Bright Health Group(BHG) - 2023 Q4 - Annual Report

Financial Performance - The company reported a net loss of $1.3 billion for the year ended December 31, 2023[870]. - The company recorded a net loss attributable to common shareholders of$1.2 billion for 2023, compared to a loss of $1.5 billion in 2022, with a basic and diluted loss per share of$150.94[903]. - Total operating costs decreased from $354.4 million in 2022 to$287.1 million in 2023, a reduction of approximately 19%[834]. - Bad debt expense for the year ended December 31, 2023, was $27.4 million, primarily due to a care partner filing for bankruptcy[859]. - The company incurred medical costs payable of$2.4 million and $11.2 million under contracts as of December 31, 2023, and 2022, respectively[823]. Regulatory and Compliance Risks - The company is exposed to risks related to compliance with federal and state healthcare laws, which could result in significant penalties and reputational harm[426]. - The company may face challenges in complying with evolving privacy and cybersecurity regulations, which could impact its operations and revenue[431]. - The company is subject to increased scrutiny from the U.S. Department of Justice and the OIG regarding healthcare fraud, waste, and abuse, leading to potential investigations and penalties[442]. - The company may be subject to penalties for non-compliance with healthcare laws, which could adversely affect its business and financial condition[456]. - The company faces challenges in complying with evolving regulatory and legislative environments, which could adversely affect its operations and results[454]. Internal Controls and Financial Reporting - The company has identified material weaknesses in its internal controls over financial reporting, which may result in material misstatements of its consolidated financial statements[445]. - The company announced a material weakness related to its internal controls, which it has been actively remediating since Q4 2022[478]. Debt and Financing - The company is subject to significant restrictions on future financing arrangements, which may limit its ability to raise additional debt or equity financing[421]. - The company may encounter difficulties in generating sufficient cash flows to meet its debt obligations, impacting its future working capital and financing options[450]. - The company entered into a new credit agreement in 2023, borrowing a total of$66.4 million as of December 31, 2023[838]. - The company has $303.9 million borrowed under a revolving credit agreement with a weighted-average effective annual interest rate of 10.06$66.4 million borrowed under the New Credit Agreement at a weighted-average effective interest rate of 15.00% as of December 31, 2023[881]. Assets and Liabilities - As of December 31, 2023, the company had outstanding net operating losses ("NOLs") of approximately $2.5 billion, which are available to reduce future taxable income[483]. - Intangible assets accounted for approximately 23.1$116.0 million at the beginning of 2023 to $157.9 million by December 31, 2023[846]. - The company recorded an impairment loss on long-lived assets of$1.2 million during the year ended December 31, 2023[863]. - The company fully impaired the goodwill assigned to its NeueCare reporting unit due to a decline in stock price and market capitalization[886]. Corporate Governance and Structure - The company’s amended and restated certificate of incorporation includes provisions that may delay or prevent mergers or acquisitions that stockholders might consider beneficial[493]. - The company has broad discretion in the application of net proceeds from capital raised, which may not necessarily enhance profitability or shareholder value[492]. - The company is actively evaluating additional financing options with the Board of Directors and outside advisors[871]. Operational Challenges - The company is subject to ongoing litigation and regulatory investigations, which could strain resources and negatively affect its business[437]. - The company has exited the health insurance market but will continue to account for health plan activities until the run-out of all legacy insurance plans is complete[480]. - The Company’s restructuring has resulted in the loss of institutional knowledge, which could adversely affect operations and future growth[814]. - The company has implemented a restructuring plan to reduce capital needs and operating expenses to drive positive operating cash flow and increase liquidity[874]. Stock and Market Performance - The trading price of the company's common stock has been volatile, and future fluctuations may not correlate with its operating performance[487]. - The Company’s common stock is traded on the NYSE under the symbol "NEUE"[817]. Revenue Recognition - The Company recognizes revenue from provider enablement services on a per member per month basis, with revenue recognized as the service period is completed[822]. - The Company’s enablement services are designed to empower providers in value-based care arrangements, enhancing their success[806].