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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________________
FORM 10-Q
___________________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
oTRANSITION 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)
___________________________________
Delaware84-3446686
(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 valueOSHNYSE
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.


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.

3
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 cash19.4 20.6 
Other receivables, net3.0 2.5 
Capitated accounts receivable1,215.4 894.0 
Marketable debt securities226.0 287.7 
Prepaid expenses and other current assets20.8 15.9 
Total current assets1,621.4 1,358.6 
Property, plant and equipment, net213.0 204.1 
Operating right-of-use assets313.5 317.6 
Goodwill158.0 158.0 
Intangible assets, net8.7 9.1 
Other long-term assets6.8 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 benefits65.7 52.7 
Liability for unpaid claims1,062.2 850.3 
Other liabilities44.1 43.0 
Total current liabilities1,203.1 963.1 
Long-term debt1,005.2 978.6 
Long-term operating lease liabilities350.0 349.3 
Other long-term liabilities29.8 31.0 
Total liabilities2,588.1 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 0.2 
Additional paid-in capital1,250.3 1,205.4 
Accumulated other comprehensive loss(0.8)(2.2)
Accumulated deficit(1,520.0)(1,474.5)
Total stockholders' deficit allocated to Oak Street Health, Inc.(270.3)(271.1)
Non-controlling interests3.6 3.8 
Total stockholders' deficit(266.7)(267.3)
Total liabilities and stockholders' deficit$2,321.4 $2,054.7 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OAK STREET HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($ in millions, except shares and per share data)
Three-Months Ended March 31,
20232022
Revenues:
Capitated revenue$743.2 $506.1 
Other revenue8.8 7.7 
Total revenues752.0 513.8 
Operating expenses:
Medical claims expense523.5 379.4 
Cost of care, excluding depreciation and amortization129.2 95.2 
Sales and marketing42.3 33.8 
Corporate, general and administrative89.9 88.7 
Depreciation and amortization10.5 7.8 
Total operating expenses795.4 604.9 
Loss from operations(43.4)(91.1)
Other expense:  
Interest expense, net(0.6)(0.6)
Other(0.2)(5.0)
Total other expense(0.8)(5.6)
Net loss(44.2)(96.7)
Net income/(loss) attributable to non-controlling interests1.3 (0.2)
Net loss attributable to Oak Street Health, Inc.$(45.5)$(96.5)
Weighted average common shares outstanding - basic and diluted
238,093,465 225,645,420 
Net loss per share – basic and diluted$(0.19)$(0.43)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OAK STREET HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
($ in millions, except shares and per share data)
Three-Months Ended March 31,
20232022
Net loss$(44.2)$(96.7)
Other comprehensive loss:  
Net unrealized gain/(loss) on marketable debt securities, net of tax1.4 (3.0)
Comprehensive loss(42.8)(99.7)
Less: Comprehensive income/(loss) attributable to non-controlling interests1.3 (0.2)
Comprehensive loss attributable to Oak Street Health, Inc.$(44.1)$(99.5)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OAK STREET HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/(DEFICIT)
(Unaudited)
($ in millions, except shares and per share data)
Three-Months Ended
Common StockAdditional
Paid-In Capital
Accumulated
Deficit
Accumulated Other
Comprehensive Loss
Non-controlling
Interest
Total
Equity/(Deficit)
Shares
Issued
Amount
Balances December 31, 2021240,937,465 $0.2 1,017.9 $(965.3)(1.4)$4.6 $56.0 
Issuance of Common Stock under the employee purchase plan63,284 — 1.8 — — — 1.8 
Issuance of Common Stock upon vesting of restricted stock units49,395 — — — — — — 
Issuance of Common Stock upon exercise of options116,539 — 2.2 — — — 2.2 
Forfeitures(88,446)— (1.2)— — — (1.2)
Shares withheld related to net settlement of stock based awards(6,421)— — — — — — 
Stock-based compensation— — 40.6 — — — 40.6 
Dissolution of joint venture— — (2.7)— — 0.6 (2.1)
Net unrealized loss on short-term marketable securities— — — — (3.0)— (3.0)
Net loss— — — (96.5)— (0.2)(96.7)
Balances March 31, 2022241,071,816 0.2 1,058.6 (1,061.8)(4.4)5.0 $(2.4)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OAK STREET HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/(DEFICIT)
(Unaudited)
($ in millions, except shares and per share data)
Three-Months Ended
Common StockAdditional Paid-In Capital
Accumulated
Deficit
Accumulated Other
Comprehensive Loss
Non-controlling
Interests
Total Deficit
Shares
Issued
Amount
Balances December 31, 2022242,873,706 $0.2 $1,205.4 $(1,474.5)$(2.2)$3.8 $(267.3)
Issuance of Common Stock upon exercise of options952,273 — 19.4 — — — 19.4 
Shares withheld related to net share settlement of stock based awards(37,473)— (0.8)— — — (0.8)
Issuance of Common Stock under the employee purchase plan95,207 — 1.5 — — — 1.5 
Issuance of Common Stock upon vesting of restricted stock units480,620 — — — — — — 
Forfeitures(58,011)— (1.2)— — — (1.2)
Stock compensation expense— — 26.0 — — — 26.0 
Payments to non-controlling interest— — — — — (1.5)(1.5)
Net unrealized gain on short-term marketable securities— — — — 1.4 — 1.4 
Net (Loss) Income— — — (45.5)— 1.3 (44.2)
Balances March 31, 2023244,306,322 $0.2 $1,250.3 $(1,520.0)$(0.8)$3.6 $(266.7)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OAK STREET HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
(Unaudited)
Three-Months Ended March 31,
20232022
Cash flows from operating activities:
Net loss$(44.2)$(96.7)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on debt and related issuance costs1.7 1.1 
Accretion of discounts and amortization of premiums on short-term marketable securities, net(0.8)2.3 
Fair value adjustment to contingent consideration— 5.0 
Depreciation and amortization10.5 7.8 
Non-cash operating lease costs10.5 5.0 
Stock-based compensation, net of forfeitures24.8 39.4 
Changes in assets and liabilities:
Accounts receivables(321.9)(136.9)
Other assets(4.4)(1.6)
Accounts payable and accrued compensation and benefits26.2 4.3 
Liability for unpaid claims211.9 79.6 
Operating lease liabilities(5.7)(4.5)
Other liabilities(1.3)4.0 
Net cash used in operating activities(92.7)(91.2)
Cash flows from investing activities:
Proceeds from sales and maturities of marketable debt securities146.0 288.2 
Purchases of marketable debt securities(82.1)(174.2)
Purchases of property and equipment(17.0)(19.8)
Net cash provided by investing activities46.9 94.2 
Cash flows from financing activities:
Proceeds from borrowings on term loan, net24.9 — 
Capital distributions to non-controlling interests(1.5)— 
Purchase of joint venture minority interest— (2.1)
Proceeds from exercise of options, net18.6 2.2 
Proceeds from issuance of Common Stock under the employee purchase plan1.5 1.8 
Net cash provided by financing activities43.5 1.9 
Net change in cash, cash equivalents and restricted cash(2.3)4.9 
Cash, cash equivalents and restricted cash, beginning of period158.5 120.4 
Cash, cash equivalents and restricted cash, end of period$156.2 $125.3 
Supplemental non-cash disclosure
Additions to construction in process funded through accounts payable6.3 9.2 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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OAK STREET HEALTH, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS
Description of Business
Oak Street Health, Inc. was formed as a Delaware corporation on October 22, 2019 for the purpose of completing a public offering and related reorganization transactions (collectively referred to as the “IPO”) in order to carry on the business of Oak Street Health, LLC (“OSH LLC”) and its affiliates. On August 10, 2020, the Company completed its IPO. As the managing member of OSH LLC, Oak Street Health, Inc. operates and controls all of the business affairs of OSH LLC and its affiliates.
The Company operates primary care centers serving Medicare beneficiaries. The Company, through its centers and management services organization, combines an innovative care model with superior patient experience. The Company invests resources into primary care to prevent unnecessary acute events and manage chronic illnesses. The Company engages Medicare eligible patients through the use of an innovative community outreach approach. Once patients are engaged, the Company integrates population health analytics, social support services and primary care into the care model to drive improved outcomes. The Company contracts with health plans to generate medical costs savings and realize a return on its investment in primary care. As of March 31, 2023, the Company operated 172 centers.
Merger with CVS Health
As more fully described in Note 13, the Company consummated the transactions contemplated by the Merger Agreement, and pursuant to the terms and conditions set forth in the Merger Agreement, on May 2, 2023, Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation and existing as an indirect wholly owned subsidiary of CVS Pharmacy.

On May 2, 2023, at the effective time of the Merger (the “Effective Time”), each share of our Common Stock, issued and outstanding immediately prior to the Effective Time was automatically cancelled, extinguished and converted into the right to receive $39.00 in cash, without interest and less any applicable withholding taxes (the “Merger Consideration”). In connection with the Merger, the NYSE filed a Form 25 with the SEC regarding the removal of shares of our Common Stock from listing and the withdrawal of the registration of our Common Stock under Section 12(b) of the Exchange Act. Shares of the Company’s Common Stock were suspended from trading on the NYSE prior to the opening of trading on May 2, 2023. The Company intends to file with the SEC a Form 15 to suspend its reporting obligations under Sections 13 and 15(d) of the Exchange Act. Accordingly, as of the Effective Time, the Company no longer existed as a standalone public company.

Other than transaction expenses and related costs associated with the Merger of $6.5 million for the three-months ended March 31, 2023, the terms of the Merger Agreement did not impact our condensed consolidated financial statements.
Basis of Presentation and Consolidation
The accompanying unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such regulations that would substantially duplicate the disclosures contained in the Company's annual audited consolidated financial statements. These financial statements have been prepared on a basis consistent with the accounting principles applied for the fiscal year ended December 31, 2022 in the Company’s 2022 Form 10-K filed with the SEC. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-months ended March 31, 2023 are not necessarily indicative of the results that may be expected any other interim period for or for the year ending December 31, 2023.
The condensed consolidated financial statements of the Company include the financial statements of all wholly owned subsidiaries and majority-owned or controlled companies, which include the variable interest entities (“VIE”) in which OSH has an interest and is the primary beneficiary. See Note 11, “Variable Interest Entities.” For those consolidated subsidiaries where our ownership is less than 100%, the portion of the net income or loss allocable to the non-controlling
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interests is reported as “Net income (loss) attributable to non-controlling interests” in the condensed consolidated statements of operations. Intercompany balances and transactions have been eliminated in consolidation.
In addition, Oak Street Health is the majority interest owner in two joint ventures: OSH-PCJ Joliet, LLC ("PCJ JV") and OSH-RI, LLC ("RI JV"), which are consolidated in the Company’s financial statements. In January 2022, the Company paid a former joint venture partner, Evangelical Services Corporation, $2.1 million to acquire its 49.9% ownership interest in OSH-ESC Joint Venture, LLC. As such, OSH owned 100% of this entity as of March 31, 2022, and the joint venture was effectively dissolved. During the three-months ended March 31, 2023, distributions were made from OSH-PCJ Joliet, LLC to Oak Street Health MSO, LLC, a subsidiary of the Company that holds 50.1% ownership interest in PCJ JV, and Primary Care Physicians of Joliet, an unaffiliated third party that holds 49.9% ownership interest in PCJ JV. Distributions made during the three-months ended March 31, 2023 and 2022 totaled $1.5 million and $0, respectively, to each owner.
There were no material related party transactions during the three-months ended March 31, 2023 and 2022 under ASC 850.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on the information available at the time, its experiences and various other assumptions believed to be reasonable under the circumstances including estimates of the impact of COVID-19. The areas where significant estimates are used in the accompanying financial statements include revenue recognition, the liability for unpaid claims, stock-based compensation, valuation and related impairment recognition of long-lived assets, including intangibles and goodwill and the valuation of stock options. Actual results could differ from those estimates.
COVID-19
Even as the COVID-19 pandemic subsides, disruptions caused by the pandemic, including labor shortages and inflationary pressures, may continue and could, in turn, have a negative impact on the Company. Further, recurring COVID-19 outbreaks, including outbreaks caused by different virus variants, could have the potential to impact the Company and its future results of operations, cash flows and financial position.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company described its significant accounting policies in Note 2 of the notes to consolidated financial statements for the year ended December 31, 2022 included in its 2022 Form 10-K. During the three-months ended March 31, 2023, there were no significant changes to those accounting policies.

Recent Accounting Pronouncements Not Yet Adopted
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) of Equity Securities Subject to Contractual Sale Restrictions. The new guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The guidance is required to be adopted by January 1, 2024, and we do not anticipate the adoption of this will have a material impact on our consolidated financial statements or notes to the consolidated financial statements.
NOTE 3. REVENUE RECOGNITION
The Company earns revenue from our capitated arrangements with health plan payers and other revenue arrangements. Other revenue is comprised of ancillary fees earned under contracts with certain managed care organizations for the provision of certain care coordination and care management services; license subscription and fees; and fee-for- service revenue. Both our capitated and fee-for-service revenue generally relate to contracts with patients in which our performance obligation is to provide and/or manage healthcare services to the patients. Revenues are recorded during the period our obligations to provide healthcare services are satisfied as noted below within each service type.
Our care coordination services include a single performance obligation to stand ready to provide care coordination services to patients, which constitutes a series of distinct service increments. Payments received are recognized in other revenue ratably over the length of contract terms and are refundable on a pro rata basis to Humana if the Company ceases
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to provide services at the centers within the length of the term specified in the contracts. Under our care management services, we have a single performance to stand ready to provide care management services, which constitutes a series of distinct service increments.
The Company additionally generates revenue by providing subscription licenses to its customers to access its eConsult platform, as well as providing integration, training and other ad-hoc services. We have identified the performance obligation to be standing ready to provide access to the eConsult platform. Subscription license revenue is recognized when the performance obligation is met over time by either the straight-line method or when services are performed over the terms of the applicable contract.
Capitated Revenue and Accounts Receivable
The Company has agreements in place with the payors listed below, and payor sources of capitated revenue for each period presented were as follows:
Three-Months Ended March 31,
20232022
Humana32 %32 %
Wellcare/Meridian13 %16 %
Other55 %52 %
Medicare Part D comprised 2% of capitated revenues for the three-months ended March 31, 2023 and March 31, 2022. Medicare Part D comprised 3% of medical claims expense for the three-months ended March 31, 2023 and 2% for the three-months ended March 31, 2022.
For the three-months ended March 31, 2023 and 2022, respectively, we estimate that we will receive an additional $69.1 million and $49.2 million for acuity-related adjustments to be received in subsequent periods. Under our capitated revenue arrangements, we receive a fixed fee per patient, per month ("PPPM") for services. In certain contracts, PPPM fees also include adjustments for items such as performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. There were no material PPPM adjustments related to performance incentives/penalties for quality-related metrics for the three-months ended March 31, 2023 and March 31, 2022.
Other Revenue
The composition of other revenue for each period was as follows ($ in millions):
Three-Months Ended March 31,
20232022
Care coordination and care management services$2.5 $1.7 
License subscription and other fees2.6 3.1 
Fee for service3.7 2.9 
Total other revenue$8.8 $7.7 
As of March 31, 2023 and December 31, 2022, the Company’s contract liabilities related to the Humana care coordination payments totaled $36.3 million and $37.6 million, respectively. The short-term portion is recorded in other liabilities and the long-term portion is included in other long-term liabilities in the accompanying condensed consolidated balance sheets. As of March 31, 2023 and December 31, 2022, we recorded $7.0 million and $7.0 million of short-term contract liabilities, respectively, and $29.3 million and $30.6 million of long-term contract liabilities, respectively.
NOTE 4. FAIR VALUE MEASUREMENTS AND INVESTMENTS
Fair Value Measurements
In determining the fair value of financial assets and liabilities, the Company utilizes market data or other assumptions that it believes market participants would use in pricing the asset or liability in the principal or most advantageous market and adjusts for non-performance and/or other risks associated with the Company as well as
12
counterparties, as appropriate. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:
Level 1 – Valuations based on unadjusted quoted prices which are available in active markets for identical assets or liabilities accessible at the measurement date.
Level 2 – Valuations with inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Valuations with unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis ($ in millions):
Fair Value Measurements as of March 31, 2023 using:Fair Value Measurements as of December 31, 2022 using:
Level 1Level 2Level 3Level 1Level 2Level 3
Marketable debt securities:
Commercial paper$75.4 $— $— $88.4 $— $— 
U.S. Treasury obligations— 18.5 — — 4.9 — 
Corporate bonds— 99.7 — — 158.1 — 
Asset-backed securities— 3.5 — — 14.3 — 
Other— 28.9 — — 22.0 — 
Total financial assets$75.4 $150.6 $— $88.4 $199.3 $— 
The Company measures the fair value of its corporate bonds, U.S. treasury obligations and asset-backed securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value.
The fair value of the Company's Convertible Senior Notes was $906.9 million and $702.0 million as of March 31, 2023 and December 31, 2022, respectively, and classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices in an inactive market on the last day in the reporting period. The carrying value of the Convertible Senior Notes was $907.0 million and $905.8 million as of March 31, 2023 and December 31, 2022, respectively, which is net of unamortized debt issuance and offering costs.
The carrying value of the Company's Term Loan was $98.2 million and $72.8 million as of March 31, 2023 and December 31, 2022, respectively, which is net of debt issuance costs, and approximates fair value as the variable interest rate re-prices frequently. The fair value of the Term Loan is classified within Level 2 of the fair value hierarchy. For more information about the Convertible Senior Notes and Term Loan, see Note 8, “Long-Term Debt.”
During the three-months ended March 31, 2023 and 2022, there were no transfers between Levels 1, 2 and 3.
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Investments
As of March 31, 2023 and December 31, 2022, the Company’s marketable debt securities classified as available-for-sale were as follows ($ in millions):
March 31, 2023December 31, 2022
Amortized costGross unrealized gains (losses)Fair valueAmortized costGross unrealized gains (losses)Fair value
Marketable debt securities:
Commercial paper$75.4 $— $75.4 $88.5 $(0.1)$88.4 
U.S. Treasury obligations18.5 — 18.5 4.9 0.0 4.9 
Corporate bonds100.5 (0.8)99.7 160.0 (1.9)158.1 
Asset-backed securities3.5 — 3.5 14.4 (0.1)14.3 
Other28.9 — 28.9 22.1 (0.1)22.0 
Total marketable debt securities$226.8 $(0.8)$226.0 $289.9 $(2.2)$287.7 
These investments in marketable debt securities carry maturity dates of less than five years from the date of purchase. The net realized gains and losses were immaterial during the three-months ended March 31, 2023 and 2022. We do not intend to sell these investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis. We did not record an allowance for credit losses as of March 31, 2023 or December 31, 2022 as no losses were determined to be caused by credit losses.
NOTE 5. BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS
Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $158.0 million and $158.0 million at March 31, 2023 and December 31, 2022, respectively. All goodwill recorded in the condensed consolidated balance sheets is assigned to the Oak Street Health, Inc. reporting unit, which had a negative carrying value as of March 31, 2023 and December 31, 2022.
Intangible assets with a finite useful life continue to be amortized over their useful lives. Gross intangible assets amounted to $12.5 million and $12.5 million at March 31, 2023 and December 31, 2022, respectively. Accumulated amortization related to intangible assets amount to $3.8 million and $3.4 million at March 31, 2023 and December 31, 2022, respectively. The Company recorded amortization expense of $0.4 million and $0.4 million for the three-months ended March 31, 2023 and 2022, respectively.
The remaining weighted average amortization period of finite-lived intangible assets is 5.3 years. The remaining estimated future amortization expense by year, as of March 31, 2023, is presented in the following table:
(in millions)
2023$1.7 
20241.7
20251.7
20261.7
20271.7
Thereafter0.2
Estimated aggregate future intangible asset amortization$8.7 
NOTE 6. LEASES
The components of lease expense for the Company’s operating leases were as follows for the three-months ended March 31, 2023 and March 31, 2022 ($ in millions):
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Three-Months Ended March 31,
20232022
Operating lease cost$13.8 $7.0 
Variable lease cost3.7 6.0 
Total lease cost$17.5 $13.0 
The Company entered into operating leases that resulted in $6.7 million of right-of-use assets in exchange for operating lease obligations for the three-months ended March 31, 2023. The Company entered into operating leases that resulted in $22.7 million of right-of-use assets in exchange for operating lease obligations for the three-months ended March 31, 2022.
The weighted-average remaining lease term and discount rate for operating lease liabilities included in the condensed consolidated balance sheets are as follows:
March 31, 2023December 31, 2022
Weighted-average remaining lease term (in years)8.68.7
Weighted-average discount rate4.73 %4.59 %
The table below presents the future minimum lease payments under the non-cancelable operating leases as of March 31, 2023 ($ in millions):
2023$37.8 
202455.3 
202555.8 
202656.8 
202756.7 
202855.8 
Thereafter176.2 
Total lease payments494.4 
Less: imputed interest(119.7)
Total operating lease liabilities$374.7 
Reported as:
Operating lease liabilities, current (1)24.7 
Operating lease liabilities, noncurrent350.0 
Total operating lease liabilities$374.7 
(1) Included in other liabilities on the condensed consolidated balance sheet
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NOTE 7. LIABILITY FOR UNPAID CLAIMS
Activity within liabilities for unpaid claims was as follows for the three-months ended ($ in millions):
March 31,
20232022
Balance, beginning of period$850.3 $556.3 
Incurred health care costs:  
Current year530.5 377.7 
Prior years(8.3)0.8 
Total claims incurred522.2 378.5 
Claims paid:  
Current year(57.4)(32.2)
Prior years(254.0)(268.0)
Total claims paid(311.4)(300.2)
Adjustments to other claims-related liabilities1.1 1.3 
Balance, end of period$1,062.2 $635.9 
We assess the profitability of our managed care capitation arrangements to identify contracts where current operating results or forecasts indicate probable future losses. If anticipated future variable costs exceed anticipated future revenues, a premium deficiency reserve is recognized. No material premium deficiency reserves were recorded as of March 31, 2023 and December 31, 2022.
NOTE 8. LONG-TERM DEBT
The following table is a summary of the Company's indebtedness as of March 31, 2023 and December 31, 2022 ($ in millions):
March 31, 2023December 31, 2022
Liability component:
Convertible Senior Notes Principal$920.0 $920.0 
Term Loan Principal100.0 75.0 
Total Principal1,020.0 995.0 
Less: Convertible Senior Notes debt issuance costs, net of amortization(13.0)(14.2)
Less: Term Loan debt issuance costs, net of amortization(1.8)(2.2)
Total debt issuance costs, net of amortization(14.8)(16.4)
Net carrying amount$1,005.2 $978.6 
Equity component recorded at issuance:
Capped call transactions$123.6 $123.6 
See Note 13 for further discussion of impact of the Merger that was consummated on May 2,2023 on the Company's debt balances as of March 31, 2023.
Term Loan Facility

On September 30, 2022, the Company and certain of its subsidiaries entered into a Loan Agreement with Hercules Capital, Inc., as administrative and collateral agent and lender, and Silicon Valley Bank ("SVB") and the other lenders from time to time parties thereto. The Loan Agreement provides the Company with a secured term loan facility of up to $300.0 million (the "Term Loan Facility") to be funded in five committed tranches, which each tranche of term loans (collectively, the "Term Loans") available to be drawn at the Company’s option during the specified time period. As required under the Loan Agreement, at the closing of the Loan Agreement on September 30, 2022 ("the Closing"), the Company borrowed $75.0 million under Tranche A and borrowed an additional $25.0 million under Tranche A as of March 31, 2023. Under Tranche B (which became available on the Closing until December 15, 2023), the Company may borrow up to $50.0
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million in $25.0 million increments. Under Tranche C (which will become available on January 1, 2024 and remain available until June 30, 2024), the Company may borrow up to $50.0 million in $25.0 million increments. Under Tranche D (which will become available on the earlier of (a) the date on which Tranche C is fully drawn and (b) July 1, 2024, and remain available until December 15, 2024), the Company may borrow up to $75.0 million in $25.0 million increments. Under Tranche E (which became available on the Closing and will remain available until June 1, 2025), the Company may borrow up to $25.0 million subject to the approval of the individual lender. If the Company does not elect to draw the entire principal amount available under the Tranche B, C or D during the applicable drawdown period, then any such undrawn portion will be added to the aggregate principal amount available under Tranche E. The Company's obligations under the Term Loan Facility are secured by a perfected security interest in substantially all of the assets of the Company, subject to certain limitations and exceptions. The Term Loan Facility is scheduled to mature on October 1, 2027, subject to a springing maturity date of September 1, 2025 if, prior to June 1, 2025, the Company’s Convertible Senior Notes have not been (i) converted into equity interests of the Company, (ii) amended such that the scheduled maturity date of the Convertible Senior Notes is at least 180 days after the initial maturity date of the tranches of the Term Loans then in effect, or (iii) fully redeemed and extinguished.
The Term Loans bear interest at a rate equal to the greater of either 7.95% or the prime rate (as defined in the Loan Agreement) plus 2.45% per annum. In addition, the principal balance of the Term Loans bear “payment-in-kind” interest at the rate of 1.00% per annum (“PIK Interest”), which PIK Interest is added to the outstanding principal balance of the Term Loans and increases the outstanding principal balance of the Term Loans on each payment date. In addition, an end-of-term charge equal to 4.95% of the aggregate original principal amount of the Term Loans, due on the earlier of the maturity date of the Term Loans or the repayment of the Term Loans, is payable by the Company. Interest payments on the Term Loans are due on the first day of each month.
Borrowings under the Term Loan Facility may be voluntarily prepaid in minimum increments of $25.0 million, subject to a prepayment fee equal to (i) 2.00% of the amount prepaid, if the prepayment occurs during the first year following the Closing, (ii) 1.00% of the amount prepaid, if the prepayment occurs during the second year following the Closing, and (iii) 0.50% of the amount prepaid, if the prepayment occurs during the third year following the Closing. There is no prepayment fee, penalty or premium applicable to voluntary prepayments made by the Company on or after the fourth year following the closing.
At March 31, 2023, the outstanding aggregate balance of the Term Loan, net of debt issuance costs was $98.2 million.
The Loan Agreement contains customary affirmative and negative covenants, including a requirement that the Company maintain all of its operating and deposit accounts with Silicon Valley Bank ("SVB"). In addition, beginning on the earlier of (i) the reporting deadline of the Company’s fourth quarter 2023 financial statements under the Loan Agreement and (ii) the date at which more than $100.0 million in aggregate principal (excluding any paid-in-kind interest) is outstanding under the Term Loan Facility, the Company is required to maintain a specified trailing twelve-month platform contribution (as defined in the Loan Agreement), with the applicable platform contribution increasing over time and as the Company’s borrowings under the Term Loan Facility increase. At March 31, 2023, the financial covenant was not yet in effect.
On March 10, 2023, the California Department of Financial Protection and Innovation took possession of and closed SVB, appointing the Federal Deposit Insurance Corporation (“FDIC”) as receiver. As receiver, the FDIC transferred all deposits and substantially all assets of the former SVB to a newly created "bridge bank" (Silicon Valley Bridge Bank, N.A.). On March 16, 2023, in light of the uncertainty surrounding SVB and its ability to continue operations, the Company transferred certain cash deposits from SVB bridge bank to other financial institutions. On April 4, 2023, the Company entered into a Default Waiver and First Amendment (the “Amendment”) to the Loan Agreement. Among other matters, the Amendment provides a waiver of any potential default under the Loan Agreement. The Company was in compliance with all of the applicable covenants under the Loan Agreement as of March 31, 2023. Refer to Note 13 for more detailed information.
Convertible Senior Notes
On March 16, 2021, the Company issued, at par value, $920.0 million aggregate principal amount of 0% Convertible Senior Notes, including $120.0 million in aggregate principal amount pursuant to the option we granted to the initial purchasers to purchase additional convertible senior notes, which was exercised in full in March 2021. Total proceeds received by the Company from the sale of the Convertible Senior Notes, net of debt issuance and offering costs of $22.1 million, were $897.9 million. The Company used $123.6 million of the net proceeds to pay for the cost of the capped call transactions (see discussion on capped call transactions further below).
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The Convertible Senior Notes are governed by an indenture (“Indenture”), dated as of March 16, 2021, between the Company and U.S. Bank National Association, as trustee. Under the Indenture, the Convertible Senior Notes are general senior, unsecured obligations of the Company and will mature on March 15, 2026, unless earlier redeemed, repurchased or converted. The Convertible Senior Notes are equal in right of payment with the Company’s future senior, unsecured indebtedness and structurally subordinated to all indebtedness and liabilities of the Company’s subsidiaries.
Pursuant to the terms of the Indenture, the Convertible Senior Notes are convertible at the option of the holders, or may be called by the Company for redemption, upon the occurrence of certain circumstances. For additional information on the conversion provisions included in the Indenture, please see Note 8: Long-Term Debt, of the notes to the consolidated financial statements included in our 2022 Form 10-K. Based upon the reported sales price of our Common Stock during the last 30 consecutive trading days of the first quarter of 2023, the Convertible Senior Notes were not convertible by the holders on March 31, 2023 and will not be convertible until December 15, 2025.
The Company recognized $1.1 million and $1.1 million related to the amortization of debt issuance and offering costs in interest expense, net on the condensed consolidated statements of operations related to the Convertible Senior Notes for the three-months ended March 31, 2023 and 2022, respectively. The effective interest rate for both periods was 0.49%.
Capped Call Transactions
Concurrently with the pricing of the Convertible Senior Notes, the Company entered into convertible note hedge transactions (the “capped call transactions”) with six initial purchasers or their respective affiliates and other financial institutions (the “option counterparties”) to mitigate the impact of potential economic dilution to our Common Stock upon conversion of the Convertible Senior Notes. The capped calls were purchased for $123.6 million from the net proceeds from the issuance of the Convertible Senior Notes and have an initial strike price of approximately $79.16 per share, which corresponds to the initial conversion price of the Convertible Senior Notes. The capped call transactions cover, subject to customary adjustments, the number of shares of Common Stock initially underlying the Convertible Senior Notes. The capped call transactions are expected to offset the potential dilution to the Company’s Common Stock upon any conversion of Convertible Senior Notes, with such reduction and/or offset subject to a cap initially equal to $138.8750 per share.
The capped call transactions will expire on March 12, 2026. The capped call transactions are separate transactions and are not part of the terms of the Convertible Senior Notes.
The capped call transactions cover, subject to anti-dilution adjustments, approximately 11,622,176 shares of the Company’s Common Stock. The capped call transactions are subject to either adjustment or termination upon the occurrence of specified extraordinary and disruption events affecting the Company.
NOTE 9. STOCK-BASED COMPENSATION
2020 Omnibus Incentive Plan
On August 5, 2020, the Company’s Board of Directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan,”). Under the 2020 Plan, employees, consultants and directors of the Company and our affiliates that perform services for us are eligible to receive awards. The 2020 Plan provides for the grant of incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), stock appreciation rights, restricted stock awards (“RSAs”), performance awards, other share-based awards (including restricted stock units (“RSUs”)) and other cash-based awards. The maximum number of shares available for issuance under the 2020 Plan may not exceed 62,590,091 shares (subject to annual increases as approved by the Board of Directors).
Stock Options Activity, excluding PSOs
Stock options granted by the Company generally vest over four years with 25% of the option shares vesting each year. Options generally expire ten years from the date of the grant.
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The following is a summary of stock option activity, excluding PSOs, as of and for the three-months ended March 31, 2023 ($ in millions):
Number of Options Weighted-Average Exercise PriceWeighted-Average Remaining
Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2022
15,532,081$21.28 7.73$15.2 
Granted—— 
Exercised(952,273)20.92 
Cancelled(117,167)24.76 
Outstanding, March 31, 2023
14,462,641$21.27 7.55$249.4 
Options exercisable as of March 31, 2023
9,240,178$21.36 7.41$154.8 
The aggregate intrinsic value of options exercised in each of the three-months ended March 31, 2023 and 2022 was $21.0 million, and $(1.6) million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the option and the closing price of the Company’s Common Stock on the date of exercise. The fair value of options granted for the three-months ended March 31, 2022 was $12.5 million. No options were granted during the three-months ended March 31, 2023.
Performance Stock Options Activity

In February 2022, the Company granted PSOs to certain of its executives, with 50% of the option shares vesting at the end of year two and the remaining 50% of the option shares vesting at the end of year three, subject in each case to the satisfaction of certain performance-based conditions. The PSOs generally expire ten years from the date of the grant. The fair value of performance stock options granted for the three-months March 31, 2022 was $25.8 million. No performance stock options were granted during the three-months ended March 31, 2023.

The following is a summary of PSO activity as of and for the three-months ended March 31, 2023 ($ in millions):
Number of OptionsWeighted-Average Exercise PriceWeighted-Average Remaining
Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 20224,356,234 $17.45 8.95$19.0 
Granted— — 
Exercised— — 
Adjustments7,000 — 
Cancelled(18,000)21.96 
Outstanding, March 31, 20234,345,234$17.43 9.1$92.3 
Options exercisable as of March 31, 2023— $— — — 
RSU Activity

RSUs granted generally vest ratably over four years. The following is a summary of RSU transactions as of and for the three-months ended March 31, 2023:

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Unvested SharesGrant Date Fair Value
Unvested, December 31, 20222,528,388 $21.53 
Granted2,747,183 33.19 
Vested(452,824)19.65 
Canceled and forfeited(99,991)20.46 
Unvested, March 31, 20234,722,756 $28.48 
PSU Activity

The Company granted PSUs to certain of its employees during the second quarter of 2022 that vested in April 2023. The following is a summary of PSU activity as of and for the three-months ended March 31, 2023:

Unvested SharesGrant Date Fair Value
Unvested, December 31, 2022538,213 $28.03 
Granted11,663 — 
Vested(27,796)44.97 
Canceled and forfeited(19,719)22.13 
Unvested, March 31, 2023502,361 $44.97 
RSA Activity
The RSAs were granted as part of the pre-IPO conversion. The following is a summary of RSA transactions as of and for the three-months ended March 31, 2023:
Unvested Shares Grant Date Fair Value
Unvested, December 31, 2022
5,943,100 $13.54 
Granted— — 
Vested(801,201)2.34 
Canceled and forfeited(58,011)19.97 
Unvested, March 31, 2023
5,083,888 $15.31 
Employee Stock Purchase Plan
On August 5, 2020, the Board of Directors adopted, and the OSH LLC’s and OSH MH LLC’s majority unitholders approved, the 2022 Employee Stock Purchase Plan (the “ESPP”). The ESPP is more fully described in Note 13 to the consolidated financial statements included in our 2022 Form 10-K.
During the three-months ended March 31, 2023 and 2022, 95,207 shares and 63,284 shares, respectively, were purchased under the ESPP.
Stock-Based Compensation Expense
The following table is a summary of stock-based compensation expense by function ($ in millions):
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Three-Months Ended March 31,
20232022
Cost of care, excluding depreciation and amortization$2.3 $0.6 
Sales and marketing1.00.6
Corporate, general and administrative21.538.2
Total$24.8 $39.4 
As of March 31, 2023, the Company had approximately $152.0 million in unrecognized compensation expense related to all non-vested awards (RSAs, ISOs, PSO, PSUs and RSUs) that will be recognized over the weighted-average period of 3.07 years.
NOTE 10. COMMITMENTS AND CONTINGENCIES
Contingencies
The Company is presently, and from time to time, subject to various claims, investigations, suits and other legal proceedings arising in the ordinary course of business. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and its potential effects may change in the future. In accordance with applicable accounting standards, the Company establishes an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable,
Uncertainties
The healthcare industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not limited to, matters such as licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statues and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with imposition of significant fines and penalties, as well as significant repayments for patient services billed.
On November 1, 2021, the Company received a civil investigative demand (“CID”) from the United States Department of Justice. According to the CID, the Department of Justice is investigating whether the Company may have violated the False Claims Act, 31 U.S.C. §§ 3729-3722. The CID requests certain documents and information related to the Company’s relationships with third-party marketing agents and related to the Company’s provision of free transportation to federal health care beneficiaries and requests information and documents related to such matters. We are continuing to cooperate with the Department of Justice in response to the CID and believe we have complied with all of the current information requests. We are currently unable to predict the outcome of this investigation. Additionally, the Company cannot reasonably estimate the possible loss or range of loss that may result from this action. Regardless of the outcome, this inquiry has the potential to have an adverse impact on us due to any related defense and settlement costs, diversion of management resources and other factors.
On January 10, 2022, Reginald T. Allison, individually and on behalf of all others similarly situated, filed a putative class action lawsuit against the Company, Michael Pykosz, our Chief Executive Officer and also a member of our Board of Directors, and Timothy Cook, our Chief Financial Officer, in the United States District Court for the Northern District of Illinois (Case No. 1:22-cv-00149). On March 25, 2022, Central Pennsylvania Teamsters Pension Fund – Defined Benefit Plan, Central Pennsylvania Teamsters Pension Fund – Retirement Income Plan 1987, and Boston Retirement System (collectively, the “Northeast Pension Funds”) were appointed as the lead plaintiffs in the case. On May 25, 2022, the Northeast Pension Funds along with an additional named plaintiff, the City of Dearborn Police & Fire Revised Retirement System, filed their consolidated amended and restated complaint (the “Amended Complaint”), adding two of the Company's largest stockholders and members of the Company's Board of Directors as defendants.
Plaintiffs allege that the Company and certain of its executive officers made false and/or misleading statements about patient acquisition tactics that purportedly violated the False Claims Act and U.S. federal Anti-Kickback Statute, and are purportedly the subject of the CID discussed above. The Amended Complaint includes two categories of claims: (1) claims under the Securities Exchange Act of 1934 based on allegedly misleading public statements throughout the class period of August 6, 2020 through November 8, 2021 (the “Exchange Act Claims”), and (2) claims under the Securities Act
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of 1933 based on allegedly misleading statements in the registration statements and prospectuses accompanying the IPO and secondary public offerings (the “Securities Act Claims”). The Exchange Act claims are asserted against the Company, Michael Pykosz and Timothy Cook and also against certain stockholders of as “control persons.” The Securities Act Claims are asserted against the same defendants as well as the underwriters of the Company’s public offerings, and the members of our Board of Directors who signed the registration statements related to such public offerings. The Amended Complaint seeks damages, interest, costs, attorneys’ fees and other unspecified equitable relief.

On July 25, 2022, the defendants filed a consolidated motion to dismiss the Amended Complaint. On September 26, 2022, the plaintiffs' opposition to that motion to dismiss was filed, and the defendants reply to that opposition was filed on October 26, 2022. On February 10, 2023, the Court ruled on the motion to dismiss, granting the Company's' motions to dismiss with respect to the plaintiffs' section 12(a)(2) claim and section 11 claim based on misrepresentations from the May 2021 secondary public offering, and denying the remainder of the motion. Additionally, three stockholders, Joseph Miller, the Hialeah Employees' Retirement System and the Employees Retirement System of the City of St. Louis each filed, on November 7, 2022, January 5, 2023 and February 2, 2023, respectively, derivative actions in the Delaware Court of Chancery against certain of our officers and each of the members of our Board of Directors (collectively, “Defendants”) principally alleging breach of fiduciary duties and unjust enrichment. Generally, the complaint in each derivative action concerns those Defendants’ duties relating to certain outreach practices the Company allegedly engaged in and its patient transportation program, which are also matters that are the subject of the CID. These cases have all been consolidated and stayed.

The Company intends to continue to defend these claims vigorously. Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for success on the merits, the Company cannot reasonably estimate the possible loss or range of loss that may result from this action.
NOTE 11. VARIABLE INTEREST ENTITIES
The Physician Groups, or affiliated physician practice organizations, were established to employ healthcare providers, contract with managed care payors and to deliver healthcare services to patients in the markets that the Company serves.
The Company evaluated whether it has a variable interest in the Physician Groups, whether the Physician Groups are VIEs and whether the Company has a controlling financial interest in the Physician Groups. The Company concluded that it has variable interests in the Physician Groups on the basis of its Administrative Service Agreement (“ASA”) which provides for reimbursement of costs and a management fee payable to the Company from the Physician Groups in exchange for providing management and administrative services which creates risks and a potential return to the Company. The Physician Group’s equity at risk, as defined by U.S. GAAP, is insufficient to finance its activities without additional support, and, therefore, the Physician Groups are considered VIEs.
The tables below illustrate the VIE assets and liabilities and performance for the Physician Groups as of and for the periods ended ($ in millions):
March 31, 2023December 31, 2022
Total assets$1,316.2 $1,002.0 
Total liabilities1,140.6 930.8 
Three-Months Ended March 31,
20232022
Total revenues$749.6 $511.4 
Medical claims expense522.1 378.5 
Cost of care68.0 47.6 
Total operating expenses$590.1 $426.1 
There are no restrictions on the Physician Groups’ assets or on the settlement of its liabilities. The assets of the Physician Groups can be used to settle obligations of the Company. The Physician Groups are included in the Company’s obligated group; thus, creditors of the Company have recourse to the assets owned by the Physician Groups. There are no liabilities for which creditors of the Physician Groups do not have recourse to the general credit of the Company. There are no restrictions placed on the retained earnings or net income of the Physician Groups with respect to potential dividend payments.

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NOTE 12. NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net loss per common share for the three-months ended March 31, 2023 and 2022 ($ in millions).
Three-Months Ended March 31,
20232022
Numerator:
Net loss$(44.2)$(96.7)
Less: Net income/(loss) attributable to non-controlling interests1.3 (0.2)
Net loss attributable to Oak Street Health, Inc.(45.5)(96.5)
Denominator:  
Weighted average common shares outstanding - basic and diluted238,093,465 225,645,420 
Net loss per share – basic and diluted$(0.19)$(0.43)
The Company’s potentially dilutive securities, which included stock options (including PSOs), unvested RSUs (including PSUs), unvested RSAs, and shares issuable upon conversion of our Convertible Senior Notes, have been excluded from the computation of diluted net loss per share as the effect would reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share was the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated:
Three-Months Ended March 31,
20232022
Stock options18,807,875 19,650,785 
RSUs (including PSUs)5,225,117 2,345,372 
RSAs5,083,888 14,966,634 
Convertible Senior Notes11,622,176 11,622,176 
40,739,056 48,584,967 

NOTE 13. SUBSEQUENT EVENTS
Loan Amendment
On April 4, 2023, the Company entered into an Amendment to the Loan Agreement dated September 30, 2022 with Hercules Capital, Inc. as administrative and collateral agent and lender (the “Agent”), and SVB and the other lenders from time to time parties thereto (collectively with Agent in its capacity as a lender, the “Lenders”).

Among other matters, the Amendment provided a waiver of any potential default under the Loan Agreement related to the Company’s movement of certain cash deposits between financial institutions in March 2023, which were made intentionally by the Company during the recent period of uncertainty surrounding SVB and its ability to continue operations. The Amendment provides that the Company may maintain cash in certain accounts outside of SVB and its affiliates in an aggregate amount not to exceed $65.0 million. We were in compliance with terms of the Amendment as of March 31, 2023.

Delisting and Deregistration

On May 2, 2023, the Merger, as described in Note 1, was consummated. Also, on May 2, 2023, the NYSE filed a notification of removal from listing on Form 25 with the SEC with respect to the delisting and deregistration of the Company’s Common Stock. Our 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. In addition, on May 12, 2023, the Company intends to file with the SEC a Form 15, which, upon filing, will immediately suspend the reporting obligations of the Company under Sections 13(a) and 15(d) of the Exchange Act.

Treatment of Outstanding Debt in Connection with the Merger

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At the Effective Time, CVS Pharmacy repaid and discharged in full the amount outstanding under the Term Loan Facility. All commitments and obligations pursuant to such indebtedness have been terminated in full (other than indemnities and other contingent obligations expressly meant to survive termination).

On May 2, 2023, the Company entered into the first supplemental indenture to the Indenture (the “Supplemental Indenture”) pursuant to which the right to convert each $1,000 principal amount of Convertible Senior Notes into shares of Common Stock was changed to a right to convert such principal amount of Convertible Senior Notes into the Merger Consideration that a holder of a number of shares of Common Stock equal to the Conversion Rate (as defined in the Indenture) immediately prior to the Merger would have owned or been entitled to receive (the “Reference Property”), which Reference Property will be cash in an amount equal to $492.6792 per $1,000 principal amount of Convertible Senior Notes, in accordance with the Indenture, at any time from, and including, the date that the Merger became effective. In addition, the Merger constitutes a Fundamental Change (as defined in the Indenture) under the Indenture, giving the holders of the Convertible Senior Notes the right to require the Company to repurchase their Convertible Senior Notes, subject to the terms and conditions of the therein. Pursuant to the Indenture, the repurchase price for the Convertible Senior Notes will be an amount in cash equal to one hundred percent (100%) of the principal amount of the Convertible Senior Notes (or portions thereof) to be so repurchased, plus accrued and unpaid Special Interest (as defined in the Indenture) thereon to, but excluding, the Fundamental Change Repurchase Date (as defined in the Indenture). At the Effective Time, the capped call transactions were terminated pursuant to the agreements between the Company and each of the bank counterparties to the capped call transactions, with each bank counterparty paying to the Company, on or about May 2, 2023, an amount in cash as agreed between the Company and such bank counterparty.

Treatment of Outstanding Equity-Based Awards in Connection with the Merger

Each outstanding and unexercised option to purchase shares of Common Stock (for the purposes of this Note 13, an “Option”) with an exercise price per share less than $39.00 that was vested prior to the Effective Time or that, as a result of the Merger, became vested, as of the Effective Time (with any performance conditions applicable to such Option determined in accordance with the applicable award agreement as of immediately prior to the Effective Time), was, at the Effective Time, automatically cancelled and converted into the right to receive an amount in cash (without interest and subject to applicable tax withholdings) equal to the product of (i) the number of shares of Common Stock subject to such Option as of immediately prior to the Effective Time and (ii) the excess of $39.00 over the per share exercise price of such Option. At the Effective Time, each outstanding and unexercised Option with an exercise price per share equal to or greater than the $39.00, whether vested or unvested, was automatically cancelled for no consideration.

Each Option that was unvested at the Effective Time and not cancelled pursuant to the provisions described in the preceding paragraph was, at the Effective Time, automatically cancelled and converted into the contractual right to receive a payment in cash (without interest and subject to applicable tax withholdings) equal to the product of (i) the number of shares of Common Stock subject to such Option as of immediately prior to the Effective Time and (ii) the excess of $39.00 over the exercise price per share of such Option (each, a “Converted Option Cash Award”), and each Converted Option Cash Award was subject to the same terms and conditions (including applicable vesting provisions, but excluding exercise provisions) as applied to the corresponding Option immediately prior to the Effective Time and became payable in accordance with the original vesting schedule applicable to the corresponding Option, except that each Converted Option Cash Award provides that the unvested portion, if any, of such Converted Option Cash Award will immediately vest and become payable upon a termination of the holder’s employment or services without “cause” or a resignation by the holder for “good reason” that occurs within the 12-month period following the Effective Time.

Each Oak Street Health restricted stock award ("RSA") that was outstanding as of immediately prior to the Effective Time was, at the Effective Time, automatically assumed by CVS Pharmacy and converted into a corresponding CVS Health restricted stock award (each, an “Assumed RSA”) on the same terms and conditions (including applicable vesting and expiration provisions) as applied to each such RSA immediately prior to the Effective Time, except that each Assumed RSA covers a number of whole shares of CVS Health Common Stock equal to the product of (i) the number of shares of Common Stock underlying such Assumed RSA as of immediately prior to the Effective Time and (ii) the Equity Award Exchange Ratio (as defined below), and such Assumed RSA provides that the unvested portion, if any, of such Assumed RSA will immediately vest and settle upon a termination of the holder’s employment or services without “cause” or a resignation by the holder for “good reason” that occurs within the 12-month period following the Effective Time.

Each Oak Street Health restricted stock unit ("RSU") that was outstanding as of immediately prior to the Effective Time that was vested or, as a result of the Merger, became vested as of the Effective Time (in each case, with any performance conditions applicable to such RSU determined in accordance with the applicable award agreement as of immediately prior to the Effective Time), was, at the Effective Time, automatically cancelled and converted into the right to receive, an amount in cash (without interest and subject to applicable tax withholdings) equal to the product of (i) $39.00 and (ii) the number of shares of Common Stock subject to such RSU as of immediately prior to the Effective Time (a “Cash-Out RSU”).
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Each RSU granted on or after February 7, 2023 that was outstanding and unvested as of the Effective Time was, at the Effective Time, automatically assumed by CVS Pharmacy and converted into a corresponding CVS Health restricted stock unit award (each, an “Assumed RSU Award”) on the same terms and conditions (including applicable vesting and expiration provisions) as applied to each such RSU immediately prior to the Effective Time, except that each Assumed RSU Award covers a number of whole shares of CVS Health Common Stock equal to the product of (i) the number of shares of Oak Street Health Common Stock underlying such RSU as of immediately prior to the Effective Time and (ii) the Equity Award Exchange Ratio.

Each RSU (other than Cash-Out RSUs and RSUs granted on or after February 7, 2023) that was outstanding and unvested as of the Effective Time was, at the Effective Time, automatically cancelled and converted into the contractual right to receive a payment in an amount of cash (without interest and subject to applicable tax withholdings) equal to the product of (i) $39.00 and (ii) the total number of shares of Common Stock subject to such RSU as of immediately prior to the Effective Time (each, a “Converted RSU Cash Award”), and each Converted RSU Cash Award is subject to the same terms and conditions (including time-based vesting) as applied to such RSU immediately prior to the Effective Time and will become payable in accordance with the original vesting schedule applicable to the corresponding RSU, except that each Converted RSU Cash Award provides that the unvested portion, if any, of such Converted RSU Cash Award will immediately vest and become payable upon a termination of the holder’s employment or services without “cause” or a resignation by the holder for “good reason” that occurs within the 12-month period following the Effective Time.

The “Equity Award Exchange Ratio” means the quotient obtained by dividing (i) $39.00 by (ii) the volume weighted average closing sale price (rounded to the nearest cent) of one share of CVS Health Common Stock as reported on the NYSE as reported on Bloomberg L.P. under the function “VWAP” (or, if not reported therein, in another authoritative source mutually selected by the parties) for the 10 consecutive trading days ending on (and including) the date that is two trading days immediately preceding the Effective Time (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events), rounded to the nearest 0.0001.

Pursuant to the Merger Agreement, Oak Street Health took all actions necessary pursuant to the terms of the ESPP to, among other things, ensure each purchase right issued pursuant to the ESPP was fully exercised on the earlier of (x) the scheduled purchase date for such offering period and (y) the date that is no later than five business days prior to the Effective Time (with any participant payroll deductions not applied to the purchase of shares of Oak Street Health Common Stock returned to the participant). The ESPP was terminated effective immediately prior to the Effective Time.

Assumed RSAs and Assumed RSUs

Pursuant to the Merger Agreement, on May 2, 2023 CVS Health filed a registration statement on Form S-8 with respect to the issuance of the shares of CVS Health Common Stock subject to the Assumed RSAs and Assumed RSU Awards that are eligible to be registered on Form S-8.
ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes as well as the section entitled “Risk Factors" included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and the accompanying notes as well as the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2022 Form 10-K.
The discussion contains forward-looking statements about the business, operations and financial performance of the Company based on our current expectations that involves risks, uncertainties and assumptions. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed above in “Forward-Looking Statements,” as well as those discussed under the “Risk Factors” section in this Quarterly Report on Form 10-Q and our 2022 Form 10-K.
This discussion and analysis does not reflect any changes that may become relevant as a result of the Merger and the Company becoming a wholly-owned subsidiary of CVS Health.
Business Overview

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Oak Street Health, Inc. (collectively referred to as “Oak Street Health,” “OSH,” “we,” “us,” “our” or the “Company”) was formed as a Delaware corporation on October 22, 2019 for the purpose of completing a public offering and related restructuring transactions (collectively referred to as the “IPO”) in order to carry on the business of Oak Street Health, LLC (“OSH LLC”) and its affiliates. As the managing member of OSH LLC, Oak Street Health, Inc. operates and controls all of the business affairs of OSH LLC and its affiliates. Prior to May 2, 2023, our Common Stock traded on the NYSE under the ticker symbol “OSH.” On May 2, 2023, the NYSE filed a notification of removal from listing on Form 25 with the SEC with respect to the delisting and deregistration of the Company’s Common Stock. Our shares of Common Stock ceased trading prior to the opening of the market on May 2, 2023 and is no longer listed on the NYSE.
Oak Street Health was designed to provide and manage Medicare-eligible patients’ total healthcare through capitated, value-based arrangements. We created a new care platform because the then-existing primary care infrastructure was not built with the capacity to drive the significant improvements in cost and quality the current health system needs. We decided to focus on the Medicare market due to its size, growth tailwinds and largely clinically cohesive population. We designed our platform to take risk in managing patients’ health below an agreed-upon baseline cost because we believed there was a meaningful opportunity to produce system-wide cost savings by changing where and how patients’ healthcare is delivered. Our platform’s design has included investments in technology and patient-centered, community-based care delivery to create a different and, we believe, better approach to addressing the needs of high-risk Medicare-eligible patients.

As of March 31, 2023, the Company operated 172 centers across 21 states, which provided care for approximately 231,000 patients. We, together with our affiliated physician practice organizations, employ approximately 6,200 team members, including approximately 600 primary care providers. Our operations are organized and reported under one segment.

Merger with CVS Health

On February 7, 2023, the Company entered into the Merger Agreement with an indirect wholly owned subsidiary of CVS Pharmacy, pursuant to which (and subject to the terms and conditions in the Merger Agreement) such subsidiary of CVS Pharmacy will acquire all of the outstanding shares of the Company’s Common Stock in an all-cash transaction, representing an enterprise value of approximately $10.6 billion, structured as a merger of an indirect wholly-owned subsidiary of CVS Pharmacy with and into the Company, with the Company continuing as the surviving corporation.     

At the Effective Time, by virtue of the Merger, each share of our shares of Common Stock issued and outstanding immediately prior to the Effective Time was automatically cancelled, extinguished and converted into the right to receive the Merger Consideration, without interest and less any applicable withholding taxes. In connection with the Merger, the NYSE filed a Form 25 with the SEC regarding the removal of shares of our Common Stock from listing and the withdrawal of the registration of our Common Stock under Section 12(b) of the Exchange Act. Shares of the Company’s Common Stock were suspended from trading on the NYSE prior to the opening of trading on May 2, 2023. The Company intends to file, on May 12, 2023, with the SEC a Form 15, which will immediately suspend the Company's reporting obligations under Sections 13 and 15(d) of the Exchange Act. Accordingly, as a result of the Merger, the Company became an indirect wholly-owned subsidiary of CVS Pharmacy, and as of the Effective Time, the Company no longer existed as a standalone public company.

Other than transaction expenses and related costs associated with the Merger of $6.5 million for the three-months ended March 31, 2023, the terms of the Merger Agreement did not impact our condensed consolidated financial statements.
COVID-19 Update on our Business
On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic. The rapid spread of COVID-19 around the world and throughout the United States altered the behavior of businesses and people. Various policies were implemented by federal, state and local governments in response to the COVID-19 pandemic that caused many people to remain at home and forced the closure of or limitations on certain businesses, as well as suspended elective procedures by health care facilities. The on-going COVID-19 global pandemic disproportionately impacts older adults, especially those with chronic illnesses, which describes many of our patients.
The COVID-19 pandemic has impacted both our per-patient capitated revenue and medical claims expense. Throughout the pandemic, our risk scores for existing Oak Street Health patients have been consistent with our historical experience. New patients in 2021 had lower risk scores than what we would expect based on historical experience, due to a lack of availability of care in 2020 as the healthcare system was inaccessible to non-Oak Street Health patients for several months in 2020 because of local COVID-19 restrictions. As we are able to more completely and accurately document both
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current and new patients’ health conditions, we expect that risk scores will increase to reflect the true severity of these patients’ conditions. It is unknown to us at present how significantly, if at all, this new patient risk score dynamic might impact our business in 2023.

As we are financially responsible for essentially all of the healthcare costs associated with our at-risk patients whether we provide that care or a third party provides that care, we suspect that the healthcare costs of patients infected with COVID-19 will be greater than had COVID-19 not occurred as costs directly related to COVID-19 persist. It is impossible, however, to know what other healthcare issues these patients may have encountered in their pre-COVID-19 lives and whether the COVID-19 costs are, or will be, greater or lesser than the costs these patients would otherwise incur. Because of the COVID-19 related volatility in medical cost data in 2020 and 2021 and the surge in COVID-19 cases at the end of 2021 and the first half of 2022, we do not believe that these periods can serve as a reliable basis for estimating our future performance and do not know what the impact from COVID-19 will be on medical costs in the future. Given these factors, per-patient medical costs may be greater in 2023 than the levels we experienced in our recent historical results. We do believe, however, that the impact of on per-patient revenue and medical claims related to COVID-19 that we expect to experience will not have a materially detrimental effect on our long-term financial performance in future periods.

The COVID-19 pandemic did not have a material impact on our results from operations, cash flows and financial position for the three-months ended March 31, 2023. The COVID-19 pandemic had an impact on our results from operations, cash flows and financial position for the three-months ended March 31, 2022, primarily as a result of an increase in cases in early 2022 due to the Omicron variant. Based upon claims paid to- date, our direct costs related to COVID-19 claims were approximately $102.5 million for the period from March 1, 2020 through March 31, 2023. We estimated that total COVID-19 claims incurred during the three-months ended March 31, 2023 were approximately $2.1 million, which represents a decrease from our direct COVID-19 claims of $10.0 million for the three-months March 31, 2022. Due to the uncertainty of COVID-19 infection and hospitalization rates, we cannot estimate any incremental COVID-19 related costs we may incur in future periods.

We will continue to closely monitor the COVID-19 pandemic and its continued impact on our patients and prospective patients and our business. The ongoing effects of the pandemic, as well as the extent and significance of any future variants, remain unresolved and could continue for an extended period of time. Even as the COVID-19 pandemic subsides, disruptions caused by the pandemic, including labor shortages, supply chain disruptions, and inflationary pressures, may continue and could, in turn, have a negative impact on the Company. Further, recurring COVID-19 outbreaks, including outbreaks caused by different virus variants, could have the potential to impact the Company and its future results of operations, cash flows and financial position.

The full extent to which the COVID-19 pandemic has and will continue to directly or indirectly impact our business, future results of operations and financial condition will depend on factors that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19 including the impact of new variants of the virus, the actions taken to contain it or treat its impact and the economic impact on our markets. Such factors include, but are not limited to, the scope and duration of stay-at-home practices and business closures and restrictions, rate and effectiveness of vaccinations in the U.S., government-imposed or recommended suspensions of elective procedures, and expenses required for supplies and personal protective equipment. Because of these and other uncertainties, we cannot estimate the length or severity of the impact of the pandemic on our business. Furthermore, because of our business model, the full impact of the COVID-19 pandemic may not be fully reflected in our results of operations and overall financial condition until future periods. We will continue to closely evaluate and monitor the nature and extent of these potential impacts to our business, results of operations and liquidity.

The US Department of Health and Human Services has announced that the coronavirus public health emergency will conclude on May 11, 2023. As part of the continuous coverage requirement, as part of the public health emergency, Medicaid recipients were neither disenrolled, nor required to complete the annual redetermination process that is typically necessary to verify ongoing eligibility. The Medicaid redetermination process restarted on April 1, 2023.

For additional information on the various risks posed by the COVID-19 pandemic, please see the “Risk Factors” section included in our 2022 Form 10-K.
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Key Factors Affecting Our Performance

The following are the key factors that have historically affected the Company’s performance. Following the Merger, these factors will continue to be important considerations, but the key factors impacting the Company will change and new factors will become relevant as the Company becomes integrated within the CVS Health organization.
•Adding New Patients in Existing Centers: Our ability to add new patients is a key indicator of the market’s recognition of the attractiveness of the Oak Street Platform, both to our patients and Medicare Advantage ("MA") plan partners. As we add patients to our existing centers, we expect these patients to contribute incremental economics to Oak Street Health as we leverage our fixed cost base at each center. We grow our patient base through our own internal sales and marketing efforts as well as assignments from our MA plan partners. We grew our patient base from approximately 175,000 patients as of March 31, 2022 to approximately 231,000 as of March 31, 2023.
•Expand our Center Base within Existing and New Markets: We served approximately 231,000 patients as of March 31, 2023. We believe there is opportunity to expand in our existing markets through the acquisition of new patients to existing centers and addition of new centers.
•Contract with Payors: Our economic model relies on our capitated arrangements with payors and CMS, which manage and market MA plans across the United States. These existing contracts and relationships and our payors’ understanding of the value of our model reduces the risk of entering into new markets as we typically have payor contracts before entering a new market. Maintaining, supporting, and growing these relationships, particularly as we enter new geographies, is critical to our long-term success.
•Effectively Manage the Cost of Care for Our Patients: The capitated nature of our contracts with payors requires us to prudently manage the medical expense of our patients. Our care model focuses on leveraging the primary care setting as a means of avoiding costly downstream healthcare costs, such as acute hospital admissions. Our patients, however, retain the freedom to seek care at emergency rooms or hospitals; we do not restrict their access to care beyond the limits of their MA plan. Therefore, we are liable for potentially large medical claims should we not effectively manage our patients' health.
•Center-Level Contribution Margin: Due to the significant fixed costs associated with operating and managing our centers and the increases we experience in patient contribution on a per-patient basis the longer a patient is part of the Oak Street Platform, we generate significantly better center-level contribution margins (defined as (i) total revenues generated within our centers, excluding Medicare Part D revenue minus (ii) the sum of (a) medical claims expense, excluding Medicare Part D related expenses, and (b) cost of care, excluding depreciation and amortization) as the patient base within our centers increases and matures and our costs decrease as a percent of revenue. As a result, the value of a center to our business increases over time. As we add patients and document their health conditions, we are able to more accurately assess risk scores. We expect close monitoring will result in higher risk scores, which will yield higher revenue from increased capitated payments.
•Seasonality to our Business: Our operational and financial results, including at-risk patient growth, per-patient revenue, and medical costs, will experience some variability depending upon the time of year in which they are measured. We typically experience the largest portion of our at-risk patient growth during the first quarter, when plan enrollment selections made during the prior Annual Enrollment Period (“AEP”) from October 15th through December 7th of the prior year take effect. Our per-patient revenue will generally decline over the course of the year. As the year progresses, our per-patient revenue declines as new patients join us typically with less complete or accurate documentation (and therefore lower risk-adjustment scores) and our attrition skews towards our higher-risk (and therefore greater revenue) patients. Finally, medical costs will vary seasonally depending on a number of factors, including the weather which can be a driver of certain illnesses, such as the influenza virus. We would
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therefore expect to see higher levels of per-patient medical costs in the fourth quarter. Medical costs also depend upon the number of business days in a period as periods with fewer business days will have lower medical costs all else equal.
Executive Summary
The following table presents key financial statistics for the three-months ended March 31, 2023 and 2022:
Three-Months Ended March 31,
(dollars in millions)20232022
Centers172 140 
Total patients231,000 175,000 
At-risk177,000 124,000 
Fee-for-service54,000 51,000 
Total revenues$752.0 $513.8 
Loss from operations1
$(43.4)$(91.1)
Net loss1
$(44.2)$(96.7)
Patient contribution (Non-GAAP)2
$219.7 $126.7 
Platform contribution (Non-GAAP)2
$101.6 $39.8 
Adjusted EBITDA (Non-GAAP)2
$0.5 $(42.4)
_______________________________________
1Includes stock-based compensation expense as shown in the table in the Results of Operations section below.
2See “Non-GAAP Reconciliations” below for reconciliations to the most directly comparable financial measures calculated in accordance with GAAP and related disclosures.
Centers
We define our centers as those primary care centers open for business and attending to patients at the end of a particular period. Our centers are leased or licensed by Oak Street Health MSO, LLC or an affiliated entity and, pursuant to the terms of certain contractual relationships between Oak Street Health MSO, LLC and our affiliated medical practices, made available for use by the medical practices in the provision of primary care services.
Total Patients
Total patients includes both at-risk MA and ACO Reach patients (those patients for whom we are financially responsible for their total healthcare costs) as well as fee-for-service Medicare patients (those patients for whom our affiliated medical groups submit claims to the federal government for direct reimbursement under the Medicare program or to MA plans with which we do not have value-based arrangements). We define our total at-risk patients as at-risk patients who have selected one of our affiliated medical groups as their provider of primary care medical services or have been aligned under the ACO Reach program as of the end of a particular period. We define our total fee-for-service Medicare patients as fee-for-service Medicare patients who come to one of our centers for medical care at least once per year. A fee-for-service patient continues to be included in our patient count until the earlier to occur of (a) more than one year since the patient’s last visit, (b) the patient communicates a desire to stop receiving care from us or (c) the patient passes away.
Non-GAAP Financial Measures
We utilize certain financial measures that are not calculated based on GAAP. 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 financial measures used by other companies, including our competitors.
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To supplement our consolidated financial statements presented on a GAAP basis, we disclose the following non-GAAP financial measures: patient contribution, platform contribution and adjusted EBITDA as these are performance measures that our management uses to assess our operating performance. Because patient contribution, platform contribution and adjusted EBITDA 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.
Patient and platform contributions are reconciled to gross profit as the most directly comparable GAAP measure as set forth in the below tables under “Non-GAAP Reconciliations.” Gross profit is defined as total revenues less medical claims expense. Adjusted EBITDA is reconciled to net loss as the most directly comparable GAAP measure as set forth in the below table under “Non-GAAP Reconciliations.”
Our definitions of patient contribution, platform contribution and adjusted EBITDA may differ from the definition used by other companies and therefore comparability may be limited. In addition, other companies may not publish this or similar metrics. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP, such as gross profit and net loss.
We provide investors and other users of our financial information with reconciliations of patient contribution, platform contribution and adjusted EBITDA to loss from operations and net loss, respectively. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view patient contribution, platform contribution and adjusted EBITDA in conjunction with gross profit and net loss, respectively.
Patient Contribution
We define patient contribution as capitated revenue less medical claims expense. Patient contribution is intended to isolate the profitability of the Company's capitation arrangements with our health plan payors and/or CMS for which the Company provides and/or manages healthcare services for its at-risk patients. We expect that patient contribution will grow year-over-year in absolute dollars as our at-risk patient base continues to grow. We would also expect that our patient contribution per-patient-per-month economics on our at-risk patients will continue to improve the longer our patients are part of the Oak Street Platform as we better understand their health conditions and the patients better engage with our care model. We would expect, however, that our aggregate patient contribution per-patient-per-month economics on our at-risk patients may decrease at an aggregate level to the extent our patient growth skews our mix of patients towards patients newer to the Oak Street Platform. We would also expect to experience seasonality in patient contribution per-patient-per-month with the first quarter generally generating the greatest patient contribution per-patient-per-month, decreasing for the rest of the year. This seasonality is primarily driven by our adding new patients to the Oak Street Platform throughout the year, who generally have lower per-patient capitated revenue compared to our existing patient base.
Platform Contribution
We define platform contribution as total revenues less the sum of medical claims expense and cost of care, excluding depreciation and amortization and stock-based compensation. We believe this metric best reflects the economics or overall profit margin of our care model and related centers as it includes all medical claims expense associated with our patients’ care as well as the costs we incur to care for our patients via the Oak Street Platform. As a center matures, we expect the platform contribution from that center to increase both in terms of absolute dollars as well as a percent of capitated revenue. This increase will be driven by improving patient contribution economics over time as well as our ability to generate operating leverage on the costs of our centers. Our aggregate platform contribution may not increase despite improving economics at our existing centers should we open new centers at a pace that skews our mix of centers towards newer centers. We would expect to experience seasonality in platform contribution due to seasonality in our patient contribution.
Adjusted EBITDA
We define adjusted EBITDA as net loss excluding interest expense, net; other income (expense); income taxes; fair value adjustments related to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangibles and related to impairment of such investments; depreciation and amortization; transaction/offering costs; one-time in nature litigation costs and stock-based compensation. We include adjusted EBITDA in this Quarterly Report on Form 10-Q because it is an important measure upon which our management assesses and believes investors should assess our operating performance. We also consider adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
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Results of Operations
The following tables set forth our results of operations for the periods presented and as a percentage of our total revenues for those periods.
Three-Months Ended March 31,
(dollars in millions)20232022% Change
Revenues:
Capitated revenue$743.2 $506.1 47 %
Other revenue$8.8 $7.7 14 %
Total revenues$752.0 $513.8 46 %
Operating expenses:
Medical claims expense$523.5 $379.4 38 %
Cost of care, excluding depreciation and amortization (1)$129.2 $95.2 36 %
Sales and marketing (2)$42.3 $33.8 26 %
Corporate, general and administrative (3)$89.9 $88.7 1 %
Depreciation and amortization$10.5 $7.8 35 %
Total operating expenses$795.4 $604.9 31 %
Loss from operations$(43.4)$(91.1)(52)%
Other expense:
Interest expense, net(0.6)(0.6)— %
Other(0.2)(5.0)100 %
Total other expense(0.8)(5.6)(89)%
Net loss(44.2)(96.7)(54)%
Net income/(loss) attributable to non-controlling interests1.3 (0.2)(744)%
Net loss attributable to the Company(45.5)(96.5)(54)%
(1) Includes stock-based compensation, as follows:2.3 0.6 281 %
(2) Includes stock-based compensation, as follows:1.0 0.6 63 %
(3) Includes stock-based compensation, as follows:21.5 38.2 (44)%
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Three-Months Ended March 31,
20232022
Revenues:
Capitated revenue99 %99 %
Other revenue1 %1 %
Total revenues100 %100 %
Operating expenses:
Medical claims expense70 %74 %
Cost of care, excluding depreciation and amortization17 %19 %
Sales and marketing6 %7 %
Corporate, general and administrative12 %17 %
Depreciation and amortization1 %2 %
Total operating expenses106 %118 %
Loss from operations(6)%(18)%
Other income/(expense):
Interest expense, net— %— %
Other— %(1)%
Total other expense— %(1)%
Net loss(6)%(19)%
Net income/(loss) attributable to non-controlling interests0 %— %
Net loss attributable to the Company(6)%(19)%
Total Revenues
Three-Months Ended March 31,Change
(dollars in millions)20232022$%
Revenues:
Capitated revenue$743.2 $506.1 $237.1 47 %
Other revenue8.8 7.7 1.1 14 %
Total revenues$752.0 $513.8 $238.2 46 %
Capitated revenue was $743.2 million for the three-months ended March 31, 2023, an increase of $237.1 million, or 47%, compared to $506.1 million for the three-months ended March 31, 2022. This increase was driven primarily by a 43% increase in total patients under capitated arrangements and an increase in capitated revenue rates of 3%. We recorded a reduction in capitated revenue of $2.7 million related to prior periods for the three-months ended March 31, 2023 compared to a $3.4 million of incremental capitated revenue as of the three-months ended March 31, 2022, as a result of patient retroactivity and changes in acuity adjustments in both periods. When excluding the prior period revenue for the three-months ended March 31, 2023 and 2022, the year over year capitated revenue rate per patient increased by approximately 4%.

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Operating Expenses
Three-Months Ended March 31,Change
(dollars in millions)20232022$%
Medical claims expense$523.5 $379.4 $144.1 38 %
Cost of care, excluding depreciation and amortization129.2 95.2 34.0 36 %
Sales and marketing42.3 33.8 8.5 26 %
Corporate, general and administrative89.9 88.7 1.2 1 %
Depreciation and amortization10.5 7.8 2.7 35 %
Total operating expenses$795.4 $604.9 $190.5 31 %
Medical claims expense was $523.5 million or 70% of total revenues for the three-months ended March 31, 2023, an increase of $144.1 million, or 38%, compared to $379.4 million or 74% of total revenues for the three-months ended March 31, 2022. This increase was driven primarily by a 43% increase in total patients under capitated arrangements, slightly offset by a 3% decrease in cost per patient. For the three-months ended March 31, 2023, we recorded a reduction to medical claims expense of $8.3 million related to prior periods in comparison to incremental medical claims expenses of $0.8 million for the three-months ended March 31, 2022. When excluding these prior period costs for the three-months ended March 31, 2023 and 2022, the year over year medical claims expense per patient decreased by 2%.
Cost of care, excluding depreciation and amortization was $129.2 million or 17% of total revenues for the three-months ended March 31, 2023, an increase of $34.0 million or 36%, compared to $95.2 million or 19% of total revenues for the three-months ended March 31, 2022. The increase was primarily driven by increases in salaries and benefits of $23.4 million; occupancy costs of $5.3 million; and medical supplies and patient transportation costs of $3.5 million, due to growth in both the number of centers we operate and the number of team members supporting our larger patient base.
Sales and marketing expense was $42.3 million or 6% of total revenues for the three-months ended March 31, 2023, an increase of $8.5 million or 26%, compared to $33.8 million or 7% of total revenues for the three-months ended March 31, 2022. The increase was driven by greater advertising spend of $5.3 million to drive new patients to our clinics and net headcount growth of $2.9 million.
Corporate, general and administrative expense was $89.9 million or 12% of total revenues for the three-months ended March 31, 2023, an increase of $1.2 million, or 1%, compared to $88.7 million or 17% of total revenues for the three-months ended March 31, 2022. The increase was primarily driven by increases in salaries and benefits, excluding the impact of stock compensation expense, of $6.7 million and an increase in technology costs of $2.3 million. These increased costs can be primarily attributed to increased headcount to support our growth. Additionally, legal and professional fees increased by $7.1 million mainly in connection with the negotiation and execution of the Merger Agreement, as well as actions required to be taken to satisfy certain closing conditions related to the Merger. We note that the increase to total salaries and benefits was offset by a year over year decrease to stock compensation expense of $16.7 million. This reduction is due to the large amount of pre-IPO equity awards that fully vested during the third quarter of 2022. This significantly reduced the stock compensation expense for the three-months ended March 31, 2023 relative to 2022.
Depreciation and amortization expense was $10.5 million or 1% of total revenues for the three-months ended March 31, 2023, an increase of $2.7 million, or 35%, compared to $7.8 million or 2% of total revenues for the three-months ended March 31, 2022. The increase was primarily due to higher capital expenditures purchased to support the continued growth of our business as more centers are opened.
Other (Expense) Income
Three-Months Ended March 31,Change
(dollars in millions)20232022$%
Other income (expense):
Interest expense, net$(0.6)$(0.6)$— — %
Other(0.2)(5.0)4.8 (98)%
Total other expense$(0.8)$(5.6)$4.8 (89)%
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Other expense was $0.2 million for the three-months ended March 31, 2023, a decrease of $4.8 million, or 98%, compared to $5.0 million for the three-months ended March 31, 2022. The decrease was primarily due to a fair value adjustment of $4.5 million to the contingent consideration related to the acquisition of the Rubicon business in October 2021 recorded during the three-months ended March 31, 2022.
Non-GAAP Reconciliations
The following table provides a reconciliation of gross profit, the most closely comparable GAAP financial measure, to patient contribution. Gross profit is defined as total revenues less medical claims expense.
Three-Months Ended March 31,
(dollars in millions)20232022
Gross profit$228.5 $134.4 
Other revenue(8.8)(7.7)
Patient contribution$219.7 $126.7 
The following table is a reconciliation of gross profit, the most closely comparable GAAP financial measure, to platform contribution. Gross profit is defined as total revenues less medical claims expense.
Three-Months Ended March 31,
(dollars in millions)20232022
Gross profit$228.5 $134.4 
Cost of care, excluding depreciation and amortization(129.2)(95.2)
Stock-based compensation2.3 0.6 
Platform contribution$101.6 $39.8 
The following table provides a reconciliation of net loss, the most closely comparable GAAP financial measure, to adjusted EBITDA:
Three-Months Ended March 31,
(dollars in millions)20232022
Net loss$(44.2)$(96.7)
Interest expense, net0.6 0.6 
Fair value adjustments— 5.0 
Depreciation and amortization10.5 7.8 
Stock-based compensation24.8 39.4 
Litigation costs11.4 1.0 
Transaction/offering related costs0.7 0.5 
CVS transaction related costs6.5 — 
Other income/expense0.2 — 
Adjusted EBITDA$0.5 $(42.4)
Liquidity and Capital Resources
Overview

1 Litigation costs included in the calculation of Adjusted EBITDA include only those costs which are considered one-time in nature and outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) the complexity of the case, (iii) the nature of the remedy(ies) sought, including the size of any monetary damages sought, (iv) the counterparty involved, and (v) our overall litigation strategy, such as litigation costs related to the civil
investigative demand and putative class-action lawsuit (see Note 10.“Commitments and Contingencies,” to our condensed
consolidated financial statements included in this Quarterly Report on Form 10-Q)
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Historically, the Company’s long- term capital policy was to maintain a strong balance sheet and financial flexibility; reinvest in its care model; and invest in strategic opportunities that reinforce its care model and meet return requirements and has historically financed its operations through private placements of its equity securities, payments received from various payors, proceeds from issuances of convertible notes and term loans and its IPO. Following the Merger, as an indirect wholly-owned subsidiary of CVS Pharmacy and no longer a standalone public company, the Company’s long-term capital policy will become part of the overall capital policy of CVS Health, with the ongoing cash requirements of the Company, including capital expenditures and other investments to grow the Company’s business, being managed as part of CVS Health’s overall operating, financing and investing activities.

As of March 31, 2023, we had cash, restricted cash and cash equivalents of $156.2 million. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash. Since our inception and through March 31, 2023, we have generated significant operating losses from our operations as reflected in our accumulated deficit and negative cash flows from operations.
Indebtedness

For more information on the Company’s Term Loan Facility, Convertible Senior Notes, Capped Call Transactions and marketable debt securities please refer to Note 8, "Long-Term Debt," of the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and see Note 13, Subsequent Events for a discussion of the impact of the Merger that was consummated on May 2, 2023 on the Company’s debt balances.
Changes in Cash Flows
The following table presents a summary of our condensed consolidated cash flows from operating, investing and financing activities for the periods indicated.
Three-Months Ended March 31,
(dollars in millions)20232022$ Change% Change
Net cash used in operating activities$(92.7)$(91.2)$(1.5)2 %
Net cash provided by investing activities46.9 94.2 (47.3)(50)%
Net cash provided by financing activities43.5 1.9 41.6 2189 %
Net change in cash$(2.3)$4.9 $(7.2)(147)%
Operating Activities
For the three-months ended March 31, 2023, net cash used in operating activities was $92.7 million, an increase of $1.5 million in cash outflows compared to net cash used in operating activities of $91.2 million for the three-months ended March 31, 2022. The principal contributors to the year-over-year change in the operating cash flows were as follows:
•A net change of $38.6 million in net loss and non-cash charges and credits, primarily due to a decrease in net loss for the business, as noted above under “Results of Operations” offset by a decreased stock-based compensation charge.
•An increase of $40.1 million in cash outflows related to operating assets and liabilities primarily resulting from delayed cash receipts and payments driven by the Company transitioning to another financial institution from SVB in light of the uncertainty surrounding SVB and its ability to continue operations.
Investing Activities
For the three-months ended March 31, 2023, net cash provided by investing activities was $46.9 million, a decrease of $47.3 million in cash inflows compared to net cash used in investing activities of $94.2 million for the three-months ended March 31, 2022 primarily due to the net cash inflows of $63.9 million from sales, maturities and purchases of marketable debt securities during the three-months ended March 31, 2023, compared to $114.0 million during the three-months ended March 31, 2022.
Financing Activities
Cash provided by financing activities for the three-months ended March 31, 2023 was $43.5 million, primarily related to the proceeds received of $24.9 million from the Company's borrowings under its Term Loan Facility and proceeds from exercise of options received of $18.6 million, during the three-months ended March 31, 2023.
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Contractual Obligations and Commitments
As of March 31, 2023, our contractual obligations are summarized in the table below.
(dollars in millions)TotalLess than 1 Year1-3 Years3-5 YearsMore than 5 Years
Convertible senior notes (1)$920.0 $— $920.0 $— $— 
Term loan (1) 100.0 — — 100.0 — 
Operating lease obligations (2)494.4 51.1 111.8 113.4 218.1 
Total$1,514.4 $51.1 $1,031.8 $213.4 $218.1 

(1) For more information on the Convertible Senior Notes and the Term Loan please refer to Note 8, "Long-Term Debt," of the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and see Note 13, Subsequent Events for a discussion of the impact of the Merger that was consummated on May 2, 2023 on the Convertible Senior Notes and the Term Loan.

(2) The Company leases offices, operating facilities, vehicles and information technology ("IT") equipment, which are accounted for as operating leases. These leases have remaining lease terms of up to 30 years, inclusive of renewal or termination options that the Company is reasonably certain to exercise.
Off-Balance Sheet Obligations
As of March 31, 2023, we did not have any significant off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. The future effects of the COVID-19 pandemic on our results of operations, cash flows and financial position are unclear, however, we believe we have made reasonable estimates and assumptions in preparing the financial statements. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.
For a description of our critical accounting policies, see “Critical Accounting Policies” in our 2022 Form 10-K. There have been no significant changes in our critical accounting estimate policies or methodologies to our condensed consolidated financial statements.
Recently Adopted Accounting Pronouncements
For a description of recently issued accounting pronouncements, see Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7A of our 2022 Form 10-K. There have been no material changes in our market risk exposures for the three-months ended March 31, 2023, as compared to those discussed in our 2022 Form 10-K.
ITEM 4.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of
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the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of March 31, 2023.
Changes to our Internal Controls over Financial Reporting
There were no material changes in our internal control over financial reporting during the three-months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II.    OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS
See Note 10, "Commitments and Contingencies," to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
ITEM 1A.    RISK FACTORS
There have been no material changes to the risk factors disclosed under Part I, Item 1A “Risk Factors” in our 2022 Form 10-K.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Unregistered Sales of Equity Securities
None.
ITEM 3.    DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.    OTHER INFORMATION
None.
ITEM 6.    EXHIBITS
Exhibit No.Description
2.1
3.1
3.2
31.1
31.2
32.1*
32.2*
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted in Inline XBRL)
________________
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*The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES
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 thereunto duly authorized.
Oak Street Health, Inc. (Registrant)
   
Date: May 9, 2023
By:/s/Timothy Cook
Timothy Cook
Chief Financial Officer
(Principal Financial Officer)
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