Cano Health Receives NYSE Notice of Non-Compliance with Market Capitalization Criteria
Accelerates Transformation Plan, Now Targeting
Pursuant to the Listing Rule, the Company has 10 business days from receipt of the Notice to send a letter to the NYSE confirming receipt of the Notice and to indicate whether it intends to cure the deficiencies. If the Company determines to cure such deficiencies, the Company would then submit a business plan (the "Plan") within 45 days of receipt of the Notice that demonstrates that the Company will regain compliance with the Listing Rule within 18 months of receipt of the Notice. Upon receipt of the Plan, the NYSE would have up to 45 days to review and determine whether the Company has made a reasonable demonstration of its ability to come into conformity with the relevant standards within the cure period. The NYSE may either accept the Plan, at which time the Company would be subject to ongoing quarterly monitoring for compliance with the Plan, or the NYSE may not accept the Plan and the Company would be subject to suspension and delisting proceedings. Under the NYSE rules, during the 18-month cure period, the Company's Class A common stock will remain eligible for continued listing and trading on the NYSE, subject to the Company's compliance with other continued listing requirements.
The current noncompliance with the NYSE Listing Rule does not affect the Company's ongoing business operations or its
As previously disclosed by the Company, including in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 13, 2023, the Company has shifted its strategic direction to focus on executing its Transformation Plan that is designed to: (i) improve the Company's Medical Cost Ratio ("MCR"); (ii) reduce its direct patient expense ("DPE") and selling, general & administrative ("SG&A") expenses; (iii) improve the Company's gross profit and Adjusted EBITDA; and (iv) maximize the Company's productivity, cash flow and liquidity. The Transformation Plan primarily includes the following measures:
- Driving medical cost management initiatives to improve the Company's MCR;
- Lowering third party medical costs through negotiations with payors, including restructuring contractual arrangements with payors and specialty network;
- Expanding initiatives to optimize its DPE and SG&A expenses--
- reducing operating expenses, including reduction of permanent staff; and
- significantly reducing all other non-essential spending;
- Prioritizing the Company's Medicare Advantage and ACO Reach lines of business through improving patient engagement and access;
- Divesting and consolidating certain assets and operations, inclusive of exiting certain markets--
- exiting its
Puerto Rico operations by the beginning of 2024; - conducting a strategic review of the Company's Medicaid business in
Florida , pharmacy assets and other specialty practices; and - consolidating underperforming owned medical centers and delaying renovations and other capital projects;
- exiting its
- Evaluating the performance its affiliate provider relationship—
- terminating underperforming affiliate partnerships; and
- Pursuing a comprehensive process to identify and evaluate interest in a sale of the Company, or all or substantially all of its assets, including having engaged advisors to assist in the process.
As a result of accelerating these initiatives, the Transformation Plan is now targeted to achieve approximately
As part of this strategic shift, the Company also has been engaged in reviewing and continues to review strategic alternatives to recapitalize, refinance or otherwise optimize its capital structure (the "Ongoing Review"), which may ultimately result in the Company pursuing one or more significant corporate transactions or other remedial measures. The Ongoing Review includes an evaluation of available options to regain compliance with the Listing Rule. The Company can provide no assurances that it will be able to satisfy any of the steps outlined above and maintain the listing of its shares on the NYSE or the results of the Ongoing Review.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to future events and involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and could materially affect actual results, performance or achievements. These forward-looking statements generally can be identified by phrases such as "will," "expects," "anticipates," "believes," "foresees," "forecasts," "plans," "intends," "estimates" or other words or phrases of similar import, including, without limitation, statements regarding our anticipated performance, operations, financial strength, potential, and prospects for long-term shareholder value creation, our anticipated results of operations, including our business strategies, our projected costs, prospects and plans, and other aspects of our operations or operating results, as well as statements made in this press release regarding the Company's plans to (i) regain compliance with the Listing Rule; (ii) execute one or more aspects of its Transformation Plan; (iii) pursue strategic alternatives to recapitalize, refinance or otherwise optimize its capital structure, which may ultimately result in the Company pursuing one or more significant corporate transactions or other remedial measures; and (iv) achieve approximately
About Cano Health
Cano Health (NYSE: CANO) is a high-touch, technology-powered healthcare company delivering personalized, value-based primary care to approximately 310,000 members. Founded in 2009, with its headquarters in
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SOURCE Cano Health, Inc.