Delaware |
8049 |
85-1408039 | ||
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(I.R.S. Employer Identification No.) |
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Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging Growth Company |
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F-1 |
• | “Amended and Restated Bylaws” means the certain Amended and Restated Bylaws of the Company, adopted at the closing of the Business Combination. |
• | “ATI” means ATI Physical Therapy, Inc. (f/k/a Fortress Value Acquisition Corp. II prior to the consummation of the Business Combination) and its consolidated subsidiaries. |
• | “A&R RRA” means that certain Amended and Restated Registration Rights Agreement, as amended, effective at the closing of the Business Combination, by and among FAII, Fortress Acquisition Sponsor II LLC and the other parties thereto. |
• | “The Board,” “Board of Directors” or “our Board” means the board of directors of ATI. |
• | “Closing Date” means June 16, 2021. |
• | “Common Stock” means the shares of Class A common stock, par value $0.0001 per share, of ATI. |
• | “Earnout Shares” means the up to an additional 15,000,000 shares of Common Stock Wilco Acquisition and its designees have a contingent right to receive pursuant to the earnout provisions in the Merger Agreement. |
• | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
• | “FAII” means Fortress Value Acquisition Corp. II, a Delaware corporation (n/k/a ATI Physical Therapy, Inc. following the consummation of the Business Combination). |
• | “FAII Class A common stock” means the shares of Class A common stock, par value $0.0001 per share, of FAII, (following the consummation of the Business Combination, “Common Stock”). |
• | “FAII Class F common stock” means the shares of Class F common stock, par value $0.0001 per share, of FAII, which upon consummation of the Business Combination were converted into FAII Class A common stock. |
• | “Founder Shares” means shares of FAII Class F common stock initially purchased by the Insiders whether or not converted into shares of FAII Class A common stock. |
• | “FAII’s IPO” means FAII’s initial public offering, consummated on August 14, 2020, through the sale of 34,500,000 units (including 4,500,000 units sold pursuant to the underwriters’ exercise of their over- allotment option) at $10.00 per unit. |
• | “Insiders” means holders of Founder Shares prior to FAII’s IPO. |
• | “NYSE” means the New York Stock Exchange. |
• | “Parent Sponsor Letter Agreement” means that certain amended and restated letter agreement dated February 21, 2021, by and among FAII, the Company and the Insiders. |
• | “PIPE Investors” means the Sponsor and certain other investors who entered into Subscription Agreements with FAII (together with any permitted assigns under the Subscription Agreements) in connection with the Business Combination. |
• | “Private Placement Warrants” means the 2,966,666 warrants to purchase shares of Common Stock purchased in a private placement in connection with FAII’s IPO. |
• | “Public Warrants” means the warrants included in the public units issued in FAII’s IPO, each of which is exercisable for one share of Common Stock, in accordance with its terms. |
• | “SEC” means the United States Securities and Exchange Commission. |
• | “Second Amended and Restated Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of ATI, adopted at the closing of the Business Combination. |
• | “Securities Act” means the Securities Act of 1933, as amended. |
• | “Sponsor” means Fortress Acquisition Sponsor II LLC, a Delaware limited liability company. |
• | “Stockholders Agreement” means the Stockholders Agreement dated February 21, 2021, by and among the Fortress Value Acquisition Corp. II and the other parties thereto. |
• | “Subscription Agreements” means those certain Subscription Agreements, each dated as of February 21, 2021, by and between FAII and each of the PIPE Investors. |
• | “Vesting Shares” means the shares of Common Stock issued upon the conversion of the Founder Shares (shares of FAII Class F common stock initially purchased by holders of Founder Shares prior to the FAII’s IPO), which are subject to certain vesting and forfeiture provisions. |
• | “Wilco Acquisition” means Wilco Acquisition, L.P., a Delaware limited partnership. |
• | our dependence upon governmental and third party private payors for reimbursement and that decreases in reimbursement rates or changes in payor and service mix may adversely affect our financial results; |
• | federal and state governments’ continued efforts to contain growth in Medicaid expenditures, which could adversely affect the Company’s revenue and profitability; |
• | payments that we receive from Medicare and Medicaid being subject to potential retroactive reduction; |
• | further unfavorable shifts in payor, state and service mix; |
• | risks associated with public health crises, including COVID-19 (and any existing and future variants) and its direct and indirect impacts on the business, which could lead to a decline in visit volumes and referrals; |
• | risks related to the impact on our workforce of mandatory COVID-19 vaccination of employees; |
• | our inability to compete effectively in a competitive industry subject to rapid technological change, including competition that could impact our ability to recruit and retain skilled physical therapists; |
• | failure of steps being taken to reduce attrition of physical therapists and increase hiring of physical therapists and the impact of unfavorable labor market dynamics and wage inflation; |
• | failure or ineffectiveness of our strategies to improve patient referrals; |
• | risks associated with future acquisitions, which may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities; |
• | failure of third-party customer service and technical support providers to adequately address customers’ requests; |
• | our dependence upon the cultivation and maintenance of relationships with customers, suppliers, physicians and other referral sources; |
• | the severity of the weather and natural disasters that can occur in the regions of the U.S. in which we operate, which could cause disruption to our business; |
• | our failure to maintain financial controls and processes over billing and collections or disputes with third-parties could have a significant negative impact on our financial condition and results of operations; |
• | our operations are subject to extensive regulation and macroeconomic uncertainty; |
• | risks associated with applicable state laws regarding fee-splitting and professional corporation laws; |
• | changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis; |
• | the outcome of any legal and regulatory matters, proceedings or investigations instituted against us or any of our directors or officers, and whether insurance coverage will be available and/or adequate to cover such matters or proceedings; |
• | inspections, reviews, audits and investigations under federal and state government programs and payor contracts that could have adverse findings that may negatively affect our business, including our results of operations, liquidity, financial condition and reputation; |
• | our ability to attract and retain talented executives and employees; |
• | our facilities face competition for experienced physical therapists and other clinical providers that may increase labor costs and reduce profitability; |
• | risks associated with our reliance on IT in critical areas of our operations; |
• | risk resulting from the Warrants, Earnout Shares and Vesting Shares being accounted for as liabilities; |
• | further impairments of goodwill and other intangible assets, which represent a significant portion of our total assets, especially in view of the Company’s recent market valuation; |
• | our inability to remediate the material weaknesses in internal control over financial reporting related to income taxes and to maintain effective internal control over financial reporting; |
• | risks related to outstanding indebtedness, compliance with associated covenants and the potential need to incur additional debt in the future; |
• | risks associated with liquidity and capital markets, including the Company’s ability to generate sufficient cash flows, together with cash on hand, to cover liquidity and capital requirements; |
• | costs related to operating as a public company and our ability to maintain the listing of our securities on the NYSE; and |
• | those factors discussed under the heading “Risk Factors |
• | Exceeding customer expectations and providing the right care at the right place at the right time; |
• | Building new and strengthening existing relationships with referral sources, payors and employees; |
• | Allocating available capital to support growth initiatives related to same-clinic sales, de novo and acqui-novo clinic openings and selective mergers and acquisitions activity; and |
• | Integrating our services earlier in the overall process for the evaluation and treatment of musculoskeletal (“MSK”) conditions. |
• | Patients. |
• | Medical Provider Partners. end-to-end |
• | Payors. |
• | Employers. ATI First ATI First |
• | Our People. |
• | Our Clinical Systems & Data. |
• | Our Technology-Enabled Infrastructure. |
• | Outpatient physical therapy services growth. up-front, conservative care to deliver better outcomes, quality healthcare services addressing such conditions in lower cost outpatient settings may continue increasing in prevalence. |
• | U.S. population demographics. |
• | Federal funding for Medicare and Medicaid. |
June 30, 2022, which will result in an overall reduction of 2% in reimbursement rates by June 30, 2022 unless acted upon through a Congressional measure. |
• | Workers’ compensation funding. |
• | Number of people with private health insurance. |
• | National physical therapy providers; |
• | Regional physical therapy providers; |
• | Physician-owned physical therapy providers; |
• | Individual practitioners or local physical therapy operators, which number in the thousands across the nation; and |
• | Vertically integrated hospital systems and scaled physician practices. |
• | our dependence upon governmental and third party private payors for reimbursement and that decreases in reimbursement rates may adversely affect our financial results; |
• | federal and state governments’ continued efforts to contain growth in Medicaid expenditures, which could adversely affect the Company’s revenue and profitability; |
• | payments that we receive from Medicare and Medicaid being subject to potential retroactive reduction; risks associated with public health crises, including COVID-19; |
• | further unfavorable shifts in payor, state and service mix; |
• | risks associated with public health crises, including COVID-19 (and any existing and future variants) and its direct and indirect impacts on the business, which could lead to a decline in visit volumes and referrals; |
• | risks related to the impact on our workforce of mandatory COVID-19 vaccination of employees; |
• | our inability to compete effectively in a competitive industry subject to rapid technological change, including competition that could impact our ability to recruit and retain skilled physical therapists; |
• | failure of steps being taken to reduce attrition of physical therapists and increase hiring of physical therapists and the impact of unfavorable labor market dynamics and wage inflation; |
• | failure or ineffectiveness of our strategies to improve patient referrals; |
• | risks associated with future acquisitions, which may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities; |
• | failure of third-party customer service and technical support providers to adequately address customers’ requests; |
• | our dependence upon the cultivation and maintenance of relationships with customers, suppliers, physicians and other referral sources; |
• | the severity of the weather and natural disasters that can occur in the regions of the U.S. in which we operate, which could cause disruption to our business; |
• | our failure to maintain financial controls and processes over billing and collections or disputes with third-parties could have a significant negative impact on our financial condition and results of operations; |
• | our operations are subject to extensive regulation and macroeconomic uncertainty; |
• | risks associated with applicable state laws regarding fee-splitting and professional corporation laws; |
• | changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis; |
• | the outcome of any legal and regulatory matters, proceedings or investigations instituted against us or any of our directors or officers, and whether insurance coverage will be available and/or adequate to cover such matters or proceedings; |
• | inspections, reviews, audits and investigations under federal and state government programs and payor contracts that could have adverse findings that may negatively affect our business, including our results of operations, liquidity, financial condition and reputation; |
• | our ability to attract and retain talented executives and employees; |
• | our facilities face competition for experienced physical therapists and other clinical providers that may increase labor costs and reduce profitability; |
• | risks associated with our reliance on IT in critical areas of our operations; |
• | risk resulting from the Warrants, Earnout Shares and Vesting Shares being accounted for as liabilities; |
• | further impairments of goodwill and other intangible assets, which represent a significant portion of our total assets, especially in view of the Company’s recent market valuation; |
• | our inability to remediate the material weaknesses in internal control over financial reporting related to income taxes and to maintain effective internal control over financial reporting; |
• | risks related to outstanding indebtedness, compliance with associated covenants and the potential need to incur additional debt in the future; |
• | risks associated with liquidity and capital markets, including the Company’s ability to generate sufficient cash flows, together with cash on hand, to cover liquidity and capital requirements; and |
• | costs related to operating as a public company and our ability to maintain the listing of our securities on the NYSE. |
Shares of Common Stock offered by us |
9,866,657 shares of Common Stock, consisting of (i) 6,899,991 shares of Common Stock that may be issued upon exercise of the Public Warrants and (ii) 2,966,666 shares of Common Stock that may be issued upon exercise of the Private Placement Warrants. |
Shares of Common Stock outstanding prior to exercise of all Warrants |
207,358,218 shares (as of February 17, 2022). |
Shares of Common Stock outstanding assuming exercise of all Warrants |
217, 224,875 shares (based on total shares outstanding as of February 17, 2022). |
Exercise price of Warrants |
$11.50 per share, subject to adjustment as described herein. |
Use of proceeds |
We will receive up to an aggregate of approximately $113,466,556 from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use the net proceeds from the exercise of the Warrants for general corporate purposes. |
Shares of Common Stock offered by the Selling Securityholders |
146,356,358 shares of Common Stock, consisting of (i) 8,625,000 Founder Shares, (ii) 116,467,183 shares of Common Stock subject to the Amended and Restated Registration Rights Agreement, (iii) 2,966,666 shares of Common Stock issuable upon the exercise of the Private Placement Warrants, (iv) 3,297,509 PIPE Shares and (v) up to 15,000,000 Earnout Shares that may be issued in the form of Common Stock pursuant to the earnout provisions in the Merger Agreement. |
Private Placement Warrants offered by the Selling Securityholders |
2,966,666 Private Placement Warrants. |
Use of proceeds |
We will not receive any proceeds from the sale of the shares of Common Stock or Private Placement Warrants by the Selling Securityholders. |
Restrictions to sell |
Certain of our securityholders are subject to certain restrictions on transfer until the termination of applicable lockup periods. See the section entitled “ Plan of Distribution—Restrictions to Sell |
Risk factors |
Any investment in the securities offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under “ Risk Factors |
NYSE ticker symbols |
Common Stock: ATIP |
Public Warrants: ATIPWS |
• | the duration and scope of the pandemic; |
• | the effectiveness of vaccines against COVID-19 (including against emerging variant strains); |
• | governmental, business and individual actions that have been and continue to be taken in response to the pandemic, and the resulting impacts on our patient volumes and other aspects of our business; |
• | the impact on our workforce of mandatory COVID-19 vaccination of employees; |
• | availability and size of the clinical labor force, competition for the employment of clinical labor and wage inflation related to clinical labor; |
• | our ability to comply with the requirements necessary to retain the Coronavirus Aid, Relief, and Economic Security Act provider relief funds we received; |
• | the effect on our patient, physician and facility referral sources and demand and ability to pay for physical therapy services; |
• | disruptions of or restrictions on the ability of our employees to travel and to work, including as a result of their health and well-being; |
• | availability of third-party providers to whom we outsource portions of our internal business functions, including billing and administrative functions relating to revenue cycle management; |
• | increased cybersecurity risks as a result of remote working conditions; |
• | the availability and cost of accessing the capital markets; |
• | our ability to pursue, diligence, finance and integrate acquisitions; |
• | our ability to comply with financial and operating covenants in our debt and operating lease agreements; and |
• | the potential for goodwill, intangible and other asset impairment charges. |
• | the difficulty and expense of integrating acquired personnel into our business; |
• | the diversion of management’s time from existing operations; |
• | the potential loss of key employees of acquired companies and existing customers of the acquired companies that may not be familiar with our brand or services; |
• | the difficulty of assignment and/or procurement of managed care contractual arrangements; and |
• | the assumption of the liabilities and exposure to unforeseen liabilities of acquired companies, including liabilities for failure to comply with healthcare regulations. |
• | Medicare and Medicaid reimbursement rules and regulations (as discussed above); |
• | federal and state anti-kickback laws, which prohibit the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration in return for ordering, leasing, purchasing or recommending or arranging for, or to induce, the referral of an individual, or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid; |
• | the Physician Self-Referral Law and analogous state self-referral prohibition statutes, which, subject to limited exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services,” including physical therapy, if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with an entity, and prohibits the entity from billing Medicare or Medicaid for such “designated health services”; |
• | the federal False Claims Acts (the “False Claims Acts”), which impose civil and/or criminal penalties against any person or entity that knowingly submits or causes to be submitted a claim that the person knew or should have known (i) to be false or fraudulent; (ii) for items or services not provided or provided as claimed; or (iii) was provided by an individual not otherwise qualified or who was excluded from participation in federal healthcare programs. The False Claims Acts also impose penalties for requests for payment that otherwise violate conditions of participation in federal healthcare programs or other healthcare compliance laws; |
• | U.S.C. 42 U.S. Code § 1320a–7, the Exclusions Statute of the Social Security Act, which subjects healthcare providers to exclusion from participation in federal healthcare programs if they engage in Medicare fraud, patient neglect or abuse / felony convictions related to fraud, breach of fiduciary duties or other financial misconduct related to healthcare service delivery; |
• | the civil monetary penalty statute and associated regulations, which authorizes the government agency to impose civil money penalties, an assessment, and program exclusion for various forms of fraud and abuse; and |
• | the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it. |
• | refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from payors; |
• | state or federal agencies imposing fines, penalties and other sanctions on us; |
• | temporary suspension of payment for new patients; |
• | decertification or exclusion from participation in the Medicare or Medicaid programs or one or more payor networks; |
• | self-disclosure of violations to applicable regulatory authorities; |
• | damage to our reputation; and |
• | loss of certain rights under, or termination of, our contracts with payors. |
• | hire additional tax personnel to bolster the capabilities and capacity of our in-house tax department; |
• | refine the scope of our external tax advisors to provide advice related to complex or unusual items; |
• | enhance the design and precision of our controls related to the income tax provision calculations and documentation, including controls related to the valuation allowance assessment. |
• | results of operations that vary from the expectations of securities analysts and investors; |
• | changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors or other unexpected adverse developments in our financial results, guidance or other forward-looking information, or industry, geographical or market sector trends; |
• | declines in the market prices of stocks generally; |
• | strategic actions by us or our competitors; |
• | announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; |
• | any significant change in our management; |
• | changes in general economic or market conditions or trends in our industry or markets; |
• | changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
• | future sales of our Common Stock or other securities; |
• | investor perceptions or the investment opportunity associated with our Common Stock relative to other investment alternatives; |
• | the public’s response to press releases or other public announcements by us or third-parties, including |
• | our filings with the SEC; |
• | litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; |
• | guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; |
• | the development and sustainability of an active trading market for our stock; |
• | actions by institutional or activist stockholders; |
• | changes in accounting standards, policies, guidelines, interpretations or principles; and |
• | other events or factors, including those resulting from natural disasters, war, acts of terrorism, health pandemics or responses to these events. |
• | there is no cumulative voting with respect to the election of our Board; |
• | the division of our Board into three classes, with only one class of directors being elected in each year; |
• | the ability of our Board to issue one or more series of preferred stock; |
• | advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; |
• | certain limitations on convening special stockholder meetings; |
• | limiting the ability of stockholders to act by written consent; |
• | the ability of our Board to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances; |
• | providing that our Board is expressly authorized to adopt, amend, alter or repeal our bylaws; |
• | the removal of directors only for cause; and |
• | that certain provisions may be amended only by the affirmative vote of at least 65% (for amendments to the indemnification provisions) or 66.7% (for amendments to the provisions relating to the board of directors) of the shares of our Common Stock entitled to vote generally in the election of our directors. |
• | the requirement that a majority of its board of directors consist of independent directors; |
• | the requirement that compensation of its executive officers be determined by a majority of the independent directors of the board or a compensation committee comprised solely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | the requirement that director nominees be selected, or recommended for the board’s selection, either by a majority of the independent directors of the board or a nominating committee comprised solely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
• | The attrition of our workforce during periods of 2021 caused, in part, by changes made during the COVID-19 pandemic related to compensation, staffing levels and support for clinicians. We have taken swift actions to offset those changes, but the impact of attrition has impacted overall profitability for the year. |
• | Labor market dynamics increased competition for the available physical therapy providers in the workforce, creating wage inflation and elevated employee attrition at ATI. |
• | Decrease in rate per visit primarily driven by continuing less favorable payor and state mix when compared to pre-pandemic profile, with general shift from workers’ compensation and auto personal injury to commercial and government, and further impacted by mix-shift out of higher reimbursement states. |
• | Lower than expected referral and patient visit volumes caused, in part, by volume softness in certain regions and states and the increase in COVID-19 cases during the fourth quarter of 2021, which has continued into the beginning of 2022, due to the outbreak of additional variants. |
• | In 2020, we received approximately $91.5 million of general distribution payments under the Provider Relief Fund. These payments have been recognized as other income in the consolidated statements of operations throughout 2020 in a manner commensurate with the reporting and eligibility requirements issued by HHS. Based on the terms and conditions of the program, including reporting guidance issued by HHS in 2021, we believe that we have met the applicable terms and conditions. This includes, but is not limited to, the fact that our COVID-19 related expenses and lost revenues for the year ended December 31, 2020 exceeded the amount of funds received. To the extent that reporting requirements and terms and conditions are subsequently modified, it may affect our ability to comply and ability to retain the funds. The following table summarizes the quarterly recognition of general distribution payments recognized in other expense (income), net in our 2020 consolidated statements of operations (in millions): |
Three Months Ended |
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March 31, 2020 |
June 30, 2020 |
September 30, 2020 |
December 31, 2020 |
Total |
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$— |
$ | (44.3 | ) | $ | (23.1 | ) | $ | (24.1 | ) | $ | (91.5 | ) |
• | We applied for and obtained approval to receive $26.7 million of Medicare Accelerated and Advance Payment Program (“MAAPP”) funds during the quarter ended June 30, 2020. During the year ended December 31, 2021, we applied $12.6 million in MAAPP funds and transferred $1.8 million in MAAPP funds as part of the divestiture of its Home Health service line. The remaining amounts are required to be applied or repaid by the quarter ending September 30, 2022. Because we have not yet met all required performance obligations or performed the services related to the remaining funds, as of December 31, 2021 and December 31, 2020, $12.3 million and $15.5 million of the funds are recorded in accrued expenses and other liabilities, respectively, and zero and $11.2 million of the funds are recorded in other non-current liabilities, respectively. We expect the remaining advanced payments to be applied by the quarter ending September 30, 2022. |
• | We elected to defer depositing the employer portion of Social Security taxes for payments due from March 27, 2020 through December 31, 2020, interest-free and penalty-free. Related to these payments, as of December 31, 2021 and December 31, 2020, $5.9 million and $5.5 million is included in accrued expenses and other liabilities, respectively, and zero and $5.5 million is included in other non-current liabilities, respectively. |
• | Outpatient physical therapy services growth |
U.S. As healthcare trends in the U.S. continue to evolve, with a growing focus on value-based care emphasizing up-front, conservative care to deliver better outcomes, quality healthcare services addressing such conditions in lower cost outpatient settings may continue increasing in prevalence. |
• | U.S. population demographics |
• | Federal funding for Medicare and Medicaid |
• | Workers’ compensation funding |
• | Number of people with private health insurance |
Year Ended |
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December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
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Number of clinics owned (end of period) |
910 | 875 | 872 | |||||||||
Number of clinics managed (end of period) |
20 | 22 | 27 | |||||||||
New clinics during the period |
58 | 23 | 71 | |||||||||
Business days |
257 | 257 | 255 | |||||||||
Average visits per day |
20,608 | 18,274 | 25,152 | |||||||||
Average visits per day per clinic |
23.1 | 21.0 | 30.0 | |||||||||
Total patient visits |
5,296,161 | 4,696,475 | 6,413,697 | |||||||||
Net patient revenue per visit |
$ | 105.94 | $ | 112.76 | $ | 111.88 | ||||||
Same clinic revenue growth rate |
4.6 | % | (26.9 | )% | 2.8 | % |
Year Ended |
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December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
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Number of clinics owned (beginning of period) |
875 | 872 | 810 | |||||||||
Add: New clinics opened during the period |
51 | 23 | 70 | |||||||||
Add: Clinics acquired during the period |
7 | — | 1 | |||||||||
Less: Clinics closed/sold during the period |
23 | 20 | 9 | |||||||||
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Number of clinics owned (end of period) |
910 | 875 | 872 | |||||||||
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Year Ended December 31, |
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2021 |
2020 |
Increase/(Decrease) |
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($ in thousands, except percentages) |
$ |
% of Revenue |
$ |
% of Revenue |
$ |
% |
||||||||||||||||||
Net patient revenue |
$ | 561,080 | 89.4 | % | $ | 529,585 | 89.4 | % | $ | 31,495 | 5.9 | % | ||||||||||||
Other revenue |
66,791 | 10.6 | % | 62,668 | 10.6 | % | 4,123 | 6.6 | % | |||||||||||||||
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Net operating revenue |
627,871 |
100.0 |
% |
592,253 |
100.0 |
% |
35,618 |
6.0 |
% | |||||||||||||||
Cost of services: |
||||||||||||||||||||||||
Salaries and related costs |
336,496 | 53.6 | % | 306,471 | 51.7 | % | 30,025 | 9.8 | % | |||||||||||||||
Rent, clinic supplies, contract labor and other |
180,932 | 28.8 | % | 166,144 | 28.1 | % | 14,788 | 8.9 | % | |||||||||||||||
Provision for doubtful accounts |
16,369 | 2.6 | % | 16,231 | 2.7 | % | 138 | 0.9 | % | |||||||||||||||
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Total cost of services |
533,797 |
85.0 |
% |
488,846 |
82.5 |
% |
44,951 |
9.2 |
% | |||||||||||||||
Selling, general and administrative expenses |
111,809 | 17.8 | % | 104,320 | 17.6 | % | 7,489 | 7.2 | % | |||||||||||||||
Goodwill and intangible asset impairment charges |
962,303 | 153.3 | % | — | — | % | 962,303 | n/m | ||||||||||||||||
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|
|
|
|||||||||||||||||||
Operating loss |
(980,038 |
) |
(156.1 |
)% |
(913 |
) |
(0.2 |
)% |
(979,125 |
) |
n/m |
|||||||||||||
Change in fair value of warrant liability |
(22,595 | ) | (3.6 | )% | — | — | % | (22,595 | ) | n/m | ||||||||||||||
Change in fair value of contingent common shares liability |
(175,140 | ) | (27.9 | )% | — | — | % | (175,140 | ) | n/m | ||||||||||||||
Loss on settlement of redeemable preferred stock |
14,037 | 2.2 | % | — | — | % | 14,037 | n/m | ||||||||||||||||
Interest expense, net |
46,320 | 7.4 | % | 69,291 | 11.7 | % | (22,971 | ) | (33.2 | )% | ||||||||||||||
Interest expense on redeemable preferred stock |
10,087 | 1.6 | % | 19,031 | 3.2 | % | (8,944 | ) | (47.0 | )% | ||||||||||||||
Other expense (income), net |
241 | — | % | (91,002 | ) | (15.4 | )% | 91,243 | (100.3 | )% | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
(Loss) income before taxes |
(852,988 |
) |
(135.9 |
)% |
1,767 |
0.3 |
% |
(854,755 |
) |
n/m |
||||||||||||||
Income tax (benefit) expense |
(70,960 | ) | (11.3 | )% | 2,065 | 0.3 | % | (73,025 | ) | n/m | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net loss |
(782,028 |
) |
(124.6 |
)% |
(298 |
) |
(0.1 |
)% |
(781,730 |
) |
n/m |
|||||||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
2020 |
2019 |
Increase/(Decrease) |
||||||||||||||||||||||
(in $ thousands, except percentages) |
$ |
% of Revenue |
$ |
% of Revenue |
$ |
% |
||||||||||||||||||
Net patient revenue |
$ | 529,585 | 89.4 | % | $ | 717,596 | 91.4 | % | ($ | 188,011 | ) | (26.2 | %) | |||||||||||
Other revenue |
62,668 | 10.6 | % | 67,862 | 8.6 | % | (5,194 | ) | (7.7 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net operating revenue |
592,253 |
100.0 |
% |
785,458 |
100.0 |
% |
(193,205 |
) |
(24.6 |
%) | ||||||||||||||
Clinic operating costs: |
||||||||||||||||||||||||
Salaries and related costs |
306,471 | 51.7 | % | 414,492 | 52.8 | % | (108,021 | ) | (26.1 | %) | ||||||||||||||
Rent, clinic supplies, contract labor and other |
166,144 | 28.1 | % | 170,516 | 21.7 | % | (4,372 | ) | (2.6 | %) | ||||||||||||||
Provision for doubtful accounts |
16,231 | 2.7 | % | 22,191 | 2.8 | % | (5,960 | ) | (26.9 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total clinic operating costs |
488,846 |
82.5 |
% |
607,199 |
77.3 |
% |
(118,353 |
) |
(19.5 |
%) | ||||||||||||||
Selling, general and administrative expenses |
104,320 | 17.6 | % | 119,221 | 15.2 | % | (14,901 | ) | (12.5 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss) income |
(913 |
) |
(0.2 |
%) |
59,038 |
7.5 |
% |
(59,951 |
) |
(101.5 |
%) | |||||||||||||
Other (income) expenses, net |
(91,002 | ) | (15.4 | %) | 825 | 0.1 | % | (91,827 | ) | NM | ||||||||||||||
Interest expense, net |
69,291 | 11.7 | % | 76,972 | 9.8 | % | (7,681 | ) | (10.0 | %) | ||||||||||||||
Interest expense on redeemable preferred stock |
19,031 | 3.2 | % | 15,511 | 2.0 | % | 3,520 | 22.7 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before income taxes |
1,767 |
0.3 |
% |
(34,270 |
) |
(4.4 |
%) |
36,037 |
(105.2 |
%) | ||||||||||||||
Income tax expense (benefit) |
2,065 | 0.3 | % | (44,019 | ) | (5.6 | %) | 46,084 | (104.7 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income |
(298 |
) |
(0.1 |
%) |
$ |
9,749 |
1.2 |
% |
($ |
10,047 |
) |
(103.1 |
%) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
||||||||||||
($ in thousands) |
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
|||||||||
Net (loss) income |
$ |
(782,028 |
) |
$ |
(298 |
) |
$ |
9,749 |
||||
Plus ( minus ): |
||||||||||||
Net loss (income) attributable to non-controlling interest |
3,700 | (5,073 | ) | (4,400 | ) | |||||||
Interest expense, net |
46,320 | 69,291 | 76,972 | |||||||||
Interest expense on redeemable preferred stock |
10,087 | 19,031 | 15,511 | |||||||||
Income tax (benefit) expense |
(70,960 | ) | 2,065 | (44,019 | ) | |||||||
Depreciation and amortization expense |
37,995 | 39,700 | 39,104 | |||||||||
|
|
|
|
|
|
|||||||
EBITDA |
$ |
(754,886 |
) |
$ |
124,716 |
$ |
92,917 |
|||||
Goodwill and intangible asset impairment charges (1) |
962,303 | — | — | |||||||||
Goodwill and intangible asset impairment charges attributable to non-controlling interest(1) |
(7,949 | ) | — | — | ||||||||
Changes in fair value of warrant liability and contingent common shares liability (2) |
(197,735 | ) | — | — | ||||||||
Loss on settlement of redeemable preferred stock (3) |
14,037 | — | — | |||||||||
Transaction and integration costs (4) |
9,788 | 4,790 | 4,535 | |||||||||
Gain on sale of Home Health service line, net |
(5,846 | ) | — | — | ||||||||
Share-based compensation |
5,769 | 1,936 | 1,822 | |||||||||
Loss on debt extinguishment (5) |
5,534 | — | — | |||||||||
Reorganization and severance costs (6) |
3,913 | 7,512 | 8,331 | |||||||||
Non-ordinary legal and regulatory matters(7) |
2,914 | — | — | |||||||||
Pre-opening de novo costs(8) |
1,929 | 1,565 | 2,275 | |||||||||
Business optimization costs (9) |
— | 10,377 | 18,512 | |||||||||
Charges related to lease terminations (10) |
— | 4,253 | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ |
39,771 |
$ |
155,149 |
$ |
128,392 |
||||||
|
|
|
|
|
|
(1) |
Represents non-cash charges related to the write-down of goodwill and trade name indefinite-lived intangible assets. Refer to Note 5 – Goodwill, Trade Name and Other Intangible Assets |
(2) |
Represents non-cash amounts related to the change in the estimated fair value of Warrants, Earnout Shares and Vesting Shares. Refer to Notes 3 – Business Combination and Divestiture Warrant Liability Contingent Common Shares Liability |
(3) |
Represents loss on settlement of redeemable preferred stock based on the value of cash and equity provided to preferred stockholders in relation to the outstanding redeemable preferred stock liability at the time of the closing of the Business Combination. |
(4) |
Represents costs related to the Business Combination, non-capitalizable debt transaction costs, clinic acquisitions and acquisition-related integration and consulting and planning costs related to preparation to operate as a public company. |
(5) |
Represents charges related to the derecognition of the proportionate amount of remaining unamortized deferred financing costs and original issuance discount associated with the partial repayment of the first lien term loan and derecognition of the unamortized original issuance discount associated with the full repayment of the subordinated second lien term loan. Refer to Note 8 – Borrowings |
(6) |
Represents severance, consulting and other costs related to discrete initiatives focused on reorganization and delayering of the Company’s labor model, management structure and support functions. |
(7) |
Represents non-ordinary course legal costs related to the previously-disclosed ATIP shareholder class action complaints, derivative complaint and SEC inquiry. Refer to Note 18 – Commitments and Contingencies |
(8) |
Represents expenses associated with renovation, equipment and marketing costs relating to the start-up and launch of new locations incurred prior to opening. |
(9) |
Represents non-recurring costs to optimize our platform and ATI transformative initiatives. Costs primarily relate to duplicate costs driven by IT and Revenue Cycle Management conversions, labor related costs during the transition of key positions and other incremental costs of driving optimization initiatives. |
(10) |
Represents charges related to lease terminations prior to the end of term for corporate facilities no longer in use. |
Year Ended |
||||||||
($ in thousands) |
December 31, 2021 |
December 31, 2020 |
||||||
Net cash (used in) provided by operating activities |
(42,100 | ) | 138,604 | |||||
Net cash used in investing activities |
(39,889 | ) | (21,809 | ) | ||||
Net cash used in financing activities |
(11,523 | ) | (12,970 | ) | ||||
|
|
|
|
|||||
Net (decrease) increase in cash and cash equivalents |
(93,512 | ) | 103,825 | |||||
Cash and cash equivalents at beginning of period |
142,128 | 38,303 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 48,616 | $ | 142,128 | ||||
|
|
|
|
Year Ended |
||||||||
($ in thousands) |
December 31, 2020 |
December 31, 2019 |
||||||
Net cash (used in) provided by operating activities |
138,604 | 47,944 | ||||||
Net cash used in investing activities |
(21,809 | ) | (42,678 | ) | ||||
Net cash used in financing activities |
(12,970 | ) | (13,029 | ) | ||||
|
|
|
|
|||||
Net (decrease) increase in cash and cash equivalents |
103,825 | (7,763 | ) | |||||
Cash and cash equivalents at beginning of period |
38,303 | 46,066 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 142,128 | $ | 38,303 | ||||
|
|
|
|
• | Patient revenue recognition and allowance for doubtful accounts |
• | Realization of deferred tax assets |
• | Goodwill and intangible assets |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Commercial |
56.3 | % | 53.1 | % | 51.5 | % | ||||||
Government |
23.7 | % | 22.2 | % | 23.6 | % | ||||||
Workers’ Compensation |
14.3 | % | 17.6 | % | 17.2 | % | ||||||
Other (1) |
5.7 | % | 7.1 | % | 7.7 | % | ||||||
|
|
|
|
|
|
|||||||
100.0 | % | 100.0 | % | 100.0 | % | |||||||
|
|
|
|
|
|
(1) |
Other is primarily comprised of net patient revenue related to auto personal injury which by its nature may have longer-term collection characteristics relative to other payor classes. |
December 31, 2021 |
December 31, 2020 |
|||||||
Commercial |
40.3 | % | 42.8 | % | ||||
Government |
9.1 | % | 11.2 | % | ||||
Workers’ Compensation |
18.1 | % | 18.6 | % | ||||
Other (1) |
32.5 | % | 27.4 | % | ||||
|
|
|
|
|||||
100.0 | % | 100.0 | % | |||||
|
|
|
|
Discount rate |
Terminal growth rate (1) |
EBITDA margin |
Royalty rate |
|||||||||||||||||||||||||||||
50 basis points |
50 basis points |
100 basis points |
50 basis points |
|||||||||||||||||||||||||||||
Increase |
Decrease |
Increase |
Decrease |
Increase |
Decrease |
Increase |
Decrease |
|||||||||||||||||||||||||
Goodwill |
$ | (50,000 | ) | $ | 60,000 | $ | 30,000 | $ | (20,000 | ) | $ | 70,000 | $ | (70,000 | ) | |||||||||||||||||
Trade name |
$ | (30,000 | ) | $ | 30,000 | $ | 20,000 | $ | (20,000 | ) | $ | 50,000 | $ | (50,000 | ) |
(1) |
An increase of 100 basis points to our assumed non-terminal revenue growth rates would result in approximately $60 million of an estimated increase to the fair value of our goodwill reporting unit, whereas, a 100 basis point decrease would result in approximately $100 million of an estimated decrease to the fair value of our goodwill reporting unit. |
• | Exceeding customer expectations and providing the right care at the right place at the right time; |
• | Building new and strengthening existing relationships with referral sources, payors and employees; |
• | Allocating available capital to support growth initiatives related to same-clinic sales, de novo and acqui-novo clinic openings and selective mergers and acquisitions activity; and |
• | Integrating our services earlier in the overall process for the evaluation and treatment of MSK conditions. |
• | Patients |
• | Medical Provider Partners end-to-end |
• | Payors |
• | Employers |
• | Our People |
patient outcomes and customer satisfaction. We have invested in clinical and leadership development programs offering our clinical and support staff opportunities to enhance their clinical skills and take on increasing leadership responsibilities. Combined with a competitive compensation model, we strive to be an attractive employer in the physical therapy industry. |
• | Our Clinical Systems & Data |
• | Our Technology-Enabled Infrastructure |
• | Outpatient physical therapy services growth up-front, conservative care to deliver better outcomes, quality healthcare services addressing such conditions in lower cost outpatient settings may continue increasing in prevalence. |
• | U.S. population demographics. The population of adults aged 65 and older in the U.S. is expected to continue to grow and thus expand the Company’s market opportunity. According to the U.S. Census Bureau, the population of adults over the age of 65 is expected to grow 30% from 2020 through 2030. |
• | Federal funding for Medicare and Medicaid. Federal and state funding of Medicare and Medicaid and the terms of access to these reimbursement programs affect demand for physical therapy services. Beginning in January 2021, the physical therapy industry observed a reduction of Medicare reimbursement rates of approximately 3% in accordance with the Medicare physician fee schedule for therapy services. The proposed 2022 budget, released by CMS in July 2021, called for an approximate 3.75% further reduction in reimbursement rates as well as a 15% decrease in payments for services performed by physical therapy assistants. However, in December 2021, the Protecting Medicare and American Farmers from Sequester Cuts Act was signed into law. As a result, the reimbursement rate reduction beginning in January 2022 was approximately 0.75%. The Act did not address the 15% decrease in payments for services performed by physical therapy assistants, which began on January 1, 2022. Additionally, a further reduction through resuming sequestration has been postponed. Sequestration reductions will resume at 1% after March 31, 2022, and by an additional 1% after June 30, 2022, which will result in an overall reduction of 2% in reimbursement rates by June 30, 2022 unless acted upon through a Congressional measure. |
• | Workers’ compensation funding |
• | Number of people with private health insurance |
• | National physical therapy providers; |
• | Regional physical therapy providers; |
• | Physician-owned physical therapy providers; |
• | Individual practitioners or local physical therapy operators, which number in the thousands across the nation; and |
• | Vertically integrated hospital systems and scaled physician practices. |
Name |
Age |
Title | ||
John L. Larsen | 64 | Member of the leadership team fulfilling the role of Principal Executive Officer; Executive Chair; Director | ||
Joseph Jordan | 40 | Member of the leadership team fulfilling the role of Principal Executive Officer; Chief Financial Officer | ||
Ray Wahl | 49 | Member of the leadership team fulfilling the role of Principal Executive Officer; Chief Operating Officer | ||
Diana Chafey | 53 | Chief Legal Officer and Corporate Secretary | ||
Augustus Oakes | 47 | Chief Information Officer | ||
Joe Zavalishin | 48 | Chief Development Officer | ||
Joanne Burns | 61 | Director | ||
Daniel Dourney | 65 | Director | ||
John Maldonado | 46 | Director | ||
Andrew A. McKnight | 44 | Director | ||
James E. Parisi | 57 | Director | ||
Carmine Petrone | 39 | Director | ||
Teresa Sparks | 53 | Director |
• | the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by ATI; |
• | the pre-approval of all non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by ATI; |
• | setting clear hiring policies for employees or former employees of the independent registered public accounting firm; |
• | obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
• | reviewing and discussing the Company’s annual audited and quarterly financial statements; |
• | discussing the Company’s earnings press releases as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC; |
• | discussing with management and the independent auditor, as appropriate, any audit problems or difficulties and management’s response, and the Company’s risk assessment and risk management policies, including the Company’s major financial risk exposure and steps taken by management to monitor and mitigate such exposure; and |
• | reviewing the Company’s financial reporting and accounting standards and principles, significant changes in such standards or principles or in their application and the key accounting decisions affecting ATI’s financial statements, including alternatives to, and the rationale for, the decisions made. |
• | reviewing and approving annually corporate goals and objectives relating to the compensation of the CEO, evaluating performance of the CEO in light of those goals and reviewing and establishing the CEO’s annual compensation and incentive plan participation levels and bases of participation; |
• | reviewing and recommending to the Board non-CEO executive officer compensation; evaluating, reviewing and recommending to the Company’s Board any changes to, or additional stock-based and other incentive compensation plans in the annual proxy statement and annual report on Form 10-K to be filed with the SEC; and |
• | reviewing and recommending annually for approval by the Board, the form and amount of non-management director compensation and benefits. |
• | identifying individuals qualified to become Board members and recommending to the Board the director nominees for the next annual meeting of shareholders; |
• | developing and recommending to the Board the corporate governance guidelines applicable to the Company; |
• | leading the Board in its annual review of the performance of (a) the Board, (b) the Board committees and (c) management; and |
• | recommending to the Board nominees for each Board committee. |
• | being knowledgeable about compliance issues facing the health care industry; |
• | primary responsibility for oversight of health care compliance matters, including assisting the Board and Audit Committee with oversight of enterprise risk management and health care compliance matters; |
• | overseeing ATI’s health care regulatory compliance program and monitoring performance; and |
• | providing an avenue of communication among management, those persons responsible for the internal compliance function, and the Board. |
Name |
Title | |
John Larsen (1) |
Executive Chairman and Office of the CEO | |
Joseph Jordan | Chief Financial Officer and Office of the CEO | |
Ray Wahl | Chief Operating Officer and Office of the CEO | |
Diana Chafey | Chief Legal Officer and Corporate Secretary | |
Joseph Zavalishin | Chief Development Officer | |
Augustus Oakes | Chief Information Officer | |
Labeed Diab | Former Chief Executive Officer |
(1) |
Interim role beginning August 9, 2021 |
Acadia Healthcare Company, Inc. | National HealthCare Corporation | |
Addus HomeCare Corporation | National Vision Holdings Corporation | |
Amedisys, Inc. | Option Care Health, Inc. | |
Brookdale Senior Living Inc. | RadNet, Inc. | |
Encompass Health Corporation | Select Medical Holdings Corporation | |
Hanger, Inc. | Surgery Partners, Inc. | |
LHC Group, Inc. | The Ensign Group, Inc. | |
MEDNAX, Inc. | U.S. Physical Therapy, Inc. |
Base Salary |
Annual Incentive Bonus Plan |
Long-Term Equity Incentives |
Additional NEO Compensation | |||||
Objective |
Provides minimum pay for base duties and responsibilities for each position, reflecting market factors, as well as individual experience, performance and level of responsibility. | Provides a reward for short-term performance. | Provides an incentive for longer-term performance, and aligns compensation with the creation of long-term stockholder value. Retains talent through multi-year vesting. | Provides financial and health and welfare peace of mind, allowing executives to focus on company performance. | ||||
Key Features |
Fixed compensation designed to attract and retain NEOs. | At risk pay based on the performance achieved during the year. | At risk pay based on the performance achieved over the course of many years. | Executive pay based on role. |
Name |
Beginning 2021 Annualized Base Salary |
Ending 2021 Annualized Base Salary |
||||||
John Larsen (1) |
NA | $ | 1,440,000 | |||||
Joseph Jordan |
$ | 384,750 | $ | 450,000 | ||||
Ray Wahl |
$ | 410,400 | $ | 450,000 | ||||
Diana Chafey |
$ | 359,100 | $ | 359,100 | ||||
Joseph Zavalishin |
$ | 359,100 | $ | 359,100 | ||||
Augustus Oakes |
$ | 300,000 | $ | 325,000 |
(1) |
In connection with Mr. Larsen’s appointment as Executive Chair, the Company determined to compensate him by paying him an additional $720,000, paid over six months. Mr. Larsen’s annualized salary of $1,440,000 was set to 85% of ATI’s previous CEO cash compensation inclusive of base and target bonus. |
Name |
2021 Base Salary ($) |
2021 AIB Target (% of Base Salary) |
2021 AIB Target Opportunity ($) |
Discretionary 2021 Annual Bonus Earned ($) |
||||||||||||
John Larsen |
$ | 1,440,000 | NA | NA | NA | |||||||||||
Joseph Jordan |
$ | 450,000 | 75 | % | $ | 337,500 | $ | 168,750 | ||||||||
Ray Wahl |
$ | 450,000 | 75 | % | $ | 337,500 | $ | 168,750 | ||||||||
Diana Chafey |
$ | 359,100 | 75 | % | $ | 269,325 | $ | 134,663 | ||||||||
Joseph Zavalishin |
$ | 359,100 | 75 | % | $ | 269,325 | $ | 134,663 | ||||||||
Augustus Oakes |
$ | 325,000 | 50 | % | $ | 162,500 | $ | 81,250 |
Restricted Stock Units |
Stock Options |
|||||||||||||||||||
Name |
Target LTI Value ($) |
Value ($) |
Number of Units (#) |
Value ($) |
Number of Options (#) |
|||||||||||||||
John Larsen |
$ | 480,000 | $ | 240,000 | 70,175 | $ | 240,000 | 134,216 | ||||||||||||
Joseph Jordan |
$ | 500,000 | $ | 250,000 | 73,099 | $ | 250,000 | 139,808 | ||||||||||||
Ray Wahl |
$ | 500,000 | $ | 250,000 | 73,099 | $ | 250,000 | 139,808 | ||||||||||||
Diana Chafey |
$ | 250,000 | $ | 125,000 | 36,550 | $ | 125,000 | 69,604 | ||||||||||||
Joseph Zavalishin |
$ | 250,000 | $ | 125,000 | 36,550 | $ | 125,000 | 69,904 | ||||||||||||
Augustus Oakes |
$ | 250,000 | $ | 125,000 | 36,550 | $ | 125,000 | 69,904 |
Name and Principal Position |
Year |
Salary ($) |
Bonus (2) ($) |
Stock Awards (3) ($) |
Option Awards (3) ($) |
Change in Pension Value and Nonqualified Deferred Compensati on Earnings (5) ($) |
All Other Compensation (5) ($) |
Total ($) |
||||||||||||||||||||||||
John Larsen Executive Chairman (1) |
2021 | 555,517 | — | 302,499 | 287,586 | — | — | 1,145,602 | ||||||||||||||||||||||||
Joseph Jordan Chief Financial Officer |
2021 | 415,895 | 168,750 | 249,999 | 237,674 | 3,335 | 18,443 | 1,094,096 | ||||||||||||||||||||||||
2020 | 369,538 | 169,281 | — | — | — | 10,678 | 549,497 | |||||||||||||||||||||||||
2019 | 349,808 | 187,500 | 436,818 | — | — | 7,897 | 982,023 | |||||||||||||||||||||||||
Ray Wahl Chief Operating Officer |
2021 | 428,622 | 168,750 | 249,999 | 237,674 | 2,877 | 22,615 | 1,110,537 | ||||||||||||||||||||||||
2020 | 394,840 | 153,900 | — | — | — | 47,344 | 596,084 | |||||||||||||||||||||||||
2019 | 321,442 | 225,000 | 140,019 | — | — | 69,442 | 755,903 | |||||||||||||||||||||||||
Diana Chafey Chief Legal Officer |
2021 | 359,100 | 134,663 | 266,538 | 118,837 | — | 17,733 | 896,871 | ||||||||||||||||||||||||
2020 | 344,200 | 134,663 | — | — | — | 4,053 | 482,916 | |||||||||||||||||||||||||
2019 | 350,000 | 262,500 | 120,698 | — | — | 8,655 | 741,853 | |||||||||||||||||||||||||
Joseph Zavalishin Chief Development Officer |
2021 | 357,719 | 134,663 | 125,001 | 118,837 | 7,173 | 10,850 | 754,243 | ||||||||||||||||||||||||
2020 | 330,424 | 234,663 | — | — | — | 13,453 | 578,540 | |||||||||||||||||||||||||
2019 | 82,115 | 166,884 | 272,766 | — | — | 15,451 | 537,216 | |||||||||||||||||||||||||
Augustus Oakes Chief Information Officer |
2021 | 311,346 | 81,250 | 125,001 | 118,837 | — | 16,871 | 653,305 | ||||||||||||||||||||||||
2020 | 260,892 | 61,072 | 220,073 | — | — | 4,285 | 546,322 | |||||||||||||||||||||||||
2019 | 246,250 | 84,000 | — | — | — | 931 | 331,181 | |||||||||||||||||||||||||
Labeed Diab Former Chief Executive Officer |
2021 | 446,250 | 281,000 | — | — | 1,505,165 | 710,642 | 2,943,057 | ||||||||||||||||||||||||
2020 | 693,750 | 359,100 | — | — | — | 21,376 | 1,074,226 | |||||||||||||||||||||||||
2019 | 619,231 | 700,000 | 1,463,686 | — | — | 32,525 | 2,815,442 |
(1) |
John Larsen became ATI’s Executive Chairman on August 9, 2021, all fees earned serving on the Board of Directors are included in the above table as follows: $112,440 cash fees, 34,952 stock options valued at $59,418, and 18,275 restricted stock units valued at $62,500. |
(2) |
Cash bonuses earned in 2021 were discretionary awards paid to retain bonus-eligible employees, including the above NEOs. |
(3) |
The award values for periods prior to the Closing Date of the Business Combination reflect the value of the shares distributed by Wilco Acquisition on December 16, 2021 (the “Distribution Date”) discussed herein relating to ICUs granted to the NEOs during such prior periods and held by the NEOs on the Distribution Date. The value of the shares reflected in the table is $3.14, which was the share price as of the close of trading on the Distribution Date. |
(4) |
The assumptions used in determining the values disclosed in the Stock Awards and Option Awards columns are set out in the 2021 Consolidated Financial Statements included in this prospectus |
(5) |
Former Chief Executive Officer, Labeed Diab, stepped down effective August 7, 2021. John Larsen was appointed and named Executive Chairman and took an active role in leading the Company along with Ray Wahl, Chief Operating Officer, and Joseph Jordan, Chief Financial Officer. Mr. Diab received $1,505,165 in deferred compensation related to his previous employers’ contingent signing bonus repayment, negotiated to the amount owed plus interest. |
(6) |
Amounts shown in the All Other Compensation column for 2021 are comprised of the following: |
401(k) Match | Executive Physical |
Other* | Tax Gross-Ups |
Termination or CIC Payment/Accrual |
Total | |||||||||||||||||||
John Larsen |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Joseph Jordan |
$ | 9,750 | $ | 5,694 | $ | 1,428 | $ | 1,571 | $ | — | $ | 18,443 | ||||||||||||
Ray Wahl |
$ | 9,750 | $ | — | $ | 928 | $ | 11,937 | $ | — | $ | 22,615 | ||||||||||||
Diana Chafey |
$ | 7,402 | $ | 7,445 | $ | 328 | $ | 2,559 | $ | — | $ | 17,733 | ||||||||||||
Joseph Zavalishin |
$ | 8,507 | $ | — | $ | 928 | $ | 1,415 | $ | — | $ | 10,850 | ||||||||||||
Augustus Oakes |
$ | 9,120 | $ | 5,418 | $ | 928 | $ | 1,405 | $ | — | $ | 16,871 | ||||||||||||
Labeed Diab |
$ | 9,750 | $ | 5,279 | $ | 214 | $ | 10,879 | $ | 684,519 | $ | 710,642 |
* | Other perquisites include: life insurance, long term disability insurance benefits, cell phone reimbursements, and non-compete considerations. |
Name |
Grant Date |
Compensation Committee and Board Meeting Date |
All Other Stock Awards: Number of Shares or Stock Units |
All Other Option Awards: Number of Securities (#) |
Exercise or Base Price of Option Awards ($/Sh) |
Grant Date Fair Value of Stock and Option Awards |
||||||||||||||||||
John Larsen |
11/23/21 | 11/22/21 | 88,450 | — | $ | 302,499 | ||||||||||||||||||
11/23/21 | 11/22/21 | — | 169,168 | $ | 3.42 | $ | 287,586 | |||||||||||||||||
Joseph Jordan |
11/23/21 | 11/22/21 | 73,099 | — | $ | 249,999 | ||||||||||||||||||
11/23/21 | 11/22/21 | — | 139,808 | $ | 3.42 | $ | 237,674 | |||||||||||||||||
Ray Wahl |
11/23/21 | 11/22/21 | 73,099 | — | $ | 249,999 | ||||||||||||||||||
11/23/21 | 11/22/21 | — | 139,808 | $ | 3.42 | $ | 237,674 | |||||||||||||||||
Diana Chafey (1) |
11/23/21 | 11/22/21 | 77,935 | — | $ | 266,538 | ||||||||||||||||||
11/23/21 | 11/22/21 | — | 69,904 | $ | 3.42 | $ | 118,837 | |||||||||||||||||
Joseph Zavalishin |
11/23/21 | 11/22/21 | 36,550 | — | $ | 125,001 | ||||||||||||||||||
11/23/21 | 11/22/21 | — | 69,904 | $ | 3.42 | $ | 118,837 | |||||||||||||||||
Augustus Oakes |
11/23/21 | 11/22/21 | 36,550 | — | $ | 125,001 | ||||||||||||||||||
11/23/21 | 11/22/21 | — | 69,904 | $ | 3.42 | $ | 118,837 |
(1) |
Ms. Chafey’s award includes shares of common stock awarded in lieu of a distribution of shares of common stock from Wilco Acquisition related to the unallocated pool of ICUs discussed herein. See discussion under “Wilco Acquisition, LP 2016 Equity Incentive Plan.” The award was valued at $141,537 and the shares vest in quarterly installments over three years with a vest start date of the Closing Date of the Business Combination. |
(2) |
The amounts reported represent the grant date fair value associated with the grant of these restricted stock, as computed in accordance with ASC 718. See Note 13 – Warrant Liability to our consolidated financial statements included elsewhere in this prospectus for a discussion of the relevant assumptions used in calculating these amounts. |
Option Awards |
Stock Awards |
|||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price (1) ($) |
Option Expiration Date |
Number of Shares or Units of Stock that Have Not Vested (2) (#) |
Market Value of Shares or Units that Have Not Vested (3) ($) |
|||||||||||||||
John Larsen |
169,168 | $ | 3.42 | 11/23/2031 | 97,995 | $ | 332,203 | |||||||||||||
Joseph Jordan |
139,808 | $ | 3.42 | 11/23/2031 | 192,944 | $ | 654,080 | |||||||||||||
Ray Wahl |
139,808 | $ | 3.42 | 11/23/2031 | 159,414 | $ | 540,413 | |||||||||||||
Diana Chafey |
69,904 | $ | 3.42 | 11/23/2031 | 127,716 | $ | 432,957 | |||||||||||||
Joseph Zavalishin |
69,904 | $ | 3.42 | 11/23/2031 | 99,893 | $ | 338,637 | |||||||||||||
Augustus Oakes |
69,904 | $ | 3.42 | 11/23/2031 | 97,769 | $ | 331,437 |
(1) |
Stock options vest one-third on each of the first three anniversaries of the Closing Date of the Business Combination. |
(2) |
Restricted shares of common stock held by each NEO as of December 31, 2021, including restricted shares of common stock received in distribution from Wilco Acquisition related to ICUs held by each NEO. Restricted shares of common stock vest in installments on each quarterly anniversary of the Closing Date of the Business Combination over the shorter of (a) the eight-year period from the original grant date of the underlying ICUs, or (b) three years post-Closing Date, subject to the NEO’s continued service through each vesting date. |
(3) |
The market value of shares of outstanding restricted stock is based on the stock price of $3.39, the closing stock price on December 31, 2021. |
Stock Awards |
||||||||
Name |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting (1) ($) |
||||||
John Larsen |
2,962 | $ | 10,468 | |||||
Joseph Jordan |
30,288 | $ | 108,979 | |||||
Ray Wahl |
24,839 | $ | 83,174 | |||||
Diana Chafey |
22,344 | $ | 81,372 | |||||
Joseph Zavalishin |
14,841 | $ | 50,402 | |||||
Augustus Oakes |
16,376 | $ | 56,182 | |||||
Labeed Diab |
466,142 | $ | 1,463,686 |
(1) |
For the period from January 1, 2021 through June 16, 2021, pricing of the market value reported in this table is based on the closing price on the date the ICUs were distributed on December 16, 2021 of $3.14. For the period from June 16, 2021 through December 31, 2021, the market value reported in this table is based upon the closing price of our common stock. |
Name |
Executive Contributions in Last FY (1) ($) |
Aggregate Earnings in Last FY (2) ($) |
Aggregate Balance at Last FYE ($) |
|||||||||
Joseph Jordan |
$ | 1,734 | $ | 2,065 | $ | 16,940 | ||||||
Ray Wahl |
$ | 1,666 | $ | 490 | $ | 8,173 | ||||||
Joseph Zavalishin |
$ | 20,800 | $ | 7,261 | $ | 52,132 |
(1) |
The full amount shown for executive contributions is included in the base salary figures for each NEO shown above in the Summary Compensation Table. |
(2) |
The amount shown under aggregate earnings reflects the NEO’s gain or loss based upon the individual allocation their account balance. These gains or losses do not represent current income to the NEO and have not been included in any of the compensation tables shown above. |
Termination (Without Cause or For Good Reason) within 18 months of a CIC |
Termination (Without Cause or For Good Reason) not within 18 months of a CIC |
Disability |
||||||||||
John Larsen: |
||||||||||||
Cash severance payments | $ | — | $ | — | $ | — | ||||||
Accelerated equity vesting | $ | — | $ | — | $ | — | ||||||
|
|
|
|
|
|
|||||||
Total | $ | — | $ | — | $ | — | ||||||
Joseph Jordan: |
||||||||||||
Cash severance payments | $ | 1,181,250 | $ | 900,000 | $ | 450,000 | ||||||
Accelerated equity vesting | $ | 654,080 | $ | 654,080 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Total | $ | 1,835,330 | $ | 1,554,080 | $ | 450,000 | ||||||
Ray Wahl: |
||||||||||||
Cash severance payments | $ | 1,181,250 | $ | 900,000 | $ | 450,000 | ||||||
Accelerated equity vesting | $ | 540,413 | $ | 540,413 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Total | $ | 1,721,663 | $ | 1,440,413 | $ | 450,000 | ||||||
Diana Chafey: |
||||||||||||
Cash severance payments | $ | 942,638 | $ | 718,200 | $ | 359,100 | ||||||
Accelerated equity vesting | $ | 432,957 | $ | 432,957 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Total | $ | 1,375,595 | $ | 1,151,157 | $ | 359,100 | ||||||
Joseph Zavalishin: |
||||||||||||
Cash severance payments | $ | 942,638 | $ | 718,200 | $ | 359,100 | ||||||
Accelerated equity vesting | $ | 338,637 | $ | 338,637 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Total | $ | 1,281,275 | $ | 1,056,837 | $ | 359,100 | ||||||
Augustus Oakes: |
||||||||||||
Cash severance payments | $ | 731,250 | $ | 609,375 | $ | 325,000 | ||||||
Accelerated equity vesting | $ | 331,437 | $ | 331,437 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Total | $ | 1,062,687 | $ | 940,812 | $ | 325,000 |
Committee Cash Retainer |
Audit |
Compensation |
Governance |
Healthcare Compliance |
||||||||||||
Chair |
$ | 25,000 | $ | 20,000 | $ | 10,000 | $ | 15,000 | ||||||||
Member |
$ | 15,000 | $ | 10,000 | $ | 5,000 | $ | 5,000 |
Name |
Fees Earned or Paid in Cash (2) ($) |
Stock Awards (5) ($) |
Option Awards (5) ($) |
Total ($) |
||||||||||||
John Larsen (1) |
$ | — | $ | — | $ | — | $ | — | ||||||||
Joanne Burns |
$ | 112,500 | $ | 50,000 | $ | 47,535 | $ | 210,035 | ||||||||
Christopher Krubert |
$ | 85,000 | $ | 50,000 | $ | 47,535 | $ | 182,535 | ||||||||
James Parisi |
$ | 105,417 | $ | 50,000 | $ | 47,535 | $ | 187,952 | ||||||||
Teresa Sparks (3) |
$ | — | $ | 49,999 | $ | 49,918 | $ | 99,917 | ||||||||
Todd Zimmerman (4) |
$ | 6,250 | $ | — | $ | — | $ | 6,250 |
(1) |
John Larsen’s Director cash and equity fees in 2021 are reported in the Summary Compensation Table. |
(2) |
Joanne Burns and James Parisi received one-time cash payments in April 2021 of $25,000 and $16,667, respectively, in lieu of a grant under the 2016 plan. |
(3) |
Teresa Sparks joined the Board of Directors effective December 21, 2021. Her 2021 equity awards were approved by the Compensation Committee and granted on December 28, 2021. |
(4) |
Todd Zimmerman resigned January 27, 2021 and his fees reflect a prorated award for his service in 2021. |
(5) |
The amounts reported represent the grant date fair value of restricted stock units and stock options granted in 2021, calculated based on the closing stock price on the date of the grant in accordance with FASB ASC Topic 718, Compensation—Stock Compensation, (“ASC 718”). The aggregate number of options and stock awards outstanding as of fiscal year end for each director were as follows: |
Name |
Aggregate Outstanding Option Awards (#) |
Aggregate Outstanding Stock Awards (#) |
||||||
Joanne Burns |
27,962 | 14,620 | ||||||
Christopher Krubert |
27,962 | 21,337 | ||||||
James Parisi |
27,962 | 14,620 | ||||||
Teresa Sparks |
32,414 | 16,077 |
• | in the event the dollar volume-weighted average price (“VWAP”) of one share of Common Stock as reported on the NYSE is greater than $12.00 for at least five days out of a period of ten consecutive trading days ending on the trading day immediately prior to the date of determination, there will be a one-time issuance of 5,000,000 shares of Common Stock; |
• | in the event the VWAP of one share of Common Stock as reported on the NYSE is greater than $14.00 for at least five days out of a period of ten consecutive trading days ending on the trading day immediately prior to the date of determination, there will be a one-time issuance of 5,000,000 shares of Common Stock; and |
• | in the event the VWAP of one share of Common Stock as reported on the NYSE is greater than $16.00 for at least five days out of a period of ten consecutive trading days ending on the trading day immediately prior to the date of determination, there will be a one-time issuance of 5,000,000 shares of Common Stock. |
• | any person who is, or at any time during the applicable period was, one of ATI’s executive officers or a member of the Board; |
• | any person who is known by ATI to be the beneficial owner of more than 5% of any class of our voting stock; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
Name and Address of Beneficial Owner |
Shares Beneficially Owned (#) |
Percentage of Beneficial Ownership |
||||||
5% or Greater Stockholders |
||||||||
Advent International Corporation (1) |
116,391,635 | 56.1 | % | |||||
Fortress Acquisition Sponsor II LLC (2) |
18,991,666 | 9.0 | % | |||||
Knighthead Capital Management, LLC (3) |
13,446,189 | 6.33 | % | |||||
Named Executive Officers and Directors |
||||||||
John L. Larsen (4) |
26,143 | * | ||||||
Joseph Jordan (5) |
173,736 | * | ||||||
Ray Wahl (6) |
173,736 | * | ||||||
Diana Chafey (7) |
126,232 | * | ||||||
Augustus Oakes (8) |
79,773 | * | ||||||
Joe Zavalishin (9) |
86,868 | * | ||||||
Labeed Diab |
466,142 | * | ||||||
Joanne Burns |
— | * | ||||||
Daniel Dourney |
— | * | ||||||
John Maldonado |
— | * | ||||||
Andrew A. McKnight |
— | * | ||||||
James E. Parisi |
— | * | ||||||
Carmine Petrone |
— | * | ||||||
Teresa Sparks |
— | * | ||||||
All Directors and Executive Officers of ATI as a group (14 persons) |
1,132,630 |
* |
* | Represents beneficial ownership of less than 1% of total shares of common stock legally outstanding. |
(1) |
Represents 116,391,635 shares of Common Stock held by funds managed by Advent International Corporation (“Advent”), comprised of: (i) 64,664,697 shares indirectly owned through GPE VII GP S.À.R.L. (“Advent GP Luxembourg”), including 11,324,692 shares held by Advent International GPE VII Limited Partnership, 30,970,377 shares held by Advent International GPE VII-B Limited Partnership, 9,845,475 shares held by Advent International GPE VII-C Limited Partnership, 6,777,137 shares held by Advent International GPE VII-D Limited Partnership, 2,873,508 shares held by Advent International GPE VII-F Limited Partnership and 2,873,508 shares held by Advent International GPE VII-G Limited Partnership (collectively, the “Advent Luxembourg Funds”); (ii) 34,541,846 shares indirectly owned through GPE VII GP Limited Partnership (“Advent GP Cayman”), including 10,481,756 shares held by Advent International GPE VII-A Limited Partnership, 22,316,207 shares held by Advent International GPE |
VII-E Limited Partnership and 1,743,883 shares held by Advent International GPE VII-H Limited Partnership (collectively, the “Advent Cayman Funds”); (iii) 806,132 shares held by Advent Partners GPE VII – Cayman Limited Partnership; (iv) 1,063,662 shares held by Advent Partners GPE VII – B Cayman Limited Partnership; (v) 45,266 shares held by Advent Partners GPE VII – Limited Partnership; (vi) 212,875 shares held by Advent Partners GPE VII – A Cayman Limited Partnership; (vii) 107,151 shares held by Advent Partners GPE VII – A Limited Partnership; (viii) 65,045 shares held by Advent Partners GPE VII – 2014 Limited Partnership; (ix) 155,782 shares held by Advent Partners GPE VII – 2014 Cayman Limited Partnership; (x) 179,333 shares held by Advent Partners GPE VII-A 2014 Limited Partnership; (xi) 109,903 shares held by Advent Partners GPE VII-A 2014 Cayman Limited Partnership (the entities listed in (iii) through (xi) collectively, the “Advent AP Funds”); (xii) 13,878,964 shares held by GPE VII ATI Co-Investment Limited Partnership (the “Advent Co-Invest Fund”); and (xiii) 560,979 shares of held by Wilco Acquisition. Excludes 15,000,000 Earnout Shares subject to vesting as described elsewhere in this prospectus. Wilco GP, Inc. (“Wilco GP”), an affiliate of Advent, is the general partner of Wilco Acquisition. Advent is the manager of Advent International GPE VII, LLC (“Advent Top GC”), which in turn is the General Partner of each of GPE VII GP Limited Partnership (“Advent GP Cayman”), the Advent AP Funds, and the Advent Co-Invest Fund. Advent Top GC is also the manager of Advent GP Luxembourg, which is the General Partner of each of the Advent Luxembourg Funds. Advent GP Cayman is the General Partner of each of the Advent Cayman Funds. The address of Advent, Advent GP Luxembourg, the Advent Luxembourg Funds, Advent GP Cayman, the Advent Cayman Funds, Advent Top GC, the Advent AP Funds and Advent Co-Invest Fund (collectively, the “Advent Related Entities”) is Prudential Tower, 800 Boylston Street, Suite 3300, Boston, MA 02199. |
(2) |
Based solely on Amendment Number 1 to the Schedule 13D filed on August 6, 2021 by Fortress Acquisition Sponsor II LLC (“Sponsor”), Hybrid GP Holdings (Cayman) LLC (“Cayman GP”), Hybrid GP Holdings LLC (“Hybrid GP”), FIG LLC (“FIG LLC”), Fortress Operating Entity I LP (“FOE I”), FIG Corp. (“FIG Corp.”), and Fortress Investment Group LLC (“Fortress”). Sponsor directly beneficially owns an aggregate of 16,025,000 shares of Common Stock and 2,966,666 shares of Common Stock issuable upon the exercise of the same number of private placement warrants. Cayman GP controls the general partners of certain investment funds that together, pursuant to a transfer agreement, acquired a majority equity interest in Sponsor. Hybrid GP is the sole owner of Cayman GP. FIG LLC indirectly controls certain investment funds (the “Funds”) managed or advised by controlled affiliates of FIG LLC, which Funds hold all of the outstanding equity interest in Sponsor. FOE I is the sole owner of FIG LLC and the managing member of, and holds the majority of equity interest in, Hybrid GP. FIG Corp. is the general partner of FOE I. Fortress is the sole owner of FIG Corp. Each of Cayman GP, Hybrid GP, FIG LLC, FOE I, FIG Corp. and Fortress may be deemed to indirectly beneficially own the securities held by Sponsor. As the Co-Chief Investment Officers of the fund that owns Sponsor (through advisory and general partner entities) each of Peter L. Briger, Jr., Dean Dakolias, Andrew A. McKnight and Joshua Pack participates in the voting and investment decisions with respect to the shares of Common Stock held by Sponsor, but each of them disclaims beneficial ownership thereof. The address of each of the entities and individuals named in this footnote is 1345 Avenue of the Americas, 46th Floor, New York, New York 10105. |
(3) |
Based solely on a Schedule 13D filed on March 4, 2022 by Knighthead Capital Management, LLC (“Knighthead”), Knighthead Master Fund, L.P. (“KHMF”), Knighthead Fund, L.P. (“KHNY”), Knighthead Annuity & Life Assurance Company (“KHAL”), and Knighthead Distressed Opportunities Fund, L.P. (“KHDOF”). Consists of (a) 3,411,571 shares of Class A Common Stock held by KHMF, 1,039,606 shares of Class A Common Stock held by KHNY, 2,607,082 shares of Class A Common Stock held by KHAL, and 1,181,383 shares of Class A Common Stock held by KHDOF, (b) 1,342,846 penny warrants to acquire shares of Class A Common Stock upon payment of $0.01 per share (“Penny Warrants”) held by KHMF, 396,256 Penny Warrants held by KHNY, 616,942 Penny Warrants held by KHAL, and 779,884 Penny Warrants held by KHDOF, and (c) 895,231 warrants to acquire shares of Class A Common Stock upon payment of $3.00 per share (“$3 Warrants”) held by KHMF, 264,171 $3 Warrants held by KHNY, 411,294 $3 Warrants held by KHAL, and 519,923 $3 Warrants held by KHDOF. Knighthead, pursuant to certain investment management agreements serves as the investment manager of KHMF and KHDOF and pursuant to certain investment advisory agreements serves as the investment advisor to KHNY and KHAL. |
Investment decision with respect to the Class A Common Stock held by the Knighthead Funds are made by Knighthead in its sole discretion. Knighthead beneficially owns an aggregate of 13,466,189 shares of Common Stock, including (i) 8,239,642 shares of Class A Common Stock, (ii) 3,135,928 Penny Warrants, and (iii) 2,090,619 $3 Warrants. The address of each of the entities named in this footnote is 280 Park Avenue, 22nd Floor, New York, New York 10017. |
(4) |
Includes 673 for John Larsen’s restricted stock awards that will be settled into shares within 60 days of March 6, 2022. |
(5) |
Includes 12,367 for Joseph Jordan’s restricted stock awards that will be settled into shares within 60 days of March 6, 2022. |
(6) |
Includes 8,633 for Ray Wahl’s restricted stock awards that will be settled into shares within 60 days of March 6, 2022. |
(7) |
Includes 9,480 for Diana Chafey’s restricted stock awards that will be settled into shares within 60 days of March 6, 2022. |
(8) |
Includes 5,952 for Augustus Oakes’ restricted stock awards that will be settled into shares within 60 days of March 6, 2022. |
(9) |
Includes 6,335 for Joseph Zavalishin’s restricted stock awards that will be settled into shares within 60 days of March 6, 2022. |
• | the name of the Selling Securityholders for whom we are registering shares of Common Stock for resale to the public, |
• | the number and percentage of shares of Common Stock that the Selling Securityholders beneficially owned prior to the offering for resale of the securities under this prospectus, |
• | the number and percentage of shares of Common Stock that may be offered from time to time for resale for the account of the Selling Securityholders pursuant to this prospectus, and |
• | the number and percentage of shares to be beneficially owned by the Selling Securityholders after the offering of the resale securities (assuming all of the offered shares of Common Stock are sold by the Selling Securityholders). |
Shares of Common Stock |
Warrants to Purchase Common Stock |
|||||||||||||||||||||||||||||||
Number Beneficially Owned Prior to Offering |
Number Registered for Sale Hereby |
Number Beneficially Owned After Offering |
Percent Owned After Offering (1) |
Beneficially Owned Prior to Offering |
Number Registered for Sale Hereby |
Beneficially Owned After Offering |
Percent Owned After Offering |
|||||||||||||||||||||||||
Name of Selling Securityholder |
||||||||||||||||||||||||||||||||
Funds managed by Advent International Corporation (2) |
131,391,635 | 131,391,635 | — | — | — | — | — | — | ||||||||||||||||||||||||
Fortress Acquisition Sponsor II LLC (3) |
16,025,000 | 16,025,000 | — | — | 2,966,666 | 2,966,666 | — | — | ||||||||||||||||||||||||
Dakota Holdco, LLC (4) |
78 | 78 | — | — | — | — | — | — | ||||||||||||||||||||||||
PBCAY One Limited (5) |
1,095,000 | 1,095,000 | — | — | ||||||||||||||||||||||||||||
Funds managed by Weiss Asset Management LP (6) |
252,509 | 252,509 | — | — | — | — | — | — | ||||||||||||||||||||||||
Healthcare Ontario Pension Plan Trust Fund (7) |
750,000 | 750,000 | — | — | 220,000 | — | 220,000 | 2.2 | % | |||||||||||||||||||||||
Allspring Global Investments, LLC (8) |
1,200,000 | 1,200,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Aaron Hood |
25,000 | 25,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Carmen Policy |
25,000 | 25,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Rakefet Russak-Aminoach |
25,000 | 25,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Sunil Gulati |
25,000 | 25,000 | — | — | — | — | — | — | ||||||||||||||||||||||||
Diana Chafey (9) |
44,546 | 44,546 | — | — | — | — | — | — | ||||||||||||||||||||||||
John L. Larsen (10) |
16,143 | 16,143 | — | — | — | — | — | — | ||||||||||||||||||||||||
Brent Rhodes (11) |
14,781 | 14,781 | — | — | — | — | — | — |
(1) | Based on 232,224,875 shares of Common Stock comprised of (i) 207,358,218 shares of Common Stock issued and outstanding as of February 17, 2022, (ii) 9,866,657 shares of Common Stock that may be issued upon exercise of the Warrants on February 17, 2022 and (iii) 15,000,000 Earnout shares. |
(2) | Represents 131,391,635 shares of Common Stock held by funds managed by Advent International Corporation (“Advent”), comprised of: (i) 64,664,697 shares indirectly owned through GPE VII GP S.À.R.L. (“Advent GP Luxembourg”), including 11,324,692 shares held by Advent International GPE VII Limited Partnership, 30,970,377 shares held by Advent International GPE VII-B Limited Partnership, 9,845,475 shares held by Advent International GPE VII-C Limited Partnership, 6,777,137 shares held by Advent International GPE VII-D Limited Partnership, 2,873,508 shares held by Advent International GPE VII-F Limited Partnership and 2,873,508 shares held by Advent International GPE VII-G Limited Partnership (collectively, the “Advent Luxembourg Funds”); (ii) 34,541,846 shares indirectly owned through GPE VII GP Limited Partnership (“Advent GP Cayman”), including 10,481,756 shares held by Advent International GPE VII-A Limited Partnership, 22,316,207 shares held by Advent International GPE VII-E Limited Partnership and 1,743,883 shares held by Advent International GPE VII-H Limited Partnership (collectively, the “Advent Cayman Funds”); (iii) 806,132 shares held by Advent Partners GPE VII – Cayman Limited Partnership; (iv) 1,063,662 shares held by Advent Partners GPE VII – B Cayman |
Limited Partnership; (v) 45,266 shares held by Advent Partners GPE VII – Limited Partnership; (vi) 212,875 shares held by Advent Partners GPE VII – A Cayman Limited Partnership; (vii) 107,151 shares held by Advent Partners GPE VII – A Limited Partnership; (viii) 65,045 shares held by Advent Partners GPE VII – 2014 Limited Partnership; (ix) 155,782 shares held by Advent Partners GPE VII – 2014 Cayman Limited Partnership; (x) 179,333 shares held by Advent Partners GPE VII-A 2014 Limited Partnership; (xi) 109,903 shares held by Advent Partners GPE VII-A 2014 Cayman Limited Partnership (the entities listed in (iii) through (xi) collectively, the “Advent AP Funds”); (xii) 13,878,964 shares held by GPE VII ATI Co-Investment Limited Partnership (the “Advent Co-Invest Fund”); and (xiii) 15,560,979 shares of held by Wilco Acquisition. Includes 15,000,000 Earnout Shares subject to vesting as described elsewhere in this prospectus. Wilco GP, Inc. (“Wilco GP”), an affiliate of Advent, is the general partner of Wilco Acquisition. Advent is the manager of Advent International GPE VII, LLC (“Advent Top GC”), which in turn is the General Partner of each of GPE VII GP Limited Partnership (“Advent GP Cayman”), the Advent AP Funds, and the Advent Co-Invest Fund. Advent Top GC is also the manager of Advent GP Luxembourg, which is the General Partner of each of the Advent Luxembourg Funds. Advent GP Cayman is the General Partner of each of the Advent Cayman Funds. The address of Advent, Advent GP Luxembourg, the Advent Luxembourg Funds, Advent GP Cayman, the Advent Cayman Funds, Advent Top GC, the Advent AP Funds and Advent Co-Invest Fund (collectively, the “Advent Related Entities”) is Prudential Tower, 800 Boylston Street, Suite 3300, Boston, MA 02199. |
(3) | Represents 16,025,000 shares of Common Stock held by FAII Sponsor, including (i) 7,500,000 shares acquired in the private placement and (ii) 8,525,000 shares subject to vesting. Excludes 2,966,666 shares of Common Stock issuable upon the exercise of 2,966,666 private placement warrants held directly by FAII Sponsor. Interests in the Selling Securityholder are owned by each of FCOF V UB Investments L.P., a Cayman Islands exempted limited partnership, FTS SIP II L.P., a Jersey limited partnership, FCO MA J5 L.P., a Cayman Islands exempted limited partnership, FCO MA V UB Securities LLC, a Delaware limited liability company, Super FCO MA III L.P., a Cayman Islands exempted limited partnership, FCO MA Centre Street II (ER) LP, a Delaware limited partnership, FCO MA Centre Street II (PF) LP, a Delaware limited partnership, FCO MA Centre Street II (TR) LP, a Delaware limited partnership, FCO V LSS SubCo LP, a Delaware limited partnership, FCO MA Maple Leaf LP, a Delaware limited partnership, FCO MA MI II L.P. a Cayman Islands exempted limited partnership, Drawbridge Special Opportunities Fund LP, a Delaware limited partnership, Drawbridge Special Opportunities Fund Ltd., a Cayman Islands exempted company, DBSO TRG Fund (A) L.P., a Cayman Islands exempted limited partnership, and Fortress Vintage Securities Fund L.P., a Cayman Islands exempted limited partnership, as the members. FCOF V UB Investments L.P. is owned by Fortress Credit Opportunities Fund V (A) L.P., a Cayman Islands exempted limited partnership, Fortress Credit Opportunities Fund V (B) L.P., a Cayman Islands exempted limited partnership, Fortress Credit Opportunities Fund V (C) L.P., a Cayman Islands exempted limited partnership, Fortress Credit Opportunities Fund V (D) L.P., a Cayman Islands exempted limited partnership, Fortress Credit Opportunities Fund V (D) LP, a Delaware limited partnership, Fortress Credit Opportunities Fund V (G) L.P., a Cayman Islands exempted limited partnership (collectively, the “FCO V Funds”). FCO V Fund GP LLC, a Delaware limited partnership is the general partner of each of the FCO V Funds. Fortress Credit Opportunities V-C Advisors LLC, a Delaware limited liability company, is the investment advisor of Fortress Credit Opportunities Fund V (C) L.P. and Fortress Credit Opportunities V Advisors LLC, a Delaware limited liability company, is the investment advisor of each other FCO V Fund. The general partner of each of the FCO V Funds is FCO Fund V GP LLC. Hybrid GP Holdings (Cayman) LLC, a Cayman Islands limited liability company (“Hybrid Cayman”), is the owner of all of the issued and outstanding interests of FCO Fund V GP LLC. Hybrid GP Holdings LLC, a Delaware limited liability company (“Hybrid Holdings”), is the owner of all of the issued and outstanding interests of Hybrid GP Holdings (Cayman) LLC. Fortress Operating Entity I, a Delaware limited partnership (“FOE I”) is the owner of all of the issued and outstanding membership interests in Fortress Principal Investment Holdings IV LLC. FIG Corp., a Delaware corporation, is the general partner of FOE I. Fortress Investment Group LLC, a Delaware limited liability company, is the holder of all of the issued and outstanding shares of FIG Corp. FCO BT GP LLC, a Delaware limited liability company, is the general partner of FTS SIP II L.P. The owner of all of the issued and outstanding interests of FCO BT GP LLC is Hybrid GP Holdings. Fortress |
Credit Opportunities MA Advisors LLC is the investment advisor of FTS SIP II L.P. FCO Fund V GP LLC is the general partner of FCO MA J5 L.P. FCO MA JS Advisors LLC is the investment advisor of FCO MA J5 L.P. FCO MA SUP GP III LLC is the general partner of FCO MA III Super L.P. Hybrid Cayman is the owner of all of the issued and outstanding interests of FCO MA SUP GP III LLC. FCO MA Sup Advisors LLC is the investment advisor of FCO MA SUP GP III LLC. FCO MA Centre II GP LLC, a Delaware limited liability company, is the general partner of, and FCO MA Centre II Advisors LLC, a Delaware limited liability company, is the investment advisor of, each of FCO MA Centre Street (ER) LP, FCO MA Centre Street II (PF) LP and FCO MA Centre Street II (TR) LP. Hybrid Holdings is the owner of all of the issued and outstanding interests of FCO MA Centre II GP LLC. FCO V LSS SubCo GP LLC, a Delaware limited liability company, is the general partner of FCO V LSS SUBCO LP. Hybrid Cayman is the owner of all of the issued and outstanding interests of FCO V LCC SubCo GP LLC. FCO V LSS SubCo Advisors LLC, a Delaware limited liability company, is the investment advisor of FCO V LSS SubCo GP LLC. FCO MA Maple Leaf GP LLC, a Delaware limited liability company, is the general partner of FCO MA Maple Leaf LP. Hybrid Holdings is the owner of all of the issued and outstanding interests of FCO MA Maple Leaf GP LLC. MA Maple Leaf Advisors LLC, a Delaware limited liability company, is the investment advisor of FCO MA Maple Leaf LP. FCO MA MI II GP LLC, a Delaware limited liability company, is the general partner of FCO MA MI II L.P. Hybrid Holdings is the owner of all of the issued and outstanding interests of FCO MA MI II GP LLC. Fortress Credit Opportunities MA II Advisor LLC is the investment advisor of FCO MA MI II GP LLC. Drawbridge Special Opportunities Fund GP LLC is the General Partner of Drawbridge Special Opportunities Fund LP. Fortress Principal Investment Holdings IV LLC, a Delaware limited liability company, is the managing member of Drawbridge Special Opportunities Fund GP LLC. FOE I is the owner of all of the issued and outstanding membership interests in Fortress Principal Investment Holdings IV LLC. Drawbridge Special Opportunities Intermediate Fund L.P., a Cayman islands exemption limited partnership, is the owner of all of the issued and outstanding interests of Drawbridge Special Opportunities Fund Ltd. Drawbridge Special Opportunities Offshore Fund Ltd., a Cayman Islands exempted company, is the owner of all of the issued and outstanding interests of Drawbridge Special Opportunities Intermediate Fund L.P. Drawbridge Special Opportunities Advisors is the investment advisor of each of Drawbridge Special Opportunities Offshore Fund Ltd. and Drawbridge Special Opportunities Fund LP DBSO TRG Fund (A) GP LLC, a Delaware limited liability company, is the general partner of DBSO TRG Fund (A) L.P. Hybrid Holdings is the owner of all of the issued and outstanding interests of DBSO TRG Fund (A) GP LLC. DBSO TRG Fund (A) Advisors LLC is the investment advisor of DBSO TRG Fund (A) GP LLC. Fortress Vintage Securities Fund GP LLC, a Delaware limited liability company, is the general partner of Fortress Vintage Securities Fund L.P. Hybrid Holdings is the owner of all of the issued and outstanding interests of Fortress Vintage Securities Fund GP LLC. Fortress Vintage Securities Fund Advisors LLC, a Delaware limited liability company, is the investment advisor of Fortress Vintage Securities Fund GP LLC. FCO MA V UB Securities LLC, a Delaware limited liability company, is owned by FCO MA V L.P., a Cayman Islands exemption limited partnership. The general partner of FCO MA V L.P. is FCO MA V GP LLC, a Delaware limited liability company, and the investment advisor of FCO MA V L.P. is FCO MA V Advisors LLC, a Delaware limited liability company. FIG LLC, a Delaware limited liability company, is the holder of all of the issued and outstanding interests of each of the investment advisors listed above. The Selling Securityholder holds and beneficially owns all of the Shares, and on the basis of the relationships described herein, each of the other foregoing persons may be deemed to beneficially own the shares of Common Stock held by the Selling Securityholder. As the Co-Chief Investment Officers of the fund that own the Selling Securityholder (through advisory and general partner entities) each of Peter L. Briger, Jr., Dean Dakolias, Andrew A. McKnight and Joshua Pack participates in the voting and investment decisions with respect to the shares of Common Stock held by the Selling Securityholder, but each of them disclaims beneficial ownership thereof. The address of FAII Sponsor and each of the foregoing entities is 1345 Avenue of the Americas, 46th Floor, New York, New York 10105. |
(4) | Represents 78 shares of Common Stock held by Dakota Holdco, LLC. Pursuant to an LLC Agreement Gregory Steil, Dylan Bates, Brent Mack and Robert McKenzie are the managers of Dakota Holdco, LLC and exercise voting and investment power with respect to the shares. Each of Messrs. Steil, Bates, Mack and McKenzie may be deemed the beneficial owner of the securities held by Dakota Holdco, LLC. Each of |
Messrs. Steil, Bates, Mack and McKenzie, however, disclaims beneficial ownership of the Common Stock held by Dakota Holdco, LLC other than to the extent of any pecuniary interest therein. The address of Dakota Holdco, LLC is 1433 Maple Avenue, Downers Grove, IL 60515. |
(5) | The address of PBCAY One Limited is 201 The Exchange Building, DIFC, PO Box 116020, Dubai, U.A.E.. |
(6) | Consists of (i) 93,444 shares held by Brookdale Global Opportunity Fund (“BGO”) and (ii) 159,065 shares held by Brookdale International Partners, L.P. (“BIP”). Andrew Weiss is the Manager of WAM GP LLC, which is the general partner of Weiss Asset Management LP, the investment manager of BGO and BIP. WAM GP LLC is also the Manager of BIP GP LLC, the general partner of BIP. Mr. Weiss has voting and dispositive power with respect to the securities held by the BGO and BIP. Mr. Weiss, WAM GP LLC, Weiss Asset Management LP and BIP GP LLC each disclaim beneficial ownership of the shares held by BGO and BIP, except to the extent of their respective pecuniary interests therein. The business address of the foregoing entities is c/o Weiss Asset Management, 222 Berkeley Street, 16th Floor, Boston, MA 02116. |
(7) | The address of Healthcare of Ontario Pension Plan Trust Fund is 1 York Street, Suite 1900, Toronto, Ontario M5J 0B6. |
(8) | Consists of (i) 271,300 shares held by Allspring Small Cap Fund, a series of Allspring Funds Trust and (ii) 928,700 shares held Allspring Special Small Cap Value Fund, a series of Allspring Funds Trust. The address of the foregoing entities is 100 Heritage Reserve, Menomonee Falls, WI 53051. |
(9) | Diana Chafey is a named executive officer of the Company. |
(10) | John L. Larsen is a director and named executive officer of the Company. |
(11) | Brent Rhodes is the Chief Accounting Officer of the Company. |
• | in whole and not in part; |
• | at a price of $0.01 per Public Warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported sale price of shares of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date we send to the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Common Stock except as otherwise described below; |
• | if, and only if, the last reported sale price of our Common Stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the warrant holders; |
• | if, and only if, the Private Placement Warrants are also concurrently exchanged at the same price (equal to a number of shares of Common Stock) as the outstanding Public Warrants, as described above; and |
• | if, and only if, there is an effective registration statement covering the issuance of the shares of Common Stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given. |
Redemption Date |
Fair Market Value of Common Stock |
|||||||||||||||||||||||||||||||||||
(period to expiration of warrants) |
10.00 |
11.00 |
12.00 |
13.00 |
14.00 |
15.00 |
16.00 |
17.00 |
18.00 |
|||||||||||||||||||||||||||
57 months |
0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.365 | |||||||||||||||||||||||||||
54 months |
0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.365 | |||||||||||||||||||||||||||
51 months |
0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.365 | |||||||||||||||||||||||||||
48 months |
0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.365 | |||||||||||||||||||||||||||
45 months |
0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.365 | |||||||||||||||||||||||||||
42 months |
0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.364 | |||||||||||||||||||||||||||
39 months |
0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.364 | |||||||||||||||||||||||||||
36 months |
0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.364 | |||||||||||||||||||||||||||
33 months |
0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.364 | |||||||||||||||||||||||||||
30 months |
0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.364 | |||||||||||||||||||||||||||
27 months |
0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.364 | |||||||||||||||||||||||||||
24 months |
0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.364 | |||||||||||||||||||||||||||
21 months |
0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.364 | |||||||||||||||||||||||||||
18 months |
0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.363 | |||||||||||||||||||||||||||
15 months |
0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.363 | |||||||||||||||||||||||||||
12 months |
0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.363 | |||||||||||||||||||||||||||
9 months |
0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.362 | |||||||||||||||||||||||||||
6 months |
0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.362 | |||||||||||||||||||||||||||
3 months |
0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months |
— | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 |
• | the Company’s Board approved the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction; |
• | after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than certain excluded shares of Common Stock; or |
• | on or subsequent to the date of the transaction, the business combination is approved by the Company’s Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
• | There is no cumulative voting with respect to the election of directors. |
• | Our Board is empowered to appoint a director to fill a vacancy created by the expansion of the Board or the resignation, death, or removal of a director in certain circumstances. |
• | Directors may only be removed from the Board for cause. |
• | A prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders. |
• | A prohibition on stockholders calling a special meeting and the requirement that a meeting of the stockholders may only be called by members of our Board, by our Chief Executive Officer or by our Chairman, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors. |
• | Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | 1% of the total number of shares of Common Stock or Warrants, as applicable, then outstanding; or |
• | the average weekly reported trading volume of the Common Stock or Warrants, as applicable, during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | on the NYSE, in the over-the-counter |
• | in privately negotiated transactions; |
• | in underwritten transactions; |
• | in a block trade in which a broker-dealer will attempt to sell the offered securities as agent but may purchase and resell a portion of the block as principal to facilitate the transaction; |
• | through purchases by a broker-dealer as principal and resale by the broker-dealer for its account pursuant to this prospectus; |
• | in ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | through the writing of options (including put or call options), whether the options are listed on an options exchange or otherwise; |
• | through the distribution of the securities by any Selling Securityholder to its partners, members or stockholders; |
• | in short sales entered into after the effective date of the registration statement of which this prospectus forms a part; |
• | by pledge to secured debts and other obligations; |
• | to or through underwriters or agents; |
• | “at the market” or through market makers or into an existing market for the securities; and |
• | any other method permitted pursuant to applicable law. |
• | an individual citizen or resident of the United States; |
• | a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person. |
• | the gain is effectively connected with the conduct of a trade or business by the non-U.S. Holder within the United States (or, if an applicable tax treaty so requires, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder); |
• | the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or |
• | (i) we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. Holder held our Common Stock, and (ii) shares of our Common Stock (A) are not regularly traded on an established securities market or (B) are regularly traded on an established securities market, but the non-U.S. Holder has owned, directly or constructively, more than 5% of our Common Stock at any time within the shorter of the five-year period preceding the disposition or such non-U.S. Holder’s holding period for the shares of our Common Stock. There can be no assurance that our Common Stock will be treated as regularly traded on an established securities market for this purpose. |
Page | ||||
F-2 |
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Financial Statements: |
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F-5 |
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F-6 |
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F-7 |
||||
F-8 |
||||
F-9 |
||||
F-11 |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable (net of allowance for doubtful accounts of $ |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Operating lease right-of-use |
||||||||
Goodwill, net |
||||||||
Trade name and other intangible assets, net |
||||||||
Other non-current assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ Equity: |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses and other liabilities |
||||||||
Current portion of operating lease liabilities |
||||||||
Current portion of long-term debt |
||||||||
Total current liabilities |
||||||||
Long-term debt, net |
||||||||
Redeemable preferred stock |
||||||||
Warrant liability |
||||||||
Contingent common shares liability |
||||||||
Deferred income tax liabilities |
||||||||
Operating lease liabilities |
||||||||
Other non-current liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Note 18) |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
||||||||
Treasury stock, at cost, |
( |
) | ||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total ATI Physical Therapy, Inc. equity |
||||||||
Non-controlling interests |
||||||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Net patient revenue |
$ | $ | $ | |||||||||
Other revenue |
||||||||||||
Net operating revenue |
||||||||||||
Cost of services: |
||||||||||||
Salaries and related costs |
||||||||||||
Rent, clinic supplies, contract labor and other |
||||||||||||
Provision for doubtful accounts |
||||||||||||
Total cost of services |
||||||||||||
Selling, general and administrative expenses |
||||||||||||
Goodwill and intangible asset impairment charges |
||||||||||||
Operating (loss) income |
( |
) | ( |
) | ||||||||
Change in fair value of warrant liability (Note 13) |
( |
) | — | — | ||||||||
Change in fair value of contingent common shares liability (Note 14) |
( |
) | ||||||||||
Loss on settlement of redeemable preferred stock |
||||||||||||
Interest expense, net |
||||||||||||
Interest expense on redeemable preferred stock |
||||||||||||
Other expense (income), net |
( |
) | ||||||||||
(Loss) income before taxes |
( |
) | ( |
) | ||||||||
Income tax (benefit) expense |
( |
) | ( |
) | ||||||||
Net (loss) income |
( |
) | ( |
) | ||||||||
Net (loss) income attributable to non-controlling interest |
( |
) | ||||||||||
Net (loss) income attributable to ATI Physical Therapy, Inc. |
$ | ( |
) | $ | ( |
) | $ | |||||
(Loss) earnings per share of Class A common stock: |
||||||||||||
Basic |
$ | ( |
) | $ | ( |
) | $ | |||||
Diluted |
$ | ( |
) | $ | ( |
) | $ | |||||
Weighted average shares outstanding: |
||||||||||||
Basic and diluted |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Net (loss) income |
$ | ( |
) | $ | ( |
) | $ | |||||
Other comprehensive income (loss): |
||||||||||||
Unrealized gain (loss) on interest rate swap |
( |
) | ( |
) | ||||||||
Comprehensive (loss) income |
$ | ( |
) | $ | ( |
) | $ | |||||
Net (loss) income attributable to non-controlling interest |
( |
) | ||||||||||
Comprehensive (loss) income attributable to ATI Physical Therapy, Inc. |
$ | ( |
) | $ | ( |
) | $ | |||||
Common Stock |
Treasury Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Non-Controlling Interest |
Total Stockholders’ Equity |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||
Balance at January 1, 2019 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
Retrospective application of reverse recapitalization |
( |
) | — | — | — | — | ||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2019 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Contributions related to acquisitions |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive loss (1) |
— | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||
Distribution to non-controlling interest holder |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Net income attributable to non-controlling interest |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Net income attributable to ATI Physical Therapy, Inc. |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | |
$ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
42 adoption |
— | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Other comprehensive loss (1) |
— | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||
Distribution to non-controlling interest holder |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Net income attributable to non-controlling interest |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Net loss attributable to ATI Physical Therapy, Inc. |
— | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
Net proceeds from FAII in Business Combination |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Shares issued through PIPE investment |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Shares issued to Wilco Holdco Series A Preferred stockholders |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Warrant liability recognized upon the closing of the Business Combination |
— | — | — | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||
Contingent common shares liability recognized upon the closing of the Business Combination |
— | — | — | — | ( |
) | — | — | — | ( |
) | |||||||||||||||||||||||||
Vesting of restricted shares distributed to holders of ICUs |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock awards |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Tax withholdings related to net share settlement of restricted stock awards |
( |
) | — | ( |
) | — | — | — | — | ( |
) | |||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income (1) |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Distribution to non-controlling interest holder |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Net loss attributable to non-controlling interest |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Net loss attributable to ATI Physical Therapy, Inc. |
— | — | — | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Balance at December 31, 2021 |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||||||||||
(1) |
Other comprehensive income (loss) related to unrealized gain (loss) on interest rate swap |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Operating activities: |
||||||||||||
Net (loss) income |
$ | ( |
) | $ | ( |
) | $ | |||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
||||||||||||
Goodwill and intangible asset impairment charges |
||||||||||||
Depreciation and amortization |
||||||||||||
Provision for doubtful accounts |
||||||||||||
Deferred income tax provision |
( |
) | ( |
) | ||||||||
Amortization of right-of-use |
||||||||||||
Share-based compensation |
||||||||||||
Amortization of debt issuance costs and original issue discount |
||||||||||||
Non-cash interest expense |
||||||||||||
Non-cash interest expense on redeemable preferred stock |
||||||||||||
Loss on extinguishment of debt |
||||||||||||
Loss on settlement of redeemable preferred stock |
||||||||||||
(Gain) loss on disposal and impairment of assets |
( |
) | ||||||||||
Loss on lease terminations and impairment |
||||||||||||
Change in fair value of warrant liability |
( |
) | ||||||||||
Change in fair value of contingent common shares liability |
( |
) | ||||||||||
Changes in: |
||||||||||||
Accounts receivable, net |
( |
) | ( |
) | ( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ||||||||||
Other non-current assets |
( |
) | ||||||||||
Accounts payable |
( |
) | ||||||||||
Accrued expenses and other liabilities |
( |
) | ||||||||||
Operating lease liabilities |
( |
) | ( |
) | ||||||||
Other non-current liabilities |
||||||||||||
Medicare Accelerated and Advance Payment Program Funds |
( |
) | ||||||||||
Transaction-related amount due to former owners |
( |
) | ||||||||||
Net cash (used in) provided by operating activities |
( |
) | ||||||||||
Investing activities: |
||||||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Purchases of intangible assets |
( |
) | ( |
) | ||||||||
Proceeds from sale of property and equipment |
||||||||||||
Proceeds from sale of clinics |
||||||||||||
Proceeds from sale of Home Health service line |
||||||||||||
Business acquisitions, net of cash acquired |
( |
) | ( |
) | ||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Financing activities: |
||||||||||||
Deferred financing costs |
( |
) | ||||||||||
Principal payments on long-term debt |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from revolving line of credit |
||||||||||||
Payments on revolving line of credit |
( |
) | ||||||||||
Cash inflow from Business Combination |
||||||||||||
Payments to Series A Preferred stockholders |
( |
) | ||||||||||
Proceeds from shares issued through PIPE investment |
||||||||||||
Payments for equity issuance costs |
( |
) | ||||||||||
Taxes paid on behalf of employees for shares withheld |
( |
) | ||||||||||
Distribution to non-controlling interest holder |
( |
) | ( |
) | ( |
) | ||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
Changes in cash and cash equivalents: |
||||||||||||
Net (decrease) increase in cash and cash equivalents |
( |
) | ( |
) | ||||||||
Cash and cash equivalents at beginning of period |
||||||||||||
Cash and cash equivalents at end of period |
$ | $ | $ | |||||||||
Supplemental noncash disclosures: |
||||||||||||
Derivative changes in fair value |
$ | ( |
) | $ | $ | |||||||
Purchases of property and equipment in accounts payable |
$ | $ | $ | |||||||||
Warrant liability recognized upon the closing of the Business Combination |
$ | ( |
) | $ | $ | |||||||
Contingent common shares liability recognized upon the closing of the Business Combination |
$ | ( |
) | $ | $ | |||||||
Shares issued to Wilco Holdco Series A Preferred stockholders |
$ | $ | $ | |||||||||
Other supplemental disclosures: |
||||||||||||
Cash paid for interest |
$ | $ | $ | |||||||||
Cash paid for (received from) taxes |
$ | $ | ( |
) | $ | ( |
) |
• | In 2020, the Company received approximately $ |
conditions. This includes, but is not limited to, the fact that the Company’s COVID-19 related expenses and lost revenues for the year ended December 31, 2020 exceeded the amount of funds received. To the extent that reporting requirements and terms and conditions are subsequently modified, it may affect the Company’s ability to comply and ability to retain the funds. |
Three Months Ended |
||||||||||||||||
March 31, 2020 |
June 30, 2020 |
September 30, 2020 |
December 31, 2020 |
Total |
||||||||||||
$ |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
• | The Company applied for and obtained approval to receive $ non-current liabilities, respectively. |
• | The Company elected to defer depositing the employer portion of Social Security taxes for payments due from March 27, 2020 through December 31, 2020, interest-free and penalty-free. Related to these payments, as of December 31, 2021 and December 31, 2020, $ non-current liabilities, respectively. |
Equipment | ||
Furniture & fixtures | ||
Automobiles | ||
Software | ||
Buildings | ||
Leasehold improvements | Lesser of lease term or estimated useful lives of the assets (generally |
ATI Physical Therapy trade name/trademarks | Indefinite | |
Non-compete agreements |
||
Other intangible assets |
• | Level 1: Observable inputs, which include unadjusted quoted prices in active markets for identical instruments. |
• | Level 2: Observable inputs other than Level 1 inputs, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instruments. |
• | Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
(1) | operating lease ROU assets of $ |
(2) | operating lease liabilities of $ |
(3) | the cumulative effect adjustment to increase the opening balance of the accumulated deficit by $ |
Class A Common Shares |
||||
FAII Class A common stock prior to Business Combination |
||||
FAII Class F common stock prior to Business Combination (1) |
||||
Less: FAII Class A common stock redemptions |
( |
) | ||
FAII common shares (Class A and Class F) |
||||
Add: Shares issued to Wilco Holdco stockholders (2, 3) |
||||
Add: Shares issued through PIPE investment |
||||
Add: Shares issued to Wilco Holdco Series A Preferred stockholders |
||||
Total shares issued as of the Closing Date of the Business Combination (4) |
||||
Less: Vesting Shares (1) |
( |
) | ||
Less: Restricted shares (3) |
( |
) | ||
Total shares outstanding as of the Closing Date of the Business Combination (4) |
||||
(1) |
Per the Merger Agreement, as of the closing of the Business Combination, all Class F shares converted into the equivalent number of Class A common shares and became subject to certain vesting and forfeiture provisions (“Vesting Shares”) as detailed in Note 14— Contingent Common Shares Liability. |
(2) |
Includes Share-Based Compensation for further details. |
(3) |
Includes Share-Based Compensation for further details. |
(4) |
Excludes Warrant Liability and Note 14—Contingent Common Shares Liability for further details. |
Cash in trust with FAII as of the Closing Date of the Business Combination |
$ | |||
Cash used for redemptions of FAII Class A common stock |
( |
) | ||
FAII transaction costs paid at closing |
( |
) | ||
Cash inflow from Business Combination |
||||
Wilco Holdco, Inc. transaction costs offset against proceeds |
( |
) | ||
Net proceeds from FAII in Business Combination |
||||
Cash proceeds from PIPE investment |
||||
Repayment of second lien subordinated loan |
( |
) | ||
Partial repayment of first lien term loan |
( |
) | ||
Cash payment to Wilco Holdco Series A Preferred stockholders |
( |
) | ||
Wilco Holdco, Inc. transaction costs expensed during the year ended December 31, 2021 |
( |
) | ||
Net decrease in cash related to Business Combination, PIPE investment and debt repayments |
$ | ( |
) | |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Net patient revenue |
$ | $ | $ | |||||||||
ATI Worksite Solutions (1) |
||||||||||||
Management Service Agreements (1) |
||||||||||||
Other revenue (1) |
||||||||||||
$ | $ | $ | ||||||||||
(1) |
ATI Worksite Solutions, Management Service Agreements and Other revenue are included within other revenue on the face of the consolidated statements of operations. |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Commercial |
% | % | % | |||||||||
Government |
% | % | % | |||||||||
Workers’ compensation |
% | % | % | |||||||||
Other (1) |
% | % | % | |||||||||
% | % | % | ||||||||||
(1) |
Other is primarily comprised of net patient revenue related to auto personal injury. |
Year Ended |
||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Beginning balance |
$ | $ | ||||||
Reductions—impairment charges |
( |
) | ||||||
Additions – acquisitions |
||||||||
Ending balance |
$ | $ | ||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Gross intangible assets: |
||||||||
ATI trade name (1) |
$ | $ | ||||||
Non-compete agreements |
||||||||
Other intangible assets |
||||||||
Accumulated amortization: |
||||||||
Accumulated amortization – non-compete agreements |
( |
) | ( |
) | ||||
Accumulated amortization – other intangible assets |
( |
) | ( |
) | ||||
Total trade name and other intangible assets, net |
$ | $ | ||||||
(1) |
Not subject to amortization. The Company recorded $ |
December 31, 2021 |
December 31, 2020 |
|||||||
Equipment |
$ | $ | ||||||
Furniture and fixtures |
||||||||
Leasehold improvements |
||||||||
Automobiles |
||||||||
Computer equipment and software |
||||||||
Construction-in-progress |
||||||||
Accumulated depreciation and amortization |
( |
) | ( |
) | ||||
Property and equipment, net |
$ | $ | ||||||
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Rent, clinic supplies, contract labor and other |
$ | $ | $ | |||||||||
Selling, general and administrative expenses |
||||||||||||
Total depreciation expense |
$ | $ | $ | |||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Salaries and related costs |
$ | $ | ||||||
CARES Act funds (1) |
||||||||
Accrued professional fees |
||||||||
Credit balance due to patients and payors |
||||||||
Revenue cycle management costs |
||||||||
Transaction-related costs (2) |
||||||||
Transaction-related amount due to former owners (3) |
||||||||
Other payables and accrued expenses |
||||||||
Total |
$ | $ | ||||||
(1) |
Includes current portion of MAAPP funds received and deferred employer Social Security tax payments. |
(2) |
Represents costs related to public readiness initiatives and corporate transactions. |
(3) |
Represents the amount due to former owners related to the Company’s utilization of net operating loss carryforwards generated prior to its acquisition of ATI Holdings Acquisition, Inc. |
December 31, 2021 |
December 31, 2020 |
|||||||
First lien term loan (1) (due May 10, 2023, with principal payable in quarterly installments) |
$ | $ | ||||||
Second lien subordinated loan (2) |
||||||||
Less: unamortized debt issuance costs |
( |
) | ( |
) | ||||
Less: unamortized original issue discount |
( |
) | ( |
) | ||||
Total debt, net |
$ | $ | ||||||
Less: current portion of long-term debt |
( |
) | ( |
) | ||||
Long-term debt, net |
$ | $ | ||||||
(1) |
Interest rate of |
(2) |
Loan balance was repaid in its entirety on June 16, 2021 as part of the Business Combination. The effective interest rate for the second lien term loan was |
2022 |
$ | |||
2023 |
||||
Total future maturities |
||||
Unamortized original issue discount and debt issuance costs |
( |
) | ||
Total debt, net |
$ | |||
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Salaries and related costs |
$ | $ | $ | |||||||||
Selling, general and administrative expenses |
||||||||||||
Total |
$ | $ | $ | |||||||||
Number of Options |
Weighted- Average Exercise Price |
Weighted- Average Contractual Term (in years) |
Aggregate Intrinsic Value |
|||||||||||||
Outstanding, January 1, 2021 |
$ | — | $ | — | ||||||||||||
Granted |
N/A | N/A | ||||||||||||||
Exercised |
N/A | |||||||||||||||
Forfeited/Cancelled |
N/A | N/A | ||||||||||||||
Outstanding, December 31, 2021 |
$ | $ | ||||||||||||||
Exercisable, December 31, 2021 |
$ | — | $ |
2021 |
||||
Weighted-average grant-date fair value |
$ | |||
Risk-free interest rate |
% | |||
Term (years) |
||||
Volatility |
% | |||
Expected dividend |
% |
2021 |
||||||||
RSUs |
Weighted-Average Grant Date Fair Value |
|||||||
Outstanding and unvested, beginning of year |
$ | |||||||
Granted |
||||||||
Vested |
||||||||
Forfeited |
||||||||
Outstanding and unvested, end of year |
$ | |||||||
2021 |
||||||||
RSAs |
Weighted-Average Grant Date Fair Value |
|||||||
Outstanding and unvested, beginning of year |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Outstanding and unvested, end of year |
$ | |||||||
December 31, 2021 |
||||
Shares available for grant under the ATI 2021 Equity Incentive Plan |
||||
Earnout Shares reserved |
||||
Class A common stock Warrants outstanding |
||||
Vesting Shares reserved (1) |
||||
Restricted shares (1,2) |
||||
Total shares of common stock reserved |
||||
(1) |
Represents shares of Class A common stock legally issued, but not outstanding, as of December 31, 2021. |
(2) |
Represents a portion of the Share-Based Compensation for further details. |
Private Placement Warrants |
Public Warrants |
Warrant Liability |
||||||||||
Fair value as of Business Combination, June 16, 2021 |
$ | $ | $ | |||||||||
Changes in fair value |
( |
) | ( |
) | ( |
) | ||||||
Fair value as of December 31, 2021 |
$ | $ | $ | |||||||||
• | The first issuance of |
• | The second issuance of |
• | The third issuance of |
• | The first issuance of |
• | The second issuance of |
• | The third issuance of |
• | Level 1: Observable inputs, which include unadjusted quoted prices in active markets for identical instruments. |
• | Level 2: Observable inputs other than Level 1 inputs, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instruments. |
• | Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Earnout Shares |
Vesting Shares |
|||||||||||||||
June 16, 2021 |
December 31, 2021 |
June 16, 2021 |
December 31, 2021 |
|||||||||||||
Risk-free interest rate |
% | % | % | % | ||||||||||||
Volatility |
% | % | % | % | ||||||||||||
Dividend yield |
% | % | % | % | ||||||||||||
Expected term (years) |
||||||||||||||||
Share price |
$ | $ | $ | $ |
Earnout Shares Liability |
Vesting Shares Liability |
|||||||
Fair value as of Business Combination, June 16, 2021 |
$ | $ | ||||||
Changes in fair value |
( |
) | ( |
) | ||||
Fair value as of December 31, 2021 |
$ | $ | ||||||
2021 |
2020 |
2019 |
||||||||||
Current: |
||||||||||||
Federal |
$ | $ | $ | |||||||||
State |
||||||||||||
Total current |
||||||||||||
Deferred: |
||||||||||||
Federal |
( |
) | ( |
) | ||||||||
State |
( |
) | ( |
) | ( |
) | ||||||
Total deferred |
( |
) | ( |
) | ||||||||
Total income tax (benefit) expense |
$ | ( |
) | $ | $ | ( |
) | |||||
2021 |
2020 |
2019 |
||||||||||||||||||||||
Federal income tax benefit at statutory rate |
$ | ( |
) | % | $ | ( |
) | % | $ | ( |
) | % | ||||||||||||
State income tax (benefit) expense, net of federal tax benefit |
( |
) | % | ( |
)% | ( |
) | % | ||||||||||||||||
Change in state tax rate |
% | ( |
) | % | ( |
) | % | |||||||||||||||||
Prior period adjustments and other |
( |
)% | ( |
) | % | ( |
) | % | ||||||||||||||||
Valuation allowance |
( |
)% | ( |
) | % | ( |
) | % | ||||||||||||||||
Interest expense on redeemable preferred stock |
( |
)% | ( |
)% | ( |
)% | ||||||||||||||||||
Changes in fair value of warrant liability and contingent common shares liability |
( |
) | % | % | % | |||||||||||||||||||
Goodwill and intangible asset impairment charges |
( |
)% | % | % | ||||||||||||||||||||
Other permanent differences, net |
( |
)% | ( |
)% | ( |
)% | ||||||||||||||||||
Total income tax (benefit) expense |
$ | ( |
) | % | $ | ( |
)% | $ | ( |
) | % | |||||||||||||
2021 |
2020 |
|||||||
Deferred income tax assets: |
||||||||
Accrued liabilities |
$ | $ | ||||||
Provision for bad debt |
||||||||
Operating lease liabilities |
||||||||
Acquisition and transaction costs |
||||||||
Net operating losses |
||||||||
Interest expense |
||||||||
Other deferred tax assets |
||||||||
Total gross deferred income tax assets |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Total gross deferred income tax assets, net of valuation allowance |
||||||||
Deferred income tax liabilities: |
||||||||
Goodwill |
||||||||
Trade name/trademark |
||||||||
Operating right-of-use |
||||||||
Depreciation |
||||||||
Other deferred tax liabilities |
||||||||
Total gross deferred income tax liabilities |
||||||||
Net deferred income tax liabilities |
$ | $ | ||||||
2021 |
2020 |
2019 |
||||||||||
Balance at beginning of period |
$ | $ | $ | |||||||||
Increases for positions taken during the year |
||||||||||||
Decreases for positions taken in prior years |
( |
) | — | — | ||||||||
Balance at end of period |
$ | $ | $ | |||||||||
Year Ended |
||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Lease cost |
||||||||
Operating lease cost |
$ | $ | ||||||
Variable lease cost (1) |
||||||||
Total lease cost (2) |
$ | $ | ||||||
(1) |
Includes short term lease costs, which are not material. |
(2) |
Sublease income was not material. |
Year Ended |
||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Other information |
||||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||
Operating cash flows from operating leases |
$ | $ | ||||||
Cash payments related to lease terminations |
$ | $ | ||||||
Right-of-use |
$ | $ |
December 31, 2021 |
December 31, 2020 |
|||||||
Weighted-average remaining lease term: |
||||||||
Operating leases |
||||||||
Weighted-average discount rate: |
||||||||
Operating leases |
% | % |
Year |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
||||
Total undiscounted future cash flows |
$ | |||
Less: Imputed Interest |
( |
) | ||
Present value of future cash flows |
$ | |||
Presentation on Balance Sheet |
||||
Current |
$ | |||
Non-current |
$ |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Basic and diluted (loss) earnings per share: |
||||||||||||
Net (loss) income |
$ | ( |
) | $ | ( |
) | $ | |||||
Less: Net (loss) income attributable to non-controlling interest |
( |
) | ||||||||||
Less: Income allocated to participating securities |
||||||||||||
(Loss) income available to common stockholders |
$ | ( |
) | $ | ( |
) | $ | |||||
Weighted average shares outstanding (1) |
||||||||||||
Basic and diluted (loss) earnings per share |
$ | ( |
) | $ | ( |
) | $ | |||||
(1) |
The weighted-average number of shares outstanding in periods presented prior to the closing of the Business Combination has been retrospectively adjusted based on the exchange ratio established through the transaction. |
Year Ended |
||||||||||||
December 31, 2021 |
December 31, 2020 |
December 31, 2019 |
||||||||||
Warrants |
||||||||||||
Restricted shares (1) |
||||||||||||
Stock options |
||||||||||||
RSUs |
||||||||||||
RSAs |
||||||||||||
Total |
||||||||||||
(1) |
Represents a portion of the Share-Based Compensation for further details. |
Three Months Ended |
Year Ended |
|||||||||||||||||||
March 31, 2021 |
June 30, 2021 (1) |
September 30, 2021 (1) |
December 31, 2021 |
December 31, 2021 |
||||||||||||||||
Net operating revenue |
$ | $ | $ | $ | $ | |||||||||||||||
Total cost of services |
||||||||||||||||||||
Selling, general and administrative expenses |
||||||||||||||||||||
Goodwill and intangible asset impairment charges (1) |
||||||||||||||||||||
Operating loss (1) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Loss before taxes (1) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Income tax benefit (1) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Net (loss) income (1) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net income (loss) attributable to non-controlling interest |
( |
) | ( |
) | ( |
) | ||||||||||||||
Net (loss) income attributable to ATI Physical Therapy, Inc. (1) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||
(Loss) earnings per share of Class A common stock: |
||||||||||||||||||||
Basic (1)(2) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||
Diluted (1)(2) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||
Weighted average shares outstanding: |
||||||||||||||||||||
Basic |
||||||||||||||||||||
Diluted |
(1) |
Amounts are presented as revised for immaterial prior period revisions. Refer to discussion below. |
(2) |
Basic and diluted (loss) earnings per share are computed independently for each of the periods presented. Accordingly, the sum of the quarterly (loss) earnings per share amounts may not agree to the total for the year. |
Three months ended June 30, 2021 |
As reported |
Revision |
As revised |
|||||||||
Goodwill and intangible asset impairment charges |
$ | $ | ( |
) | $ | |||||||
Operating loss |
$ | ( |
) | $ | $ | ( |
) | |||||
Loss before taxes |
$ | ( |
) | $ | $ | ( |
) | |||||
Income tax benefit |
$ | ( |
) | $ | $ | ( |
) | |||||
Net loss |
$ | ( |
) | $ | $ | ( |
) | |||||
Net loss attributable to ATI Physical Therapy, Inc. |
$ | ( |
) | $ | $ | ( |
) | |||||
Loss per share, Basic |
$ | ( |
) | $ | $ | ( |
) | |||||
Loss per share, Diluted |
$ | ( |
) | $ | $ | ( |
) |
Six months ended June 30, 2021 |
As reported |
Revision |
As revised |
|||||||||
Goodwill and intangible asset impairment charges |
$ | $ | ( |
) | $ | |||||||
Operating loss |
$ | ( |
) | $ | $ | ( |
) | |||||
Loss before taxes |
$ | ( |
) | $ | $ | ( |
) | |||||
Income tax benefit |
$ | ( |
) | $ | $ | ( |
) | |||||
Net loss |
$ | ( |
) | $ | $ | ( |
) | |||||
Net loss attributable to ATI Physical Therapy, Inc. |
$ | ( |
) | $ | $ | ( |
) | |||||
Loss per share, Basic |
$ | ( |
) | $ | $ | ( |
) | |||||
Loss per share, Diluted |
$ | ( |
) | $ | $ | ( |
) |
SEC Registration Fee |
$ |
186,439.62 |
||
Printing and engraving expenses |
* |
|||
Legal fees and expenses |
* |
|||
Accounting fees and expense |
* |
|||
Miscellaneous expenses |
* |
|||
Total |
$ |
* |
||
* |
These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be defined at this time. |
Exhibit Number |
Description | |
2.1+ |
||
3.1 |
||
3.2 |
||
3.3 |
Exhibit Number |
Description | |||
4.1 |
||||
4.2 |
||||
4.3 |
||||
4.4 |
||||
5.1 |
||||
10.1 |
||||
10.2 |
||||
10.3 |
||||
10.4 |
||||
10.5 |
||||
10.6 |
||||
10.7 |
||||
10.8 |
||||
10.9 |
Exhibit Number |
Description | |
10.10 |
||
10.11 |
||
10.12# |
||
10.13# |
||
10.14# |
||
10.15# |
||
10.16# |
||
10.17# |
||
10.18# |
||
10.19 |
||
10.20# |
||
10.21# |
||
10.22# |
||
10.23 |
||
10.24 |
Exhibit Number |
Description | |
10.25 |
||
10.26 |
||
16.1 |
||
21.1 |
||
23.1 |
||
23.3 |
||
24.1 |
||
101.INS |
Inline XBRL Instance Document* | |
101.SCH |
Inline XBRL Taxonomy Extension Schema Document* | |
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document* | |
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL* |
* |
Filed herewith. |
** |
Previously filed. |
+ |
Schedules omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon the request of the SEC in accordance with Item 601(b)(2) of Regulation S-K. |
# |
Management contract or compensatory plan or arrangement. |
$ in thousands |
Balance at Beginning of Year |
Additions |
Deductions/ Adjustments |
Balance at End of Year |
||||||||||||
Year ended December 31, 2021 |
||||||||||||||||
Allowance for doubtful accounts (1) |
( |
) | ||||||||||||||
Valuation allowance for deferred tax assets (2) |
||||||||||||||||
Year ended December 31, 2020 |
||||||||||||||||
Allowance for doubtful accounts (1) |
( |
) | ||||||||||||||
Valuation allowance for deferred tax assets (3) |
( |
) | ||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
Allowance for doubtful accounts (1) |
( |
) | ||||||||||||||
Valuation allowance for deferred tax assets (4) |
( |
) |
(1) |
The additions to the allowance for doubtful accounts represent the provision for doubtful accounts that is recorded based upon the Company’s evaluation of the collectability of accounts receivable. Deductions/Adjustments are primarily related to actual write-offs of receivables and other adjustments. |
(2) |
The increase in the valuation allowance for deferred tax assets is primarily related to an increase in net operating loss carryforwards not expected to be realized prior to expiration. Refer to Note 16— Income Taxes |
(3) |
The decrease in the valuation allowance for deferred tax assets is primarily related to removal of valuation allowance on net loss carryforwards due to current period taxable income. |
(4) |
The decrease in the valuation allowance for deferred tax assets is primarily related to the removal of both U.S. federal and state valuation allowance on net operating loss carryforwards based on operating performance and the expectation of future taxable income. |
A. |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) |
To include any prospectus required by section 10(a)(3) of the Securities Act; |
(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
B. |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
C. |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
D. |
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
E. |
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to |
the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) |
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) |
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
F. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
ATI PHYSICAL THERAPY, INC. | ||
By: |
/s/ Joseph Jordan | |
Joseph Jordan | ||
Chief Financial Officer |
Name |
Title |
Date | ||
/s/ John L. Larsen John L. Larsen |
Executive Chairman (member of leadership team fulfilling the role of Principal Executive Officer) |
April 1, 2022 | ||
/s/ Joseph Jordan Joseph Jordan |
Chief Financial Officer (member of leadership team fulfilling the role of Principal Executive Officer) |
April 1, 2022 | ||
/s/ Ray Wahl Ray Wahl |
Chief Operating Officer (member of leadership team fulfilling the role of Principal Executive Officer) |
April 1, 2022 | ||
/s/ Brent Rhodes Brent Rhodes |
Chief Accounting Officer |
April 1, 2022 | ||
* John Maldonado |
Director |
April 1, 2022 | ||
* Carmine Petrone |
Director |
April 1, 2022 | ||
* Joanne Burns |
Director |
April 1, 2022 | ||
* James E. Parisi |
Director |
April 1, 2022 | ||
* Andrew A. McKnight |
Director |
April 1, 2022 | ||
/s/ Teresa Sparks Teresa Sparks |
Director |
April 1, 2022 | ||
/s/ Daniel Dourney Daniel Dourney |
Director |
April 1, 2022 |
*By: |
/s/ Joseph Jordan | |
Joseph Jordan | ||
Attorney-in-fact |