osh-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39427

___________________________________

Oak Street Health, Inc.

(Exact Name of Registrant as Specified in its Charter)

___________________________________


Delaware			84-3446686
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
30 W. Monroe Street Suite 1200 Chicago, Illinois			60603
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (844) 871-5650

___________________________________

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

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Common Stock, $0.001 par value

OSH

NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ☒

As of April 27, 2023, the registrant had 245,008,081 shares of Common Stock, $0.001 par value per share, outstanding.

Table of Contents


PART I.	FINANCIAL INFORMATION	4
Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	4
	Condensed Consolidated Statements of Operations for the Three-Months Ended March 31, 2023 and 2022 (unaudited)	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three-Months Ended March 31, 2023 and 2022 (unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity/(Deficit) for the Three-Months Ended March 31, 2023 and 2022 (unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the Three-Months Ended March 31, 2023 and 2022 (unaudited)	9
	Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION	38
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	38
Item 3.	Defaults upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	38

Table of Contents

EXPLANATORY NOTE

On May 2, 2023, Oak Street Health, Inc. (“Oak Street Health,” “OSH,” “we,” “us,” “our” or the “Company”) consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of February 7, 2023 (the “Merger Agreement”), by and among Oak Street Health, CVS Pharmacy, Inc. (“CVS Pharmacy”), Halo Merger Sub Corp., an indirect wholly owned subsidiary of CVS Pharmacy (“Merger Sub”), and, solely for the limited purposes set forth therein, CVS Health Corporation ("CVS Health"). Pursuant to the terms and conditions set forth in the Merger Agreement, on May 2, 2023, Merger Sub merged with and into Oak Street Health, with Oak Street Health continuing as the surviving corporation (the “Merger”). Following consummation of the Merger, the New York Stock Exchange (the “NYSE”) filed a notification of removal from listing on Form 25 with the Securities and Exchange Commission (the “SEC”) with respect to the delisting and deregistration of the Common Stock, par value $0.001 per share, of Oak Street Health (the “Common Stock”). The shares of Common Stock ceased trading prior to the opening of the market on May 2, 2023, and are no longer listed on the NYSE. Accordingly, the Company is no longer a publicly traded company and is an indirect wholly-owned subsidiary of CVS Pharmacy. In addition, the Company intends to file with the SEC a Form 15 to suspend the reporting obligations of the Company under Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) on May 12, 2023, which, upon filling, will immediately suspend Oak Street Health's reporting obligations under the Exchange Act. Unless otherwise specified, the financial information included in Part 1 of this Quarterly Report on Form 10-Q, as well as the accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations, reflect the corporate status of the Company as it existed on March 31, 2023.

This Quarterly Report on Form 10-Q does not reflect any changes in the Company's operations, strategy or business plan that may occur as a result of the Merger and the Company becoming part of CVS Health.

FORWARD-LOOKING STATEMENTS

Throughout this Quarterly Report on Form 10-Q, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal” or similar terminology. The forward-looking statements contained in this Quarterly Report on Form 10-Q are generally set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but may be found in other sections as well. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for the year-ended December 31, 2022 ("2022 Form 10-K") and this Quarterly Report on Form 10-Q. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other filings with the SEC and public communications. You should evaluate all forward-looking statements made in this Quarterly Report on Form 10-Q in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Table of Contents

PART I FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

OAK STREET HEALTH, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the quarterly period ended March 31, 2023

OAK STREET HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions, except shares and per share data)


	March 31, 2023 (unaudited)		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	136.8	$	137.9
Restricted cash	19.4		20.6
Other receivables, net	3.0		2.5
Capitated accounts receivable	1,215.4		894.0
Marketable debt securities	226.0		287.7
Prepaid expenses and other current assets	20.8		15.9
Total current assets	1,621.4		1,358.6
Property, plant and equipment, net	213.0		204.1
Operating right-of-use assets	313.5		317.6
Goodwill	158.0		158.0
Intangible assets, net	8.7		9.1
Other long-term assets	6.8		7.3
Total assets	$	2,321.4	$	2,054.7
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	31.1	$	17.1
Accrued compensation and benefits	65.7		52.7
Liability for unpaid claims	1,062.2		850.3
Other liabilities	44.1		43.0
Total current liabilities	1,203.1		963.1
Long-term debt	1,005.2		978.6
Long-term operating lease liabilities	350.0		349.3
Other long-term liabilities	29.8		31.0
Total liabilities	2,588.1		2,322.0
Commitments and contingencies (See Note 10)
Stockholders' deficit:
Preferred stock, par value $0.001; 50,000,000 shares authorized as of March 31, 2023 and December 31, 2022; no shares issued and outstanding as of March 31, 2023 and December 31, 2022	—		—
Common stock, par value $0.001; 500,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 244,306,322 and 242,873,706 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	0.2

SEC Form 10-Q filed by Oak Street Health Inc.