Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported) January 2, 2024

Bright Health Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware	001-40537	47-4991296
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)


8000 Norman Center Drive Suite 900, Minneapolis, Minnesota						55437
Address of Principal Executive Office						(Zip Code)

(612) 238-1321

Registrant's telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

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

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

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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	BHG	New York Stock Exchange

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

Emerging growth company ☐

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

Item 1.01 Entry into a Material Definitive Agreement.

The information contained in Item 1.02 of this Current Report on Form 8-K is incorporated herein by reference.

Item 1.02 Termination of a Material Definitive Agreement.

As previously reported, on December 27, 2023, Bright Health Group, Inc., a Delaware corporation (the "Company"), JPMorgan Chase Bank, N.A., as Collateral Agent and Administrative Agent (in each such capacity, the “Agent”) and as Issuing Bank under the Credit Agreement (as defined below), the financial institutions party thereto, as lenders (the “Lenders”), and the Guarantors party thereto entered into a letter agreement (the “Letter Agreement”) in relation to that certain Credit Agreement dated as of March 1, 2021 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”), by and among the Company, the Agent, the Lenders, and the other agents, arrangers and bookrunners identified therein. Pursuant to the Letter Agreement, in each case subject to the Agent’s receipt of (a) the payment in an amount equal to $274.6 million to give effect to the Termination (as defined below) as of January 2, 2024 (the “Payoff Condition”) and (b) payment to the issuer (the “L/C Issuer”) of letters of credit outstanding under the Credit Agreement (the “Existing Letters of Credit”) cash in an amount equal to $24.1 million, which is equal to 105% of the aggregate face amount of the Existing Letters of Credit (the “Cash Collateral”), which shall be held by the Issuing Bank as collateral for the obligation of the Company to reimburse the Issuing Bank in an amount equal to the amount of any drawing under the Existing Letters of Credit and to pay certain fees in respect of Existing Letters of Credit until the Existing Letters of Credit have terminated or expired (collectively, the “L/C Condition”), (i) the Lenders and the Agent consented to the Transaction (as defined below) (this clause (i), the “Consent”) and (ii) all liabilities, obligations and indebtedness of the Company and its applicable subsidiaries that are guarantors under the Credit Agreement and the other Loan Documents (collectively, the “Credit Documents”), other than customary obligations that survive termination of the Credit Agreement by their express terms and the Company’s obligations in respect of the Existing Letters of Credit, owing by the Company and such subsidiaries under the Credit Documents shall be released, discharged and satisfied in full, all liens securing the obligations under the Credit Agreement (other than in respect of the Cash Collateral) shall be terminated and all guarantees under the Credit Agreement shall be released (this clause (ii), the “Termination”).

On January 2, 2024, both the Payoff Condition and the L/C Condition were satisfied and, as a result, the Consent and the Termination occurred.

Item 2.01 Completion of Acquisition or Disposition of Assets

As previously reported, on June 29, 2023, the Company entered into a Stock Purchase Agreement by and among Molina Healthcare, Inc., a Delaware corporation (“Molina”), Bright Health Company of California, Inc., a California corporation (“BHCC”), Central Health Plan of California, Inc., a California corporation (“CHP”), Universal Care, Inc. d/b/a Brand New Day, a California corporation (“BND”), and the Company, as amended by that certain amendment thereto dated as of December 13, 2023 (as amended, the “SPA”), pursuant to which, among other things, BHCC agreed to sell to Molina all of its shares of capital stock in CHP and BND (together, the “MA Business”) for an aggregate purchase price of $500.0 million in cash, subject to certain purchase price adjustments (such sale, the “Transaction”), and, following the consummation of the Transaction, each of BND and CHP would be a wholly owned subsidiary of Molina. Effective as of January 1, 2024, the Transaction was consummated.

Pursuant to Article 11 of Regulation S-X, the Company expects to file a report to disclose certain unaudited condensed pro forma financial information regarding the divestiture of the MA Business.

The foregoing summary of the SPA and the transactions contemplated thereby does not purport to be complete and is qualified and superseded in its entirety by reference to (i) the SPA filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on June 30, 2023, and (ii) the amendment to the SPA filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the SEC on December 18, 2023, each of which is incorporated herein by reference. The foregoing summary is intended to provide investors and security holders with information regarding the terms of the SPA. It is not intended to provide any other factual information about Molina or the Company or any other parties to the SPA. The representations, warranties and covenants of each party set forth in the SPA were made only for purposes of the SPA as of the specific dates set forth therein, were solely for the benefit of the parties to the SPA, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the SPA instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. The Company’s investors and security holders are not third-party beneficiaries under the SPA and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Molina, the Company, the parties to the SPA or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the SPA, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The SPA should not be read alone, but

should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or incorporated by reference into, this Current Report on Form 8-K (including the SPA), the Form 10-Ks, Form 10-Qs and the other documents that the Company files with the SEC.

Item 7.01 Regulation FD Disclosure.

On January 2, 2024, the Company issued a press release announcing the closing of the Transaction. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8‑K.

The information set forth under this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information of exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(d) Exhibits.


Exhibit No.						Description
99.1						Press release dated January 2, 2024
104						The cover page from the Current Report on Form 8-K formatted in Inline XBRL.

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 hereunto duly authorized.


		BRIGHT HEALTH GROUP, INC.

Date:	January 2, 2024	By:	/s/ Jeff Craig
		Name:	Jeff Craig
		Title:	General Counsel and Corporate Secretary

Exhibit 99.1

Bright Health Group Closes the Sale of its California Medicare Advantage Business to Molina Healthcare

•Completes final repayment on secured credit facility eliminating the Company's secured debt

•Further focuses on increasing access to value-driven healthcare for all populations across the ACA Marketplace, Medicare, and Medicaid through its continuing business, NeueHealth

•Reaffirms expectation for Adjusted EBITDA profitability in 2024

MINNEAPOLIS – January 2, 2024 – Bright Health Group, Inc. (“Bright Health” or the “Company”) (NYSE: BHG), the technology enabled, value-driven healthcare company, today announced that it has successfully completed the sale of its California Medicare Advantage business, Brand New Day and Central Health Plan, to Molina Healthcare, Inc. ("Molina"). The sale closed, effective as of January 1, 2024.

Concurrent with the closing of the sale, the Company also made the final repayment on its amended credit facility with J.P. Morgan, eliminating its secured debt. The remaining proceeds of the sale are expected to provide a solid foundation for the Company to continue to advance its continuing business, NeueHealth, in 2024 and beyond.

“We are pleased to announce the close of this transaction as it meaningfully improves our capital position and allows us to focus on making high-quality healthcare accessible and affordable to all populations,” said Mike Mikan, President and CEO of Bright Health. “We see tremendous opportunities in our NeueHealth business and look forward to continuing to partner with providers and payors to deliver a more seamless, coordinated care experience for health consumers.”

Bright Health expects to drive strong results in its NeueHealth business, reaffirming its expectation to be profitable on an Adjusted EBITDA basis in 2024. The Company expects to share its full outlook for 2024 on its Fourth Quarter earnings call.

Moelis & Company LLC served as Bright Health’s financial advisor and Simpson Thacher & Bartlett LLP acted as Bright Health’s legal advisor in connection with the sale.

About Bright Health Group

Bright Health Group is a technology enabled, value-driven healthcare company that organizes and operates networks of affiliate care providers to be successful at managing population risk. We focus on serving aging and underserved consumers that have unmet clinical needs through our value-based, consumer-driven care model in Florida, Texas, and California, some of the largest markets in healthcare where 26% of the U.S. aging population call home. We believe everyone should have access to personal, affordable, and high-quality healthcare. Our mission is to Make healthcare right. Together. For more information, visit www.brighthealthgroup.com.

Forward Looking Statements

Statements made in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “projections,” “outlook,” “ensure,” and other similar expressions. These forward-looking statements include any statements regarding our plans and expectations with respect to Bright Health Group, Inc. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Factors that might materially affect such forward-looking statements include: our ability to continue as a going concern; our ability to comply with the terms of our credit facility, including financial covenants, both during and after any waiver period, and/or obtain any additional waivers of any terms of our credit facility to the extent required; our ability to receive the remaining proceeds from the sale of our Medicare Advantage business in California in a timely manner; our ability to obtain any short or long term debt or equity financing needed to operate our business; our ability to quickly and efficiently complete the wind down our IFP businesses and MA businesses outside of California, including by satisfying liabilities of those businesses when due and payable; potential disruptions to our business due to corporate restructuring and any resulting headcount reduction; our ability to accurately estimate and effectively manage the costs relating to changes in our businesses offerings and models; a delay or inability to withdraw regulated capital from our subsidiaries; a

lack of acceptance or slow adoption of our business model; our ability to retain existing consumers and expand consumer enrollment; our and our Care Partner’s abilities to obtain and accurately assess, code, and report risk adjustment factor scores; our ability to contract with care providers and arrange for the provision of quality care; our ability to accurately estimate our medical expenses, effectively manage our costs and claims liabilities or appropriately price our products and charge premiums; our ability to obtain claims information timely and accurately; the impact of any pandemic or epidemic on our business and results of operations; the risks associated with our reliance on third-party providers to operate our business; the impact of modifications or changes to the U.S. health insurance markets; our ability to manage the growth of our business; our ability to operate, update or implement our technology platform and other information technology systems; our ability to retain key executives; our ability to successfully pursue acquisitions and integrate acquired businesses; the occurrence of severe weather events, catastrophic health events, natural or man-made disasters, and social and political conditions or civil unrest; our ability to prevent and contain data security incidents and the impact of data security incidents on our members, patients, employees and financial results; our ability to comply with requirements to maintain effective internal controls; our ability to adapt to the new risks associated with our ACO Reach businesses, including any unanticipated market or regulatory developments; and the other factors set forth under the heading “Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q, and Form 8-K (including all amendments to those reports) and our other filings with the SEC. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or changes in our expectations.

Investor Contact:

IR@brighthealthgroup.com

Media Contact:

media@brighthealthgroup.com

Cover Page	Jan. 02, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jan. 02, 2024
Entity Registrant Name	Bright Health Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40537
Entity Tax Identification Number	47-4991296
Entity Address, Address Line One	8000 Norman Center Drive Suite 900
Entity Address, City or Town	Minneapolis
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55437
City Area Code	612
Local Phone Number	238-1321
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	BHG
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001671284
Amendment Flag	false