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Item 9A. Controls and Procedures

2022-02-23 compared with 2021-03-11 · 57 added, 75 removed, 117 unchanged (53% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of December 31, 2021 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

Management Report on Internal Control over Financial Reporting

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Based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), management concluded that the internal control over financial reporting was effective as of December 31, 2021.

The Company’s independent registered public accounting firm, KPMG LLP, has issued an audit report on the Company’s internal control over financial reporting, which appears elsewhere in this Annual Report.

All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements.

1 unchanged sentence

Changes in Internal Controls over Financial Reporting

As described in Part II, Item 9a of our Annual Report on form 10-K for the year ended December 31, 2019, the Merger with BioScrip was completed on August 6, 2019, and represented a change in internal control over financial reporting.

During the year ended December 31, 2020 management consolidated and integrated BioScrip’s system of controls.

The processes and controls for significant areas, including business combinations, intangibles and goodwill valuations, income taxes, treasury, consolidations and the preparation of financial statements and related disclosures, compensation and benefits, procure to pay, inventory and order to receipt have all been substantially impacted by the integration activities.

The primary changes in these areas are related to the consolidation of process owner leadership and control owners, and where required, the modification of inputs, processes and associated systems.

For all areas of change noted, management believes the control design and implementation thereof are being appropriately modified to address underlying risks.

There were no other changes during the year ended December 31, 2020 that have materially affected, or reasonably likely to materially affect, our internal controls over financial reporting.

There has been no change during the quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Report of Independent Registered Public Accounting Firm

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Opinion on Internal Control Over Financial Reporting

We have audited Option Care Health, Inc.and subsidiaries (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited Option Care Health, Inc.

and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements), and our report dated March 11, 2021 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements), and our report dated February 23, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Chicago, Illinois March 11, 2021

Chicago, Illinois February 23, 2022

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

14 unchanged sentences

The following financial statements appear in Part II, Item 8:

Report of Independent Registered Public Accounting Firm 47

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020

7 unchanged sentences

Exhibit Number Description

Agreement and Plan of Merger, dated as of January 24, 2010, by and among BioScrip, Inc.

(the “Company”), and the parties set forth on the signature page (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 27, 2010, SEC File Number 0-28740).

Stock Purchase Agreement, dated as of December 12, 2012, by and among HomeChoice Partners, Inc., DaVita HealthCare Partners Inc., Mary Ann Cope, R.Ph., Kathy F.

Puglise, RN, CRNI, Joseph W.

Boyd, R.Ph., Barbara J.

Exum, PharmD and the Company (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 4, 2013, SEC File Number 0-28740).

2.3 Asset Purchase Agreement, dated June 11, 2016, by and among HS Infusion Holdings, Inc., the direct and indirect subsidiaries of HS Infusion Holdings, Inc.

set forth on the signature pages, the Company and HomeChoice Partners, Inc.

(the “Home Solutions Agreement”).

(Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 13, 2016, SEC File Number 000-28740).

2.4 First Amendment, dated June 16, 2016, to the Home Solutions Agreement (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed on June 20, 2016, SEC File Number 000-28740).

2.5 Second Amendment, dated September 2, 2016, to the Home Solutions Agreement (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 7, 2016, SEC File Number 001-11993).

2.6 Third Amendment, dated September 9, 2016, to the Home Solutions Agreement (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 12, 2016, SEC File Number 001-11993).

2.1+ Agreement and Plan of Merger, dated as of March 14, 2019, by and among BioScrip, Inc., Beta Sub, Inc., Beta Sub, LLC, HC Group Holdings I, LLC, HC Group Holdings II, Inc.

and HC Group Holdings III, Inc.

(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 15, 2019, SEC File Number 001-11993).

(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 15, 2019).

3.1 Third Amended and Restated Certificate of Incorporation of BioScrip, Inc.

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

3.2 Certificate of Amendment to Certificate of Incorporation, amending the Third Amended and Restated Certificate of Incorporation of BioScrip, Inc.

(incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

3.3 Amended and Restated Bylaws of Option Care Health, Inc., formerly known as BioScrip, Inc.

(incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

3.4 Certificate of Amendment of the Certificate of Incorporation, filed January 30, 2020.

(incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

3.3 Second Amended and Restated Bylaws of Option Care Health, Inc., formerly known as BioScrip, Inc.

(incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

3.4 Certificate of Amendment of the Certificate of Incorporation, filed January 30, 2020 (incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K filed on March 11, 2021).

4.1 Registration Rights Agreement, dated as of March 9, 2015, by and among the Company, Coliseum Capital Partners, L.P., Coliseum Capital Partners II, L.P., and Blackwell Partners, LLC, Series A.

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 10, 2015, SEC File Number 000-28740).

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 10, 2015).

4.2 Amendment No.

1 unchanged sentence

and Blackwell Partners, LLC Series A.

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 13, 2016, SEC File Number 000-28740).

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 13, 2016).

4.3 Amendment No.

2 to the Registration Rights Agreement dated June 14, 2016, by and among the Company and the PIPE Investors.

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 14, 2016, SEC File Number 000-28740).

4.4 Form of Subscription Rights Certificate.

(Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3/A filed on May 29, 2015, SEC File Number 000-28740).

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 14, 2016).

4.4 Common Stock Warrant Agreement, dated July 28, 2015, by and between the Company and the American Stock Transfer & Trust Company, LLC.

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 28, 2015, SEC File Number 000-28740).

4.6 Registration Rights Agreement, dated March 1, 2017, by and among the Company and the investors named therein.

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 2, 2017, SEC File Number 001-11993).

4.7 Registration Rights Agreement, dated June 29, 2017, by and among the Company and the parties signatory thereto (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on June 29, 2017, SEC File Number 001-11993).

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 28, 2015).

4.5 Registration Rights Agreement, dated June 29, 2017, by and among the Company and the parties signatory thereto (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on June 29, 2017).

4.6 Amendment No.

1 to Registration Rights Agreement by and between BioScrip, Inc.

and the stockholders of the Company signatory thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 15, 2019, SEC File Number 001-11993).

4.9 Warrant Agreement, dated June 29, 2017, by and among the Company and the subscribers signatory thereto (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 29, 2017, SEC File Number 001-11993).

4.10 Second Lien Notes Indenture, dated as of August 6, 2019, among HC Group Holdings II, LLC, as the Initial Issuer, BioScrip, Inc., as the Parent Issuer, subsidiary issuers and guarantors party thereto from time to time, and Ankura Trust Company, LLC, as the Trustee and Collateral Agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

4.11 Supplemental Indenture, dated November 18, 2019, by and between Option Care Health, Inc., as parent issuer, and Ankura Trust Company, LLC, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 19, 2019, SEC File Number 001-11993).

4.12 Description of Option Care Health Inc.’s registered securities.

BioScrip, Inc.

2018 Equity Incentive Plan (Incorporated by reference to Appendix A to the definitive proxy statement filed on April 4, 2018).

and the stockholders of the Company signatory thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 15, 2019).

4.7 Description of Option Care Health Inc.’s registered securities (incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K filed on March 11, 2021).

10.1 Amended and Restated Warrant Agreement, dated as of March 14, 2019, by and among BioScrip, Inc.

and the Holders (as defined therein) signatory thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 15, 2019, SEC File Number 001-11993).

10.3 Form of Letter Agreement, dated March 14, 2019, by and among BioScrip, Inc.

and each of the Holders (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 15, 2019, SEC File Number 001-11993).

and the Holders (as defined therein) signatory thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 15, 2019).

10.2 Registration Rights Agreement, dated as of August 6, 2019, by and among BioScrip, Inc.

and HC Group Holdings I, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

and HC Group Holdings I, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

10.3 Director Nomination Agreement, dated as of August 6, 2019, by and among the BioScrip, Inc.

and HC Group Holdings I, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

10.6 First Lien Credit Agreement, dated as of August 6, 2019, among HC Group Holdings II, LLC, as the Initial Borrower, BioScrip, Inc., as the Parent Borrower, the guarantors party thereto from time to time, Bank of America, N.A., as the Administrative Agent, the lenders party thereto from time to time, BofA Securities, Inc., as Lead Arranger and Bookrunner and as Syndication Agent and Documentation Agent (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

and HC Group Holdings I, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

10.4 ABL Credit Agreement, dated as of August 6, 2019, among HC Group Holdings II, LLC, as the Initial Borrower, BioScrip, Inc., as the Parent Borrower, and Bank of America N.A., as the Administrative Agent, Issuing Bank and Swing Line Lender, the other lenders party thereto from time to time and Bank of America, N.A.

and ACF Finco I LP as Joint Lead Arrangers and Joint Lead Bookrunners (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

10.8 Note Purchase Agreement, dated as of August 6, 2019, among HC Group Holdings II, LLC, as the Initial Issuer, BioScrip, Inc., as the Parent Issuer, subsidiary issuers and guarantors party thereto from time to time, and the several initial purchasers party thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

John Rademacher Amended and Restated Employment Agreement entered into on February 23, 2018 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

Michael Shapiro Employment Agreement entered into on October 13, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

Harriet Booker Employment Agreement entered into on June 3, 2019 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 7, 2019, SEC File Number 001-11993).

10.12† Rich Denness Employment Agreement entered into on June 8, 2019 (filed herewith).

10.13† Cliff Berman Employment Agreement entered into on August 3, 2015 (filed herewith).

and ACF Finco I LP as Joint Lead Arrangers and Joint Lead Bookrunners (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

Michael Shapiro Employment Agreement entered into on October 13, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

Harriet Booker Employment Agreement entered into on June 3, 2019 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on August 7, 2019).

10.8† Rich Denness Employment Agreement entered into on June 8, 2019 (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K filed on March 11, 2021).

10.9† Cliff Berman Employment Agreement entered into on August 3, 2015 (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K filed on March 11, 2021).

10.10 First Amendment to ABL Credit Agreement, dated as of October 5, 2020, among Option Care Health, Inc.

(f/k/a BioScrip, Inc.), each Guarantor party hereto, each lender party hereto and Bank of America, N.A., as administrative agent .

(f/k/a BioScrip, Inc.), each Guarantor party hereto, each lender party hereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on October 6, 2020).

10.11 Second Amendment to ABL Credit Agreement, dated as of January 21, 2021, by and among Option Care Health, Inc., the guarantors party thereto, Bank of America, N.A.

and the financial institutions party thereto (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed on January 22, 2021).

10.12 Option Care Health, Inc.

2018 Equity Incentive Plan updated as of May 19, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q/A filed on August 3, 2021).

10.13 Indenture, dated as of October 27, 2021, by and between Option Care Health, Inc., each of the Guarantors (as defined therein) listed on the signature pages thereto and Ankura Trust Company, LLC as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on October 29, 2021).

10.14 Form of 4.375% Senior Notes due 2029 (included in Exhibit 10.14 and incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on October 29, 2021).

10.15 Second Amendment and Amendment and Restatement Agreement to First Lien Credit Agreement, dated as of October 27, 2021 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on October 29, 2021).

10.16 Third Amendment to ABL Credit Agreement, dated as of October 27, 2021 (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed on October 29, 2021).

21.1 List of subsidiaries of Option Care Health, Inc.

3 unchanged sentences

Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(filed herewith).

31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(filed herewith).

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(filed herewith).

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(filed herewith).

101 The following financial information from the Company’s Form 10-K for the fiscal year ended December 31, 2021, formatted in XBRL (Extensible Business Reporting Language):

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Form 10-K Summary

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 11, 2021.

OPTION CARE HEALTH, INC.

5 unchanged sentences

Chief Executive Officer, President and Director

(Principal Executive Officer) March 11, 2021

(Principal Executive Officer) February 23, 2022

/ s/ Michael Shapiro

1 unchanged sentence

Chief Financial Officer and Senior Vice President

(Principal Financial Officer) March 11, 2021

/s/ Robert R.

Senior Vice President, Finance and Chief Accounting Officer

(Principal Accounting Officer) March 11, 2021

(Principal Financial Officer, Principal Accounting Officer) February 23, 2022

Jansen Kraemer, Jr.

Non-Executive Chairman of the Board March 11, 2021

Director March 11, 2021

Non-Executive Chairman of the Board February 23, 2022

Director February 23, 2022

/s/ Elizabeth Q.

Director March 11, 2021

Director February 23, 2022

/s/ Alan Nielsen

Director March 11, 2021

Director February 23, 2022

/s/ Nitin Sahney

Director March 11, 2021

Director February 23, 2022

/s/ Timothy P.

Director March 11, 2021

Director February 23, 2022

/s/ Mark Vainisi

Director March 11, 2021

Director February 23, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures