What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-23 · 243 added, 260 removed, 664 unchanged (43% of the section changed)

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of Option Care Health, Inc.

and subsidiaries (the Company) as of December 31, 2022 and 2021, 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, 2022, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

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As discussed in Notes 2 and 4 to the consolidated financial statements, net revenue is reported at the net realizable value amount that reflects the consideration the Company expects to receive in exchange for providing services.

Revenues are from government payers, commercial payers, and patients for infusion therapy and other ancillary health care services.

Revenues are from commercial payers, government payers, and patients for infusion therapy and other ancillary health care services.

The Company estimates the transaction price adjustments based on the verification of the patient’s insurance coverage, historical price concessions, and historical payments.

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We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s transaction price adjustment process, including general IT controls and IT application controls.

We involved IT professionals with specialized skills and knowledge who assisted in the identification and testing of certain IT systems used by the Company for the processing and recording of transaction price adjustments.

We involved IT professionals with specialized skills and knowledge who assisted in the identification and testing of certain IT systems used by the Company for processing and recording of transaction price adjustments.

We tested the relevance and reliability of the underlying data that served as the basis for the transaction price adjustments by agreeing a selection of certain data elements to underlying support.

18 unchanged sentences

Goodwill 1,540,246 1,533,424

Deferred income taxes — 27,033

Other noncurrent assets 42,349 40,313

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Treasury stock;

383,722 shares outstanding, at cost, as of December 31, 2022 and 2021, respectively.

8,330,022 and 383,722 shares outstanding, at cost, as of December 31, 2023 and 2022, respectively.

( 255,107 ) ( 2,403 )

1 unchanged sentence

Retained earnings 457,513 190,423

Accumulated other comprehensive income (loss) 21,159 ( 451 )

Accumulated other comprehensive income 14,978 21,159

Total stockholders’ equity 1,421,672 1,386,103

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OPTION CARE HEALTH, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

13 unchanged sentences

Other, net 89,865 14,218 ( 13,374 )

Total other expense ( 34,463 ) ( 74,347 ) ( 115,998 )

INCOME (LOSS) BEFORE INCOME TAXES 205,768 116,494 ( 5,243 )

Total other income (expense) 44,147 ( 34,463 ) ( 74,347 )

INCOME BEFORE INCOME TAXES 358,742 205,768 116,494

INCOME TAX EXPENSE (BENEFIT) 91,652 55,212 ( 23,404 )

NET INCOME (LOSS) $ 150,556 $ 139,898 $ ( 8,076 )

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

Change in unrealized gains (losses) on cash flow hedges, net of income taxes of $ 7,259 , $ 0 and $ 0 , respectively

NET INCOME $ 267,090 $ 150,556 $ 139,898

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:

Change in unrealized (losses) gains on cash flow hedges, net of income tax benefit (expense) of $ 2,158 , $( 7,259 ) and $ 0 , respectively

$ ( 6,181 ) $ 21,610 $ 10,721

OTHER COMPREHENSIVE INCOME (LOSS) 21,610 10,721 ( 3,977 )

NET COMPREHENSIVE INCOME (LOSS) $ 172,166 $ 150,619 $ ( 12,053 )

EARNINGS (LOSS) PER COMMON SHARE

Earnings (loss) per share, basic $ 0.83 $ 0.78 $ ( 0.04 )

Earnings (loss) per share, diluted $ 0.83 $ 0.77 $ ( 0.04 )

OTHER COMPREHENSIVE (LOSS) INCOME ( 6,181 ) 21,610 10,721

NET COMPREHENSIVE INCOME $ 260,909 $ 172,166 $ 150,619

EARNINGS PER COMMON SHARE:

Earnings per share, basic $ 1.49 $ 0.83 $ 0.78

Earnings per share, diluted $ 1.48 $ 0.83 $ 0.77

Weighted average common shares outstanding, basic 178,973 181,105 179,855

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 150,556 $ 139,898 $ ( 8,076 )

Adjustments to reconcile net income (loss) to net cash provided by operations:

Net income $ 267,090 $ 150,556 $ 139,898

Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization expense 62,200 65,434 68,804

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Amortization of deferred financing costs 4,446 4,304 4,998

Loss on interest rate swaps upon discontinuing hedge accounting — — 3,746

Paid-in-kind interest capitalized as principal — — 7,525

Equity in earnings of joint ventures ( 5,530 ) ( 5,125 ) ( 6,030 )

1 unchanged sentence

Capital distribution from equity method investments 4,000 5,875 2,900

Change in contingent consideration liability — — ( 1,500 )

Other adjustments ( 1,244 ) — 844

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Business acquisitions, net of cash acquired ( 12,494 ) ( 87,364 ) ( 85,909 )

Other investing cash flows — — 541

Other investing activities ( 5,889 ) — —

Net cash used in investing activities ( 56,506 ) ( 108,052 ) ( 111,541 )

1 unchanged sentence

Exercise of stock options, vesting of restricted stock, and related tax withholdings ( 3,115 ) 352 ( 32 )

Net proceeds from issuance of common stock — — 118,934

Purchase of company stock ( 250,261 ) — —

Proceeds from warrant exercises — 20,916 —

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Debt prepayment fees — — ( 2,458 )

Net cash provided by (used in) financing activities 15,268 ( 76,870 ) ( 68,849 )

Other financing activities ( 5,750 ) — —

Net cash (used in) provided by financing activities ( 265,126 ) 15,268 ( 76,870 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 49,663 174,763 20,158

1 unchanged sentence

CASH AND CASH EQUIVALENTS - END OF PERIOD $ 343,849 $ 294,186 $ 119,423

Supplemental disclosure of cash flow information:

Supplemental disclosure of cash flows information:

Cash paid for interest $ 69,804 $ 50,372 $ 60,920

10 unchanged sentences

Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 32 ) — — ( 32 )

Net proceeds from the issuance of common stock — 1 — 118,933 — — 118,934

Cancellation of common stock - see Note 16 — ( 1 ) — 1 — — —

Net loss — — — — ( 8,076 ) — ( 8,076 )

Other comprehensive loss — — — — — ( 3,977 ) ( 3,977 )

Net income — — — — 139,898 — 139,898

Other comprehensive income — — — — — 10,721 10,721

Balance - December 31, 2021 $ — $ 18 $ ( 2,403 ) $ 1,138,855 $ 39,867 $ ( 451 ) $ 1,175,886

1 unchanged sentence

Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — 352 — — 352

Exercise of warrants — — — 20,916 — — 20,916

Net income — — — — 150,556 — 150,556

3 unchanged sentences

Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 3,115 ) — — ( 3,115 )

Exercise of warrants — — — 20,916 — — 20,916

Purchase of company stock, and related tax effects — — ( 252,704 ) — — — ( 252,704 )

Net income — — — — 267,090 — 267,090

Other comprehensive income — — — — — 21,610 21,610

Other comprehensive loss — — — — — ( 6,181 ) ( 6,181 )

Balance - December 31, 2023 $ — $ 18 $ ( 255,107 ) $ 1,204,270 $ 457,513 $ 14,978 $ 1,421,672

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NATURE OF OPERATIONS AND PRESENTATION OF FINANCIAL STATEMENTS

Corporate Organization and Business — On April 7, 2015, HC I and HC II collectively acquired Walgreens Infusion Services, Inc.

and its subsidiaries from Walgreen Co., and the business was rebranded as Option Care.

On March 14, 2019, HC I and HC II entered into the Merger Agreement to merge with and into a wholly-owned subsidiary of BioScrip, a national provider of infusion and home care management solutions, which was completed on August 6, 2019.

Following the close of the Merger, BioScrip was rebranded as Option Care Health.

The combined Company’s stock is listed on the Nasdaq Global Select Market as of December 31, 2022.

During the year ended December 31, 2022, HC I completed a secondary offering of 11,000,000 shares of its Option Care common stock.

Following this offering, HC I holds approximately 14.4 % of the common stock of the Company.

Option Care Health, and its wholly-owned subsidiaries, provides infusion therapy and other ancillary health care services through a national network of 96 full service pharmacies and 67 stand-alone ambulatory infusion sites.

Corporate Organization and Business — The Company’s stock is listed on the Nasdaq Global Select Market as of December 31, 2023.

During the year ended December 31, 2023, HC Group Holdings I, LLC.

(“HC I”) completed sales of 23,771,926 shares of its Option Care common stock.

In addition, the Company repurchased 2,475,166 shares from HC I on March 3, 2023 under the Company’s share repurchase program.

See Note 16, Stockholders’ Equity , for further discussion of the Company’s share repurchase program.

As of December 31, 2023, HC I no longer holds shares of the Company’s common stock.

Option Care Health, and its wholly-owned subsidiaries, provides infusion therapy and other ancillary healthcare services through a national network of 93 full service pharmacies and 84 stand-alone ambulatory infusion sites.

The Company contracts with managed care organizations, third-party payers, hospitals, physicians, and other referral sources to provide pharmaceuticals and complex compounded solutions to patients for intravenous delivery in the patients’ homes or other nonhospital settings.

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The Company has investments in companies that are 50 % owned and are accounted for as equity-method investments.

The Company’s share of earnings from equity-method investments is included in the line entitled “Equity in earnings of joint ventures” in the consolidated statements of comprehensive income (loss).

The Company’s share of earnings from equity-method investments is included in the line entitled “Equity in earnings of joint ventures” in the consolidated statements of comprehensive income.

See “Equity-Method Investments” within Note 2, Summary of Significant Accounting Policies , for further discussion of the Company’s equity-method investments.

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Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Accounts Receivable — The Company’s accounts receivable is reported at the net realizable value amount that reflects the consideration the Company expects to receive in exchange for providing services, which is inclusive of adjustments for price concessions.

The majority of accounts receivable are due from private insurance carriers and governmental health care programs, such as Medicare and Medicaid.

As of December 31, 2023, cash equivalents consisted of money market funds.

Accounts Receivable — The Company’s accounts receivable are reported at the net realizable value amount that reflects the consideration the Company expects to receive in exchange for providing services, which is inclusive of adjustments for price concessions.

The majority of accounts receivable are due from private insurance carriers and governmental healthcare programs, such as Medicare and Medicaid.

Price concessions may result from patient hardships, patient uncollectible accounts sent to collection agencies, lack of recovery due to not receiving prior authorization, differing interpretations of covered therapies in payer contracts, different pricing methodologies, or various other reasons.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), an allowance for doubtful accounts is established only as a result of an adverse change in the Company’s payers’ ability to pay outstanding billings.

The Company had no allowance for doubtful accounts as of December 31, 2022 and 2021, respectively.

The Company had no allowance for doubtful accounts as of December 31, 2023 and 2022.

Included in accounts receivable are earned but unbilled gross receivables of $ 89.1 million and $ 101.5 million as of December 31, 2023 and 2022, respectively.

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Referral sources have a useful life of fifteen to twenty years .

Trademarks/names have a useful life ranging from ten to fifteen years .

Trademarks/names have a useful life ranging from two to fifteen years .

The useful lives for other amortizable intangible assets range from approximately two to nine years .

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If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

E quity-Method Investments — The Company’s investments in certain unconsolidated entities are accounted for under the equity method.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flows basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

Equity-Method Investments — The Company’s investments in certain unconsolidated entities are accounted for under the equity method.

The balance of these investments is included in other noncurrent assets in the accompanying consolidated balance sheets.

2 unchanged sentences

The investments are decreased to reflect the Company’s equity in losses of the investees and for distributions received that are not in excess of the carrying amount of the investments.

The Company’s proportionate share of earnings or losses of the investees is recorded in equity in earnings of joint ventures in the accompanying consolidated statements of comprehensive income (loss).

The Company’s proportionate share of earnings or losses of the investees is recorded in equity in earnings of joint ventures in the accompanying consolidated statements of comprehensive income.

The Company’s proportionate share of earnings was $ 5.5 million, $ 5.1 million and $ 6.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Revenues are from government payers, commercial payers, and patients for goods and services provided and are based on a gross price based on payer contracts, fee schedules, or other arrangements less any implicit price concessions.

Due to the nature of the health care industry and the reimbursement environment in which the Company operates, certain estimates are required to record revenue and accounts receivable at their net realizable values at the time goods or services are provided.

Due to the nature of the healthcare industry and the reimbursement environment in which the Company operates, certain estimates are required to record revenue and accounts receivable at their net realizable values at the time goods or services are provided.

Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available.

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For the years ended December 31, 2023, 2022, and 2021, approximately 72 %, 73 % and 74 %, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors.

For the year ended December 31, 2020, approximately 70 % of the Company’s pharmaceutical and medical supply purchases were from three vendors .

Although there are a limited number of suppliers, the Company believes that other vendors could provide similar products on comparable terms.

However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or operating results.

Although there is uncertainty regarding the COVID-19 pandemic, as of December 31, 2022 the Company has been able to maintain adequate levels of supplies and pharmaceuticals to support its operations.

Fair Value Measurements — The fair value measurement accounting standard, ASC Topic 820, Fair Value Measurement (“ASC 820”), provides a framework for measuring fair value and defines fair value as the price that would be received to sell an asset or paid to transfer a liability.

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While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Recently Issued Accounting Pronouncements — In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

In response to concerns about structural risks of interbank offered rates (“IBORs”), and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation.

The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

The FASB further issued ASU 2021-01 to clarify the scope of Topic 848 and was effective immediately upon issuance.

The ASU 2020-04 was adopted during the year ended December 31, 2022.

The adoption did not have any material impact on the Company’s results of operations, cash flows or financial position.

Recently Issued Accounting Pronouncements — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This ASU addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The ASU improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

The ASU allows investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows.

This ASU also improves the effectiveness and comparability of disclosures by adding disclosures of pretax income (loss) and income tax expense (benefit) to be consistent with U.S.

Securities and Exchange Commission (“SEC”) Regulation S-X and removing disclosures that no longer are considered cost beneficial or relevant.

The Company is required to adopt this ASU for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its results of operations, cash flows, financial position, and disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This ASU improves the disclosures about a public entity’s reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment’s expenses.

The ASU improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities, including those public entities that have a single reportable segment, to enable investors to develop more decision-useful financial analyses.

The Company is required to adopt this ASU for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Once adopted the Company will apply the ASU retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this ASU on its results of operations, cash flows, financial position, and disclosures.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

This ASU is the result of the Board’s decision to incorporate into the Codification 14 disclosures referred by the SEC.

The ASU represents changes to clarify or improve disclosure and presentation requirements of a variety of Topics.

Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements.

Also, the amendments align the requirements in the Codification with the SEC’s regulations.

The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption permitted.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective.

The Company is currently evaluating the impact of this ASU on its results of operations, cash flows, financial position, and disclosures.

BUSINESS ACQUISITIONS AND DIVESTITURES

BioCure Asset Acquisition — In April 2021, pursuant to the asset purchase agreement dated April 7, 2021, the Company completed the acquisition of certain assets of BioCure, LLC (“BioCure”) for a purchase price of $ 18.9 million.

The allocation of the purchase price of BioCure was accounted for as an asset acquisition in accordance with ASC Topic 805, Business Combinations , with the total purchase price being allocated to the assets acquired based on the relative fair value of each asset.

The purchase price was allocated to the assets acquired as follows:

Inventories $ 601

Intangible assets, net 18,251

Total consideration transferred $ 18,852

Intangibles assets, net consists of referral sources which were assigned a useful life of 15 years, amortized on a straight-line basis.

Infinity Infusion Nursing LLC — In October 2021, pursuant to the equity purchase agreement dated October 1, 2021, the Company completed the 100 % acquisition of the equity interest in Infinity Infusion LLC (“Infinity”) for a purchase price, net of cash acquired of $ 59.6 million, which is comprised of a $ 50.0 million cash payment, two contingent $ 5.0 million payments (included as a non-cash change in other noncurrent assets and liabilities within the consolidated statements of cash flows), and $( 0.4 ) million of other purchase price adjustments.

The allocation of the purchase price of Infinity was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations , with the total purchase price being allocated to the assets and liabilities acquired based on the relative fair value of each asset and liability.

The Company has finalized the purchase price allocation of the acquisition and no purchase accounting adjustments were made.

The following is an allocation of acquired identifiable assets and assumed liabilities, net of cash acquired, as of December 31, 2022 (in thousands):

Amedisys, Inc.

— On May 3, 2023, the Company entered into a definitive merger agreement with Amedisys.

Under the terms of the merger agreement, the Company would issue new shares of its common stock to Amedisys’s stockholders, which would result in the Company’s stockholders holding approximately 64.5 % of the combined company.

On June 26, 2023, the Company entered into an agreement to terminate the Amedisys Merger Agreement.

Under the terms of the Mutual Termination Agreement, the Company received a payment of $ 106.0 million in cash on behalf of Amedisys.

The Termination Fee is included in Other, net in the consolidated statements of comprehensive income and in Net cash provided by operating activities in the consolidated statements of cash flows.

During the year ended December 31, 2023, the Company incurred $ 21.1 million in merger-related expenses, which are included in Other, net in the consolidated statements of comprehensive income and in Net cash provided by operating activities in the consolidated statements of cash flows.

Revitalized, LLC — In May 2023, pursuant to the equity purchase agreement dated May 1, 2023, the Company completed the acquisition of 100 % of the membership interests in Revitalized, LLC for a purchase price, net of cash acquired, of $ 12.5 million, which primarily consisted of $ 6.7 million of goodwill and $ 5.5 million of intangible assets.

Respiratory Therapy Asset Sale — The Company closed the transaction in December 2022, for a sale price of $ 18.4 million comprised of $ 14.7 million in proceeds received at the time of closing and $ 3.7 million recorded as a current asset was paid in the year ended December 31, 2023.

Pursuant to the final transaction terms, $ 8.8 million of assets were sold, along with $ 0.7 million of liabilities that were previously classified as held for sale at the lower of their carrying amount or fair values less cost to sell.

As a result of the transaction, a $ 10.3 million pre-tax gain on sale was recorded within Other, net in the Company’s consolidated statements of comprehensive income within the year ended December 31, 2022.

Rochester Home Infusion, Inc.

— In August 2022, pursuant to the stock purchase agreement dated June 10, 2022, the Company completed the acquisition of 100 % of the equity interests in Rochester Home Infusion, Inc.

(“RHI”) for a purchase price, net of cash acquired, of $ 27.4 million.

The allocation of the purchase price of RHI was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations , with the total purchase price being allocated to the assets and liabilities acquired based on the relative fair value of each asset and liability.

The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired (in thousands):

Accounts receivable $ 686

Intangible assets 5,449

Accounts payable and other assumed liabilities ( 539 )

Other assets 394

Accounts payable and other liabilities ( 434 )

Fair value identifiable assets and liabilities 6,095

4 unchanged sentences

Purchase price, net of cash acquired $ 27,418

(1) Goodwill is attributable to cost synergies from operational efficiencies and establishing a more comprehensive clinical platform through the Company’s national infrastructure and Infinity’s nursing network.

Wasatch Infusion LLC Acquisition — In December 2021, pursuant to the executed asset purchase agreement on December 29, 2021, the Company completed the acquisition of Wasatch Infusion LLC (“Wasatch”) for a purchase price of $ 19.5 million, which is comprised of a $ 17.8 million cash payment, a contingent $ 2.0 million payment (included as a non-cash change in other noncurrent assets and liabilities within the consolidated statements of cash flows), and $( 0.3 ) million of other purchase price adjustments.

The allocation of the purchase price of Wasatch was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations , with the total purchase price being allocated to the assets and liabilities acquired based on the relative fair value of each asset and liability.

The Company has finalized the purchase price allocation of the acquisition.

Certain adjustments were made to preliminary valuation amounts related to accounts receivable, other assets and other assumed liabilities.

The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities (in thousands):

Accounts receivable $ 2,688

Inventories 2,038

Intangible assets 4,245

Other assets 769

Accounts payable ( 6,686 )

Other assumed liabilities ( 965 )

Fair value identifiable assets and liabilities 2,089

Goodwill (1) 17,366

Purchase price $ 19,455

(1) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs.

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Certain adjustments were made to preliminary valuation amounts related to accrued compensation.

The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities (in thousands):

The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired, (in thousands):

Accounts receivable $ 2,303

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Rochester Home Infusion, Inc.

— In August 2022, pursuant to the stock purchase agreement dated June 10, 2022, the Company completed the acquisition of 100 % of the equity interests in Rochester Home Infusion, Inc.

(“RHI”) for a purchase price, net of cash acquired, of $ 27.4 million.

The following is a preliminary estimate of the allocation of the consideration transferred, open for accounts receivable, to acquired identifiable assets and assumed liabilities, net of cash acquired, as of December 31, 2022 (in thousands):

Wasatch Infusion LLC Acquisition — In December 2021, pursuant to the executed asset purchase agreement on December 29, 2021, the Company completed the acquisition of Wasatch Infusion LLC for a purchase price of $ 19.5 million, which primarily consisted of $ 17.4 million of goodwill, $ 4.2 million of intangible assets, $ 2.7 million of accounts receivable, $ 2.0 million in inventories, and $( 6.7 ) million of accounts payable.

The Company has finalized the purchase price allocation of the acquisition and no purchase accounting adjustments were made.

The following is an allocation of acquired identifiable assets and assumed liabilities, net of cash acquired, (in thousands):

Accounts receivable $ 2,219

Intangible assets 25,400

Other assets 394

Accounts payable and other liabilities ( 434 )

Accounts payable and other assumed liabilities ( 539 )

Fair value identifiable assets and liabilities 27,080

4 unchanged sentences

Purchase price, net of cash acquired $ 59,604

(1) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs.

Respiratory Therapy Asset Sale - As of September 30, 2022, the Company determined that certain respiratory therapy assets met the applicable criteria as being held for sale.

In October 2022, the Company entered into a definitive agreement to sell these assets.

The Company closed the transaction in December 2022, for a sale price of $ 18.4 million comprised of $ 14.7 million in proceeds received at the time of closing and $ 3.7 million recorded as a current asset due within one year (included as a non-cash change in prepaid expenses and other current assets within the consolidated statements of cash flows).

As a result of the transaction, a $ 10.3 million pre-tax gain on sale was recorded within Other, net in the Company’s consolidated statements of comprehensive income (loss) .

BioCure Asset Acquisition — In April 2021, pursuant to the asset purchase agreement dated April 7, 2021, the Company completed the acquisition of certain assets of BioCure, LLC for a purchase price of $ 18.9 million, which is comprised of $ 18.3 million of intangible assets, net and $ 0.6 million of inventories.

The following table sets forth the net revenue earned by category of payer for the years ended December 31, 2023, 2022 and 2021 (in thousands):

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2023 2022 2021

US federal income tax expense (benefit):

federal income tax expense (benefit):

Current $ 56,474 $ 4,103 $ —

9 unchanged sentences

2023 2022 2021

US federal statutory tax rate 21.0 % 21.0 % 21.0 %

federal statutory tax rate 21.0 % 21.0 % 21.0 %

State and local income taxes net of federal tax benefit 4.8 % 5.0 % 4.9 %

Valuation allowance 0.0 % ( 46.2 ) % ( 29.9 ) %

Stock-based compensation 0.0 % ( 0.1 ) % 6.7 %

Non-deductible compensation 0.4 % 0.1 % ( 16.3 ) %

Non-deductible expenses 0.1 % 0.2 % 0.3 %

Valuation allowance ( 1.5 ) % 0.0 % ( 46.2 ) %

Non-deductible and stock-based compensation 0.7 % 0.4 % 0.0 %

Other, net 0.4 % 0.2 % ( 0.1 ) %

Effective income tax rate 25.5 % 26.8 % ( 20.1 ) %

The Company recorded income tax expense of $ 55.2 million and income tax benefit of $ 23.4 million, which represents an effective tax rate of 26.8 % and negative 20.1 % for the years ended December 31, 2022 and 2021, respectively.

The variance in the Company’s effective tax rate of 26.8 % and negative 20.1 % is primarily attributable to the release of the Company’s federal valuation allowance for the year ended December 31, 2021.

The variance in the Company’s effective tax rate of 26.8 % for the year ended December 31, 2022 compared to the federal statutory rate of 21% is primarily attributable to the difference between federal and state tax rates, as well as various non-deductible expenses.

The components of deferred income tax assets and liabilities using the 21% U.S.

Federal statutory tax rate were as follows as of December 31, 2022 and 2021 (in thousands):

The Company recorded income tax expense of $ 91.7 million and $ 55.2 million, which represents an effective tax rate of 25.5 % and 26.8 % for the years ended December 31, 2023 and 2022, respectively.

The income tax expense for the year ended December 31, 2023 includes $ 21.8 million of tax expense related to the Termination Fee payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses.

In September 2023, the Company released $ 5.8 million of state valuation allowance.

The variance in the Company’s effective tax rate of 25.5 % and 26.8 % for the years ended December 31, 2023 and 2022, respectively, is primarily attributable to the difference in state taxes, various non-deductible expenses, and a change in state valuation allowance.

The variance in the Company’s effective tax rate of 25.5 % for the year ended December 31, 2023 compared to the federal statutory rate of 21% is also primarily attributable to state taxes, various non-deductible expenses, and a change in state valuation allowance.

The variance in the Company’s effective tax rate of 26.8 % and negative 20.1 % for the years ended December 31, 2022 and 2021, respectively, is primarily attributable to the release of the Company’s federal valuation allowance for the year ended December 31, 2021.

The components of deferred income tax assets and liabilities were as follows as of December 31, 2023 and 2022 (in thousands):

December 31, 2023 December 31, 2022

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Deferred tax liabilities ( 146,239 ) ( 141,605 )

Net deferred tax (liabilities) assets $ ( 22,154 ) $ 27,033

Net deferred tax liabilities $ ( 34,920 ) $ ( 22,154 )

Deferred tax assets are generally required to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

For the year ended December 31, 2022, the Company maintains a valuation allowance of $ 13.1 million against certain state net operating losses.

For the year ended December 31, 2023, the Company maintains a valuation allowance of $ 6.4 million against certain state net operating losses (“NOL”).

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some or all the deferred tax assets will not be realized.

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The Company is subject to taxation in the United States and various states.

At December 31, 2022, the Company had $ 201.3 million of gross federal NOL carryforwards all of which are currently available to offset future taxable income in the United States and reflected as a deferred tax asset of the company.

Gross federal NOL carryforwards of $ 144.9 million expire beginning in 2027 through 2036 and $ 56.4 million have an indefinite carryforward period.

At December 31, 2021, the Company had $ 358.4 million of gross federal NOL’s.

At December 31, 2022 and 2021, the Company had $ 118.1 million and $ 140.2 million of interest limitation carryforwards which have an indefinite carryforward period.

At December 31, 2022 and 2021, the Company also had $ 349.5 million and $ 405.1 million of cumulative gross state NOL carryforwards available to offset future taxable income in various states.

At December 31, 2023, the Company had $ 39.3 million of tax-effected federal NOL carryforwards all of which are currently available to offset future taxable income in the United States and reflected as a deferred tax asset of the company.

Tax-effected federal NOL carryforwards of $ 28.4 million expire beginning in 2028 through 2036, and $ 10.9 million of tax-effected federal NOLs have an indefinite carryforward period.

At December 31, 2022, the Company had $ 42.3 million of tax-effected federal NOLs.

At December 31, 2023 and 2022, the Company had $ 13.8 million and $ 29.4 million tax-effected amounts of interest limitation carryforwards which have an indefinite carryforward period.

At December 31, 2023 and 2022, the Company also had $ 17.7 million and $ 19.5 million tax-effected amounts of cumulative state NOL carryforwards available to offset future taxable income in various states.

These state NOL carryforwards will begin to expire beginning in 2024 through 2042, with some having an indefinite carryforward period.

At December 31, 2022 and 2021, the unrecognized tax benefits for uncertain tax positions was $ 0 .

At December 31, 2023 and 2022, there were no unrecognized tax benefits for uncertain tax positions.

The following table presents the valuation allowance for deferred tax assets for the years ended December 31, 2023, 2022 and 2021 (in thousands):

Description Balance at Beginning of Period Charged (Benefit) to Costs and Expenses Charged (Benefit) to Other Accounts Balance at End Period

Description Balance at Beginning of Period Charged (Benefit) to Costs and Expenses Charged (Benefit) to Other Accounts Balance at End of Period

Valuation allowance for deferred tax assets $ 112,085 $ ( 96,136 ) $ ( 2,798 ) $ 13,151

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The Company is subject to various state tax audits and believes that the outcome of these audits will not have a material impact on the Company.

EARNINGS (LOSS) PER SHARE

The Company presents basic and diluted earnings (loss) per share for its common stock.

Basic earnings (loss) per share is calculated by dividing the net income (loss) of the Company by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings (loss) per share is determined by adjusting the profit or loss and the weighted average number of shares of common stock outstanding for the effects of all potentially dilutive securities.

The earnings (loss) is used as the basis of determining whether the inclusion of common stock equivalents would be anti-dilutive.

The computation of diluted shares for the years ended December 31, 2022 and 2021 includes the effect of shares that would be issued in connection with warrants, stock options and restricted stock awards, as these common stock equivalents are dilutive to the earnings per share.

The computation of diluted shares for the year ended December 31, 2020 excludes the effect of shares that would be issued in connection with warrants, stock options and restricted stock awards, as their inclusion would be anti-dilutive to the loss per share.

As of December 31, 2022, there were 629,690 stock option awards and 205,652 restricted stock awards outstanding that were excluded from the calculation as they would be anti-dilutive.

As of December 31, 2021, there were 457,753 warrants, 490,968 stock options and 316,454 restricted stock awards outstanding that were excluded from the calculation as they were anti-dilutive.

As of December 31, 2020, there were 2,285,784 warrants, 412,831 stock options and 549,650 restricted stock awards outstanding that were excluded from the calculation as they were anti-dilutive.

The following table presents the Company’s basic earnings (loss) per share and shares outstanding (in thousands, except per share data):

EARNINGS PER SHARE

The Company presents basic and diluted earnings per share for its common stock.

Basic earnings per share is calculated by dividing the net income of the Company by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is determined by adjusting the profit or loss and the weighted average number of shares of common stock outstanding for the effects of all potentially dilutive securities.

The earnings are used as the basis of determining whether the inclusion of common stock equivalents would be anti-dilutive.

The computation of diluted shares for the years ended December 31, 2023, 2022 and 2021 includes the effect of shares that would be issued in connection with warrants, stock options, restricted stock awards and performance stock unit awards, as these common stock equivalents are dilutive to the earnings per share.

The following table presents the Company’s common stock equivalents that were excluded from the calculation of earnings per share as they would be anti-dilutive:

Year Ended December 31,

2023 2022 2021

Net income (loss) (1) (2) $ 150,556 $ 139,898 $ ( 8,076 )

Warrants — — 457,753

Stock option awards 1,214,560 629,690 490,968

Restricted stock awards 340,331 205,652 316,454

Performance stock unit awards — — —

The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):

Year Ended December 31,

2023 2022 2021

Net income (1) (2) (3) $ 267,090 $ 150,556 $ 139,898

Weighted average number of common shares outstanding 178,973 181,105 179,855

Earnings (loss) per Common Share:

Earnings (loss) per common share, basic $ 0.83 $ 0.78 $ ( 0.04 )

(1) Net income (loss) for the year ended December 31, 2021 includes the impact of the Company’s release of its valuation allowance.

See Note 6, Income Taxes , for further discussion.

(2) Net income (loss) for the year ended December 31, 2022 includes the impact of the Company’s Respiratory Therapy Asset Sale.

Earnings per Common Share:

Earnings per common share, basic $ 1.49 $ 0.83 $ 0.78

(1) Net income for the year ended December 31, 2023 includes $ 63.1 million related to the termination payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses and taxes.

See Note 3, Business Acquisitions and Divestitures , for further discussion.

The following table presents the Company’s diluted earnings (loss) per share and shares outstanding (in thousands, except per share data):

In addition, net income includes approximately $ 5.3 million of other non-operating income.

(2) Net income for the year ended December 31, 2022 includes the impact of the Company’s Respiratory Therapy Asset Sale.

See Note 3, Business Acquisitions and Divestitures , for further discussion.

(3) Net income for the year ended December 31, 2021 includes the impact of the Company’s release of its valuation allowance.

The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):

Year Ended December 31,

2023 2022 2021

Net income (loss) (1) (2) $ 150,556 $ 139,898 $ ( 8,076 )

Net income (1) (2) (3) $ 267,090 $ 150,556 $ 139,898

Weighted average number of common shares outstanding 178,973 181,105 179,855

1 unchanged sentence

Weighted average number of common shares outstanding, diluted 180,375 182,075 181,205

Earnings (loss) per Common Share:

Earnings (loss) per common share, diluted $ 0.83 $ 0.77 $ ( 0.04 )

(1) Net income (loss) for the year ended December 31, 2021 includes the impact of the Company’s release of its valuation allowance.

See Note 6, Income Taxes , for further discussion.

(2) Net income (loss) for the year ended December 31, 2022 includes the impact of the Company’s Respiratory Therapy Asset Sale.

Earnings per Common Share:

Earnings per common share, diluted $ 1.48 $ 0.83 $ 0.77

See Note 3, Business Acquisitions and Divestitures , for further discussion.

During the years ended December 31, 2022 and 2021, the Company incurred operating lease expenses of $ 29.1 million and $ 29.8 million, respectively, including short-term lease expenses, which were included as a component of selling, general and administrative expenses in the consolidated statements of comprehensive income (loss).

In addition, net income includes approximately $ 5.3 million of other non-operating income.

(2) Net income for the year ended December 31, 2022 includes the impact of the Company’s Respiratory Therapy Asset Sale.

See Note 3, Business Acquisitions and Divestitures , for further discussion.

(3) Net income for the year ended December 31, 2021 includes the impact of the Company’s release of its valuation allowance.

During the years ended December 31, 2023, 2022 and 2021, the Company incurred operating lease expenses of $ 30.6 million, $ 29.1 million, and $ 29.8 million, respectively, including short-term lease expenses, which were included as a component of selling, general and administrative expenses in the consolidated statements of comprehensive income.

As of December 31, 2023, the weighted-average remaining lease term was 6.8 years, and the weighted-average discount rate was 6.16 %.

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Present value of lease liabilities $ 103,762

During the year ended December 31, 2022, the Company commenced new leases, extensions and amendments, resulting in non-cash investing and financing activities in the consolidated statements of cash flows of $ 17.2 million related to the increases in the operating lease right-of-use asset and operating lease liabilities, respectively.

During the year ended December 31, 2023, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the consolidated statements of cash flows of $ 30.5 million related to the increases in the operating lease ROU asset and operating lease liabilities.

As of December 31, 2023, the Company did not have any significant operating or financing leases that had not yet commenced.

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Property and equipment, net $ 120,630 $ 108,321

Depreciation expense is recorded within cost of revenue and operating expenses within the consolidated statements of comprehensive income (loss), depending on the nature of the underlying fixed assets.

Depreciation expense is recorded within cost of revenue and operating expenses within the consolidated statements of comprehensive income, depending on the nature of the underlying fixed assets.

The depreciation expense included in cost of revenue relates to revenue-generating assets, such as infusion pumps.

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The Company determined that there was no goodwill impairment in 2023, 2022 or 2021.

The determination of fair value for acquisitions and the allocation of that value to individual assets and liabilities within the reporting unit requires the Company to make significant estimates and assumptions.

The determination of fair value for acquisitions and the allocation of that value requires the Company to make significant estimates and assumptions.

These estimates and assumptions primarily include, but are not limited to, the selection of appropriate peer group companies;

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Balance at December 31, 2020 $ 1,428,610

Purchase accounting adjustments 3,068

Acquisitions 48,954

Balance at December 31, 2021 $ 1,477,564

Acquisitions 54,543

Purchase accounting adjustments 1,317

Balance at December 31, 2022 $ 1,533,424

2 unchanged sentences

Balance at December 31, 2023 $ 1,540,246

The carrying amount and accumulated amortization of intangible assets consists of the following as of December 31, 2022 and 2021 (in thousands):

The carrying amount and accumulated amortization of intangible assets consist of the following as of December 31, 2023 and 2022 (in thousands):

December 31, 2023 December 31, 2022

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Principal Amount Discount Debt Issuance Costs Net Balance

ABL Facility $ — $ — $ — $ —

Revolver Facility $ — $ — $ — $ —

First Lien Term Loan 588,000 ( 6,974 ) ( 9,678 ) 571,348

11 unchanged sentences

Total long-term debt $ 1,058,204

As of December 31, 2022 and 2021, the Company’s ABL Facility provided for borrowings up to $ 175.0 million, and matures on October 27, 2026.

The ABL Facility bears interest at a rate equal to, at the Company’s election, either (i) a base rate determined in accordance with the ABL Credit Agreement plus an applicable margin, which is equal to between 0.25 % and 0.75 % based on the historical excess availability as a percentage of the Line Cap (as such term is defined in the ABL Credit Agreement);

and (ii) LIBOR (or a comparable successor rate, with a floor of 0.00 % per annum) plus an applicable margin, which is equal to between 1.25 % and 1.75 % based on the historical excess availability as a percentage of the Line Cap.

The ABL Facility contains commitment fees payable on the unused portion ranging from 0.25 % to 0.375 %, depending on various factors including the Company’s leverage ratio, type of loan and rate type, and letter of credit fees of 2.50 %.

Borrowings under the ABL Facility are secured by a first priority security interest in the Company’s and each of its subsidiaries’ inventory, accounts receivable, cash, deposit accounts and certain assets and property related thereto (the “ABL Priority Collateral”), in each case subject to certain exceptions, and a third priority security interest in the Term Loan Priority Collateral, as defined below.

The ABL Credit Agreement was amended in October 2021, and prior to the amendment, the ABL Facility bore interest at a per annum rate initially provided that was determined by the Company’s periodic selection of rate type, either the base rate or the Eurocurrency rate and previously matured on August 6, 2024.

Interest on the ABL Facility was charged on base rate loans at the greater of base rate, as defined, or 0.25 % plus 1.25 % to 1.75 %, depending on the historical excess availability as a percentage of the Line Cap, as defined in the ABL Facility credit agreement.

Interest on the ABL Facility was charged on Eurocurrency rate loans at the Eurocurrency rate, as defined, plus 2.25 % to 2.75 %, depending on the historical excess availability as a percentage of the Line Cap, as defined in the ABL Facility credit agreement.

The Company had $ 6.7 million and $ 7.1 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the ABL Facility of $ 168.3 million and $ 167.9 million, as of December 31, 2022 and 2021, respectively.

On December 7, 2023, the Company entered into the second amendment (the “Amendment”) to the amended and restated First Lien Credit Agreement dated as of October 27, 2021.

The Amendment, among other things, provides for revolving credit commitments by the applicable Revolving Credit Lenders in an aggregate amount of $ 400.0 million (the “Revolver Facility”) pursuant to which such lenders have agreed to make Revolving Credit Loans to the Company.

As of December 31, 2023, the Company had $ 5.3 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $ 394.7 million.

The Revolver Facility matures on the date that is the earlier of (i) December 7, 2028 and (ii) the date that is 91 days prior to the stated maturity date applicable to any Term B Loans.

Borrowings under the Revolver Facility bear interest at a rate equal to, at the option of the Company, either (i) the Term Secured Overnight Financing Rate (“SOFR”) applicable thereto plus the Applicable Rate or (ii) the then applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the Amendment, (A) for Term SOFR Loans, 1.75 %, (B) for Base Rate Loans, 0.75 % and (ii) thereafter, the following percentages per annum, based upon the Total Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to the terms of the Credit Agreement.

The table below illustrates the aforementioned interest rate terms:

Pricing Level Total Net Leverage Ratio Applicable Rate for Term SOFR Loans Applicable Rate for Base Rate Loans

I Greater than or equal to 3.00x 2.25 % 1.25 %

II Less than 3.00x, but greater than or equal to 2.25x 2.00 % 1.00 %

III Less than 2.25x, but greater than or equal to 1.50x 1.75 % 0.75 %

IV Less than 1.50x, but greater than or equal to 1.00x 1.50 % 0.50 %

V Less than 1.00x 1.25 % 0.25 %

Concurrently with the creation of the Revolver Facility, the Company terminated the ABL Credit Agreement.

Prior to the transition to the Revolver Facility, the ABL Facility had been in effect from August 6, 2019 to December 7, 2023.

As of December 31, 2022, the Company’s ABL Facility provided for borrowings up to $ 175.0 million and had a maturity date of October 27, 2026.

Effective January 13, 2023, the Company entered into an agreement to amend the ABL Facility and increase the amount of borrowing availability by $ 50.0 million to $ 225.0 million total borrowing availability.

As a result of the amended agreement, Secured Overnight Financing Rate (“SOFR”) was established as the new reference rate, replacing LIBOR.

The Company entered into the First Lien Term Loan Agreement (the “First Lien Credit Agreement Amendment”), which commenced in October 2021 (the “October 2021 Refinancing”).

The First Lien Term Loan (the “First Lien Term Loan Facility”) is charged an interest rate equal to, at the Company’s option, either (i) LIBOR (or a comparable successor rate, with a floor of 0.50 % per annum) plus an applicable margin of 2.75 % for Eurocurrency Rate Loans (as such term is defined in the First Lien Term Loan Agreement);

and (ii) a base rate determined in accordance with the First Lien Term Loan Agreement, plus 1.75 % for Base Rate Loans (as such term is defined in the First Lien Term Loan Agreement).

As a result of the amended agreement, SOFR was established as the new reference rate, replacing LIBOR.

Prior to the termination of the ABL Facility in December 2023, the ABL Facility bore interest at a rate equal to, at the Company’s election, either (i) a base rate determined in accordance with the ABL Credit Agreement plus an applicable margin, which is equal to between 0.25 % and 0.75 % based on the historical excess availability as a percentage of the Line Cap (as such term is defined in the ABL Credit Agreement);

and (ii) SOFR plus an applicable margin, which is equal to between 1.25 % and 1.75 % based on the historical excess availability as a percentage of the Line Cap.

The ABL Facility contained commitment fees payable on the unused portion ranging from 0.25 % to 0.375 %, depending on various factors including the Company’s leverage ratio, type of loan and rate type, and letter of credit fees of 2.50 %.

Borrowings under the ABL Facility were secured by a first priority security interest in the Company’s and each of its subsidiaries’ inventory, accounts receivable, cash, deposit accounts and certain assets and property related thereto (the “ABL Priority Collateral”), in each case subject to certain exceptions, and a third priority security interest in each of the Company’s subsidiaries’ capital stock (subject to certain exceptions) and substantially all of the Company’s property and assets (other than the ABL Priority Collateral).

The Company had $ 6.7 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the ABL Facility of $ 168.3 million, as of December 31, 2022.

Effective June 30, 2023, the Company entered into an agreement, dated as of June 8, 2023, to amend the First Lien Term Loan to replace LIBOR and related definitions and provisions with SOFR as the new reference rate.

The Company entered into the First Lien Term Loan Agreement (the “First Lien Credit Agreement Amendment”), which commenced in October 2021 (the “October 2021 Refinancing”) to provide $ 600.0 million of refinanced borrowings.

The First Lien Term Loan (the “First Lien Term Loan Facility”) is charged an interest rate equal to, at the Company’s option, either (i) SOFR (with a floor of 0.50 % per annum) plus an applicable margin of 2.75 % for Term SOFR Loans (as such term is defined in the First Lien Credit Agreement Amendment);

and (ii) a base rate determined in accordance with the First Lien Credit Agreement Amendment, plus 1.75 % for Base Rate Loans (as such term is defined in the First Lien Credit Agreement Amendment).

The First Lien Term Loan Facility is repayable in quarterly installments, which began in March 2022, and matures on October 27, 2028.

1 unchanged sentence

The weighted average interest rate incurred on the First Lien Term Loan was 7.83 % and 4.52 % for the years ended December 31, 2023 and 2022, respectively.

The October 2021 Refinancing refinanced the $ 1,157.0 million outstanding on the Company’s prior First Lien Term Loan due in 2026.

The Company amended the existing First Lien Term Loan, to provide $ 600.0 million of refinanced borrowings.

The principal balance of the First Lien Term Loan prior to the October 2021 Refinancing was repayable in quarterly installments which commenced in March 2020 of $ 2.3 million plus interest, with a final payment of all remaining outstanding principal due on August 6, 2026.

Interest on the First Lien Term Loan was payable monthly on base rate loans at base rate, as defined, plus 3.25 % to 3.50 %, depending on the Company’s leverage ratio.

Interest is charged on Eurocurrency rate loans at the Eurocurrency rate, as defined, plus 4.25 % to 4.50 %, depending on the Company’s leverage ratio.

Amounts borrowed under the First Lien Term Loan were secured by a first priority security interest in each of the Company’s subsidiaries’ capital stock (subject to certain exceptions) and substantially all of the Company’s property and assets (other than the ABL Priority Collateral) (the “Term Loan Priority Collateral”), in each case subject to certain exceptions, and a second priority security interest in the ABL Priority Collateral.

In conjunction with the refinancing, the Company also issued $ 500.0 million in aggregate principal of unsecured senior notes (“Senior Notes”).

In conjunction with the October 2021 Refinancing, the Company also issued $ 500.0 million in aggregate principal of unsecured senior notes (“Senior Notes”).

The Senior Notes bear interest at a rate of 4.375 % per annum payable semi-annually in arrears on October 31 and April 30 of each year, commencing on April 30, 2022.

The Senior Notes mature on October 31, 2029.

The interest rate on the Senior Notes was 4.375 % as of both December 31, 2022 and 2021, respectively.

The weighted average interest rate incurred on the Senior Notes was 4.375 % for both years ended December 31, 2022 and 2021, respectively.

The interest rate on the Senior Notes was 4.375 % as of both December 31, 2023 and 2022.

The weighted average interest rate incurred on the Senior Notes was 4.375 % for both years ended December 31, 2023 and 2022.

The Company assessed whether the October 2021 Refinancing resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping lenders as follows:

5 unchanged sentences

The Company determined that $ 501.4 million of new debt was issued related to the First Lien Term Loan, which is disclosed as an inflow from financing activities in the consolidated statements of cash flows.

In connection with the refinancing of the First Lien Term Loan and issuance of the Senior Notes, the Company incurred $ 10.7 million in debt issuance costs and third-party fees, of which $ 8.8 million was capitalized, $ 1.7 million was expensed as a component of other expense and $ 0.2 million was expensed as a loss on extinguishment as a component of other expense in the consolidated statements of comprehensive income (loss).

Further, $ 1.5 million of the total fees incurred of $ 10.7 million was netted against the $ 501.4 million of proceeds from debt as a component of the cash flows from financing activities, $ 7.4 million was presented as deferred financing costs as a component of cash flows from financing activities, and the remaining $ 1.8 million was included in cash flows from operating activities in the consolidated statements of cash flows.

The Company recognized a loss on extinguishment of debt of $ 1.0 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income (loss), of which $ 0.2 million related to debt issuance costs incurred with the First Lien Term Loan refinancing and issuance of the Senior Notes, as discussed above, and $ 0.8 million related to existing deferred financing fees that were written off upon extinguishment within the consolidated statements of comprehensive income (loss) and cash flows during the year ended December 31, 2021.

Prior to the October 2021 Refinancing, the Company entered into an amendment on the First Lien Term Loan in January 2021 (the “January 2021 Refinancing”).

The January 2021 Refinancing resulted in an additional $ 250.0 million of incremental First Lien Term Loan indebtedness being issued in addition to the $ 915.8 million outstanding and reduced the interest rate on all outstanding First Lien Term Loan indebtedness from LIBOR plus 4.25 % to LIBOR plus 3.75 %.

The proceeds of the $ 250.0 million incremental First Lien Term Loan indebtedness were used to prepay the remaining $ 245.8 million balance of the previous $ 400.0 million senior secured second lien pay-in-kind (“PIK”) toggle floating rate notes due 2027 (“Second Lien Notes”).

Following the January 2021 Refinancing, the First Lien Term Loan was repayable in quarterly installments of $ 2.9 million plus interest, with a final payment of all remaining outstanding principal due on August 6, 2026.

Prior to the January 2021 Refinancing, the Second Lien Notes were set to mature on August 6, 2027.

Interest on the Second Lien Notes was payable quarterly and was at LIBOR, plus 8.75 %.

The Company recognized a loss on extinguishment of debt of $ 1.0 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income, of which $ 0.2 million related to debt issuance costs incurred with the First Lien Term Loan refinancing and issuance of the Senior Notes, as discussed above, and $ 0.8 million related to existing deferred financing fees that were written off upon extinguishment within the consolidated statements of comprehensive income and cash flows during the year ended December 31, 2021.

Prior to the October 2021 Refinancing, the Company entered into an amendment on the First Lien Term Loan in January 2021 (the “January 2021 Refinancing”) which resulted in additional First Lien Term Loan indebtedness.

The proceeds of the First Lien Term Loan indebtedness were used to prepay the remaining balance of the previous senior secured second lien pay-in-kind toggle floating rate notes due 2027 (“Second Lien Notes”).

The Company assessed whether the repayment of the Second Lien Notes by issuing incremental First Lien Term Loan indebtedness resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping lenders as follows:

5 unchanged sentences

The Company determined that $ 356.2 million of new debt was issued related to the First Lien Term Loan, which is disclosed as an inflow from financing activities in the consolidated statements of cash flows.

In connection with the prepayment of the Second Lien Notes and incremental First Lien Term Loan indebtedness, the Company incurred $ 7.2 million in debt issuance costs and third-party fees, of which $ 3.7 million was capitalized, $ 0.9 million was expensed as a component of other expense and $ 2.6 million was expensed as a loss on extinguishment as a component of other expense in the consolidated statements of comprehensive income (loss).

Further, $ 1.0 million of the total fees incurred of $ 7.2 million was netted against the $ 356.2 million of proceeds from debt as a component of the cash flows from financing activities, $ 2.9 million was presented as deferred financing costs as a component of cash flows from financing activities, $ 2.4 million was presented as debt prepayment fees as a component of cash flows from financing activities, and the remaining $ 0.9 million was included in cash flows from operating activities in the consolidated statements of cash flows.

The Company recognized a loss on extinguishment of debt of $ 12.4 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income (loss), of which $ 2.6 million related to debt issuance costs incurred with the incremental First Lien Term Loan indebtedness and prepayment of the Second Lien Notes, as discussed above, and $ 9.8 million related to existing deferred financing fees that were written off upon extinguishment within the consolidated statements of comprehensive income (loss) and cash flows during the year ended December 31, 2021.

The Company recognized a loss on extinguishment of debt of $ 12.4 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income, of which $ 2.6 million related to debt issuance costs incurred with the incremental First Lien Term Loan indebtedness and prepayment of the Second Lien Notes, as discussed above, and $ 9.8 million related to existing deferred financing fees that were written off upon extinguishment within the consolidated statements of comprehensive income and cash flows during the year ended December 31, 2021.

Long-term debt matures as follows (in thousands):

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Credit risk is monitored through established approval procedures, including reviewing credit ratings when appropriate.

In August 2019, the Company entered into interest rate swap agreements that reduce the variability in the interest rates on the newly-issued debt obligations following the Merger with BioScrip.

The first interest rate swap for $ 925.0 million notional was effective in August 2019 with $ 911.1 million designated as a cash flow hedge against the underlying interest rate on the First Lien Term Loan interest payments indexed to one-month LIBOR through August 2021.

In accordance with ASU 2017-12, Targeted Improvements to Accounting for Hedges , the Company had determined that the $ 911.1 million designated cash flow hedge is perfectly effective.

The remaining $ 13.9 million notional amount of the first interest rate swap is not designated as a hedging instrument.

The first interest rate swap expired in August 2021.

The second interest rate swap of $ 400.0 million notional was effective in November 2019 and was designated as a cash flow hedge against the underlying interest rate on the Second Lien Notes interest payments indexed to three-month LIBOR through November 2020.

In May 2020, the Company elected to PIK the Second Lien Notes’ quarterly interest payment due in August 2020.

Upon making the PIK election, the Company determined that the hedged interest payment would no longer occur, resulting in an ineffective hedge, so the Company discontinued hedge accounting on its $ 400.0 million notional interest rate swap.

As a result, the Company reclassified accumulated comprehensive loss of $ 3.7 million to interest expense, net in the consolidated statements of comprehensive income (loss).

The gains and losses associated with the $ 400.0 million notional swap were recognized in net income (loss) through interest expense until the swap expired in November 2020.

In October 2021, the Company entered into an interest rate cap hedge with a notional amount of $ 300.0 million for a 5-year term beginning November 30, 2021.

In August 2019, the Company entered into an interest rate swap agreement that reduced the variability in the interest rates on the newly-issued debt obligations following the Merger with BioScrip.

The interest rate swap for $ 925.0 million notional was effective in August 2019 with $ 911.1 million designated as a cash flows hedge against the underlying interest rate on the First Lien Term Loan interest payments indexed to one-month LIBOR through August 2021.

In accordance with ASU 2017-12, Targeted Improvements to Accounting for Hedges , the Company had determined that the $ 911.1 million designated cash flows hedge is perfectly effective.

The remaining $ 13.9 million notional amount of the interest rate swap is not designated as a hedging instrument.

The interest rate swap expired in August 2021.

In October 2021, the Company entered into an interest rate cap hedge with a notional amount of $ 300.0 million for a five-year term beginning November 30, 2021.

The hedge partially offsets risk associated with the First Lien Term Loan’s variable interest rate.

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Derivative Balance Sheet Caption December 31, 2023 December 31, 2022

Interest rate cap designated as cash flow hedge Prepaid expenses and other current assets $ 10,926 $ —

Interest rate cap designated as cash flow hedge Other noncurrent assets 17,342 —

Total derivatives $ 28,268 $ —

Fair Value - Derivatives in Liability Position

Derivative Balance Sheet Caption December 31, 2022 December 31, 2021

Interest rate cap designated as cash flow hedge Accrued expenses and other current liabilities $ — $ 601

Total derivatives $ — $ 601

The gain and loss associated with the changes in the fair value of the effective portion of hedging instruments are recorded into other comprehensive income (loss).

The gain and loss associated with the changes in the fair value of the hedging instruments not designated are recognized in net income (loss) through interest expense.

The following table presents the pre-tax gains (losses) from derivative instruments recognized in other comprehensive income (loss) in the Company’s consolidated statements of comprehensive income (loss) (in thousands):

Interest rate cap designated as cash flows hedge Prepaid expenses and other current assets $ 9,746 $ 10,926

Interest rate cap designated as cash flows hedge Other noncurrent assets 10,183 17,342

Total derivative assets $ 19,929 $ 28,268

The gain and loss associated with the changes in the fair value of the effective portion of hedging instruments are recorded into other comprehensive (loss) income.

The gain and loss associated with the changes in the fair value of the hedging instruments not designated are recognized in net income through interest expense.

The following table presents the pre-tax (loss) gain from derivative instruments recognized in other comprehensive (loss) income in the Company’s consolidated statements of comprehensive income (in thousands):

Year Ended December 31,

Derivative 2023 2022 2021

Interest rate cap designated as cash flow hedge $ 28,869 $ ( 601 ) $ —

Interest rate swaps designated as cash flow hedges — 11,172 ( 7,723 )

Interest rate swaps that discontinued hedge accounting — — 3,746

Interest rate cap designated as cash flows hedge $ ( 8,339 ) $ 28,869 $ ( 601 )

Interest rate swap designated as cash flows hedge — — 11,172

Total $ ( 8,339 ) $ 28,869 $ 10,571

The following table presents the amount and location of pre-tax income (loss) recognized in the Company’s consolidated statement of comprehensive income (loss) related to the Company’s derivative instruments (in thousands):

The following table presents the amount and location of pre-tax income (loss) recognized in the Company’s consolidated statement of comprehensive income related to the Company’s derivative instruments (in thousands):

Year Ended December 31,

Derivative Income Statement Caption 2023 2022 2021

Interest rate cap designated as cash flow hedge Interest expense $ 1,090 $ ( 239 ) $ —

Interest rate swaps designated as cash flow hedges Interest expense — ( 11,298 ) ( 12,799 )

Interest rate swaps not designated as hedges Interest expense — ( 2 ) ( 34 )

Interest rate swaps that discontinued hedge accounting Interest expense — — ( 3,746 )

Interest rate cap designated as cash flows hedge Interest expense $ 10,974 $ 1,090 $ ( 239 )

Interest rate swap designated as cash flows hedge Interest expense — — ( 11,298 )

Interest rate swap not designated as hedge Interest expense — — ( 2 )

Total $ 10,974 $ 1,090 $ ( 11,539 )

The Company expects to reclassify $ 2.8 million of total interest rate costs from accumulated other comprehensive income against interest expense during the next 12 months.

The Company expects to reclassify $ 2.8 million of total interest rate costs from accumulated other comprehensive income (loss) against interest expense during the next 12 months.

FAIR VALUE MEASUREMENTS

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First Lien Term Loan :

Prior to the October 2021 refinancing, the fair value of the First Lien Term Loan was derived from a broker quote on the loans in the syndication (Level 2 inputs).

The fair value of the First Lien Term Loan is derived from a broker quote on the loans in the syndication (Level 2 inputs).

See Note 11, Indebtedness , for further discussion of the carrying amount and fair value of the First Lien Term Loan.

Second Lien Notes :

Prior to the January 2021 refinancing, the fair value of the Second Lien Notes was derived from a cash flow model that discounted the cash flows based on market interest rates (Level 3 inputs).

See Note 11, Indebtedness , for further discussion of the carrying amount and fair value of the Second Lien Notes.

New First Lien Term Loan :

Subsequent to the October 2021 refinancing, the fair value of the agreement to amend and restate its existing First Lien Term Loan (“New First Lien Term Loan”) is derived from a broker quote on the loans in the syndication (Level 2 inputs).

See Note 11, Indebtedness , for further discussion of the carrying amount and fair value of the New First Lien Term Loan.

Senior Notes :

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See Note 11, Indebtedness , for further discussion of the carrying amount and fair value of the Senior Notes.

Interest Rate Swaps :

The fair values of interest rate swaps were derived from the interest rates prevalent in the market and future expectations of those interest rates (Level 2 inputs).

The Company determines the fair value of the investments based on quoted prices from third-party brokers.

Both interest rate swaps have been terminated.

See Note 12, Derivative Instruments , for further discussion of the fair value of the interest rate swaps.

Interest Rate Cap :

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See Note 12, Derivative Instruments , for further discussion of the fair value of the interest rate cap.

Money Market Funds :

The fair value of the money market funds is derived from the closing price reported by the fund sponsor and classified as cash and cash equivalents on the Company’s consolidated balance sheets (Level 1 inputs).

There were no other assets or liabilities measured at fair value at December 31, 2023 or 2022.

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The results of legal proceedings are often uncertain and difficult to predict, and the costs incurred in litigation can be substantial, regardless of the outcome.

The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s consolidated balance sheets.

The Company does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s consolidated balance sheets.

However, substantial unanticipated verdicts, fines, and rulings may occur.

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Exercisable at December 31, 2023 283,571 $ 17.07 $ 4,713 6.36 years

During the years ended December 31, 2022, 2021 and 2020, shares were surrendered to satisfy tax withholding obligations on the exercise of stock options with a cost basis of $ 0.7 million, $ 0.1 million and $ 2.7 million.

No cash was received from stock option exercises under share-based payment arrangements for the years ended December 31, 2022 or 2021.

During the year ended December 31, 2020, $ 0.4 million of cash was received from stock option exercises under share-based payment arrangements.

During the years ended December 31, 2023, 2022 and 2021, shares were surrendered to satisfy tax withholding obligations on the exercise of stock options with a cost basis of $ 0.3 million, $ 0.7 million and $ 0.1 million, respectively.

No cash was received from stock option exercises under share-based payment arrangements for the years ended December 31, 2023, 2022 and 2021.

The maximum term of stock options under these plans is ten years .

Options outstanding as of December 31, 2022 expire on various dates ranging from March 2023 through November 2032.

Options outstanding as of December 31, 2023 expire on various dates ranging from May 2024 through July 2033.

The following table outlines the outstanding and exercisable stock options as of December 31, 2023:

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1,142,650 $ 28.19 8.8 years 5,464 $ 29.51

$ 41.28 - $ 49.52

6,250 $ 44.16 0.2 years 6,250 $ 44.16

$ 49.52 - $ 57.76

1,625 $ 56.24 0.3 years 1,625 $ 56.24

$ 66.00 - $ 74.28

1,250 $ 66.52 0.6 years 1,250 $ 66.52

All options 1,746,272 283,571

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Balance at December 31, 2023 1,883,116 $ 26.28

During the year ended December 31, 2022, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with a cost basis of $ 1.4 million.

During the years ended December 31, 2021 and December 31, 2020, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with an immaterial cost basis.

During the years ended December 31, 2023 and 2022, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with a cost basis of $ 4.4 million and $ 1.4 million, respectively.

During the year ended December 31, 2021, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with an immaterial cost basis.

As of December 31, 2023, there was $ 31.4 million in unrecognized compensation expense related to unvested restricted stock awards that is expected to be recognized over a weighted average period of 1.2 years.

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Performance Stock Units — Performance-based stock units are generally earned based on the attainment of specified goals achieved over a designated performance period.

During the years ended December 31, 2022 and 2021, the Company’s Compensation Committee approved awards of performance-based stock units to certain senior executives of the Company with a grant date of February 2022 and February 2021, respectively.

The performance-based stock units approved during 2022 (“2022 PSU”) and 2021 (“2021 PSU”) each offer a three-year -cliff vesting schedule.

During the years ended December 31, 2023, 2022 and 2021, the Company’s Compensation Committee approved awards of performance-based stock units to certain senior executives of the Company with grant dates in 2023, 2022 and 2021, respectively.

The performance-based stock units approved during 2023 (“2023 PSU”), 2022 (“2022 PSU”) and 2021 (“2021 PSU”) each offer a three-year -cliff vesting schedule.

Each award reflects a target number of shares (“Target Shares”) that may be issued to the award recipient.

The 2022 PSU and 2021 PSU awards may be earned upon the completion of the two-year -average performance periods ending December 31, 2023 and 2022, respectively.

The 2023 PSU, 2022 PSU and 2021 PSU awards may be earned upon the completion of the two-year -average performance periods ending December 31, 2024, 2023 and 2022, respectively.

Whether units are earned at the end of the performance period will be determined based on the achievement of certain performance objectives over the performance period.

The performance objectives include achieving a target growth for adjusted EBITDA and revenue combined in addition to a target growth for cash flow from operations over the performance period.

The performance objectives include achieving a target growth for adjusted EBITDA and revenue combined in addition to a target growth for cash flows from operations over the performance period.

Depending on the results achieved during the performance period, the actual number of shares that a grant recipient receives at the end of the period may range from 0 % to 200 % of the Target Shares granted.

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Compensation expense for performance unit stock awards is recognized on a straight-line basis over the requisite service period.

During the year ended December 31, 2023, the Company recognized compensation expense related to the 2023 PSU, 2022 PSU and 2021 PSU awards of $ 2.2 million, $ 2.9 million and $ 2.4 million, respectively.

During the year ended December 31, 2022, the Company recognized compensation expense related to the 2022 PSU and 2021 PSU awards of $ 2.4 million and $ 1.7 million, respectively.

During the year ended December 31, 2021, the Company recognized compensation expense related to the 2021 PSU awards of $ 2.7 million.

As of December 31, 2022, there were $ 5.9 million and $ 2.7 million in unrecognized compensation expense related to unvested 2022 PSU and 2021 PSU awards, respectively, that are expected to be recognized over the period of 2.2 years and 1.2 years, respectively.

As of December 31, 2023, there were $ 5.5 million, $ 3.3 million and $ 0.3 million in unrecognized compensation expense related to unvested 2023 PSU, 2022 PSU and 2021 PSU awards, respectively, that are expected to be recognized over the period of 2.2 years, 1.2 years and 0.2 years, respectively.

STOCKHOLDERS’ EQUITY

On January 3, 2020, the Company’s board of directors and HC I, which at that time held a majority of the Company’s common stock, approved a reverse stock split of the Company’s issued and outstanding common stock on a one share for four share basis and appropriately amended the Company’s Third Amended and Restated Certificate of Incorporation to reflect the change.

On February 3, 2020, the reverse stock split became effective.

In connection with the reverse stock split, the Company changed its ticker symbol from “BIOS” to “OPCH” and transferred the Company’s common stock from the Nasdaq Capital Market to the Nasdaq Global Select Market.

The par value of the Company’s common stock remained unchanged as a result of the reverse stock split, resulting in a decrease to the aggregate par value of common stock and corresponding increase to paid-in capital in the Company’s consolidated financial statements, which was retrospectively applied to all periods presented in the financial statements.

All common shares, warrants and stock awards presented in the consolidated financial statements have been retrospectively adjusted for the reverse stock split.

During the years ended December 31, 2023 and 2022, HC I completed secondary offerings of 23,771,926 and 11,000,000 shares of common stock, respectively.

As of December 31, 2022, HC I holds approximately 14.4 % of the common stock of the Company.

As of December 31, 2023, HC I no longer holds shares of the Company’s common stock.

2017 Warrants — Prior to the Merger, BioScrip issued warrants to certain debt holders pursuant to a Warrant Purchase Agreement dated as of June 29, 2017.

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The 2017 Warrants are classified as equity instruments, and the fair value of these warrants of $ 14.1 million was recorded in paid-in capital as of the Merger Date.

During the years ended December 31, 2022 and 2021, warrant holders exercised warrants to purchase 1,130,089 and zero shares of common stock, respectively.

During the years ended December 31, 2023 and 2022, warrant holders exercised warrants to purchase 188,350 and 1,130,089 shares of common stock, respectively.

No proceeds were received from these exercises as the warrant holders elected to surrender shares to pay the exercise price.

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The 2015 Warrants were assumed by the Company in conjunction with the Merger and are classified as equity instruments, and the fair value of these warrants of $ 4.6 million was recorded in paid in capital as of the Merger Date.

During the years ended December 31, 2022 and 2021, warrant holders exercised warrants to purchase 900,272 and zero shares of common stock, respectively.

During the year ended December 31, 2023, warrant holders exercised an immaterial number of warrants to purchase shares of common stock.

During the year ended December 31, 2022, warrant holders exercised warrants to purchase 900,272 shares of common stock.

During the year ended December 31, 2023, no cash proceeds were received from warrant exercises.

During the year ended December 31, 2022, $ 20.9 million of cash was received as proceeds from warrant exercises.

At December 31, 2023 and 2022, the remaining warrant holders are entitled to purchase 13,888 and 15,231 shares of common stock, respectively.

Treasury Stock — As of December 31, 2022 and 2021, the Company held 383,722 shares of treasury stock.

Share Repurchase Program — On February 20, 2023, the Company’s Board of Directors approved a share repurchase program of up to an aggregate $ 250.0 million of common stock of the Company.

On December 6, 2023, the Company’s Board of Directors approved an increase to its share repurchase program authorization from $ 250.0 million to $ 500 million.

Under the share repurchase program, repurchases may occur in any number of methods depending on timing, market conditions, regulatory requirements, and other corporate considerations.

The share repurchase program has no specified expiration date.

During the year ended December 31, 2023, the Company purchased 7,946,301 shares of common stock for an average share price of $ 31.46 , totaling $ 250.0 million.

All repurchased shares became treasury stock.

As of December 31, 2023, the Company is authorized to repurchase up to a remaining $ 250.0 million of common stock of the Company.

Treasury Stock — As of December 31, 2023 and 2022, the Company held 8,330,022 and 383,722 shares of treasury stock, respectively.

Preferred Stock — The Company had no preferred stock outstanding as of December 31, 2023 or 2022.

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The Company recorded management fee income of $ 5.3 million, $ 4.1 million and $ 3.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Management fees are recorded in net revenues in the accompanying consolidated statements of comprehensive income (loss).

Management fees are recorded in net revenues in the accompanying consolidated statements of comprehensive income.

The Company had amounts due to its joint ventures of $ 0.5 million and due from its joint ventures of $ 0.1 million as of December 31, 2023.

The Company had amounts due to its joint ventures of $ 1.5 million as of December 31, 2022.

The Company had amounts due to its joint ventures of $ 1.4 million as of December 31, 2021 and due from its joint ventures of $ 2.4 million as of December 31, 2020.

These receivables were included in prepaid expenses and other current assets in the accompanying balance sheets and these payables were included in accrued expenses and other current liabilities in the accompanying balance sheets.

These balances primarily relate to cash collections received by the Company on behalf of the joint ventures, offset by certain pharmaceutical inventories purchased by the Company on behalf of the joint ventures.

SUBSEQUENT EVENTS

The Company has evaluated whether any subsequent events occurred since December 31, 2022 and noted the following subsequent event:

On February 20, 2023, the Company’s Board of Directors approved a share repurchase program of up to an aggregate $ 250 million of common stock of the Company.

Shares may be repurchased under the program through open market purchases, privately negotiated transactions, block trades, or accelerated or other structured share repurchase programs.

The extent to which the Company repurchases shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by the Company’s management.

As a result, an estimate of the financial effect cannot be made.

Share Repurchase Agreement — On February 28, 2023, we entered into a Share Repurchase Agreement (the “Share Repurchase Agreement”) with HC I, pursuant to which we agreed to repurchase, subject to the terms and conditions contained therein, up to $ 75.0 million of our common stock then held by HC I at the same purchase price per share as the underwriter in a

concurrent underwritten public offering of our common stock held by HC I.

On March 3, 2023, the transactions contemplated by the Share Repurchase Agreement closed, and we repurchased directly from HC I 2,475,166 shares of our common stock.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data