United States securities and exchange commission logo
December 16, 2022
Kevin Wirges
Chief Financial Officer and Treasurer
CareMax, Inc.
1000 NW 57th Court, Suite 400
Miami, Florida 33126
Re: CareMax, Inc.
Form 10-K for the
Year Ended December 31, 2021
Form 10-Q for the
Period Ended September 30, 2022
File No. 1-39391
Dear Kevin Wirges:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Year Ended December 31, 2021
EBITDA and Adjusted EBITDA, page 44
1. Your calculation of
EBITDA contains adjustments for items other than interest, taxes,
depreciation and
amortization. Please relabel or revise your presentation as necessary.
Refer to Question
103.01 of the Non-GAAP Financial Measures Compliance
& Disclosures
Interpretations. Also, in accordance with Item 10(e)(1)(i)(C), expand your
disclosures to address
the reasons why management believes the presentation
of EBITDA provides
useful information to investors regarding your results of operations.
In this regard, we note
your discussion only addresses Adjusted EBITDA.
2. You indicate in your
headnote to your reconciliation that Adjusted EBITDA is a pro
forma measure. We have
the following comments on your presentation:
Tell us and
disclose if the pro forma net (loss)/income amounts used in your
reconciliation were
prepared in accordance with Article 11 of Regulation S-X. If
such information
has not been prepared in accordance with Article 11, please revise
Kevin Wirges
FirstName LastNameKevin Wirges
CareMax, Inc.
Comapany16,
December NameCareMax,
2022 Inc.
December
Page 2 16, 2022 Page 2
FirstName LastName
to disclose the basis for the presentation and revise the
description of the measures
accordingly. Refer to Question 100.05 of the Non-GAAP Measures
Compliance and
Disclosure Interpretations as updated December 13, 2022;
If the pro forma net (loss)/income amounts are prepared in
accordance with Article
11, more clearly label the EBITDA and Adjusted EBITDA amounts
presented to
indicate that they are pro forma amounts;
Based on your reconciliation, EBITDA also appears to be a pro
forma measure.
Please clarify your headnote accordingly;
Separately break out the material components of "GAAP Pro Forma
Adjustments" and disclose the nature and corresponding amount of
each component;
and
Ensure your adjustments to arrive at EBITDA and Adjusted EBITDA
are shown
gross with income taxes shown as a separate adjustment and are
clearly explained.
Refer to Question 102.11 of the Non-GAAP Measures Compliance and
Disclosure
Interpretations as updated December 13, 2022.
3. In regards to your adjustments to arrive at Adjusted EBITDA, please
address the
following:
For non-recurring expenses, please separately break out the
components included in
this line item and corresponding amount; and
Regarding your adjustment for de novo losses, please tell us what
consideration you
gave to Question 100.01 of the Non-GAAP Financial Measures
Compliance
& Disclosure Interpretations as updated December 13, 2022 in
determining it was
appropriate to include this adjustment.
Non-GAAP Operating Metrics, page 45
4. In the headnote to non-GAAP operating metrics, you state that the
chart presented is a pro
forma view of your operations. Tell us and disclose if these pro forma
metrics were
prepared in accordance with Article 11 of Regulation S-X. If such
information has not
been prepared in accordance with Article 11, please revise to disclose
the basis
for presentation and revise the description of the measures
accordingly. Refer to Question
100.05 of the Non-GAAP Measures Compliance and Disclosure
Interpretations as
updated December 13, 2022. Ensure that you appropriately label each
metric accordingly.
5. With regard to your presentation of platform contribution, please
provide the disclosures
required pursuant to Item 10(e)(1) of Regulation S-K or explain why
you do not believe
such disclosures are required.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-10
6. Regarding your settlements with third-party payors for retroactive
adjustments due to
capitation risk adjustments, or claim audits, reviews or
investigations, please disclose any
Kevin Wirges
FirstName LastNameKevin Wirges
CareMax, Inc.
Comapany16,
December NameCareMax,
2022 Inc.
December
Page 3 16, 2022 Page 3
FirstName LastName
material revenue adjustments recognized from performance obligations
satisfied (or
partially satisfied) in previous periods. Refer to ASC 606-10-50-12A.
7. We note your disclosures regarding your MSO and the services it
provides to IPAs.
Please clearly disclose your accounting policy for these services and
also clarify where
these services are reflected on your income statement.
8. Please disclose whether fees are recorded gross or net and your basis
for such accounting.
Derivative Instruments, page F-12
9. We note the Contingent Consideration issuable in connection with the
Business
Combination was accounted for as liabilities in accordance with ASC
815-40 in the
second quarter of 2021 following a restatement of your financial
statements. On July 9,
2021, the First Share Price Trigger was achieved, and the remaining
Contingent
Consideration was re-assessed and determined to be indexed to your own
equity, resulting
in equity classification under ASC 815-40. Please help us better
understand the
analysis you performed in determining the appropriate accounting
pursuant to ASC 815-
40. Please help us better understand the factors that led you to
determine that the
contingent consideration should be accounted for as liabilities prior
to July 9, 2021 as well
as the specific terms that changed and led to your determination that
the Contingent
Consideration should be reclassified to equity on July 9, 2021.
Form 10-Q for the Period Ended September 30, 2022
Liquidity and Capital Resources, page 35
10. In your 10-K for the year ended December 31, 2021, you disclosed that
you were in
compliance, in all material respects, with all covenants under the
First Amendment of the
Credit Agreement as of December 31, 2021. We note the new Credit
agreement entered
into in May 2022 with various covenants. In light of your continued
operating losses and
net cash used in operating activities, please also confirm and
disclose that you continue to
comply with your covenants, if true.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Kevin Wirges
CareMax, Inc.
December 16, 2022
Page 4
You may contact Nudrat Salik at (202) 551-3692 or Jeanne Baker at (202)
551-3691 with
any questions.
Sincerely,
FirstName LastNameKevin Wirges
Division of
Corporation Finance
Comapany NameCareMax, Inc.
Office of Industrial
Applications and
December 16, 2022 Page 4 Services
FirstName LastName