EX-99.5 12 tm2117964d1_ex99-5.htm EXHIBIT 99.5

 

Exhibit 99.5

 

UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL INFORMATION OF DFHT

 

The following unaudited pro forma condensed combined information presents the unaudited pro forma condensed combined balance sheet as of March 31, 2021 and the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 and the year ended December 31, 2020 based upon the combined historical financial statements of Deerfield Healthcare Technology Acquisitions Corp. (“DFHT”), CareMax Medical Group, LLC (“CareMax”) and IMC Medical Group Holdings, LLC (“IMC”), after giving effect to the business combination (the “Business Combination”) and related adjustments described in the accompanying notes. Under applicable accounting standards, CareMax will be the accounting acquirer in the Business Combination, which will be treated as a reverse recapitalization. The accounting guidance for business combinations, FASB Accounting Standards Codification (ASC) 805, provides that in identifying the acquiring entity in a transaction effected through an exchange of equity interests, all pertinent facts and circumstances must be considered, including: the relative voting rights of the stockholders of the constituent companies in the combined company, the existence of a large minority voting interest in the combined entity if no other owner or organized group of owners has a significant voting interest, the composition of the board of directors and senior management of the combined company, the relative size of each company and the terms of the exchange of equity securities in the transaction, including payment of any premium.

 

Management considered the following quantitative and qualitative factors in the determination that CareMax is the accounting acquirer in the Business Combination:

 

·The consideration in the Business Combination includes both cash and Class A common shares of DFHT. Upon completion of the Business Combination, none of the legacy DFHT shareholders, the DFHT sponsor, Deerfield Management, legacy CareMax equity holders or IMC equity holders will own more than 20% of the common stock of the company post-Business Combination. Management further considered whether there will be an existence of a large minority voting interest in the combined company. Management believes the remaining public shareholders are passive investors which include both institutional and retail investors with varying interests and ownership goals.

 

·The Chief Executive Officer of the combined company is Carlos A. de Solo, Chief Executive Officer of CareMax. The remaining senior management of the combined company is represented by approximately 50% each of the CareMax and IMC senior management team. Upon closing of the Business Combination, the pre-Business Combination DFHT Chief Executive Officer became the Executive Chairman of the combined company and the Chief Financial Officer resigned. None of the officers of DFHT are officers of the Company post-Business Combination.

 

·Upon closing of the Business Combination, the board of directors is comprised of six (6) directors. The Merger Agreement does not provide either DFHT or CareMax with sole discretion to appoint or nominate the independent directors to the board. There are no agreements with pre-Business Combination DFHT shareholders to appoint directors to the board and the continuing voting rights of the pre-Business Combination DFHT shareholders are the same as all shareholders post- Business Combination. Carlos A. de Solo serves as a director of the combined company.

 

·The fair value of the pre-Business Combination equity interests of CareMax, IMC and DFHT are approximately $364 million, $250 million and $190 million, respectively. The fair value of the pre-Business Combination equity interests of CareMax relative to fair value of the pre-Business Combination equity interests of DFHT results in a premium in the exchange of the CareMax equity interests for equity interests of DFHT as part of the Business Combination.

 

 

 

 

·Upon closing of the Business Combination, the Current Charter was amended to, among other matters, provide changing the post-Business Combination Company’s corporate name from “Deerfield Healthcare Technology Acquisitions Corp.” to “CareMax, Inc.” which reflects the value proposition the CareMax name brings as a publicly traded entity and from a customer facing perspective in the marketplace. The Company’s ticker post-Business Combination references CareMax and the Company’s corporate headquarters will be relocated to CareMax current headquarters.

 

In the unaudited pro forma condensed financial statements, CareMax has measured and recognized the assets acquired and liabilities assumed at their acquisition date fair values.

 

The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 and the year ended December 31, 2020 give pro forma effect to the Business Combination as if it had occurred on January 1, 2020. The unaudited pro forma condensed combined balance sheet as of March 31, 2021 gives pro forma effect to the Business Combination as if it were completed on March 31, 2021. The unaudited pro forma condensed combined statement of operations for the fiscal year ended December 31, 2020 gives pro forma effect to the acquisitions by CareMax of Clinica Las Americas (“Little Havana II”) on December 10, 2020 and Care Holdings Group, LLC as if they had occurred on January 1, 2020.

 

The unaudited pro forma condensed combined financial information should be read in conjunction with the audited historical financial statements of each of DFHT, CareMax, and IMC and the notes thereto included in the Company’s Definitive Proxy Statement, filed with the Securities and Exchange Commission (“SEC”) on May 14, 2021, and the unaudited historical financial statements of each of DFHT, CareMax and IMC for the three months ended March 31, 2021 and 2020 included in this Current Report on Form 8-K, as well as the disclosures contained in the Definitive Proxy Statement, the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the SEC on May 24, 2021, and herein in the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations of DFHT" and "Management's Discussion and Analysis of Financial Condition and Results of Operations of CareMax and IMC."

 

The unaudited pro forma condensed combined financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company. The unaudited pro forma condensed combined financial information also does not give effect to the potential impact, of any anticipated synergies, operating efficiencies or cost savings that may result from the Business Combination, any integration costs or tax deductibility of transaction costs. Furthermore, the unaudited pro forma condensed combined statements of operations do not include certain nonrecurring charges and the related tax effects which result directly from the Business Combination as described in the notes to the unaudited pro forma condensed combined financial information.

 

 

 

 

DEERFIELD HEALTHCARE TECHNOLOGY ACQUISITIONS CORP.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS MARCH 31, 2021 

 

   Pro Forma       Interamerican     
  CareMax Medical       Medical Center   Pro Forma       Pro Forma 
(in thousands)  Group, LLC (2) (3)   DFHT (1)   Group, LLC   Adjustments   Note 4   Combined 
Assets                             
Current assets:                             
Cash and cash equivalents  $7,014   $390   $14,000   $211,313   (a)   $232,717 
                   (4,443)  (d)    (4,443)
                   206,870        228,274 
Accounts receivable, net   9,089    -    17,928    -        27,017 
Inventory   15    -    -    -        15 
Prepaid Expenses   169    210    1,019    -        1,398 
Due from Related Parties   627    -    -    -        627 
Total current assets   16,915    600    32,947    206,870        257,332 
Property and Equipment, net   6,253    -    6,509    -        12,762 
Goodwill   10,068    -    85,476    187,437   (j)    282,981 
Investments held in Trust Account   -    143,856    -    (143,856)  (b)    - 
Intangible Asset, net   8,323    -    17,626    15,526   (j)    41,475 
Other Assets   414    -    2,261    -        2,675 
Total assets  $41,974   $144,456   $144,819   $265,977       $597,226 
                              
Liabilities and Stockholders'/Members' Equity                             
Current liabilities:                             
Accounts payable and accrued expenses  $5,274   $4,812   $7,547   $-       $17,633 
Risk Settlements Due to Providers   282    -    -    -        282 
Current portion of long-term debt, net   992    -    323    -        1,315 
Other current liabilities   51    49    -    -        100 
Total current liabilities   6,599    4,861    7,869    -        19,330 
Derivative warrant liabilities   -    13,870    -    -        13,870 
Long-term debt, less current portion   26,694    -    77,212    (103,402)  (c)    122,504 
                   125,000   (c)      
                   (3,000)  (c)      
Other long-term liabilities   708    4,443    1,151    -        1,859 
                   (4,443)  (d)      
Total liabilities   34,001    23,175    86,233    14,155        157,563 
Stockholders' equity / Commitments and contingencies   7,973    121,282    58,586    251,823   (e)    439,663 
Total Liabilities and Stockholders' Equity  $41,974   $144,456   $144,819   $265,977       $597,226 

 

(1) Refer to Note 2 for reclassification of DFHT historical information.

(2) Refer to Note 3 for reclassification of CareMax historical information.

(3) Reflects the acquisition of Clinica Las Americas and Care Holdings Group by CareMax as if the transactions occurred on March 31, 2021.

 

 

 

 

DEERFIELD HEALTHCARE TECHNOLOGY ACQUISITIONS CORP.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2021

 

   Pro Forma       Interamerican     
   CareMax Medical       Medical Center   Pro Forma       Pro Forma 
(in thousands, except share data)  Group, LLC (2) (3)   DFHT (1)   Group, LLC   Adjustments   Note 4   Combined 
Revenue:                             
Capitated Revenue  $27,819   $-   $56,475   $-       $84,294 
Other Managed Care Services   99    -    3,063    -        3,161 
Other Revenue   917    -    47    -        964 
Net revenue   28,835    -    59,585    -        88,420 
Costs and expenses:                             
Medical Expenses   18,439    -    49,645    -        68,084 
Selling, General and Administrative expenses   9,378    1,612    9,593    1,679   (j)    22,262 
Total costs and expenses   27,816    1,612    59,238    1,679        90,346 
Operating (loss) income   1,019    (1,612)   347    (1,679)       (1,926)
Interest (Income) Expense   504    (20)   1,950    (1,282)  (f)    1,302 
                   150   (c)      
Other (Income) Expense, net   -    -    (4)   -        (4)
Change in fair value of warrant liabilities   -    (10,894)   -    -        (10,894)
Income (loss) before income taxes   515    9,302    (1,599)   (547)       7,670 
Income Tax expense   -    -    -    1,881   (g)    1,881 
Net Income (loss)  $515   $9,302   $(1,599)  $(2,428)      $5,789 
Pro forma weighted average common shares outstanding - basic                      (h)    80,176,840 
Pro forma weighted average common shares outstanding—diluted                      (h)    81,248,155 
Pro forma net income per common share - basic                          $0.07 
Pro forma net income per common share—diluted                          $0.07 

 

(1) Refer to Note 2 for reclassification of DFHT historical information.

(2) Refer to Note 3 for reclassification of CareMax historical information.

(3) Includes the results of Clinica Las Americas and Care Group Holdings, LLC giving effect to those acquisitions as if they were completed on January 1, 2020.

 

 

 

 

DEERFIELD HEALTHCARE TECHNOLOGY ACQUISITIONS CORP.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (AS RESTATED)
FOR THE YEAR ENDED DECEMBER 31, 2020

 

   Pro Forma       Interamerican     
   CareMax Medical       Medical Center   Pro Forma       Pro Forma 
(in thousands, except share data)  Group, LLC (2) (3)   DFHT (1)   Group, LLC   Adjustments   Note 4   Combined 
Revenue:                             
Capitated Revenue  $110,155   $-   $216,041   $-       $326,197 
Other Managed Care Services   370    -    10,856    -        11,225 
Other Revenue   4,457    -    204    -        4,661 
Net revenue   114,982    -    227,101    -        342,084 
Costs and expenses:                             
Medical Expenses   70,973    -    186,315    -        257,288 
Selling, General and Administrative expenses   32,942    4,012    31,136    8,368   (j)    107,457 
                   31,000   (e)      
Total costs and expenses   103,915    4,012    217,451    39,368        364,745 
Operating (loss) income   11,067    (4,012)   9,650    (39,368)       (22,662)
Interest (Income) Expense   1,728    (86)   9,536    (6,577)  (f)    5,202 
                   600   (c)      
Other (Income) Expense, net   5         (1,000)   -        (995)
Change in fair value of derivative warrant liability        17,585                  17,585 
Income (loss) before income taxes   9,334    (21,511)   1,114    (33,391)       (44,454)
Income Tax benefit  -    -    -    (10,900)  (g)    (10,900)
Net income (loss)  $9,363   $(21,511)  $1,114    $(22,491)       $(33,524)
Pro forma weighted average common shares outstanding - basic and diluted                      (h)    80,176,840 
Pro forma net income (loss) per common share—basic and diluted                          $(0.42)

 

 

(1) Refer to Note 2 for reclassification of DFHT historical information.

(2) Refer to Note 3 for reclassification of CareMax historical information.

(3) Includes the results of Clinica Las Americas and Care Group Holdings, LLC giving effect to those acquisitions as if they were completed on January 1, 2020.

 

 

 

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Note 1—Description of the Business Combination

 

Basis of presentation

 

The historical financial information has been adjusted to conform to the presentation rules set forth in Rule 11-02(a)(6) of SEC Regulation S-X regarding the unaudited pro forma condensed combined financial information. Specifically, the pro forma condensed balance sheet and statement of operations must include and be limited to i) transaction accounting adjustments and ii) autonomous entity adjustments, if required and, optionally, management adjustments that capture synergies or dis-synergies from the business combination. Transaction accounting adjustments that affect the pro forma condensed balance sheet have been calculated assuming the transaction took place on March 31, 2021. Transaction accounting adjustments that affect the pro forma condensed statement of operations have been calculated assuming the transaction occurred on January 1, 2020 (the beginning of the fiscal year presented). We have concluded that no autonomous entity adjustments are required.

 

DFHT's historical results reflect the unaudited balance sheet as of March 31, 2021 and unaudited statement of operations for the three months ended March 31, 2021, and the audited statement of operations for the period from May 8, 2020 (inception) through December 31, 2020 under Generally Accepted Accounting Principles in the United States of America (“GAAP”). IMC’s historical results reflect the unaudited consolidated balance sheet as of March 31, 2021, the unaudited consolidated statement of operations for the three months ended March 31, 2021, and the audited consolidated statement of operations for the year ended December 31, 2020, under GAAP. CareMax’s historical results reflect the unaudited combined balance sheet as of March 31, 2021, the unaudited combined statement of operations for the three months ended March 31, 2021 and the audited combined statement of operations for the year ended December 31, 2020 under GAAP.

 

General Description of the Business Combination Agreement

 

On December 18, 2020, Deerfield Healthcare Technology Acquisitions Corp.(“DFHT”), CareMax Medical Group, LLC (“CareMax”), IMC Medical Group Holdings, LLC (“IMC”), the CareMax Group, IMC Holdings, LLC (“IMC Parent”), and Deerfield Partners, LLP (“Deerfield”) entered into a Business Combination agreement. The closing is expected to occur in the first quarter of 2021. Upon completion of the closing of the Business Combination, the combined company now operates under the name CareMax.

 

Pursuant to the agreement, DFHT acquired all of the issued and outstanding equity interests of CareMax and IMC in exchange for a combination of cash and equity consideration in the form of Class A common shares of DFHT.

 

The aggregate consideration payable at the closing of the Business Combination to the members of CareMax and IMC was approximately $364 million and $250 million, respectively, subject to the purchase price adjustments as set forth in the Business Combination Agreement (the “Closing Merger Consideration”). The Closing Merger Consideration was comprised of 68% and 45% in cash for each of the members of CareMax and IMC, respectively, with the remainder of the Closing Merger Consideration comprising DFHT Class A Common Stock, valued at reference price of $10.00 per share.

 

 

 

 

Note 1 (continued)

 

An additional 3,500,000 and 2,900,000 shares of DFHT Class A Common Stock (the “Earnout Shares”) are payable after the Closing to the members of the CareMax Group and IMC Parent, respectively, upon satisfaction of the following conditions: (i) if within the first year after the Closing (the “First Earnout Period”) the trading price of DFHT Class A Common Stock equals or exceeds $12.50 on any 20 trading days in any 30-day trading period (the “First Share Price Trigger”), then 1,750,000 and 1,450,000 of the Earnout Shares will be released to the members of the CareMax Group and IMC Parent, respectively, or (ii) if within the second year after the Closing (the “Second Earnout Period”) the trading price of DFHT Class A Common Stock equals or exceeds $15.00 on any 20 trading days in any 30-day trading period (the “Second Share Price Trigger” and collectively, the “Share Price Triggers”), then 1,750,000 and 1,450,000 of the Earnout Shares will be released to the members of the CareMax Group and IMC Parent, respectively. Notwithstanding the foregoing, if the First Share Price Trigger is not satisfied but the Second Share Price Trigger is satisfied, DFHT will issue 3,500,000 and 2,900,000 shares of DFHT Class A Common Stock to the members of the CareMax Group and IMC Parent, respectively.

 

Upon completion of the Business Combination: (i) CareMax and IMC ownership collectively own approximately 26% of the combined company; (ii) Deerfield Management own approximately 16% of the combined company; (iii) the other DFHT public stockholders (including the PIPE Investors) own approximately 53% of the combined company; and (iv) DFHTA Sponsor LLC (the “sponsor”) own approximately 5% of the combined company. These levels of ownership interest do not take into account the Earnout Shares, the Adjustment Escrow Shares or the public warrants and private placement warrants to purchase DFHT Class A Common Stock that remain outstanding immediately following the Business Combination.

 

The following table sets forth the net assets of DFHT as of March 31, 2021:

 

(in thousands)  DFHT 
Current assets  $600 
Cash held in trust   143,856 
Property and Equipment, net   - 
Other Assets   - 
Current liabilities   (4,861)
Derivative warrant liabilities   (13,870)
Other long-term liabilities (1)   (4,443)
Net assets  $121,282 

 

(1)These are deferred underwriting commissions related to the Company’s initial public offering and are reflected as a long-term liability on the historical balance sheet of DFHT. For pro forma purposes and on the pro forma condensed balance sheet it has been reclassified as a reduction of cash to the balance sheet as these fees were paid upon closing of the transaction.

 

 

 

 

Note 1 (continued)

 

Sources and Uses (in thousands) 

 

Sources    
DFHT Cash from Trust  $143,856 
Deerfield PIPE(1)   410,000 
New Debt   125,000 
      
      
Total Sources  $678,856 

 

 

 

Uses    
Cash to balance sheet  $206,870 
Cash to CareMax and IMC Shareholders   318,141 
Debt repayment   103,402 
SPAC redemptions   - 
Deal expenses (2)   50,443 
Total Uses  $678,856 

 

 

 

(1)Represents the issuance in a private placement to be consummated concurrently with the closing, to Deerfield of up to 41,000,000 shares of Class A common stock.

(2)Comprised of $12,000 PIPE transaction fees, $31,000 acquisition-related costs, $3,000 debt issuance costs and $4,443 underwriting commissions related to our IPO.

 

Basis of the Pro Forma Presentation

 

Upon consummation of the Business Combination, DFHT and IMC will adopt the accounting policies of CareMax. CareMax may identify differences between the accounting policies among the companies, that when conformed, could have a material impact on the consolidated financial statements of the combined entity.

 

 

 

 

Note 2—Reclassifications to Historical Financial Information of DFHT, CareMax, and IMC

 

        Certain balances and transactions presented in the historical financial statements of DFHT, IMC, and CareMax included within the unaudited pro forma condensed combined financial information have been reclassified to conform to the presentation of new group financial statements as indicated in the tables below.

 

DFHT Condensed Combined Balance Sheet

Reclassification as of March 31, 2021

 

   As per Historical        
  Unaudited Financial      As 
(in thousands)  Statements   Reclassifications   Reclassified 
Liabilities               
Current liabilities:               
     Accounts payable  $457   $(457)  $- 
     Accrued expenses   4,355    (4,355)   - 
     Accounts payable and accrued expenses   -    4,812    4,812 
     Franchise tax payable   49    (49)   - 
     Other current liabilities   -    49    49 

 

DFHT Statement of Operations Reclassification for

the Three Months Ended March 31, 2021

 

   As per Historical         
  Unaudited Financial       As 
(in thousands)  Statements   Reclassifications   Reclassified 
General and administrative expenses  $1,547   $65   $1,612 
General and administrative expenses - related party   53    (53)   - 
Franchise tax expense   13    (13)   - 

 

 

 

 

Note 2—Reclassifications to Historical Financial Information of DFHT, CareMax, and IMC (continued)

 

DFHT Statement of Operations Reclassification for

the Year Ended December 31, 2020.

 

(in thousands)  As per Historical Audited Financial Statements   Reclassifications   As
Reclassified		 
General and administrative expenses  $3,777   $-   $4,012 
General and administrative expenses - related party          105                (105)                - 
Franchise tax expense   130    (130)   - 

 

CareMax Condensed Combined Balance Sheet

Reclassification as of March 31, 2021

 

   As per Historical         
   Unaudited Financial       As 
(in thousands)  Statements   Reclassifications   Reclassified 
Liabilities               
Current liabilities:               
     Accounts payable  $2,172   $(2,172)  $- 
     Accrued expenses   2,438             (2,438)                 - 
     Accrued interest payable   161    (161)   - 
     Accounts payable- Care Holdings Group, LLC   504    (504)     
     Accounts payable and accrued expenses   -    5,274    5,274 

 

 

 

 

Note 2 (continued)

 

CareMax Condensed Combined Statement of Operations Reclassification

for the Three Months Ended March 31, 2021

 

   As per Historical         
   Unaudited Financial       As 
   Statements   Reclassifications   Reclassified 
Selling, General and administrative expenses   $7,673    $(7,673)   $- 
General and administrative expenses (Care Holdings)   1,704    (1,704)   - 
   Selling, general & administrative expenses             9,378 

 

CareMax Condensed Combined Statement of Operations Reclassification

for the Year Ended December 31, 2020

 

   As per Historical         
   Audited Financial       As  
(in thousands)  Statements   Reclassifications   Reclassified 
Capitated revenue  $127,159   $(17,004)  $110,155 
Administrative fee   17,004    (17,004)   - 
Selling, General and administrative expenses   27,107    (27,107)   - 
General and administrative expenses (Care Holdings)   4,172    (4,172)   - 
General and administrative expenses (Clinica Las Americas)   1,663    (1,663)   - 
Selling, general & administrative expenses             32,942 

 

 

 

 

Note 2 (continued)

 

IMC Condensed Consolidated Balance Sheet
Reclassification as of March 31, 2021		  As per Historical         
  unaudited Financial       As 
(in thousands)  Statements   Reclassifications   Reclassified 
Assets               
Current assets:               
Accounts receivable, net  $-   $17,928   $17,928 
Capitated plan receivables, net   12,418    (12,418)   - 
Other receivables, net   5,510    (5,510)   - 
Liabilities               
Current liabilities:               
Accounts payable   2,198    (2,198)   - 
Accrued expenses   3,881    (3,881)   - 
Amounts due to health plans, net   1,467    (1,467)   - 
Accounts payable and accrued expenses            $7,547 

 

 

 

 

Note 2 (continued)

 

IMC Condensed Consolidated Statement of Operations
Reclassification for the Three Months Ended March 31, 2021		            
   As per Historical        
   Unaudited Financial      As 
(in thousands)  Statements   Reclassifications   Reclassified 
General and administrative expenses  $4,258   $(4,258)  $9,593 
Non-medical Salaries, wages, and beenfits   4,269    (4,269)   - 
Amortization of intangibles   407    (407)   - 
Depreciation Expense   659    (659)   - 

 

IMC Condensed Consolidated Statement of Operations
Reclassification for the Year Ended December 31, 2020		            
   As per Historical        
   Audited Financial      As 
(in thousands)  Statements   Reclassifications   Reclassified 
General and administrative expenses  $12,741   $(12,741)  $31,136 
Non-medical Salaries, wages, and beenfits   13,962    (13,962)   - 
Amortization of intangibles   1,627    (1,627)   - 
Depreciation Expense   2,806    (2,806)   - 

 

 

 

 

Note 3—Reclassifications and Adjustments to Historical Information of CareMax

 

The following table presents the pro forma balance sheet for CareMax as of March 31, 2021

 

   CareMax Medical   Care Holdings   Pro Forma 
(in thousands)  Group, LLC (1)   Group, LLC (2)   Combined 
Assets               
Current assets:               
Cash and cash equivalents  $6,435   $579   $7,014 
Accounts receivable, net   8,756    333    9,089 
Inventory   15    -    15 
Prepaid Expenses, net   167    2    169 
Due from Related Parties   627    -    627 
Total current assets   16,001    915    16,915 
Property and Equipment, net   6,191    62    6,253 
Goodwill   10,068    -    10,068 
Investments held in Trust Account   -    -    - 
Intangible Assets, net   8,323    -    8,323 
Other Assets   388    26    414 
Total assets  $40,971   $1,003   $41,974 
                
Liabilities and Members' Equity               
Current liabilities:               
Accounts payable  $2,172   $504   $2,675 
Accrued expenses   2,438    -    2,438 
Accrued Interest Payable   161    -    161 
Risk Settlements Due to Providers   282    -    282 
Current portion of long-term debt, net   992    -    992 
Other current liabilities   -    51    51 
Total current liabilities   6,044    555    6,599 
Long-term debt, less current portion   26,190    504    26,694 
Other Liabilities   708    -    708 
Total liabilities   32,943    1,059    33,293 
                
Units (no par value, 300 authorized, issued and outstanding as of March 31, 2021)   223    -    223 
Members' equity   7,805    (55)   7,750 
Members' equity-controlling interest   8,028    (55)   7,973 
Total Members' equity   8,028    (55)   7,973 
Total Liabilities and Members' Equity  $40,971   $1,003   $41,974 

 

1)Represents the historical unaudited balance sheet of CareMax Medical Group, LLC.

2)Reflects the acquisition of Care Holdings Group, LLC as if the transaction occurred on March 31, 2021.

 

 

 

  

Note 3 (continued)

 

The following table presents the pro forma statement of operations for CareMax for the three months ended March 31, 2021:

 

  CareMax Medical   Care Holdings    Pro Forma 
(in thousands, except unit data)  Group, LLC (1)   LLC (2)   Combined 
Revenue:               
Capitated Revenue  $27,819   $-   $27,819 
Other Managed Care Services   99    -    99 
Other Revenue   -    917    917 
Net revenue   27,918    917    28,835 
Costs and expenses:               
Medical Expenses   18,439    -    18,439 
General and administrative expenses   7,673    1,704    9,378 
Total costs and expenses   26,112    1,704    27,816 
Operating (loss) income   1,806    (787)   1,018 
Interest expense   504    -    504 
Income before income taxes   1,302    (787)   515 
Income tax expense   -    -    - 
Net Income   $1,302   $(787)  $515 
Weighted-average Common Units Outstanding   200    100    300 
Net Income per Unit - Basic & Diluted            $1,093 

 

(1)Represents the historical unaudited statement of operations for CareMax.

(2)Represents the acquisition of Care Holdings Group, LLC as if the transaction was completed on January 1, 2020.

 

 

 

 

Note 3 (continued)

 

The following table presents the pro forma statement of operations for CareMax for the year ended December 31, 2020:

 

  CareMax Medical   Clinica   Care Holdings    Pro Forma 
(in thousands, except unit data)  Group, LLC (1)   Little Havana II   LLC (2)   Combined 
Revenue:                    
Capitated Revenue  $103,051   $7,104   $-   $110,155 
Other Managed Care Services   370         -    370 
Other Revenue   -    -    4,457    4,457 
Net revenue   103,421    7,104    4,457    114,982 
Costs and expenses:                    
Medical Expenses   67,015    3,958    -    70,973 
General and administrative expenses   27,107    1,663    4,172    32,942 
Total costs and expenses   94,122    5,621    4,172    103,915 
Operating (loss) income   9,300    1,483    285    11,067 
Interest (income) expense   1,728    -    -    1,728 
Other (income) expense, net   -    -    5    5 
Income before income taxes   7,572    1,483    279    9,334 
Income tax expense   -         -    - 
Net income   7,572    1,483    279    9,334 
Net Income attributable to noncontrolling interest   (29)   -    -    (29)
Net Income Attributable to Controlling Interests  $7,601   $1,483   $279   $9,363 
Pro Forma Weighted-average Common Units Outstanding   200         100    300 
Pro Forma Net Income per Unit - Basic & Diluted                 $31,211 

 

(1)Represents the historical audited statement of operations for CareMax.

(2)Represents the acquisition of Clinica Las Americas and Care Holdings Group, LLC as if the transactions were completed on January 1, 2020.

 

 

 

 

Note 4—Pro Forma Adjustments

 

Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet (in thousands)

 

The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2021 are as follows:

 

a)Sources of cash include DFHT cash held in trust of $143,856, proceeds from the Deerfield PIPE of $410,000, proceeds of $125,000 of long-term debt off set by cash to CareMax and IMC shareholders of $318,141, repayment of gross debt of $103,402 and acquisition-related costs and debt and equity issuance costs of deal of $50,443 resulting in net cash to the balance sheet of $206,870.

 

b)See Note 1—Sources and Uses for the release of the Investments held in the Trust Account upon consummation of the Business Combination to fund the Closing.

 

c)At the date of closing of the Business Combination, CareMax entered a new long-term debt facility for $125.0 million and CareMax historical debt of $26.2 million (debt outstanding at March 31, 2021) and historical IMC debt of $77.2 million (debt outstanding as of March 31, 2021) was paid off with the proceeds of the new long-term debt facility. The historical IMC debt paid off concurrent with the Business Combination is recognized as a component of the consideration transferred to acquire IMC. See Note 4j for the pro forma adjustment to assume and pay off the IMC historical debt in the amount of $77.2 million.

 

We expect to incur debt issuance costs of approximately $3,000 related to the new long-term debt facility. The deferred debt issuance costs are amortized as a component of interest expense over a 5-year term of the long-term debt facility on the pro forma condensed statement of operations.

 

  Long-term 
(in thousands)  Debt 
Repayment of historical CareMax debt  $(26,190)
New long-term debt entered into by CareMax  $125,000 
Debt issuance costs  $(3,000)
New long-term debt, net  $122,000 

 

Proceeds from the Business Combination AND new long-term debt in the amount of $125,000 will be used to fund future acquisitions, repay debt or for other corporate purposes. Given there are no probable acquisitions at this time, the proformas assume proceeds will be used to repay debt in a manner where it can be redrawn when a future acquisition becomes available.

 

 

 

 

Note 4 (continued)

 

d)Represents the payment of $4,443 of deferred underwriting costs incurred as part of DFHT's initial public offering and committed to be paid upon the Closing of the Business Combination and its re-classification from long term liability on the historical books of DFHT to a reduction of cash to the balance sheet as these costs are expected to be paid at closing.
   
e)Below is a presentation of the pro forma adjustments to stockholders’ equity on the pro forma balance sheet.

 

Pro Forma Adjustments to Stockholders' Equity

 

      Historical Equity       
  Historical Equity  and Contingent Shares  Historical Equity  Pro Forma  Pro Forma 
(in thousands)  CareMax  DFHT  IMC  Adjustments  Combined 
   $7,973  $5,000  $58,586      $439,663 
Reclassification from contingent shares to Class A shares               116,281     
Elimination of IMC historical equity to effect acquisition method               (58,586)    
Fair value of shares issued in connection with acquisition of IMC               155,347     
Deemed dividend in connection with reverse merger transaction with CareMax (1)               (234,087)    
PIPE investment               410,000     
Equity-classified contingent consideration               22,148     
Payment of transaction fees (2)               (43,000)    
Cash paid to redeeming shareholders               -     
               $251,822     

 

(1)Represents the recapitalization of CareMax equity including the issuance of 10,796,067 shares of DFHT Class A Common Stock as part of the purchase consideration for the acquisition of CareMax. The excess of the purchase consideration for CareMax including the 10,796,067 shares of DFHT Class A Common Stock, equity-classified contingent consideration of $26,730 for the 3,500,000 contingently-issuable shares of DFHT Class A common stock and cash of $234,087 over the net assets of DFHT is recorded as an adjustment of CareMax equity.

 

(2)Transaction costs are comprised of approximately $12 million related to the estimated cost of the issuance of equity securities in connection with the PIPE and are recorded as a reduction of additional paid-in-capital within stockholders’ equity on the pro forma condensed balance sheet, acquisition-related costs including advisory, legal, accounting, valuation or other professional fees of approximately $31 million which are reflected on the pro forma condensed statement of operations as a general and administrative expense and as a reduction of retained earnings on the pro forma condensed balance sheet and $3 million of debt issuance costs on the new $125 million long-term debt facility which are reflected as a reduction of debt on the pro forma condensed balance sheet.

 

 

 

 

Note 4f

 

Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations

 

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the three months March 31, 2021 and year ended December 31, 2020 are as follows:

 

  Pro Forma   Pro Forma 
   Three Months Ended   Year Ended 
(in thousands)  March 31, 2021   December 31, 2020 
Interest expense from term debt  $1,172   $4,688 
Reversal of historical interest expense   (2,454)  $(11,264)
Pro forma adjustment  $(1,282)  $(6,577)

 

Represents interest expense related to the issuance of the new term debt and repayment of old term debt pursuant to the Business Combination, assuming the transaction took place on January 1, 2020.

 

$125 million x 3.75% interest x 3 months= $1.2 million interest expense for the three months ended March 31, 2021.

 

$125 million x 3.75% interest x 12 months= $4.7 million interest expense for the twelve months ended December 31, 2020.

 

The 3.75% interest rate is variable and is based on a commitment from a third-party lender.

 

New CareMax term debt of $125 million minus payoff of old term debt of $103.9 million based upon the old debt outstanding as of March 31, 2021, leaves net remaining term debt of $125 million.

 

A 1/8 % change in the variable interest rate of the debt would result in an approximate change to interest expense of $0.16 million

 

 

 

 

  Note 4 (continued)

 

g)Reflects income tax effect of pro forma adjustments using the estimated statutory tax rate of 24.52%. CareMax is organized as a limited liability company (“LLC”). As an LLC treated as a disregarded entity for income taxes purposes, CareMax has not historically presented an income tax provision and related balance sheet income tax accounts in its financial statements. The pro forma adjustments include an adjustment to reflect income taxes for CareMax, partially offset by the losses before income taxes for DFHT and IMC using an estimated statutory tax rate of 24.52%. In addition, the pro forma adjustments affecting income (loss) before income taxes reflect an income tax benefit effect using an estimated statutory tax rate of 24.52%. The pro forma adjustments do not include the pro forma effect on the combined entity’s deferred tax assets that may result from changes in the valuation allowances recorded on the deferred tax assets in the historical financial statements of DFHT and IMC.

 

h)As a result of the Business Combination and the conversion of the 3,593,750 shares Class B Common Stock, on a one-for-one basis, into shares of Class A Common Stock , the pro forma basic number of shares for the three months ended March 31, 2021 and the year ended December 31, 2020 are reflective of 80,176,840 shares of Class A Common Stock outstanding. The pro forma diluted number of shares for the three months ended March 31, 2021 includes potentially dilutive shares of 1,071,315 related to warrants to purchase an aggregate of 5,791,667 shares of Class A Common Stock at a price of $11.50. The pro forma number of diluted shares for the year ended December 31, 2020 excludes the warrants, since their inclusion would be anti-dilutive under the treasury stock method.

 

i)Reflects the CareMax acquisition of IMC and pro forma adjustments to reflect the opening balance sheet at fair value. See Note 5 for the purchase price allocation to each asset and liability and the excess consideration paid over the fair value of the net assets acquired.

 

 

 

 

Note 4 (continued)

 

   IMC unaudited Condensed         
   Historical Balance Sheet         
(thousands)  as of March 31, 2021   Pro Forma Adjustments   Pro Forma Combined 
Assets               
  Cash  $14,000   $-   $14,000 
  Accounts receivable   17,928    -    17,928 
  Other current assets   1,019    -    1,019 
Total Current Assets   32,947    -    32,947 
  Property, plant & equipment   6,509    -    6,509 
  Intangible Assets, net   17,626    15,526    33,152 
  Goodwill   85,476    187,437    272,913 
  Other assets   2,261    -    2,261 
Total Assets  $144,819   $202,963   $347,782 
Liabilities               
  Accounts payable and accrued expenses   7,547    -    7,547 
  Short-term debt   323    -    323 
  Other current liabilities   -    -    - 
Total Current Liabilities   7,869    -    7,869 
  Long-term debt   77,212    (77,212)   - 
  Other long term liabilities   1,151    -    1,151 
Total Liabilities   86,233    (77,212)   9,021 
Members' Equity               
  Member contributions   160,740    178,021    338,761 
  Accumulated deficit   (102,154)   102,154    - 
Total Members' Equity   58,586    280,175    338,761 
Total Liabilities and Members' Equity  $144,819   $202,963   $347,782 

 

 

 

 

Note 4 (continued)

 

j)The below table reflects the pro forma amortization expense related to the IMC tradename/trademark and risk contract intangible assets acquired by CareMax and the reversal of historical trademark amortization expense.

 

  Pro Forma   Pro Forma 
   Three Months Ended   Year Ended 
(in thousands)  March 31, 2021   December 31, 2020 
Amortization expense- trade names/trademarks  $-   $342 
Amortization expense- risk contracts   2,086    9,650 
Reversal of historical amortization expense   (407)   (1,627)
Pro forma adjustment  $1,679   $8,368 

 

Note 5—Business Combination

 

CareMax acquired the net assets of Interamerican Medical Center Group, LLC (“IMC”). The purchase price was approximately $339 million consisting of cash of $162 million (inclusive of $77 million in assumed IMC indebtedness based upon the balance as of March 31, 2021), paid off concurrently with the Business Combination), equity consideration of $155 million and contingent consideration of $22 million. The contingent consideration is included in equity in the pro forma combined condensed balance sheet. IMC constitutes a business and a significant acquisition and was accounted for under the acquisition method of accounting pursuant to ASC 805. The purchase price allocation is preliminary and subject to potential adjustments including updating the fair value of the equity consideration on the date of the completion of the Business Combination and the acquisition date fair value of assets acquired and liabilities assumed in the acquisition of IMC. The estimated fair value of the assets acquired and liabilities assumed, consisted of the following at the acquisition date:

 

 

 

 

Note 5—Business Combination (continued)

 

   Purchase price allocation 
Cash  $14,000 
Accounts receivable   17,928 
Other current assets   1,019 
Property, plant & equipment   6,509 
Identifiable Intangible Assets:     
  Tradenames/trademarks   345 
  Risk contracts   32,807 
Other assets   2,261 
Accounts payable and accrued expenses   (7,547)
Current portion of long term debt   (323)
Other long term liabilities   (1,151)
  Net Assets Acquired   65,848 
Excess of Consideration over Net Assets Acquired   273,744 
Total Consideration  $272,913 

 

 

 

 

Note 5—Business Combination (continued)

 

The value of DFHT shares as equity consideration was based on the trading price of DFHT Class A Common Stock on the closing of the Business Combination (June 8, 2021) at a price of $14.92 per share.

 

A Monte Carlo simulation was used to value the Contingent Consideration. The traded price of DFHT was simulated in each trial using Geometric Brownian Motion and the simulated path was then analyzed to determine, which, if any, earnout tranches would be payable within the given trial. The estimated payments were calculated by multiplying the shares earned for a given tranche by the trading price of DFHT common stock at March 31, 2021. The average of all trials yielded the valuation conclusion.

 

The fair value of the tradenames/trademarks was determined using the Relief from Royalty Method. In estimating an appropriate royalty rate, we conducted a royalty search through the Intangible Spring Database for tradenames/trademarks in the Medical and Healthcare industries and concluded on a selected net royalty rate of 1.0%. After estimating the appropriate royalty rate, we considered the amount of revenue attributable to the tradenames/trademarks, the annual royalty savings for each discrete period, an effective tax rate of market participants and our plan to incrementally phase out the IMC tradename/trademark beginning in the third quarter of 2021 and completed by the end of 2021.

 

The fair value of risk contracts was determined using the multi-period excess earnings method. In estimating the forecasted excess earnings and in the determination of the estimated useful life, we applied an estimated patient attrition rate of 31% based upon our historical patient attrition. The risk contracts intangible asset is being amortized over six years on an accelerated basis that reflects the pattern in which the economic benefits of the risk contracts intangible asset is consumed or otherwise used up.  The accelerated basis reflects the fact that the Company receives a greater benefit in the earlier years after the acquisition and a lesser benefit over time due to the further attrition of patients that existed at the time of the acquisition.

 

We considered other potential intangible assets including patient relationships, marketing-related and other customer-related, artistic-related, contract-based, and technology-based intangibles. We concluded there were no other significant, identifiable intangible assets that should be valued separately from goodwill. Goodwill was recognized as the excess of the purchase price over the net identifiable assets recognized. The goodwill is primarily attributable to IMC’s assembled workforce and anticipated future economic benefits to be derived from the combination of IMC operations with CareMax.

 

 

 

 

COMPARATIVE SHARE INFORMATION

 

        The following table sets forth the historical comparative share information for DFHT, CareMax and IMC on a stand-alone basis and the unaudited pro forma combined share information for the three months March 31, 2021 and the year ended December 31, 2020, after giving effect to the Business Combination,

 

You should read the information in the following table in conjunction with the selected historical financial information summary included elsewhere in this proxy statement, and the historical financial statements of DFHT, CareMax, and IMC and related notes that are included elsewhere in this proxy statement. The unaudited pro forma combined share information is derived from, and should be read in conjunction with, the unaudited pro forma combined financial statements and related notes included elsewhere in this proxy statement.

 

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of DFHT, CareMax, and IMC would have been had the companies been combined during the periods presented.

 

 

 

 

(in thousands, except per share information)  DFHT   CareMax   IMC   Pro Forma 
Three Months Ended March 31, 2021                    
Stockholders'/members' equity (deficit) and commitments and contingencies  $121,282   $7,973   $58,586   $439,663 
Net income (loss)  $9,302   $515   $(1,599)  $5,789 
Weighted average shares outstanding—basic   14,375,000    -    -    80,176,840 
Weighted average shares outstanding—diluted   15,446,315              81,248,155 
Stockholders'/members' equity per share—basic  $8.44   $-   $-   $5.48 
Stockholders'/members' equity per share— diluted  $0.60   $-   $-   $5.41 
Basic net income per share  $0.65   $-   $-   $0.07 
Diluted net income per share  $0.65             $0.07 
Cash dividends per share—basic  $-   $-   $-   $- 
Cash dividends per share—diluted  $-   $-   $-   $- 
Year Ended December 31, 2020                    
Net income (loss) attributable to controlling interest  $(21,511)  $9,363   $1,114   $(33,524)
Weighted average shares outstanding—basic and diluted   14,375,000    -    -    80,176,840 
Basic and diluted net income (loss) per share  $(1.50)  $-   $-   $(0.42)
Cash dividends per share—basic and diluted  $-   $-   $-   $-