Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim
Review.
In connection with the preparation of its Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, CareMax, Inc., a Delaware corporation (the
"Company"), reevaluated the balance sheet classification of the non-cash prepaid
asset associated with the equity consideration issued to the Company's real
estate advisor in July 2021 (the "Prepaid Asset"). The Prepaid Asset was
previously classified as short-term in other current assets. The Company
concluded that the majority of the Prepaid Asset should instead be classified as
long-term within other assets (the "Misclassification").
The Misclassification related to the short-term classification of the Prepaid
Asset, a non-cash asset, and has no impact on the Company's historical reported
total assets, total liabilities or total equity; revenues, expenses, or net
loss; adjusted EBITDA, platform contribution, or medical expense ratio; or cash
or liquidity.
On March 15, 2023, the Audit Committee (the "Audit Committee") of the Board of
Directors of the Company, after discussion with the Company's management and
WithumSmith+Brown, PC, the Company's independent registered accounting firm for
the year ended December 31, 2021, concluded that the Company's (i) previously
issued audited consolidated financial statements as of and for the year ended
December 31, 2021 included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2021, (ii) previously issued unaudited
consolidated financial statements as of and for the three and nine months ended
September 30, 2021 included in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2021, (iii) previously issued unaudited
consolidated financial statements as of and for the three months ended March 31,
2022 included in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2022, (iv) previously issued unaudited consolidated
financial statements as of and for the three and six months ended June 30, 2022
included in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2022 and (v) previously issued unaudited consolidated financial
statements as of and for the three and nine months ended September 30, 2022
included in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2022 (collectively, the "Prior Financial Statements"), the
earnings release relating to the Company's financial results as of and for the
fiscal year ended December 31, 2022 (the "FY2022 Earnings Release") and any
reports, related earnings releases, investor presentations or similar
communications describing the Prior Financial Statements, including the FY2022
Earnings Release, should no longer be relied upon due to the Misclassification
of the Prepaid Asset.
As a result of the foregoing, as soon as practicable, the Company intends to
amend its Annual Report on Form 10-K for the year ended December 31, 2021 and
its Quarterly Reports on Form 10-Q for the quarterly periods ended September 30,
2021, March 31, 2022, June 30, 2022 and September 30, 2022 to restate its
financial statements for those periods.
As previously disclosed, in connection with the preparation and audit of the
Company's financial statements for the year ended December 31, 2021, certain
material weaknesses were identified in the Company' internal control over
financial reporting. As of the date of the filing of this Current Report on Form
8-K, management of the Company has determined that such material weaknesses had
not been remediated as of December 31, 2022. As a result of the
Misclassification, the Company is evaluating its disclosure controls and
procedures and internal control over financial reporting. There can be no
assurance that additional material weaknesses will not be identified as the
Company completes its financial close process.
Management and the chair of the Audit Committee have discussed the matters
described herein, including the restatement of the Company's Quarterly Reports
on Form 10-Q for the quarterly periods ended March 31, 2022, June 30, 2022 and
September 30, 2022, with the Company's current independent registered public
accounting firm, PricewaterhouseCoopers LLP.
Forward-Looking Statements
This Current Report on Form 8-K may be deemed to contain forward-looking
statements within the meaning of Section 27A of the Securities Act, Section 21E
of the Exchange Act, and the Private Securities Litigation Reform Act of 1995,
as amended. These forward-looking statements include statements regarding the
effects of the restatement of the Company's past financial statements, the
filing of the Company's amended periodic reports and the Company's evaluation of
its disclosure controls and procedures and internal control over financial
reporting. Words such as "anticipate," "believe," "budget," "contemplate,"
"continue," "could," "envision," "estimate," "expect," "guidance," "indicate,"
"intend," "may," "might," "plan," "possibly," "potential," "predict,"
"probably," "pro-forma," "project," "seek," "should," "target," or "will," or
the negative or other variations thereof, and similar words or phrases or
comparable terminology, are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future performance,
conditions or results, and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of which are
outside the Company's control, that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking statements.
Important risks and uncertainties that could cause the Company's actual results
and financial condition to differ materially from those indicated in
forward-looking statements include, among others, the timing and nature of the
final resolution of the accounting issues discussed in this Current Report on
Form 8-K, any delay in the filing of required periodic reports with the U.S.
Securities and Exchange Commission (the "SEC"), whether a restatement of
financial results will be required for other accounting issues for the same or
other periods in addition to the restatement currently expected by management,
additional uncertainties related to accounting issues generally, adverse effects
on the Company's business as a result of the restatement process and other risks
identified
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in the Company's reports filed with the SEC. All information provided in this
Current Report on Form 8-K is as of the date hereof, and the Company undertakes
no duty to update or revise this information unless required by law.
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