# EDGAR Filing Document

**Accession Number:** 0001832466
**File Stem:** 0001171843-23-001253
**Filing Date:** 2023-2
**Character Count:** 28962
**Document Hash:** b325d7e7cdf12b473bca0cf9d2bceb70
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001171843-23-001253.hdr.sgml**: 20230228

**ACCESSION NUMBER**: 0001171843-23-001253

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230228

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230228

**DATE AS OF CHANGE**: 20230228

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Alignment Healthcare, Inc.
- **CENTRAL INDEX KEY:** 0001832466
- **STANDARD INDUSTRIAL CLASSIFICATION:** HOSPITAL & MEDICAL SERVICE PLANS [6324]
- **IRS NUMBER:** 465596242
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40295
- **FILM NUMBER:** 23685028

**BUSINESS ADDRESS:**
- **STREET 1:** 1100 W. TOWN AND COUNTRY ROAD
- **STREET 2:** SUITE 1600
- **CITY:** ORANGE
- **STATE:** CA
- **ZIP:** 92868
- **BUSINESS PHONE:** 844-310-2247

**MAIL ADDRESS:**
- **STREET 1:** 1100 W. TOWN AND COUNTRY ROAD
- **STREET 2:** SUITE 1600
- **CITY:** ORANGE
- **STATE:** CA
- **ZIP:** 92868

?xml version="1.0" encoding="utf-8"?Form 8-K

### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

### Washington, D.C. 20549
_________________

### FORM 8-K
_________________

#### CURRENT REPORT

#### Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

#### Date of Report (Date of earliest event reported): February 28, 2023
_______________________________

#### Alignment Healthcare, Inc.
(Exact name of registrant as specified in its charter)

_______________________________

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-40295** | **46-5596242** |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |

---

#### 1100 W. Town and Country Road, Suite 1600

#### Orange, California 92868
(Address of Principal Executive Offices) (Zip Code)

(844) 310-2247

(Registrant's telephone number, including area code)

#### N/A
(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| Title of each class | Name of each exchange on which registered |
| Common Stock, par value $0.001 per share ALHC | The NASDAQ Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 2.02. Results of Operations and Financial Condition.**

On February 28, 2023, Alignment Healthcare, Inc. issued a press release announcing its financial results for its fourth quarter and full year ending Dec. 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.

The information contained in this Current Report on Form 8-K and in the accompanying exhibit are "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

**Item 9.01. Financial Statements and Exhibits.**

(d) Exhibits

---

| | |
|:---|:---|
| **<u>Exhibit Number</u>** | **<u>Description</u>** |
| [99.1](exh_991.htm) | [Press Release dated February 28, 2023](exh_991.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

#### SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **Alignment Healthcare, Inc.** | **Alignment Healthcare, Inc.** |
| Date: February 28, 2023 | By: | <u>/s/ Thomas Freeman&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> |
|  |  | Thomas Freeman |
|  |  | Chief Financial Officer |

---

## Exhibit 99.1

**EXHIBIT 99.1**

**Alignment Healthcare Reports Fourth Quarter and Full-Year 2022 Results; Provides Full-Year 2023 Financial Guidance**

* *Reports $1.43 billion in total revenue for 2022, up 23*%*** *year-over-year*

* *Beats high end of fourth quarter and full-year guidance on revenue, adjusted gross profit and adjusted EBITDA* 

* *Demonstrates replicability of the company's clinical management capabilities outside its core markets through its Care Anywhere clinical model and proprietary AVA*<sup>*®*</sup> *data platform, reporting nearly 40% fewer hospitalizations than traditional Medicare in California and each new market*

ORANGE, Calif., Feb. 28, 2023 (GLOBE NEWSWIRE) -- Alignment Healthcare, Inc. (NASDAQ: ALHC), a tech-enabled Medicare Advantage company, today reported financial results for its fourth quarter and full year ending Dec. 31, 2022.

"Alignment Healthcare's relentless focus on quality allowed us to deliver strong financial results in 2022, having exceeded or met our guidance across all four of our key performance indicators for the eighth consecutive quarter," said John Kao, founder and CEO. "As we approach the company's 10-year anniversary, we're confident that strategic investments in our people and technology will continue to drive meaningful improvements in the health and quality of life of all those we serve."

**<u>Fourth Quarter 2022 Financial Highlights</u>**

*All comparisons, unless otherwise noted, are to the three months ended Dec. 31, 2021.*

* Health plan membership at the end of the quarter was approximately 98,400, up 14.3% year over year

* Total revenue was $361.8 million, up 21.3% year over year

* Health plan premium revenue of $344.9 million represented 21.5% growth year over year

* Adjusted gross profit was $38.3 million and loss from operations was ($52.1) million Adjusted gross profit excludes depreciation and amortization of $4.8 million and selling, general, and administrative expenses of $83.2 million (which includes $20.5 million of equity-based compensation). Adjusted gross profit also excludes an additional $2.4 million of equity-based compensation recorded within medical expensesMedical benefits ratio based on adjusted gross profit was 89.4% 

* Adjusted EBITDA was ($23.7) million and net loss was ($57.0) million

**<u>Full Year 2022 Financial Highlights</u>**

*All comparisons, unless otherwise noted, are to the twelve months ended Dec. 31, 2021.*

* Total revenue was $1,434.2 million, up 22.8% year over year

* Health plan premium revenue of $1,372.3 million represented 22.4% growth year over year

* Adjusted gross profit was $193.6 million and loss from operations was ($128.6) million Adjusted gross profit excludes depreciation and amortization of $17.5 million and selling, general, and administrative expenses of $295.6 million (which includes $72.6 million of equity-based compensation). Adjusted gross profit also excludes an additional $9.1 million of equity-based compensation recorded within medical expensesMedical benefits ratio based on adjusted gross profit was 86.5% 

* Adjusted EBITDA was ($26.7) million and net loss was ($149.6) million

* As of Dec. 31, 2022, total cash was $409.5 million, and debt was $165.0 million (excluding unamortized debt issuance costs)

Adjusted Gross Profit is reconciled as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| ***(dollars in thousands)*** |  |  |  |  |
| Loss from operations | $(52106) | $(43466) | $(128639) | $(178072) |
| Add back: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation (medical expenses) | 2377 | 3960 | 9128 | 15418 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation (medical expenses) | 64 | 61 | 213 | 220 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 4687 | 4088 | 17273 | 15813 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative expenses | 83228 | 78081 | 295646 | 290991 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total add back | 90356 | 86190 | 322260 | 322442 |
| Adjusted gross profit | $38250 | $42724 | $193621 | $144370 |
| Adjusted gross profit % | 10.6% | 14.3% | 13.5% | 12.4% |
| Medical benefit ratio | 89.4% | 85.7% | 86.5% | 87.6% |

---

Adjusted EBITDA is reconciled as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| ***(dollars in thousands)*** |  |  |  |  |
| Net loss | $(56995) | $(47834) | $(149639) | $(195286) |
| Less: Net loss attributable to noncontrolling interest | 92 |  | 92 |  |
| Add back: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 4793 | 4452 | 18289 | 17443 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 4751 | 4149 | 17486 | 16033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | 172 |  | 339 |  |
| EBITDA | (47187) | (39233) | (113433) | (161810) |
| Equity-based compensation<sup>(1)</sup> | 22885 | 28814 | 81718 | 121999 |
| Reorganization and transaction-related expenses<sup>(2)</sup> |  | 527 | 579 | 4585 |
| Acquisition expenses<sup>(3)</sup> | 548 | 1020 | 1614 | 2110 |
| Loss on sublease and disposal of assets<sup>(4)</sup> | 102 |  | 611 |  |
| Loss on extinguishment of debt |  |  | 2196 |  |
| Adjusted EBITDA | $(23652) | $(8872) | $(26715) | $(33116) |

---

(1) 2022 represents equity-based compensation related to grants made in the current year, as well as equity-based compensation related to the timing of the IPO, which includes previously issued stock appreciation rights ("SARs") liability awards, modifications related to transaction vesting units, and grants made in conjunction with the IPO. 2021 represents equity-based compensation related to the timing of the IPO as previously discussed. Equity-based compensation expense for the year ended December 31, 2021 includes $11.4 million related to the cash settlement of SARs.

(2) Represents legal, professional, accounting and other advisory fees related to our pre-IPO corporate reorganization and the IPO that are considered non-recurring and non-capitalizable.

(3) Represents acquisition-related fees, such as legal and advisory fees, that are non-capitalizable.

(4) Represents loss related to right of use ("ROU") assets that were subleased in the second quarter of 2022 and loss related to disposal of assets.

**<u>Outlook for First Quarter and Fiscal Year 2023</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ending** <br>**March 31, 2023** | **Three Months Ending** <br>**March 31, 2023** | **Twelve Months Ending\|**<br>**March 31, 2023** | **Twelve Months Ending\|**<br>**March 31, 2023** |
| ***<u>$ Millions</u>*** | Low | **High** | **Low** | **High** |
| Health Plan Membership | 109300 | 109500 | 113000 | 115000 |
| Revenue | $429 | $434 | $1705 | $1730 |
| Adjusted Gross Profit<sup>1</sup> | $38 | $41 | $205 | $217 |
| Adjusted EBITDA<sup>2</sup> | ($17) | ($14) | ($34) | ($20) |

---

_______________________

* Adjusted gross profit is a non-GAAP financial measure that is presented as supplemental disclosure, that we define as loss from operations before depreciation and amortization, clinical equity-based compensation expense, and selling, general, and administrative expenses. We cannot reconcile our estimated ranges for adjusted gross profit to loss from operations, the most directly comparable GAAP measure, and cannot provide estimated ranges for loss from operations, without unreasonable efforts because of the uncertainty around certain items that may impact loss from operations, including equity-based compensation expense and depreciation and amortization, that are not within our control or cannot be reasonably predicted.

* Adjusted EBITDA is a non-GAAP financial measure that is presented as supplemental disclosure, that we define as net loss before interest expense, income taxes, depreciation and amortization expense, reorganization and transaction-related expenses, equity-based compensation expense, loss on sublease and loss on extinguishment of debt. We cannot reconcile our estimated ranges for Adjusted EBITDA to net loss, the most directly comparable GAAP measure, and cannot provide estimated ranges for net loss, without unreasonable efforts because of the uncertainty around certain items that may impact net loss, including equity-based compensation expense and depreciation and amortization, that are not within our control or cannot be reasonably predicted.

**Conference Call Details**

The company will host a conference call at 5 p.m. EST today to discuss these results and management's outlook for future financial and operational performance. A live audio webcast will be available online at https://ir.alignmenthealthcare.com/. At the start of the conference call, participants may access the webcast at the following link: https://edge.media-server.com/mmc/p/83hqdb3q. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web links, and will remain available for approximately 12 months.

**About Alignment Health**

**Forward-Looking Statements**

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for the first quarter ending March 31, 2023, and year ending December 31, 2023. Forward-looking statements are subject to risks and uncertainties and are based on assumptions that may prove to be inaccurate, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our ability to attract new members and enter new markets, including the need for certain governmental approvals; our ability to maintain a high rating for our plans on the Five Star Quality Rating System; risks associated with being a government contractor; changes in laws and regulations applicable to our business model; risks related to our indebtedness, including the potential for rising interest rates; changes in market or industry conditions and receptivity to our technology and services; results of litigation or a security incident; the impact of shortages of qualified personnel and related increases in our labor costs; and the impact of COVID-19 on our business and results of operation. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2022, and the other periodic reports we file with the SEC. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.

**Consolidated Balance Sheets**

*(in thousands, except par value and share amounts)*

---

| | | |
|:---|:---|:---|
|  | **December 31,<br>2022** | **December 31,<br>2021** |
| **Assets** | | |
| Current Assets: |  |  |
| &nbsp;&nbsp;Cash | $409549 | $466600 |
| &nbsp;&nbsp;Accounts receivable (less allowance for credit losses of $0 at December 31, 2022 and $111 at December 31, 2021, respectively) | 92890 | 58512 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 42107 | 27747 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 544546 | 552859 |
| &nbsp;&nbsp;Property and equipment, net | 37169 | 30358 |
| &nbsp;&nbsp;Right of use asset, net | 5825 | 7853 |
| &nbsp;&nbsp;Goodwill and intangible assets, net | 40288 | 35116 |
| &nbsp;&nbsp;Other assets | 6035 | 4709 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $633863 | $630895 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;Medical expenses payable | $170135 | $125886 |
| &nbsp;&nbsp;Accounts payable and accrued expenses | 32288 | 17431 |
| &nbsp;&nbsp;Accrued compensation | 27538 | 23928 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 229961 | 167245 |
| &nbsp;&nbsp;Long-term debt, net of debt issuance costs | 160902 | 150620 |
| &nbsp;&nbsp;Long-term portion of lease liabilities | 3698 | 6975 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 394561 | 324840 |
| Stockholders' Equity: |  |  |
| &nbsp;&nbsp;Preferred stock, $.001 par value; 100,000,000 and 100,000,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively; no shares issued and outstanding as of December 31, 2022 and December 31, 2021 |  |  |
| &nbsp;&nbsp;Common stock, $.001 par value; 1,000,000,000 shares authorized as of December 31, 2022 and December 31, 2021; 187,280,015 and 187,193,613 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 187 | 187 |
| &nbsp;&nbsp;Additional paid-in capital | 970180 | 888547 |
| &nbsp;&nbsp;Accumulated deficit | (732241) | (582694) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Alignment Healthcare, Inc. stockholders' equity | 238126 | 306040 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest | 1176 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 239302 | 306055 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $633863 | $630895 |

---

**Consolidated Statements of Operations**

*(in thousands, except per share amounts)*

*(Quarterly data unaudited)*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Earned premiums | $360100 | $298071 | $1431550 | $1167085 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 1711 | 203 | 2609 | 688 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 361811 | 298274 | 1434159 | 1167773 |
| Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Medical expenses | 326002 | 259571 | 1249879 | 1039041 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative expenses | 83228 | 78081 | 295646 | 290991 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 4687 | 4088 | 17273 | 15813 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 413917 | 341740 | 1562798 | 1345845 |
| Loss from operations | (52106) | (43466) | (128639) | (178072) |
| Other expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 4793 | 4452 | 18289 | 17443 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expenses (income) | (76) | (84) | 176 | (229) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt |  |  | 2196 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | 4717 | 4368 | 20661 | 17214 |
| Loss before income taxes | (56823) | (47834) | (149300) | (195286) |
| Provision for income taxes | 172 |  | 339 |  |
| Net loss | $(56995) | $(47834) | $(149639) | $(195286) |
| Less: Net loss attributable to noncontrolling interest | 92 |  | 92 |  |
| Net loss attributable to Alignment Healthcare, Inc. | $(56903) | $(47834) | $(149547) | $(195286) |
| Total weighted-average common shares outstanding - basic and diluted | 182540539 | 178396999 | 181212757 | 171956849 |
| Net loss per share attributable to Alignment Healthcare, Inc. - basic and diluted | $(0.31) | $(0.27) | $(0.83) | $(1.14) |

---

**Consolidated Statements of Cash Flows**

*(in thousands)*

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31,** | **Year Ended<br>December 31,** |
|  | **2022** | **2021** |
| **Operating Activities:** |  |  |
| &nbsp;&nbsp;Net loss | $(149639) | $(195286) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit loss | 150 | 111 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on sublease | 510 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 17486 | 16033 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization-debt issuance costs and investment discount | 1850 | 2254 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of payment-in-kind interest | 2943 | 4197 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of property and equipment | 101 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation and common stock payments | 81718 | 110600 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense | 2811 | 2731 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 2196 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (34377) | (17608) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (14356) | (10340) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (86) | 644 |
| &nbsp;&nbsp;&nbsp;&nbsp;Medical expenses payable | 44250 | 12512 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 13743 | 437 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 3609 | (1244) |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | (4214) | (3817) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment-in-kind interest | (14122) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncurrent liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | (45427) | (78776) |
| **Investing Activities:** |  |  |
| &nbsp;&nbsp;Purchase of business, net of cash received | (4043) |  |
| &nbsp;&nbsp;Asset acquisition, net of cash received |  | (1405) |
| &nbsp;&nbsp;Purchase of investments | (2825) | (2475) |
| &nbsp;&nbsp;Sale of investments | 2425 | 1425 |
| &nbsp;&nbsp;Acquisition of property and equipment | (23774) | (18360) |
| &nbsp;&nbsp;Proceeds from the sale of property and equipment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (28217) | (20815) |
| **Financing Activities:** |  |  |
| &nbsp;&nbsp;Repurchase of noncontrolling interest | (100) |  |
| &nbsp;&nbsp;Contributions from noncontrolling interest holders | 68 | 15 |
| &nbsp;&nbsp;Equity repurchase |  | (1474) |
| &nbsp;&nbsp;Issuance of long-term debt | 165000 |  |
| &nbsp;&nbsp;Debt issuance costs | (5196) |  |
| &nbsp;&nbsp;Repayment of long-term debt | (143179) |  |
| &nbsp;&nbsp;Issuance of common stock |  | 390600 |
| &nbsp;&nbsp;Common stock issuance costs |  | (29011) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 16593 | 360130 |
| Net (decrease) increase in cash | (57051) | 260539 |
| Cash and restricted cash at beginning of period | 468350 | 207811 |
| Cash and restricted cash at end of period | $411299 | $468350 |
| **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $22447 | $10992 |
| **Supplemental non-cash investing and financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition of property in accounts payable | $47 | $347 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of business in accounts payable | $505 | $— |

---

The following table provides a reconciliation of cash and restricted cash reported within the condensed consolidated balance sheets to the total above:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** | **December 31, 2020** |
| Cash | $409549 | $466600 | $207311 |
| Restricted cash in other assets | 1750 | 1750 | 500 |
| Total | $411299 | $468350 | $207811 |

---

**Non-GAAP Financial Measures**

Certain of these financial measures are considered "non-GAAP" financial measures within the meaning of Item 10 of Regulation S-K promulgated by the SEC. We believe that non-GAAP financial measures provide an additional way of viewing aspects of our operations that, when viewed with the GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business. These non-GAAP financial measures are also used by our management to evaluate financial results and to plan and forecast future periods. However, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may differ from the non-GAAP measures used by other companies, including our competitors. To supplement our consolidated financial statements presented on a GAAP basis, we disclose the following non-GAAP measures: Medical Benefits Ratio, Adjusted EBITDA and Adjusted Gross Profit as these are performance measures that our management uses to assess our operating performance. Because these measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes and in evaluating acquisition opportunities.

**Adjusted EBITDA**

Adjusted EBITDA is a non-GAAP financial measure that we define as net loss before interest expense, income taxes, depreciation and amortization expense, reorganization and transaction-related expenses, equity-based compensation expense, loss on sublease and loss on extinguishment of debt.

Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA in lieu of net loss, which is the most directly comparable financial measure calculated in accordance with GAAP.

Our use of the term Adjusted EBITDA may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies.

**Medical Benefits Ratio (MBR)** 

We calculate our MBR by dividing total medical expenses, excluding depreciation and equity-based compensation, by total revenues in a given period.

**Adjusted Gross Profit**

Adjusted Gross Profit is a non-GAAP financial measure that we define as loss from operations before depreciation and amortization, clinical equity-based compensation expense, and selling, general, and administrative expenses.

Adjusted Gross Profit should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted Gross Profit in lieu of loss from operations, which is the most directly comparable financial measure calculated in accordance with GAAP.

Our use of the term Adjusted Gross Profit may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies.

**Investor Contact** 

Harrison Zhuo

hzhuo@ahcusa.com

**Media Contact** 

Maggie Habib

mPR, Inc. for Alignment Health

alignment@mpublicrelations.com