December 31, 2023 and 2022 , the Company's provision for credit losses was $ 3.1 million and $ 1.2 million, respectively. Accounts receivable include MRA receivables which are accrued and estimated based on the health status (acuity) and demographic characteristics of members. These estimates are continually evaluated and adjusted by management based upon our historical experience and other factors. Amounts are only included as MRA receivables to the extent it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. |
Risk Settlement Liabilities | Risk Settlement Liabilities Risk settlement liabilities represents net accruals from health plan agreements, for which the Company is financially responsible under its at-risk revenue arrangements, and accruals for payments to be made to providers as distributions pursuant to service agreements. These liabilities are expected to be paid within twelve months or less. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: • Level 1 - defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. • Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. • Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
Derivative Instruments | Derivative Instruments We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480, Distinguishing Liabilities from Equity , and ASC 815-15, Derivatives and Hedging - Embedded Derivatives. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company issued common stock warrants in connection with our initial public offering and private placements, which are recognized as derivative liabilities in accordance with ASC 815-40, Contracts in Entity's Own Equity . Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Private Placement warrants issued has been estimated using Monte Carlo simulations at each measurement date. |
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired. We test goodwill for impairment at least annually on December 31 st or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale, disposition of a significant portion of the business or other factors. ASC 350, Intangibles—Goodwill and Other , allows entities to first use a qualitative approach to test goodwill for impairment by determining whether it is more likely than not (a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying value. If the qualitative assessment supports that it is more likely than not that the fair value of the asset exceeds its carrying value, a quantitative impairment test is not required. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying value, the Company will perform the quantitative goodwill impairment test, in which we compare the fair value of the reporting unit, determined using an income approach based on the present value of expected future cash flows, a market approach, or combination of both, given each assessment period’s specific facts and circumstances, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, then goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. Goodwill impairment testing involves judgment, including the identification of reporting units, qualitative evaluation of facts and circumstances to determine if it is more likely than not that an impairment exists, and, if necessary, the estimation of the fair value of the applicable reporting unit. During the years ended December 31, 2023 and 2022, we performed impairment testing and recognized goodwill impairment charges of $ 547.2 million and $ 70.0 million, respectively. Because our total shareholders’ equity exceeded our market capitalization at each goodwill impairment testing date, we estimated the fair value of our single reporting unit primarily on the basis of the Company's market capitalization after considering reasonable control premiums which could be expected in transactions with third-party market participants. As a result, the goodwill impairments in each period were primarily driven by the reduction of the market value of our stock price. The Company does not have indefinite-lived intangibles. Our definite-lived intangibles primarily consist of risk-based contracts and provider networks. Risk-based contracts and provider networks represent the estimated values of customer relationships or provider networks, respectively, of acquired businesses and have definite lives. We amortize our intangibles on a straight-line basis over their estimated useful lives ranging from two to eleven years , except for certain risk contracts, which are amortized using the accelerated method. The determination of fair values and useful lives requires us to make significant estimates and assumptions. These estimates include, but are not limited to, future expected cash flows from acquired capitation arrangements from a market participant perspective, patient attrition rates, discount rates, and costs and years to replicate acquired provider networks. Refer to Note 6, Goodwill and Other Intangible Assets , for further information. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost, net of accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Depreciation is calculated using a straight-line method over the estimated useful life of each class of depreciable asset. Leasehold improvements are depreciated over the lesser of the length of the related lease plus any expected renewal options or the estimated life of the assets. A summary of estimated useful lives is as follows: Leasehold Improvements Lesser of lease term or asset life Assets under finance leases Lease term Furniture and Equipment 5 to 7 Years Vehicles 5 Years Software 1 to 5 Years |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets, such as property and equipment, right-of-use assets, prepaid warrants and definite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the use and eventual disposition of the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value. The evaluation of long-lived assets is performed at the lowest level of identifiable cash flows. The determination of the fair value of the asset group requires management to estimate a number of factors including anticipated future undiscounted cash flows. Although we believe these estimates are reasonable, actual results could differ from those estimates due to uncertainty in the estimates being used. |
Debt | Debt The Company records debt in the consolidated balance sheets at carrying value, net of unamortized discounts and debt issuance costs. The Company incurs specific incremental costs, other than those paid to lenders, in connection with the issuance of the Company’s debt instruments. Those deferred financing costs include loan origination costs and other direct costs payable to third parties and are recorded as a direct deduction from the carrying value of the associated debt liability in the consolidated balance sheets when the debt is drawn. The Company amortizes the deferred financing costs as interest expense over the term of the related debt using the effective interest method in the consolidated statements of operations. |
Leases | Leases The Company leases operating facilities, office space, vehicles and IT equipment. These leases generally have initial lease terms from two years to twenty years , with options to extend , which are included in the lease term when it is reasonably certain that the Company will exercise that option. Our lease payments often include annual fixed rent escalators ranging between 2 % and 3 % or a consumer price index. Variable lease expense represents the payment of real estate taxes, insurance, and common area maintenance. The payment of variable real estate taxes, insurance and common area maintenance is generally based on the Company’s pro-rata share of the total property, a portion of which is leased by the Company. The Company determines if an arrangement is a lease at inception and evaluates the lease classification (i.e., operating or finance) at that time. Lease arrangements with an initial term of 12 months or less are considered short-term leases. The Company recognizes lease expense for short-term leases on a straight-line basis over the term of the lease within corporate, general and administrative expenses. Finance leases are generally those leases that allow the Company to substantially utilize or pay for the entire asset over its estimated life. Finance lease right-of-use assets are recorded in Property and equipment, net. All other leases are categorized as operating leases. Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly secured borrowings available to the Company. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from Other assets upon lease commencement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. Costs associated with operating lease assets are recognized on a straight-line basis over the term of the lease within corporate, general and administrative expenses. Finance lease assets are amortized on a straight-line basis over the lease term within corporate, general and administrative expenses, except for the interest component, which is included in interest expense and is recognized using the effective interest method over the lease term. The Company uses its incremental borrowing rate on the commencement date for determining the present value of lease payments. The Company considers the likelihood of exercising options to extend or terminate the lease when determining the lease term. In addition, where applicable, the Company includes rent escalation provisions into the calculation of the expected lease payments. The Company has lease agreements with lease and non-lease components. The Company has elected the package of practical expedients, which, among other things, allows us to account for the lease and non-lease components as a single lease component for all leases. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes ("ASC 740"). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2023 and 2022 . |
Stock-Based Compensation Expense | Stock-Based Compensation Expense The Company periodically issues Restricted Stock Units ("RSUs"), Performance Share Units ("PSUs"), and Stock Options ("Options") as share-based compensation to employees and non-employees in non-capital raising transactions for services. The Company accounts for such grants issued and vesting based on FASB ASC 718, Compensation – Stock Compensation ("ASC 718"), whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 718. Measurement of share-based payment transactions with non-employees are recognized as compensation expense in the financial statements based on their fair values at grant date. That expense is recognized over the period during which a non-employee or consultant is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The fair value of the Company’s Options and PSUs are estimated using the Black-Scholes-Merton Option Pricing model and a Monte Carlo simulation, respectively, which use certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or stock, and future dividends. The assumptions used in the Black-Scholes Merton Option Pricing model and Monte Carlo Simulation could materially affect compensation expense recorded in future periods. The assumptions used in the model and related impact are discussed in Note 10, Stock-Based Compensation . The fair value of the Company’s RSUs are estimated using the market value of the underlying common stock on the grant date. The Company has elected to account for any forfeitures in the period that they occur. Any awards modified are accounted for in the periods of the modification and in accordance with ASC 718. The Company recognizes the fair value of stock-based compensation within its statements of operations. |
Net Loss Per Share | Net Loss Per Share Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company follows the provisions of ASC 260, Earnings Per Share, for determining whether contingently issuable shares are included for purposes of calculating net income (loss) per share and determining whether instruments granted in equity-based compensation arrangements are participating securities for purposes of calculating net income (loss) per share. Refer to Note 11, Net Income (Loss) Per Share. |
Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company elected to defer compliance with ASC Topic 842, Leases ("ASC 842"), consistent with the requirements for a private company due to the Company’s status as an emerging growth company and the provisions of the JOBS Act. Accordingly, the adoption of ASC 842 was applicable for the Company for the annual reporting period beginning January 1, 2022 , and interim reporting periods within the annual reporting period beginning after December 15, 2022. The Company elected to adopt practical expedients which permit it to not reassess its prior conclusions about lease identification, lease classification and initial direct costs under the new standard. The Company elected to combine lease and non-lease components for all lease contracts and also elected not to recognize right-of-use assets and lease liabilities for leases with terms of 12 months or less. The Company did not elect the hindsight practical expedient, which would have allowed the Company to revisit key assumptions, such as lease term, which were made when the lease was originally entered. We implemented ASC 842 effective January 1, 2022, using the modified retrospective approach, which allows entities to either apply the new lease standard to the beginning of the earliest period presented or only to the consolidated financial statements in the period of adoption without restating prior periods. We elected to apply the new guidance at the date of the adoption, January 1, 2022, without restating prior periods. The financial effect of the adoption was an increase of $ 73.7 million to the right-of-use asset and corresponding lease liabilities to the Company’s balance sheet as of January 1, 2022. Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The guidance allows for either full retrospective adoption or modified retrospective adoption. The guidance is effective for the Company in the first quarter of fiscal year 2025 and early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures . This guidance requires annual and interim disclosure of significant segment expenses that are provided to the CODM as well as interim disclosures for all reportable segment’s profit or loss and assets. This guidance also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. This guidance is expected to improve financial reporting by providing additional information about a public company’s significant segment expenses and more timely and detailed segment information reporting throughout the fiscal period. The ASU is effective for the Company’s fiscal year beginning January 1, 2025. Early adoption is permitted. The Company does not expect adoption of ASU 2023-07 will have a significant impact on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The ASU is effective for the Company’s fiscal year beginning January 1, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company does not expect adoption of ASU 2023-09 will have a significant impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Property and Equipment | A summary of estimated useful lives is as follows: Leasehold Improvements Lesser of lease term or asset life Assets under finance leases Lease term Furniture and Equipment 5 to 7 Years Vehicles 5 Years Software 1 to 5 Years |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable Net, and Risk Settlement Liabilities | Composition of the Company's accounts receivable, net, and risk settlement liabilities was as follows: As of December 31, 2023 2022 Risk-based accounts receivable $ 170,397 $ 267,971 IBNR claims liability ( 58,027 ) ( 121,823 ) Other receivables 2,384 5,595 Accounts receivable, net $ 114,754 $ 151,743 As of December 31, 2023 2022 Risk-based accounts receivable (liability) $ 381 $ ( 5,993 ) IBNR claims liability ( 37,401 ) — Distribution liabilities ( 5,583 ) ( 8,178 ) Risk settlement liabilities $ ( 42,602 ) $ ( 14,171 ) |
Summary of Changes Recognized in Prior Year Estimates | The Company re-evaluated key assumptions and estimates and based on this analysis, the Company identified changes in estimates to revenue, external provider costs, short-term and long-term accounts receivable, net, and risk settlement liabilities. Accordingly, the Company recognized the following changes in prior year estimates in each respective period ( in thousands ): Years Ended December 31, Increase (decrease) 2023 2022 Revenue $ ( 42,934 ) $ 9,046 External provider costs 900 9,662 Short-term and long-term accounts receivable, net ( 34,542 ) ( 616 ) Risk settlement liabilities 9,292 — |
Schedule of Revenues and Accounts Receivable Balances for Payors Comprising 10% or More of Revenue | Composition of the Company's revenues and accounts receivable balances for the payors comprising 10% or more of revenue was as follows (n/a - indicates balance or activity that is less than 10%): Revenue Years Ended December 31, 2023 2022 Payor A 23 % 29 % Payor B n/a 18 % Payor C 21 % 18 % Payor D 13 % 14 % Payor E 15 % 14 % Short-Term and Long-Term Accounts Receivable, net December 31, 2023 December 31, 2022 Payor A 10 % 13 % Payor B 10 % 11 % Payor C n/a 13 % Payor D n/a 13 % Payor E n/a n/a |
Acquisitions (Tables)
Acquisitions (Tables) - Steward Acquisition | 12 Months Ended |
Dec. 31, 2023 | |
Business Acquisition [Line Items] | |
Summary of Purchase Consideration | The following summarizes the consideration transferred at the Steward Closing ( in thousands ): Cash consideration $ 25,000 Initial Share Consideration (1) 134,420 Earnout Share Consideration (2) 212,355 Other consideration, net (3) 27,219 Total Steward Acquisition consideration $ 398,994 (1) Represents issuance of 0.8 million shares of Class A Common Stock of the Company using the closing price as of the date of the Steward Closing of $ 171.6 per share. (2) Calculated as the 1.3 million shares of Class A Common Stock the Company estimated that it will be obligated to issue to the Seller Parties upon achievement of certain milestones as Earnout Share Consideration, multiplied by CareMax's closing stock price as of the date of the Steward Closing of $ 171.6 per share and the estimated probability of payout of 99 %. Refer to Note 9, Stockholders' Equity , for additional information. (3) Represents funding of the Financed Net Pre-Closing Medicare AR of $ 35.5 million, offset by the Sellers' reimbursement to the Company of the interest and original issue discount of $ 6.8 million related to the Loan and Security Agreement (as defined in Note 8, Debt and Related Party Debt ) and by non-cash purchase price adjustment of $ 1.5 million. |
Summary of Initial and Final Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the initial and final fair values of the assets acquired and liabilities assumed at Steward Closing, with respective adjustments identified during the measurement period. At Steward Closing (preliminary) Measurement Period Adjustments At Steward Closing (final) Accounts receivable $ 43,060 $ ( 9,069 ) $ 33,991 Other working capital adjustments ( 21,584 ) 518 ( 21,066 ) Distribution liabilities ( 7,032 ) 5,153 ( 1,879 ) Intangible asset - Risk contracts 37,500 — 37,500 Intangible asset - Provider network 42,900 — 42,900 Net assets acquired 94,844 ( 3,397 ) 91,446 Purchase consideration 398,994 — 398,994 Goodwill $ 304,150 $ 3,397 $ 307,547 |
Summary of Unaudited Pro-Forma Information | The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2022 or of results that may occur in the future. ( in thousands ) Year Ended December 31, 2022 Revenue $ 669,319 Net loss ( 34,315 ) |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The following table shows changes in the carrying amount of goodwill ( in thousands ): Carrying Amount Balance at December 31, 2021 $ 464,566 Goodwill acquired 307,062 Measurement period adjustments ( 985 ) Impairment ( 70,000 ) Balance at December 31, 2022 700,643 Measurement period adjustments 3,397 Impairment ( 547,200 ) Balance at December 31, 2023 $ 156,841 |
Summary of Gross Carrying Amount and Accumulated Amortization of Intangible Assets by Major Class | The following tables summarize the gross carrying amounts, accumulated amortization and net carrying amounts of intangible assets by major class ( in thousands ): Gross Carrying Accumulated Net Carrying Weighted-Average December 31, 2023 Risk contracts $ 102,070 $ ( 39,394 ) $ 62,676 8 Provider network 42,900 ( 6,980 ) 35,920 7 Non-compete agreements 4,170 ( 2,343 ) 1,827 5 Trademarks 1,862 ( 1,491 ) 371 2 Other 693 ( 244 ) 449 5 Total $ 151,695 $ ( 50,452 ) $ 101,243 Gross Carrying Accumulated Net Carrying Weighted-Average December 31, 2022 Risk contracts $ 102,070 $ ( 24,217 ) $ 77,853 8 Provider network 42,900 ( 851 ) 42,049 7 Non-compete agreements 4,170 ( 1,518 ) 2,652 5 Trademarks 1,862 ( 1,352 ) 510 2 Other 693 ( 171 ) 522 5 Total $ 151,695 $ ( 28,109 ) $ 123,585 |
Schedule of Estimated Amortization for Intangible Assets | The estimated amortization for the intangible assets for each of the succeeding five years and thereafter was as follows ( in thousands ): Year Amount 2024 $ 20,613 2025 19,062 2026 17,641 2027 14,786 2028 11,854 Thereafter 17,287 Total $ 101,243 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment at December 31, 2023 and 2022 consisted of the following ( in thousands ): December 31, 2023 December 31, 2022 Leasehold improvements $ 19,200 $ 10,661 Vehicles 2,892 3,743 Furniture and equipment 12,765 8,871 Software 3,865 3,725 Assets under finance leases (1) 18,552 — Construction in progress 5,074 4,621 Total 62,349 31,620 Less: Accumulated depreciation and amortization (2) ( 14,431 ) ( 10,614 ) Total Property and equipment, net $ 47,918 $ 21,006 (1) Refer to Note 14, Leases , for information. (2) Includes accumulated amortization related to finance lease right-of-use assets of $ 0.6 million and $ 0 as of December 31, 2023 and 2022, respectively. |
Debt and Related Party Debt (Ta
Debt and Related Party Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Debt | As of December 31, 2023 and 2022, debt consisted of the following ( in thousands ): December 31, 2023 December 31, 2022 Indebtedness under the Credit Agreement $ 377,340 $ 240,277 Indebtedness under the Loan and Security Agreement - Related party debt — 35,510 Finance lease obligations, interest averaging 13.5 % and maturing at various dates through 2043 as of December 31, 2023 ( no ne as of December 31, 2022). 19,612 — Other 2,220 1,657 Less: Unamortized discounts and debt issuance costs ( 13,349 ) ( 16,188 ) 385,823 261,256 Less: Current portion ( 364,380 ) ( 30,530 ) Long-term portion $ 21,443 $ 230,725 |
Summary of Future Maturities of Debt Outstanding | Future maturities of the indebtedness outstanding at December 31, 2023 were as follows ( in thousands ): Year Amount 2024 $ 389 2025 3,487 2026 4,080 2027 370,721 2028 730 Thereafter 153 Total $ 379,560 In the table above, the future maturities are presented consistent with the contractual terms. As of December 31, 2023, we were not in compliance with a financial covenant under our Credit Agreement, but received a limited waiver from the lenders thereunder. A breach of any of the covenants under the Credit Agreement or the occurrence of other events specified in the Credit Agreement could result in an event of default under the same and give rise to the lenders’ right to accelerate our debt obligations thereunder and pursue other remedial actions under such agreement and/or trigger a cross default under our other long-term leases. Accordingly, as of December 31, 2023, the full balance of the outstanding indebtedness related to the Credit Agreement was classified as a current liability in our consolidated balance sheet. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of RSUs Activity | The following table summarizes the RSU activity for the year ended December 31, 2023: Number of shares Weighted-Average Grant Date Fair Value (per share) Outstanding as of December 31, 2022 89,107 $ 243.30 Granted 84,079 111.00 Vested ( 34,189 ) ( 242.66 ) Forfeited ( 27,028 ) ( 173.10 ) Outstanding as of December 31, 2023 111,969 $ 162.60 |
Summary of PSUs Activity | he following table summarizes the PSU activity for the year ended December 31, 2023: Number of shares Weighted-Average Grant Date Fair Value (per share) Outstanding as of December 31, 2022 6,972 $ 171.30 Granted 10,267 111.90 Vested ( 2,188 ) ( 181.50 ) Forfeited — — Outstanding as of December 31, 2023 15,050 $ 129.36 |
Assumptions Used to Calculate Fair Value of PSUs | The fair-value of the PSUs was determined on the respective grant dates using a Monte Carlo model with the following assumptions: Years Ended December 31, 2023 2022 Underlying stock price $ 111.60 $ 250.20 Performance Period (years) 2.0 2.0 Risk-free interest rate 4.5 % 2.4 % Volatility 70.8 % 55.0 % Dividend yield 0.0 % 0.0 % |
Summary of Options Activity | The following table summarizes the options activity for the year ended December 31, 2023: Number of shares Weighted-Average Grant Date Fair Value (per share) Outstanding as of December 31, 2022 12,452 $ 181.80 Granted 17,200 87.90 Vested ( 4,640 ) ( 180.98 ) Forfeited — — Outstanding as of December 31, 2023 25,012 $ 117.34 |
Assumptions Used to Calculate Fair Value of Options | The fair-value of options was determined on the respective grant dates using a Black-Scholes-Merton Option Pricing model with the following assumptions: Years Ended December 31, 2023 2022 Underlying stock price $ 111.60 $ 250.20 Performance Period (years) 10.0 10.0 Risk-free interest rate 3.7 % 2.4 % Volatility 71.5 % 65.5 % Dividend yield 0.0 % 0.0 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Basic and Diluted Net Loss Per Share | The following table sets forth the calculation of basic and diluted net loss per share for the periods indicated based on the weighted-average number of common share outstanding ( in thousands, except share and per share data ): Years Ended December 31, 2023 2022 Net loss attributable to CareMax, Inc. Class A common stockholders $ ( 683,348 ) $ ( 37,796 ) Weighted-average basic shares outstanding 3,727,725 3,026,644 Weighted-average diluted shares outstanding 3,727,725 3,026,644 Net loss per share Basic $ ( 183.31 ) $ ( 12.49 ) Diluted $ ( 183.31 ) $ ( 12.49 ) |
Potentially Dilutive Outstanding Securities Excluded from Computation of Diluted Net Loss Per Share | The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive or because issuance of shares underlying such securities is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period: Years Ended December 31, 2023 2022 Series A and Series B Warrants 266,667 266,667 Public and Private Placement Warrants 193,055 193,055 Contingent consideration 1,276,667 1,356,667 Unvested restricted stock units 120,726 89,107 Unvested performance stock units (assumes 100 % target payout) 13,578 6,972 Unvested options 21,872 12,452 Total 1,892,564 1,924,920 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value December 31, 2023 Quoted Prices Significant other Significant other Description Carrying Value (Level 1) (Level 2) (Level 3) Derivative warrant liabilities - Public Warrants $ 22 $ 22 $ — $ — Derivative warrant liabilities - Private Placement Warrants 1 — — 1 Total liabilities measured at fair value $ 22 $ 22 $ — $ 1 Fair Value December 31, 2022 Quoted Prices Significant other Significant other Description Carrying Value (Level 1) (Level 2) (Level 3) Derivative warrant liabilities - Public Warrants $ 1,495 $ 1,495 $ — $ — Derivative warrant liabilities - Private Placement Warrants 2,479 — — 2,479 Contingent earnout liability 134,561 — — 134,561 Total liabilities measured at fair value $ 138,535 $ 1,495 $ — $ 137,040 Fair value of Public Warrants is measured using the listed market price of such warrants. Fair value of the Private Placement Warrants is estimated using a Monte Carlo simulation model at each measurement date. Inherent in a Monte Carlo simulation are assumptions related to expected stock price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. During the year ended December 31, 2023 , the Company recognized a benefit resulting from a decrease in the fair value of the derivative warrant liabilities of $ 4.0 million (a loss of $ 4.4 million during the year ended December 31, 2022). As of December 31, 2022 , fair value of contingent earnout liability was calculated using 1.3 million shares, which will be issuable to the seller of Steward Value-Based Care upon achievement of certain performance metrics, the closing price of the Company's Class A Common Stock of $ 109.5 per share, and a 99 % probability of payout. On June 30, 2023, fair value of the contingent earnout consideration was reclassified from liabilities into additional paid-in-capital. Refer to Note 9, Stockholders' Equit y, for further information. Transfers between level 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the years ended December 31, 2023 or 2022. Activity of the Level 3 liabilities measured at fair value was as follows (in thousands): |
Schedule of Activity of the Liabilities Measured at Fair Value | Balance as of December 31, 2022 $ 137,040 Change in fair value of derivative warrant liabilities ( 2,479 ) Change in fair value of contingent earnout liability ( 19,916 ) Reclassification of contingent earnout consideration previously liability classified ( 114,645 ) Balance as of December 31, 2023 $ 1 |
Schedule of Measured at Fair Value on Nonrecurring Basis | Financial Instruments that are not Measured at Fair Value on a Recurring Basis December 31, 2023 Fair Value Carrying Value Quoted Prices Significant other Significant other (in thousands) (Level 1) (Level 2) (Level 3) Liabilities Fixed rate debt (a) $ 913 $ — $ — $ 747 Floating rate debt (a) 377,340 — — 375,240 Total $ 378,253 $ — $ — $ 375,987 Fair Value December 31, 2022 Carrying Value Quoted Prices Significant other Significant other (in thousands) (Level 1) (Level 2) (Level 3) Liabilities Fixed rate debt (a) $ 36,498 $ — $ — $ 32,820 Floating rate debt (a) 240,277 — — 240,280 Total $ 276,775 $ — $ — $ 273,100 (a) The debt amounts above do not include the impact of debt issuance costs or discounts. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Location of Finance Lease Right-of-use Assets and Lease Liabilities in Company's Consolidated Balance Sheets | The following table presents the location of the finance lease right-of-use assets and lease liabilities in the Company’s consolidated balance sheets ( in thousands ): Consolidated Balance Sheet Location December 31, 2023 December 31, 2022 Finance lease right-of-use assets, net Property and equipment, net $ 18,552 $ — Current finance lease liabilities Current portion of third-party debt, net — — Long-term finance lease liabilities Long-term debt, net 19,612 — |
Schedule of Lease Costs | Lease costs were as follows ( in thousands ): Years Ended December 31, (in thousands) Statement of Operations Location 2023 2022 Operating lease cost Corporate, general and administrative $ 18,235 $ 13,769 Finance lease cost: Amortization of lease assets Depreciation and amortization 641 — Interest on lease liabilities Interest expense 1,729 — Variable lease cost Corporate, general and administrative 3,268 1,897 Short-term lease cost Corporate, general and administrative 1,239 1,145 Total lease cost $ 25,112 $ 16,810 |
Schedule of Maturities of Operating and Finance Lease Liabilities | As of December 31, 2023, maturities of operating and finance lease liabilities were as follows ( in thousands ): Year Operating Leases Finance Leases 2024 $ 12,217 $ 2,200 2025 15,702 2,499 2026 15,182 2,549 2027 14,255 2,625 2028 13,179 2,704 Thereafter 101,499 48,944 Total undiscounted lease obligations 172,034 61,521 Less: Present value discount ( 65,923 ) ( 41,909 ) Present value of lease liabilities $ 106,112 $ 19,612 |
Schedule of Other Information Related to Lease Agreements | Other information related to lease agreements was as follows: (in thousands) December 31, 2023 December 31, 2022 Weighted-average remaining lease term (years) Operating leases 11.7 11.0 Finance leases 19.3 — Weighted-average discount rate Operating leases 8.16 % 6.33 % Finance leases 13.46 % — Cash paid for amounts included in measurement of liabilities Operating cash flows for operating leases 12,605 — Operating cash flows for finance leases 1,310 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Benefit | The components of income tax benefit were as follows ( in thousands ): Years Ended December 31, 2023 2022 Current income tax benefit Federal $ — $ — State — — Total current income tax benefit — — Deferred income tax benefit Federal ( 600 ) ( 15,536 ) State ( 264 ) ( 4,006 ) Total deferred income tax benefit ( 863 ) ( 19,542 ) Total income tax benefit $ ( 863 ) $ ( 19,542 ) |
Summary of Reconciliation Between Effective Tax Rate | The reconciliation between the effective tax rate and the statutory tax rate was as follows: Years Ended December 31, 2023 2022 Federal statutory rate 21.0 % 21.0 % State statutory rate, net of federal benefit 2.6 % 7.7 % Transaction costs 0.0 % ( 2.2 %) Earnout liability adjustments 0.6 % 27.9 % Nondeductible amortization ( 11.5 %) ( 17.2 %) Other ( 0.2 %) ( 0.2 %) Change in valuation allowance ( 12.4 %) ( 2.9 %) Effective tax rate 0.1 % 34.1 % |
Summary of Deferred Tax Assets and Liabilities | The deferred tax assets and liabilities consisted of the following ( in thousands ): Years Ended December 31, 2023 2022 Deferred tax assets: Accrued expenses $ 4,405 $ 6,738 Derivative warrant liabilities 6 1,053 Goodwill and other intangibles, net 26,891 — Federal and state net operating carryforwards 52,875 24,184 Business expense limitation 22,944 11,682 Lease liabilities 33,242 27,033 Property and equipment 620 312 Total deferred tax assets 140,982 71,002 Less: Valuation allowances ( 108,508 ) ( 25,793 ) Total deferred tax assets, net 32,474 45,209 Deferred tax liabilities: Goodwill and other intangibles, net — ( 18,524 ) Prepaid expenses ( 12 ) ( 7 ) Right of use lease assets ( 33,789 ) ( 28,868 ) Total deferred tax liabilities ( 33,801 ) ( 47,399 ) Total deferred tax liability, net $ ( 1,327 ) $ ( 2,190 ) |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Financial Position and Operations of PCs and Care Optical | The following tables summarize the financial position and operations of the PCs and Care Optical ( in thousands ): Years Ended December 31, 2023 2022 Total assets $ 1,200 $ 1,097 Total liabilities $ 9,896 $ 2,961 Years Ended December 31, 2023 2022 Revenues $ 2,254 $ 1,515 Operating expenses $ 7,027 $ 3,551 |
Description of Business and G_2
Description of Business and Going Concern - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) State Center $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Jun. 08, 2021 | ||
Description Of Business [Line Items] | |||||
Number of centers operated and managed | Center | 56 | ||||
Affiliated providers in number of states | State | 10 | ||||
Cash and cash equivalents | $ 65,528 | $ 41,626 | |||
Accounts receivable, net | 114,754 | 151,743 | |||
Stockholders' equity | $ 61,444 | $ 619,547 | $ 505,370 | ||
Reverse stock split, conversion ratio | 0.0333 | ||||
Class A Common Stock | |||||
Description Of Business [Line Items] | |||||
Reverse stock split, description | every thirty shares of the Class A Common Stock issued and outstanding as of the Effective Date automatically converted into one share of Class A Common Stock. | ||||
Reverse stock split, conversion ratio | 0.0333 | ||||
Common stock, par value | $ / shares | [1] | $ 0.0001 | $ 0.0001 | ||
Minimum | Credit Agreement | |||||
Description Of Business [Line Items] | |||||
Stockholders' equity | $ 100,000 | ||||
Cash | $ 25,000 | ||||
CMG | Business Combination Agreement | |||||
Description Of Business [Line Items] | |||||
Percentage of equity interests acquired | 100% | ||||
IMC | Business Combination Agreement | |||||
Description Of Business [Line Items] | |||||
Percentage of equity interests acquired | 100% | ||||
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies [Line Items] | ||
Provision for credit losses | $ 3,100,000 | $ 1,200,000 |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |
Lease liabilities | $ 106,112,000 | |
Unrecognized Tax Benefits | 0 | 0 |
Goodwill impairment | 547,200,000 | $ 70,000,000 |
ASC 842 | ||
Summary of Significant Accounting Policies [Line Items] | ||
Lease liabilities | $ 73,700,000 | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2022 | |
Maximum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Intangible asset, estimated useful lives | 11 years | |
Operating lease term | 20 years | |
Annual fixed rent | 3% | |
Minimum | ||
Summary of Significant Accounting Policies [Line Items] | ||
Intangible asset, estimated useful lives | 2 years | |
Operating lease term | 2 years | |
Annual fixed rent | 2% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | Lesser of lease term or asset life |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Assets under finance leases | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | Lease term |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeTermOfLeaseMember |
Furniture and Equipment | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Furniture and Equipment | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | 7 years |
Vehicles | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Software | Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | 1 year |
Software | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of property and equipment | 5 years |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable Net, and Risk Settlement Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Risk-based accounts receivable | $ 170,397 | $ 267,971 |
IBNR claims liability | (58,027) | (121,823) |
Other receivables | 2,384 | 5,595 |
Accounts receivable, net | 114,754 | 151,743 |
Risk-based accounts receivable (liability) | 381 | (5,993) |
IBNR claims liability | (37,401) | 0 |
Distribution liabilities | (5,583) | (8,178) |
Risk settlement liabilities | $ (42,602) | $ (14,171) |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Changes Recognized in Prior Year Estimates (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Receivables [Abstract] | ||
Revenues | $ (42,934) | $ 9,046 |
External provider costs | 900 | 9,662 |
Short-term and long-term accounts receivable, net | (34,542) | $ (616) |
Risk settlement liabilities | $ 9,292 |
Accounts Receivable - Schedul_2
Accounts Receivable - Schedule of Revenues and Accounts Receivable Balances for Payors Comprising 10% or More of Revenue (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Payor A | Customer Concentration Risk | Revenue | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 23% | 29% |
Payor A | Credit Concentration Risk | Short-Term and Long-Term Accounts Receivable, Net | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 10% | 13% |
Payor B | Customer Concentration Risk | Revenue | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 18% | |
Payor B | Credit Concentration Risk | Short-Term and Long-Term Accounts Receivable, Net | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 10% | 11% |
Payor C | Customer Concentration Risk | Revenue | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 21% | 18% |
Payor C | Credit Concentration Risk | Short-Term and Long-Term Accounts Receivable, Net | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 13% | |
Payor D | Customer Concentration Risk | Revenue | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 13% | 14% |
Payor D | Credit Concentration Risk | Short-Term and Long-Term Accounts Receivable, Net | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 13% | |
Payor E | Customer Concentration Risk | Revenue | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration risk (as a percentage) | 15% | 14% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ / shares in Units, $ in Thousands | 2 Months Ended | 12 Months Ended | ||||
Nov. 10, 2022 USD ($) Lives $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2023 USD ($) Business $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | ||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 0 | $ 55,837 | ||||
Cost of care | 164,872 | 126,648 | ||||
Acquisition-related transaction costs | 108 | 13,165 | ||||
Goodwill | $ 700,643 | 156,841 | 700,643 | $ 464,566 | ||
Revenue | $ 751,102 | $ 631,132 | ||||
Number of acquisitions | Business | 0 | |||||
Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value | $ / shares | [1] | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Other Revenue | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | $ 57,667 | $ 41,492 | ||||
Steward Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration | $ 25,000 | |||||
Financed net pre-closing medicare | $ 35,500 | |||||
Number of medicare lives | Lives | 100,000 | |||||
Maximum percentage of medical expense ratio | 85% | |||||
Cost of care | $ 1,100 | |||||
Accrued contingent consideration to seller parties | 5,000 | 5,000 | 5,000 | |||
Total purchase consideration | $ 398,994 | |||||
Acquisition-related transaction costs | 13,200 | |||||
Goodwill | $ 304,150 | 307,547 | ||||
Steward Acquisition | Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Consideration, shares | shares | 783,333 | |||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Percentage of issued and outstanding shares of common stock | 41% | |||||
Steward Acquisition | Other Revenue | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | 7,000 | |||||
Steward Acquisition | Risk Contracts | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 37,500 | $ 37,500 | ||||
Other Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase consideration | 3,300 | |||||
Goodwill | 2,900 | 2,900 | ||||
Intangible assets | $ 400 | $ 400 | ||||
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
Acquisitions - Summary of Purch
Acquisitions - Summary of Purchase Consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Nov. 10, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Cash consideration | $ 0 | $ 55,837 | |
Share consideration | 0 | 134,420 | |
Steward Acquisition | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 25,000 | ||
Initial Share Consideration | 134,420 | ||
Earnout Share Consideration | 212,355 | ||
Contingent consideration | $ 5,000 | $ 5,000 | |
Other consideration, net | 27,219 | ||
Total consideration | $ 398,994 |
Acquisitions - Summary of Pur_2
Acquisitions - Summary of Purchase Consideration (Parenthetical) (Details) - Steward Acquisition - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Nov. 10, 2022 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Financed net pre-closing medicare | $ 35.5 | |
Reimbursement from interest and original issue discount | 6.8 | |
Non-cash purchase price adjustment | $ 1.5 | |
Class A Common Stock | ||
Business Acquisition [Line Items] | ||
Earnout share consideration to seller | 1.3 | |
Estimated probability of payout percentage | 99% | |
Business acquisition, equity interest issued number of shares | 0.8 | |
Business acquisition, share price | $ 171.6 | $ 109.5 |
Acquisitions - Summary of Initi
Acquisitions - Summary of Initial and Final Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Nov. 10, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 156,841 | $ 700,643 | $ 464,566 | |
Steward Acquisition | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | 33,991 | $ 43,060 | ||
Other working capital adjustments | (21,066) | (21,584) | ||
Distribution liabilities | (1,879) | (7,032) | ||
Net assets acquired | 91,446 | 94,844 | ||
Total consideration | 398,994 | 398,994 | ||
Goodwill | 307,547 | 304,150 | ||
Measurement Period Adjustments | ||||
Accounts receivable | (9,069) | |||
Other working capital adjustments | 518 | |||
Distribution liabilities | 5,153 | |||
Net assets acquired | (3,397) | |||
Goodwill | 3,397 | |||
Steward Acquisition | Risk Contracts | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 37,500 | 37,500 | ||
Steward Acquisition | Provider Network | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 42,900 | $ 42,900 |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Pro-Forma Information (Details) - Steward Acquisition $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 669,319 |
Net loss | $ (34,315) |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Effects of Reinsurance [Line Items] | ||
Reinsurance recoveries recognized | $ 29,600,000 | $ 27,800,000 |
Reinsurance premium expense incurred | 31,400,000 | $ 19,400,000 |
Maximum | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance stop loss limit per patient per year | 200,000 | |
Minimum | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance stop loss limit per patient per year | $ 30,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Summary of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance | $ 700,643 | $ 464,566 |
Goodwill acquired | 307,062 | |
Measurement period adjustments | 3,397 | (985) |
Impairment | (547,200) | (70,000) |
Balance | $ 156,841 | $ 700,643 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Gross Carrying Amount and Accumulated Amortization of Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 151,695 | $ 151,695 |
Accumulated Amortization | (50,452) | (28,109) |
Net Book Value | 101,243 | 123,585 |
Risk Contracts | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 102,070 | 102,070 |
Accumulated Amortization | (39,394) | (24,217) |
Net Book Value | $ 62,676 | $ 77,853 |
Weighted Average Amortization Period (years) | 8 years | 8 years |
Provider Network | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 42,900 | $ 42,900 |
Accumulated Amortization | (6,980) | (851) |
Net Book Value | $ 35,920 | $ 42,049 |
Weighted Average Amortization Period (years) | 7 years | 7 years |
Non-compete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,170 | $ 4,170 |
Accumulated Amortization | (2,343) | (1,518) |
Net Book Value | $ 1,827 | $ 2,652 |
Weighted Average Amortization Period (years) | 5 years | 5 years |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,862 | $ 1,862 |
Accumulated Amortization | (1,491) | (1,352) |
Net Book Value | $ 371 | $ 510 |
Weighted Average Amortization Period (years) | 2 years | 2 years |
Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 693 | $ 693 |
Accumulated Amortization | (244) | (171) |
Net Book Value | $ 449 | $ 522 |
Weighted Average Amortization Period (years) | 5 years | 5 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Line Items] | ||
Amortization expense | $ 22,300 | $ 16,800 |
Goodwill impairment | 547,200 | 70,000 |
Cumulative goodwill impairment | $ 617,200 | $ 70,000 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization for Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2024 | $ 20,613 | |
2025 | 19,062 | |
2026 | 17,641 | |
2027 | 14,786 | |
2028 | 11,854 | |
Thereafter | 17,287 | |
Net Book Value | $ 101,243 | $ 123,585 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | $ 62,349 | $ 31,620 | |
Less: Accumulated depreciation and amortization | [1] | (14,431) | (10,614) |
Total Property and equipment, net | 47,918 | 21,006 | |
Leasehold Improvements | |||
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | 19,200 | 10,661 | |
Vehicles | |||
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | 2,892 | 3,743 | |
Furniture and Equipment | |||
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | 12,765 | 8,871 | |
Software | |||
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | 3,865 | 3,725 | |
Assets Under Finance Lease | |||
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | [2] | 18,552 | 0 |
Construction in Progress | |||
Property Plant And Equipment [Line Items] | |||
Total Property and equipment, gross | $ 5,074 | $ 4,621 | |
[1] (2) Includes accumulated amortization related to finance lease right-of-use assets of $ 0.6 million and $ 0 as of December 31, 2023 and 2022, respectively. (1) Refer to Note 14, Leases , for information. |
Property and Equipment - Summ_2
Property and Equipment - Summary of Property and Equipment (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Accumulated amortization related to finance lease right-of-use assets | $ 600 | $ 0 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense and amortization of finance lease right-of-use assets | $ 5.4 | $ 4.9 |
Debt and Related Party Debt - S
Debt and Related Party Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt gross | $ 379,560 | |
Less: Unamortized discounts and debt issuance costs | (13,349) | $ (16,188) |
Total long-term debt | 385,823 | 261,256 |
Less: Current portion | (364,380) | (30,530) |
Long-term portion | 21,443 | 230,725 |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | 377,340 | 240,277 |
Related party debt | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | 35,510 | |
Finance Lease Obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | 19,612 | |
Other | ||
Debt Instrument [Line Items] | ||
Long-term debt gross | $ 2,220 | $ 1,657 |
Debt and Related Party Debt -_2
Debt and Related Party Debt - Summary of Debt (Parenthetical) (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Finance Lease Obligations | ||
Debt Instrument [Line Items] | ||
Interest averaging rate | 13.50% | 0% |
Debt and Related Party Debt - A
Debt and Related Party Debt - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 08, 2023 USD ($) | Oct. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | Oct. 31, 2022 USD ($) | May 31, 2022 USD ($) | Sep. 30, 2026 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Debt instrument interest capitalized percentage | 4% | |||||||
Debt Instrument, Interest Rate Terms | Based on the elections made by the Company, as of December 31, 2023, borrowings under the Credit Agreement bore interest of Term SOFR (calculated as the Secured Overnight Financing Rate published on the Federal Reserve Bank of New York’s website, plus the applicable credit spread adjustment based on the elected interest period), plus an applicable margin rate of 9.00%. As permitted under the Credit Agreement, the Company elected to capitalize 4.00% of the interest as principal amount. As a result of this election, the cash interest component of the applicable margin increased by 0.50%. | |||||||
Scheduled payments of interest and fees | $ 6,800,000 | |||||||
Maximum aggregate loan amount | $ 300,000,000 | |||||||
Option to capitalize, percentage of interest as principal outstanding | 4% | |||||||
Increase in margin rate | 0.50% | |||||||
Minimum liquidity requirement | 50,000,000 | |||||||
Minimum liquidity requirement reduced amount on meeting certain adjusted EBITDA | $ 25,000,000 | |||||||
De novo losses excluded from calculation of such ratio period | 36 months | |||||||
Debt instrument covenants maximum leverage ratio | 8.5 | |||||||
Debt instrument covenant description | The Credit Agreement also contains covenants that require the Company to satisfy a minimum liquidity requirement of $50.0 million, which may be decreased to $25.0 million if the Company achieves a certain adjusted EBITDA, and maintain a maximum total leverage ratio based on the Company’s consolidated EBITDA, as defined in the Credit Agreement, with de novo losses excluded from the calculation of such ratio for up to 36 months after the opening of a de novo center, which maximum total leverage ratio was initially 8.50 to 1.00, commencing with the fiscal quarter ended September 30, 2022 and is subject to a series of step-downs. For the fiscal quarters ending September 30, 2026 and thereafter the Company must maintain a maximum total leverage ratio no greater than 5.50 to 1.00. | |||||||
Debt instrument, debt default, percentage | 4% | |||||||
Repayments of debt | $ 121,000,000 | |||||||
Loss on debt extinguishment | (6,200,000) | $ 0 | $ (6,172,000) | |||||
Related party debt, net | $ 35,500,000 | 0 | 30,277,000 | |||||
Indebtedness paid | $ 35,500,000 | $ 35,510,000 | 121,977,000 | |||||
Initial Term Loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | 190,000,000 | |||||||
Amount drawn | 190,000,000 | |||||||
Initial Term Loans | Term SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument margin rate | 9% | |||||||
Delayed Draw Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 110,000,000 | $ 110,000,000 | ||||||
Revised term loan expiration period | 45 days | |||||||
Amount drawn | $ 125,000,000 | $ 45,000,000 | ||||||
Debt instrument, facility fee percentage | 3% | |||||||
Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan beard fixed interest rate per annum | 12% | |||||||
Delayed Draw Term Loan B Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 60,000,000 | |||||||
Promissory Note | Anthem | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 1,000,000 | |||||||
Debt instrument maturity month and year | 2032-10 | |||||||
Term loan beard fixed interest rate per annum | 6.25% | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 45,000,000 | |||||||
Beginning on Second Anniversary | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest capitalized percentage | 3.50% | |||||||
Beginning on Third Anniversary | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest capitalized percentage | 3% | |||||||
Beginning on December 10, 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest capitalized percentage | 1.50% | |||||||
Scenario Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument covenants maximum leverage ratio | 5.5 |
Debt and Related Party Debt -_3
Debt and Related Party Debt - Summary of Future Maturities of Debt Outstanding (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 389 |
2025 | 3,487 |
2026 | 4,080 |
2027 | 370,721 |
2028 | 730 |
Thereafter | 153 |
Total | $ 379,560 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jul. 13, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Class Of Stock [Line Items] | ||||
Preferred stock,authorized | 1,000,000 | 1,000,000 | ||
Other current assets | $ 3,066 | $ 3,968 | ||
Preferred stock, issued | 1 | 1 | ||
Preferred stock voting rights | In any such vote, the share of Series A Preferred Stock will be entitled to 1,241,393 votes. | |||
Subscription Agreement | Series A Warrant | ||||
Class Of Stock [Line Items] | ||||
Number of shares purchased | 66,666 | |||
Exercisable period | 5 years | |||
Subscription Agreement | Series A and Series B Warrant | ||||
Class Of Stock [Line Items] | ||||
Number of shares purchased | 200,000 | |||
Warrant share price | $ 3 | |||
Subscription Agreement | Series B Warrant | ||||
Class Of Stock [Line Items] | ||||
Exercisable period | 5 years | |||
Number shares vest and exercisable | 16,666 | 0 | 50,000 | |
Vesting period | 1 year | |||
Warrant share price | $ 0.3 | |||
Subscription Agreement | Warrant Shares | ||||
Class Of Stock [Line Items] | ||||
Other current assets | $ 400 | $ 600 | ||
Subscription Agreement with Two Centers | Series B Warrant | Other Current Assets | ||||
Class Of Stock [Line Items] | ||||
Warrants and prepaid expenses | $ 7,600 | |||
Class A Common Stock | ||||
Class Of Stock [Line Items] | ||||
Common stock, shares issued | [1] | 3,744,732 | 3,711,086 | |
Class A Common Stock | Subscription Agreement | ||||
Class Of Stock [Line Items] | ||||
Number of shares purchased | 16,666 | |||
Aggregate purchase price of common shares | $ 5,000 | |||
Price per share | $ 540 | |||
Class A Common Stock | Subscription Agreement | Maximum | ||||
Class Of Stock [Line Items] | ||||
Price per share | $ 0 | |||
Series A Preferred Stock | ||||
Class Of Stock [Line Items] | ||||
Preferred stock, issued | 1 | |||
Preferred stock par value | $ 0.0001 | |||
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
Stockholders' Equity - Redeemab
Stockholders' Equity - Redeemable Warrants (Details) - IPO - DFHT - $ / shares | 1 Months Ended | 12 Months Ended |
Jul. 31, 2020 | Dec. 31, 2023 | |
Public Warrants | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 95,834 | |
Number of shares issued for each warrant upon conversion | 0.3333 | |
Exercise price of warrants | $ 345 | |
Warrants exercise period description | any time commencing on the later of 12 months from the closing of the IPO and 30 days after the completion of the Business Combination | |
Private Placement Warrants | ||
Class Of Warrant Or Right [Line Items] | ||
Number of warrants issued | 97,223 | |
Issue price of warrant | $ 45 | |
Locking period of warrants after completion of business combination | 30 days |
Stockholders' Equity - Continge
Stockholders' Equity - Contingent Consideration (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Nov. 10, 2022 Lives | Jul. 09, 2021 $ / shares shares | Dec. 31, 2023 $ / shares shares | Jun. 30, 2023 USD ($) | |
First Share Price Trigger | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Minimum weighted average trading price to issue earnout shares | $ / shares | $ 375 | $ 375 | ||
Considered trading days for share price trigger | 20 days | 20 days | ||
Considered trading period for share price trigger | 30 days | |||
Second Share Price Trigger | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Minimum weighted average trading price to issue earnout shares | $ / shares | $ 450 | |||
Considered trading days for share price trigger | 20 days | |||
Considered trading period for share price trigger | 30 days | |||
Earnout period expiration date | Jun. 09, 2023 | |||
Share price trigger | false | |||
CMG | Maximum | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Earnout shares payable | 116,667 | |||
CMG | First Share Price Trigger | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Earnout shares payable | 58,333 | |||
Earnout shares issued and paid | 58,333 | |||
CMG | Second Share Price Trigger | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Earnout shares payable | 58,333 | |||
IMC | Maximum | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Earnout shares payable | 96,667 | |||
IMC | First Share Price Trigger | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Earnout shares payable | 48,333 | |||
Earnout shares issued and paid | 48,333 | |||
IMC | Second Share Price Trigger | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Earnout shares payable | 48,333 | |||
Steward Acquisition | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Number of medicare lives | Lives | 100,000 | |||
Maximum percentage of medical expense ratio | 85% | |||
Fair value of the earnout share consideration | $ | $ 114.6 | |||
Steward Acquisition | Class A Common Stock | ||||
Business Acquisition Contingent Consideration [Line Items] | ||||
Percentage of issued and outstanding shares of common stock | 41% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock based compensation expense | $ 10,599 | $ 10,271 |
2021 Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock based compensation expense | $ 10,600 | 10,300 |
2021 Plan | Class A Common Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Initial shares available under plan | 233,333 | |
Incremental percentage of shares available for the plan of outstanding shares | 4% | |
Stock-based compensation incremental description | The initial share pool of 233,333 shares of Class A Common Stock available for grants under the 2021 Plan is automatically increased on January 1st of each calendar year commencing after the Closing Date and ending on (and including) January 1, 2031, by a number of shares of Class A Common Stock equal to the lesser of (i) four percent of the aggregate number of shares of Class A Common Stock outstanding on December 31st of the immediately preceding calendar year, excluding for this purpose any such outstanding shares of Class A Common Stock that were granted under the 2021 Plan and remain unvested and subject to forfeiture as of the relevant December 31st, or (ii) a lesser number of shares of Class A Common Stock as determined by the Board or the Compensation Committee of the Board prior to the relevant January 1st. | |
Restricted Stock Units ("RSU's") | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total unrecognized compensation expense | $ 12,800 | $ 17,400 |
Total unrecognized compensation expense, weighted-average recognized period | 1 year 9 months 18 days | 2 years 1 month 6 days |
Performance Share Units ("PSUs") | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
PSUs description | PSUs, which are issued to executives, the performance-based vesting will be satisfied with respect to a percentage of the recipient’s PSUs, as and when the specified price per share of Class A Common Stock is achieved through the applicable award expiration date, subject to the executive's continued employment with the Company through the applicable vesting date. | |
Total unrecognized compensation expense | $ 900 | $ 700 |
Total unrecognized compensation expense, weighted-average recognized period | 1 year 4 months 24 days | 2 years |
Options | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Strike price per share | $ 300 | |
Total unrecognized compensation expense, weighted-average recognized period | 2 years | 2 years 1 month 6 days |
Total unrecognized compensation expense, options | $ 2,000 | $ 1,700 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of RSUs Activity (Details) - Restricted Stock Units ("RSU's") | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of stock units, Beginning balance | shares | 89,107 |
Stock units, Granted | shares | 84,079 |
Stock units, Vested | shares | (34,189) |
Stock units, Forfeited | shares | (27,028) |
Number of stock units, Ending balance | shares | 111,969 |
Wtd. Avg. Grant Date Fair Value, Outstanding, Beginning balance | $ / shares | $ 243.3 |
Wtd. Avg. Grant Date Fair Value, Granted | $ / shares | 111 |
Wtd. Avg. Grant Date Fair Value, Vested | $ / shares | (242.66) |
Wtd. Avg. Grant Date Fair Value, Forfeited | $ / shares | (173.1) |
Wtd. Avg. Grant Date Fair Value, Outstanding, Ending balance | $ / shares | $ 162.6 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of PSUs Activity (Details) - Performance Share Units ("PSUs") | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of stock units, Beginning balance | shares | 6,972 |
Stock units, Granted | shares | 10,267 |
Stock units, Vested | shares | (2,188) |
Number of stock units, Ending balance | shares | 15,050 |
Wtd. Avg. Grant Date Fair Value, Outstanding, Beginning balance | $ / shares | $ 171.3 |
Wtd. Avg. Grant Date Fair Value, Granted | $ / shares | 111.9 |
Wtd. Avg. Grant Date Fair Value, Vested | $ / shares | (181.5) |
Wtd. Avg. Grant Date Fair Value, Outstanding, Ending balance | $ / shares | $ 129.36 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Calculate Fair Value of PSUs (Details) - Performance Share Units ("PSUs") - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Underlying stock price | $ 111.6 | $ 250.2 |
Performance Period (years) | 2 years | 2 years |
Risk-free interest rate | 4.50% | 2.40% |
Volatility | 70.80% | 55% |
Dividend yield | 0% | 0% |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Options Activity (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Payment Arrangement, Disclosure [Abstract] | |
Number of Options, Outstanding, Beginning balance | shares | 12,452 |
Number of Options, Granted | shares | 17,200 |
Number of Options, Vested | shares | (4,640) |
Number of Options, Outstanding, Ending balance | shares | 25,012 |
Wtd. Avg. Grant Date Fair Value, Outstanding, Beginning balance | $ / shares | $ 181.8 |
Wtd. Avg. Grant Date Fair Value, Granted | $ / shares | 87.9 |
Wtd. Avg. Grant Date Fair Value, Vested | $ / shares | (180.98) |
Wtd. Avg. Grant Date Fair Value, Outstanding, Ending balance | $ / shares | $ 117.34 |
Stock-Based Compensation - As_2
Stock-Based Compensation - Assumptions Used to Calculate Fair Value of Options (Details) - Options - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Underlying stock price | $ 111.6 | $ 250.2 |
Performance Period (years) | 10 years | 10 years |
Risk-free interest rate | 3.70% | 2.40% |
Volatility | 71.50% | 65.50% |
Dividend yield | 0% | 0% |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Earnings Per Share [Abstract] | |||
Net loss attributable to CareMax, Inc. Class A common stockholders | $ (683,348) | $ (37,796) | |
Weighted average basic shares outstanding | [1] | 3,727,725 | 3,026,644 |
Weighted average diluted shares outstanding | [1] | 3,727,725 | 3,026,644 |
Net loss per share, Basic | $ (183.31) | $ (12.49) | |
Net loss per share, Diluted | $ (183.31) | $ (12.49) | |
[1] Share amounts have been restated to reflect the 1-for- 30 reverse stock split that the Company completed on January 31, 2024. |
Net Loss Per Share - Potentiall
Net Loss Per Share - Potentially Dilutive Outstanding Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 1,892,564 | 1,924,920 |
Series A and Series B Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 266,667 | 266,667 |
Public and Private Placement Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 193,055 | 193,055 |
Contingent consideration | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 1,276,667 | 1,356,667 |
Unvested Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 120,726 | 89,107 |
Unvested Performance Stock Units (Assumes 100% Target Payout) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 13,578 | 6,972 |
Unvested Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from diluted earnings per share | 21,872 | 12,452 |
Net Loss Per Share - Potentia_2
Net Loss Per Share - Potentially Dilutive Outstanding Securities Excluded from Computation of Diluted Net Loss Per Share (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Unvested Performance Stock Units (Assumes 100% Target Payout) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Target payout assumption percentage | 100% | 100% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Measurement - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Level 1 | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | $ 22 | $ 1,495 |
Level 1 | Public Warrants | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | 22 | 1,495 |
Level 3 | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | 1 | 137,040 |
Level 3 | Private Placement Warrants | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | 1 | 2,479 |
Carrying Value | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | 22 | 138,535 |
Carrying Value | Public Warrants | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | 22 | 1,495 |
Carrying Value | Private Placement Warrants | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | $ 1 | 2,479 |
Contingent Earnout Liability | Level 3 | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | 134,561 | |
Contingent Earnout Liability | Carrying Value | ||
Financial Liabilities Fair Value | ||
Total liabilities measured at fair value | $ 134,561 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Nov. 10, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Contingent earnout shares payable | 1.3 | ||
Recognized benefit resulting from decrease in fair value of derivative warrant liabilities | $ 4,000 | $ (4,400) | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants | Fair Value Adjustment of Warrants | |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | $ 0 | $ 0 | |
Fair value, liabilities, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, measurement with unobservable inputs reconciliation, liability, transfers into Level 3 | 0 | 0 | |
Fair value, measurement with unobservable inputs reconciliation, liability, transfers out of Level 3 | $ 0 | $ 0 | |
Steward Acquisition | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Percentage of probability payout | 99% | ||
Steward Acquisition | Class A Common Stock | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Business acquisition, share price | $ 109.5 | $ 171.6 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Quantitative Information of Level 3 Fair Value Measurements Inputs (Details) - Level 3 - Private Placement Warrants | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Exercise Price | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement input | 345 | 345 |
Underlying stock price | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement input | 15 | 109.5 |
Volatility | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement input | 58.3 | 69.1 |
Expected Life of the Options to Convert | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Expected life of the options to convert (years) | 2 years 5 months 8 days | 3 years 5 months 8 days |
Risk Free Rate | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement input | 4.81 | 4.08 |
Dividend Yield | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement input | 0 | 0 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Activity of the Level 3 Liabilities Measured at Fair Value (Details) - Level 3 $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | $ 137,040 |
Change in fair value of derivative warrant liabilities | (2,479) |
Change in fair value of contingent earnout liability | (19,916) |
Reclassification of contingent earnout consideration previously liability classified | (114,645) |
Ending Balance | $ 1 |
Fair Value Measurements - Sch_4
Fair Value Measurements - Schedule of Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring Measurement - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | $ 378,253 | $ 276,775 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | 375,987 | 273,100 |
Fixed rate debt | Carrying Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | 913 | 36,498 |
Fixed rate debt | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | 747 | 32,820 |
Floating rate debt | Carrying Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | 377,340 | 240,277 |
Floating rate debt | Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities | $ 375,240 | $ 240,280 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Jun. 30, 2023 | Nov. 10, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 13, 2021 | |
Related Party Transaction [Line Items] | |||||
Other current assets | $ 3,066,000 | $ 3,968,000 | |||
Related liabilities | 6,275,000 | 7,687,000 | |||
Accounts receivable | $ 114,754,000 | $ 151,743,000 | |||
Steward Acquisition | |||||
Related Party Transaction [Line Items] | |||||
Accounts Payable, Current, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember | |||
Related liabilities | $ 200,000 | $ 200,000 | |||
Partially offset cash remitted amount | $ 35,500,000 | ||||
Contingent earnout liability | $ 0 | $ 134,600,000 | |||
Contingent consideration reclassified from contingent earnout liability additional paid-in-capital | $ 114,600,000 | ||||
Steward Acquisition | Value-Based Care | |||||
Related Party Transaction [Line Items] | |||||
Accounts Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember | |||
Accounts receivable | $ 0 | $ 500,000 | |||
Steward Acquisition | Corporate General and Administrative Expenses | |||||
Related Party Transaction [Line Items] | |||||
TSA expenses | 1,500,000 | 1,200,000 | |||
Class A Common Stock | Steward Acquisition | |||||
Related Party Transaction [Line Items] | |||||
Consideration, shares | 783,333 | ||||
Advisory Agreement | Warrant Shares | |||||
Related Party Transaction [Line Items] | |||||
Other current assets | 400,000 | 600,000 | |||
Advisory Agreement | Warrant Shares | Corporate General and Administrative Expenses | |||||
Related Party Transaction [Line Items] | |||||
Expense related to amortization | 400,000 | 500,000 | |||
Construction Advisory Services | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | $ 0 | $ 400,000 | |||
Operating Cost and Expense, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember | |||
Advisor | Advisory Agreement | |||||
Related Party Transaction [Line Items] | |||||
Minimum ownership common shares to be maintained by related party | 16,667 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee Lease Description [Line Items] | |||
Lease expiring term | various times through 2043 | ||
Aggregated estimated future lease payments | $ 56,800 | ||
Leases, expected to commence period | 2025 | ||
Stockholders' equity | $ 61,444 | $ 619,547 | $ 505,370 |
Maximum | |||
Lessee Lease Description [Line Items] | |||
Initial lease terms | 20 years | ||
Minimum | |||
Lessee Lease Description [Line Items] | |||
Initial lease terms | 15 years | ||
Minimum | Credit Agreement | |||
Lessee Lease Description [Line Items] | |||
Stockholders' equity | $ 100,000 | ||
Cash | $ 25,000 |
Leases - Location of Finance Le
Leases - Location of Finance Lease Right-of-use Assets and Lease Liabilities in Company's Consolidated Balance Sheet (Details)s $ in Thousands | Dec. 31, 2023 USD ($) |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization [Abstract] | |
Finance lease right-of-use assets, net | $ 18,552 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net |
Long-term finance lease liabilities | $ 19,612 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-Term Debt, Excluding Current Maturities |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 18,235 | $ 13,769 |
Finance lease cost: | ||
Amortization of lease assets | 641 | |
Interest on lease liabilities | 1,729 | |
Variable lease cost | 3,268 | 1,897 |
Short-term lease cost | 1,239 | 1,145 |
Total lease cost | $ 25,112 | $ 16,810 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Operating Leases | |
2024 | $ 12,217 |
2025 | 15,702 |
2026 | 15,182 |
2027 | 14,255 |
2028 | 13,179 |
Thereafter | 101,499 |
Total undiscounted lease obligations | 172,034 |
Less: Present value discount | (65,923) |
Lease liabilities | 106,112 |
Finance Leases | |
2024 | 2,200 |
2025 | 2,499 |
2026 | 2,549 |
2027 | 2,625 |
2028 | 2,704 |
Thereafter | 48,944 |
Total undiscounted lease obligations | 61,521 |
Less: Present value discount | 41,909 |
Present value of lease liabilities | $ 19,612 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Lease Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted-average remaining lease term (years) | ||
Operating leases | 11 years 8 months 12 days | 11 years |
Finance leases | 19 years 3 months 18 days | |
Weighted-average discount rate | ||
Operating leases | 8.16% | 6.33% |
Finance leases | 13.46% | |
Cash paid for amounts included in measurement of liabilities | ||
Operating cash flows for operating leases | $ 12,605 | |
Operating cash flows for finance leases | $ 1,310 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ (600) | $ (15,536) |
State | (264) | (4,006) |
Total deferred income tax benefit | (863) | (19,542) |
Total income tax benefit | $ (863) | $ (19,542) |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation Between Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21% | 21% |
State statutory rate, net of federal benefit | 2.60% | 7.70% |
Transaction costs | 0% | (2.20%) |
Earnout liability adjustments | 0.60% | 27.90% |
Nondeductible amortization | (11.50%) | (17.20%) |
Other | (0.20%) | (0.20%) |
Change in valuation allowance | (12.40%) | (2.90%) |
Effective tax rate | 0.10% | 34.10% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Accrued expenses | $ 4,405 | $ 6,738 |
Derivative warrant liabilities | 6 | 1,053 |
Goodwill and other intangibles, net | 26,891 | |
Federal and state net operating carryforwards | 52,875 | 24,184 |
Business expense limitation | 22,944 | 11,682 |
Lease liabilities | 33,242 | 27,033 |
Property and equipment | 620 | 312 |
Total deferred tax assets | 140,982 | 71,002 |
Less: Valuation allowances | (108,508) | (25,793) |
Total deferred tax assets, net | 32,474 | 45,209 |
Deferred tax liabilities: | ||
Goodwill and other intangibles, net | (18,524) | |
Prepaid expenses | (12) | (7) |
Right of use lease assets | (33,789) | (28,868) |
Total deferred tax liabilities | (33,801) | (47,399) |
Total deferred tax liability, net | $ (1,327) | $ (2,190) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2017 | Jun. 08, 2021 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax expense | $ (863,000) | $ (19,542,000) | ||
Increase (decrease) in income tax valuation allowance | 82,700,000 | (300,000) | ||
Operating loss carryforward subject to Section 382 limitation | $ 43,900,000 | |||
Operating loss carryforward subject to business expense Section 382 limitation | $ 26,200,000 | |||
Uncertain tax positions | $ 0 | 0 | ||
Earliest tax year | ||||
Operating Loss Carryforwards [Line Items] | ||||
Open tax year | 2017 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Loss carryforwards | $ 199,800,000 | 91,300,000 | ||
Loss carryforwards subject to expiration | $ 9,000,000 | |||
Net operating losses expiration year | 2037 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Loss carryforwards | $ 198,100,000 | $ 90,700,000 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Assets and liabilities of PCs and Care Optical (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | ||
Assets | $ 623,301 | $ 1,170,743 |
Liabilities | 561,856 | 551,196 |
Revenues | (42,934) | 9,046 |
Operating expenses | 1,407,254 | 743,297 |
PCs and Care Optical | ||
Variable Interest Entity [Line Items] | ||
Assets | 1,200 | 1,097 |
Liabilities | 9,896 | 2,961 |
Revenues | 2,254 | 1,515 |
Operating expenses | $ 7,027 | $ 3,551 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | 12 Months Ended | |||
Mar. 15, 2024 USD ($) | Jan. 31, 2024 | Dec. 31, 2023 | May 31, 2022 USD ($) | |
Subsequent Event [Line Items] | ||||
Reverse stock split, conversion ratio | 0.0333 | |||
Increase in margin rate | 0.50% | |||
Minimum liquidity requirement | $ 50 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Reverse stock split, conversion ratio | 0.0333 | |||
Increase in margin rate | 2% | |||
Minimum liquidity requirement | $ 10 |