Organization: NeueHealth, Inc. and subsidiaries (collectively, “NeueHealth,” “we,” “our,” “us,” or the “Company”) was founded in 2015 to transform healthcare. NeueHealth is a value-driven, consumer-centric healthcare company committed to making high-quality, coordinated healthcare accessible and affordable to all populations. We believe we can reduce the friction and current lack of coordination in today’s healthcare system by uniquely aligning the interests of payors and providers to enable a seamless, consumer-centric healthcare experience that drives value for all.

We have two market facing segments: NeueCare and NeueSolutions. NeueCare is our value-driven care delivery business that manages risk in partnership with external payors and serves all populations across The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (“ACA”) Marketplace, Medicare, and Medicaid. NeueSolutions is our provider enablement business that includes a suite of technology, services, and clinical care solutions that empower providers to thrive in performance-based arrangements.

Basis of Presentation: The condensed consolidated financial statements include the accounts of NeueHealth, Inc. and all subsidiaries and controlled companies. All intercompany balances and transactions are eliminated upon consolidation. The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our audited consolidated financial statements, unless the information contained in those disclosures materially changed or is required by GAAP. As such, the condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023 included in our Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The accompanying condensed consolidated financial statements include all normal recurring adjustments necessary for fair presentation of the interim financial statements.

Centrum Transaction: Subsequent to September 30, 2024, we entered into a Unit Purchase Agreement dated October 29, 2024, among our wholly owned subsidiary Medical Practice Holding Company, LLC, RRD Healthcare, LLC (“RRD”), the Company, Centrum Medical Holdings, LLC (“Centrum”) and the other parties named therein, pursuant to which, we purchased RRD’s equity in Centrum for total consideration of $101.8 million, comprised of $30.0 million in cash, a credit of $7.8 million in previous distributions to RRD as the noncontrolling interest holder and a secured promissory note with a principal of $64.0 million (“Centrum Promissory Note”) (such equity purchase and related transactions, the “Centrum Transaction”). The Centrum Promissory Note is due on October 29, 2028 and bears a cash interest rate of 6% per annum, payable monthly. Upon the close of the Centrum Transaction, NeueHealth fully owns Centrum.

In connection with the Centrum Transaction, the Company will make payment of $8.0 million to the P Unit Holders of RRD (as define in Note 9. Commitments and Contingencies), generally payable by October 29, 2028, bearing cash interest at a rate of 6% per annum.

Amended 2023 Credit Agreement and 2024 NEA Warrantholders Agreement: As described in further detail in Note 5 Borrowings and Common Stock Warrants (“Note 5”), on April 8, 2024 we entered into an amendment increasing the amount available to borrow under the 2023 Credit Agreement (as defined in Note 5) by $30.0 million. In conjunction with this amendment, we entered into the 2024 NEA Warrantholders Agreement (as defined in Note 5) setting forth the rights and obligations of the NEA Lenders (as defined in Note 5) as holders of the warrants to acquire up to 1,113,563 shares of Common Stock at an exercise price of $0.01 per share, and providing for the issuance of warrants. Additionally, the 2023 Credit Agreement was amended on June 21, 2024, in conjunction with the execution of the Hercules Credit Agreement (defined below), to change the maturity date to be August 31, 2028.

Hercules Credit Agreement and Warrantholders Agreement: As described in further detail in Note 5, on June 21, 2024, the Company entered into a loan and security agreement (the “Hercules Credit Agreement”), among the Company, Hercules Capital, Inc. (“Hercules”), certain affiliates of Hercules (together with Hercules, the “Lenders”) and other parties thereto to provide for a credit facility pursuant to which, among other things, Hercules has provided up to four tranches of term loans in an aggregate principal amount of $150.0 million, which mature on June 1, 2028. The Hercules Credit Agreement has four

tranches with funding milestones that must be met to access the tranche’s funds; refer to Note 5 for detailed descriptions of each tranche and corresponding milestones. In conjunction with the execution of the Hercules Credit Agreement, on June 21, 2024, we entered into warrant agreements with each of the Lenders (the “Hercules Warrantholders Agreement”), setting forth the rights and obligations of the Company and the Lenders as holders of the warrants to acquire an aggregate of 1,250,000 shares of Common Stock at an exercise price of $0.01 per share.

Held-for-Sale Operations: During the quarter ended June 30, 2024, we committed to a plan to sell AssociatesMD Medical Group, Inc. (“AMD”), which met the criteria to be classified as held for sale under ASC 360-10 Property, Plant, and Equipment. As a result, the major classes of assets and liabilities of AMD are now presented separately on the balance sheet within current assets of held-for-sale operations and current liabilities of held-for-sale operations. The results of AMD’s operations remain included in continuing operations and are detailed in full at Note 15 Held-for-Sale Operations.

Sale of California Medicare Advantage Business: On June 30, 2023, the Company entered into a definitive agreement with Molina Healthcare, Inc. (“Molina”) to sell its California Medicare Advantage business to Molina, which consisted of Universal Care, Inc. d/b/a Brand New Day, a California corporation (“BND”) and Central Health Plan of California, Inc., a California corporation (“CHP”) (the “Molina Purchase Agreement”). Effective as of January 1, 2024, this transaction was consummated for an aggregate purchase price of $500.0 million subject to certain contingencies adjustments relating to Tangible Net Equity (“TNE”). Upon completion of the sale, the Bright HealthCare reporting unit of our discontinued operations was no longer included in our operations. Refer to Note 16 Discontinued Operations for discussion of the transaction.

Debt Payoff: On December 27, 2023, we entered into an agreement regarding our revolving credit agreement with JPMorgan Chase Bank, N.A. (the “Agent”) and a syndicate of banks (the “2021 Credit Agreement”) providing that, upon closing of the sale of our California Medicare Advantage business, and payments for debt and interest of $274.6 million to the Agent and $24.1 million to the issuers of letters of credit outstanding under the 2021 Credit Agreement, all liabilities of the Company under the 2021 Credit Agreement would be terminated (other than those under the outstanding letters of credit that remained outstanding thereafter) (collectively, the “Termination”). These amounts were paid on January 2, 2024, and on that date the Termination occurred.

We evaluated this amendment to the 2021 Credit Agreement in accordance with ASC 470-60 Troubled Debt Restructuring and ASC 470-50 Debt - Modification and Extinguishments. The evaluation for troubled debt restructuring includes assessing both qualitative and quantitative factors such as whether the creditor granted a concession and if the Company is experiencing financial difficulties. Our quantitative analysis consisted of comparing the cash paid as part of the Payoff Condition to the total amount of outstanding indebtedness immediately prior to the payoff. Given the Company is experiencing financial difficulties, and the lenders granted a concession by accepting total payments of $298.6 million for the remaining balance of the principal and interest due, we accounted for the transaction as a troubled debt restructuring and recognized a total gain of $30.3 million from the debt settlement.

Use of Estimates: The preparation of our condensed consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Our most significant estimates include medical costs payable, provider risk share arrangements, third-party payor risk share arrangements, and valuation and impairment of intangible assets. Actual results could differ from these estimates.

The Company has a history of operating losses, and we generated a net loss of $102.2 million for the nine months ended September 30, 2024. Additionally, the Company experienced negative operating cash flows for the nine months ended September 30, 2024. Certain of the Company’s insurance subsidiaries have material risk adjustment program obligations remaining related to the Company’s discontinued commercial insurance business, totaling $274.9 million, as noted further in Note 16. The subsidiaries entered into repayment agreements with the Centers for Medicare & Medicaid Services (”CMS”) with respect to the unpaid obligations which are due March 15, 2025.

We drew the remaining $10.0 million available on this facility on October 1, 2024. In June 2024, we entered into a loan and security agreement with Hercules Capital, Inc. for term loans in an aggregate principal amount of up to $150.0 million. We drew $30.0 million of this facility in June 2024. Access to the remaining tranches of this facility is subject to several terms and conditions outside of management’s control.

Cash and investment balances held at regulated insurance entities are subject to regulatory restrictions and can only be accessed through dividends declared to the non-regulated parent company or through reimbursements from administrative services agreements with the parent company. The regulated legal entities are required to hold certain minimum levels of risk-based capital and surplus to meet regulatory requirements. As noted further in Note 16, Discontinued Operations, we are out of compliance with the minimum levels for certain of our regulated insurance legal entities. In certain of our other regulated insurance legal entities, we hold surplus levels of risk-based capital, and as we complete the wind-down exercise related to these entities over the next two years, we expect to recapture through dividends and final liquidation actions the remaining cash positions of these entities.

We believe that the existing cash and investments will not be sufficient to satisfy our anticipated cash requirements for the next twelve months following the date the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q are issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

In response to these conditions, management continues to implement plans to drive positive operating cash flow and achieve the requirements in the existing agreements to access additional liquidity. However, the Company may not fully collect the contingent consideration associated with the sale of the California Medicare Advantage business, may not be able to access other tranches of the new loan and security agreement with Hercules Capital, Inc., and may not be able to recapture through dividends additional cash from its regulated insurance entities, as these matters are all subject to conditions that are not fully within the Company’s control. In the event the Company is unable to access this additional liquidity or take other management actions, among other potential consequences, the Company forecasts that it will be unable to satisfy its obligations. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Compensation and fringe benefits	$	46,586	$	45,685	$	143,971	$	146,722
Professional fees	6,273		15,126		19,342		34,745
Technology expenses	3,374		5,442		10,311		16,509
General and administrative expenses	7,287		5,129		25,157		19,719
Marketing and selling expenses	174		258		598		1,462
Other operating expenses	381		892		1,735		2,540
Total operating costs	$	64,075	$	72,532	$	201,114	$	221,697

Recently Issued and Adopted Accounting Pronouncements: There are no accounting pronouncements that were recently issued and not yet adopted or adopted since our audited consolidated financial statements were issued that had, or are expected to have, a material impact on our consolidated financial position, results of operations, or cash flows.