United States securities and exchange commission logo
April 20, 2023
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, 2022
Form 10-K/A for the
Year Ended December 31, 2021
Correspondence
Letter dated March 30, 2023
File No. 1-39391
Dear Kevin Wirges:
We have reviewed your March 30, 2023 response to our comment
letter 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. Unless we note otherwise, our references to prior comments are
to comments in our
March 14, 2023 letter.
Form 10-K for the Year Ended December 31, 2022
Adjusted EBITDA, page 69
1. We note your response
to comment 4. The restructuring and other line item in your
reconciliation appears
to include multiple components. Please provide us, and confirm that
you will expand your
disclosures to include, a breakdown of each component that is
included in this line
item with the corresponding amount. As it relates to incremental
compensation and vendor
expenses identified as temporary or duplicative as well as legal
and professional
expenses determined to be outside of the ordinary course of business,
please help us better
understand how you determined these costs were incremental,
temporary, duplicative,
and outside the ordinary course of business, rather than normal,
recurring, cash
operating expenses necessary to operate your business. Please address your
Kevin Wirges
FirstName LastNameKevin Wirges
CareMax, Inc.
Comapany
April NameCareMax, Inc.
20, 2023
April 220, 2023 Page 2
Page
FirstName LastName
consideration of the guidance in Question 100.01 of the Non-GAAP
Financial Measures
Compliance & Disclosure Interpretations as updated December 13, 2022.
In regard to
restructuring costs, please also address your consideration of ASC 420
in determining that
these costs should be characterized as restructuring costs.
2. We note your response to comment 5. In regard to your Acquisition and
Integration
related costs line item presented in your reconciliation, please
provide us, and confirm that
you will expand your disclosures to include, a breakdown of each
significant component
with corresponding amount. For the integration related costs,
including incremental
payroll compensation expense for employees directly associated with
services to achieve
synergies, please address your consideration of the guidance in
Question 100.01 of the
Non-GAAP Financial Measures Compliance & Disclosure Interpretations as
updated
December 13, 2022. Please specifically address how you determined that
these are not
normal, recurring, cash operating expenses necessary to operate your
business.
3. Given there appears to be some overlap between the restructuring and
other line item
and the acquisitions and integration related costs line item, please
help us better
understand the differences between the two line items.
Operating Metrics and Non-GAAP Platform Contribution and Pro Forma Platform
Contribution,
page 70
4. We note your response to comment 3. Please help us better understand
the nature of the
reclassification that you discuss in note (a) to your reconciliation
of Gross Profit to
Platform Reconciliation. It appears these amounts have been reflected
in your corporate,
general and administrative expenses line item on your statements of
operations and you
have determined that they should be reflected in your determination of
gross profit for
purposes of this reconciliation. Please confirm. Please advise why the
note indicates that
the reclassification results in an increase to gross profit by $2.9
million during the three
months ended December 31, 2022, which also appears inconsistent with
your
reconciliation.
5. Please expand your disclosures to provide a breakdown of the
components of the pro
forma adjustments line item in your determination of Pro forma
Platform Contribution.
Please disclose the nature of each component and the corresponding
amount.
Critical Accounting Policies and Estimates
Goodwill and Other Intangible Assets, page 79
6. We note that you performed an annual goodwill impairment test as of
December 31, 2022,
and recognized a goodwill impairment charges of $70.0 million, which
was driven by the
reduction of the market value of your stock price in December 2022.
Given the
materiality of your goodwill balance and that your market
capitalization continues to be
significantly less than your total equity, please tell us and expand
your disclosures to
explain how you determined the amount of goodwill impairment charge to
record. In
Kevin Wirges
CareMax, Inc.
April 20, 2023
Page 3
order to provide useful and meaningful disclosures that provide
investors with the
information necessary to understand how you determined the amount of
an impairment
charge as well as the probability of a future goodwill impairment,
please provide the
following disclosures:
Your consideration of the current market capitalization in your
determination of fair
value;
The percentage by which the estimated fair value exceeded carrying
value as of the
date of the most recent impairment test. Address how you
determined such fair value
in light of your current market capitalization;
The specific critical assumptions used in your fair value
determination;
The degree of uncertainty associated with your key assumptions and
how changes in
key assumptions could impact your fair value determination; and
Potential events and/or changes in circumstances that could
reasonably be expected to
negatively affect your key assumptions.
Amendment No. 2 to the Form 10-K for the Year Ended December 31, 2021
Restatement of Previously Reported Financial Statements, page F-9
7. Please tell us how you accounted for the equity consideration paid to
the real estate
advisor in July 2021, including the consideration which led to the
recording of prepaid
assets. Address the following:
Describe each component of the equity consideration paid as part
of the arrangement,
including the Series A Warrants and Series B Warrants, explain how
you accounted
for each component, and identify the accounting guidance you used
in determining
the appropriate accounting for the component; and
Explain why the asset amount increased from $111 million to $173
million at
September 30, 2022, including what caused this significant
increase. In this regard,
we only note your disclosure that indicates you recorded $7.6
million to reflect
vesting of 1,500,000 Series B Warrant Shares.
You may contact Nudrat Salik at (202) 551-3692 or Jeanne Baker at (202)
551-3691 if
you have any questions.
Sincerely,
FirstName LastNameKevin Wirges
Division of
Corporation Finance
Comapany NameCareMax, Inc.
Office of
Industrial Applications and
April 20, 2023 Page 3 Services
FirstName LastName