UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


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

For the quarter ended June 30, ~~2021~~2022


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

For the transition period from to

Commission file number: 001-39228

MULTIPLAN CORPORATION

(Exact Name of Registrant as Specified in Its Charter)


Delaware						84-3536151
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

115 Fifth Avenue

New York, NY 10003

(Address of principal executive offices)

(212) 780-2000

(Issuer’s telephone number)

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

Title of each class

Trading
Symbol

Name of each exchange on which registered

Shares of Class A common stock, $0.0001 par value per share

MPLN

New York Stock Exchange

Warrants

MPLN.WS

New York Stock Exchange

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 x 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 x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See 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 No

As of August ~~2, 2021, 668,117,373~~1, 2022, 639,074,047 shares of Class A common stock, par value $0.0001 per share, were issued and outstanding.

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GLOSSARY

Unless otherwise stated in this Quarterly Report on Form 10-Q (this ~~“Quarterly Report”~~"Quarterly Report") or the context otherwise requires, references to:

~~“2020~~"2021 Annual ~~Report”~~Report" are to our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020;~~2021;

"2020 Omnibus Incentive Plan" are to our 2020 Omnibus Incentive Plan, as it may be amended and/or restated from time to time;

"5.50% Senior Secured Notes" are to the $1,050,000,000 in aggregate principal amount of 5.50% Senior Secured Notes due 2028 issued by MPH;

"5.750% Notes" are to the $1,300,000,000 in aggregate principal amount of 5.750% Senior Notes due 2028 issued by MPH;

"7.125% Notes" are to the 7.125% Senior Notes due 2024 issued by MPH. All of the outstanding 7.125% Notes were redeemed on October 29, 2020;

"Abacus" are to Abacus Insights, Inc.;

"Adjusted EPS" are to adjusted earnings per share;

"ASU" are to Accounting Standard Update;

"Board" are to the board of directors of the Company;

"CARES Act" are to The Coronavirus Aid, Relief, and Economic Security Act;

"Cash Interest" are to interest paid in cash on the Senior Convertible PIK Notes;

"Churchill" are to Churchill Capital Corp III, a Delaware corporation, which changed its name to MultiPlan Corporation following the consummation of the Transactions;

"Churchill IPO" are to the initial public offering by Churchill which closed on February 19, 2020;

"Churchill's Class A common stock" are, prior to consummation of the Transactions, to Churchill's Class A common stock, par value $0.0001 per share and, following consummation of the Transactions, to our Class A common stock, par value $0.0001 per share;

"Class A common stock" are to MultiPlan's Class A common stock, par value $0.0001 per share;

"Closing" are to the consummation of the Mergers;

"Closing Date" are to October 8, 2020, the date on which the Transactions were consummated;

"Common PIPE Investment" are to the private placement pursuant to which Churchill entered into subscription agreements with certain investors whereby such investors subscribed for (a) 130,000,000 shares of Churchill's Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $1,300,000,000 and (b) warrants to purchase 6,500,000 shares of Churchill's Class A Common Stock (for each share of Churchill's Class A common stock subscribed, the investor received 1/20th of a warrant to purchase one share of Churchill's Class A common stock, with each whole warrant having a strike price of $12.50 per share and a maturity date of October 8, 2025). The Common PIPE Investment was subject to an original issue discount (which was paid in additional shares of Churchill's Class A common stock) of 1% for subscriptions of $250,000,000 or less and 2.5% for subscriptions of more than $250,000,000, which resulted in an additional 2,050,000 shares of Churchill's Class A common stock being issued. The Common PIPE Investment was consummated on the Closing Date;

"common stock" are, prior to the consummation of the Transactions, to Churchill's Class A common stock and Churchill's Class B common stock and, following consummation of the Transactions, to the Class A common stock;

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"Company" are, prior to the consummation of the Transactions, to Churchill and, following consummation of the Transactions, to MultiPlan Corporation;

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"Convertible PIPE Investment" are to the private placement pursuant to which the Company entered into subscription agreements with certain investors whereby such Convertible PIPE Investors agreed to buy $1,300,000,000 in aggregate principal amount of Senior Convertible PIK Notes. The Convertible PIPE Investment was consummated on the Closing Date;

"Convertible PIPE Investors" are to the investors participating in the Convertible PIPE Investment;

"COVID-19" are to the COVID-19 pandemic;

"DHP" are to Discovery Health Partners;

"Director RSUs" are to restricted stock units issued to the Company's Non-Employee Directors under the 2020 Omnibus Incentive Plan (other than those Non-Employee Directors who have elected to forego their right to director compensation);

"Employee RS" are to grants of restricted stock awarded to certain employees under the 2020 Omnibus Incentive Plan;

"Employee RSUs" are to grants of restricted stock units awarded to certain employees under the 2020 Omnibus Incentive Plan;

"Employee NQSOs" are to grants of non-qualified stock options awarded to certain employees under the 2020 Omnibus Incentive Plan;

"EPS" are to Earnings and Loss Per Share;

"Exchange Act" are to the Securities Exchange Act of 1934, as amended;

"FASB" are to the Financial Accounting Standards Board;

"First Merger Sub" are to Music Merger Sub I, Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company;

"Fixed Value RSUs" are to restricted stock units granted based on a fixed monetary amount under the 2020 Omnibus Incentive Plan in accordance with the terms of the related side letter;

"founder shares" are to shares of Churchill's Class B common stock and Churchill's Class A common stock issued upon the automatic conversion thereof in connection with the Closing;

"GAAP" are to generally accepted accounting principles in United States of America;

"H&F" are to Hellman & Friedman Capital Partners VIII, L.P.;

"Holdings" are to Polaris Investment Holdings, L.P.;

"HST" are to HSTechnology Solutions, Inc.;

"Integration expenses" are costs associated with the integration of acquired companies into MultiPlan;

"KG" are to The Klein Group, LLC, an affiliate of Michael Klein and the Sponsor and an affiliate and wholly owned subsidiary of M. Klein and Company. KG (and not the Sponsor) was engaged by Churchill to act as Churchill's financial advisor in connection with the Transactions, and as a placement agent in connection with the PIPE Investment as more fully described herein;

"LIBOR" are to London Interbank Offered Rate;

"Liquidity Event" are to any transaction or series or related transactions involving (i) the sale of all or substantially all of the assets of Holdings on a consolidated basis to a person, or group of persons, other than (A) the H&F Investors and their affiliates or (B) a distribution of an entity resulting from a reorganization, conversion, redomiciliation, distribution, exchange or other transaction undertaken in preparation for an initial public offering to the unitholders of Holdings as part of an IPO Conversion (as defined in the unitholders agreement) or following an initial public offering, (ii) a merger, reorganization, consolidation or other similar corporate transaction in which the outstanding voting securities of Holdings are exchanged for securities of the successor entity and the holders of the voting securities of Holdings immediately prior to such transaction do not own a majority of the outstanding voting securities of the successor entity immediately upon completion of such transaction or (iii) the direct or indirect sale (whether by sale, merger or otherwise) of all or a majority of the voting securities of Holdings to a person, or group of persons, other than the H&F Investors and their affiliates;

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"M. Klein and Company" are to M. Klein and Company, LLC, a Delaware limited liability company, and its affiliates;

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"Merger Agreement" are to that certain Agreement and Plan of Merger, dated as of July 12, 2020, by and among Churchill, MultiPlan Parent, Holdings, First Merger Sub and Second Merger Sub, as the same has been or may be amended, modified, supplemented or waived from time to time;

"Mergers" are to, together, (a) the merger of First Merger Sub with and into MultiPlan Parent with MultiPlan Parent being the surviving company in the merger (the "First Merger") and (b) immediately following and as part of the same transaction as the First Merger, the merger of MultiPlan Parent with and into Second Merger Sub, with Second Merger Sub surviving the merger as a wholly owned subsidiary of Churchill (the "Second Merger");

"MPH" are to MPH Acquisition Holdings LLC;

"MultiPlan" are, prior to consummation of the Transactions, to MultiPlan Parent and its consolidated subsidiaries and, following consummation of the Transactions, to MultiPlan Corporation and its consolidated subsidiaries;

"MultiPlan Parent" are to Polaris Parent Corp., a Delaware corporation;

"Non-Employee Director" are to each member of our Board that is not an employee of the Company or any parent or subsidiary of the Company;

"Non-income taxes" includes personal property taxes, real estate taxes, sales and use taxes and franchise taxes which are included in cost of services and general and administrative ~~expenses.~~expenses;

"Other ~~expenses"~~expenses, net" represents miscellaneous income, miscellaneous expenses, gain or loss on disposal of assets, impairment of other assets, gain or loss on disposal of leases, tax penalties, and management ~~fees, and costs associated with the integration of acquired companies into MultiPlan.~~fees;

"Payors" are our customers which include large national insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, third party administrators, bill review companies, Taft-Hartley plans and other entities that pay medical bills related to the commercial healthcare, government, workers' compensation and auto medical markets

"PSAV" are to percentage of savings;

"PEPM" are to per-employee-per-month;

"PIK Interest" are to interest paid through an increase in the principal amount of the outstanding Senior Convertible PIK Notes or through the issuance of additional Senior Convertible PIK Notes;

"PIPE Investment" are to, collectively, the Common PIPE Investment and the Convertible PIPE Investment;

"PIPE Warrants" are to the warrants to purchase Churchill's Class A common stock issued in connection with the Common PIPE Investment, on terms identical to the terms of the Private Placement Warrants, other than the exercise period that started on November 7, 2020, the exercise price which is $12.50 per share and the redemption feature that exists for all holders of the PIPE warrants.

"Polaris" is Polaris Parent Corp., a Delaware corporation and direct, wholly owned subsidiary of Holdings and parent company to MultiPlan, Inc.;

"PPOs" are to Preferred Provider Organizations;

"Private Placement Warrants" are to warrants issued to the Sponsor in a private placement simultaneously with the closing of the Churchill IPO and the Working Capital Warrants whose terms are identical to the Private Placement Warrants;

"Public Warrants" are to the Company's warrants sold as part of the units in the Churchill IPO (whether they were purchased in the Churchill IPO or thereafter in the open market);

"Refinancing" are to (a) the consummation of the 5.750% Notes offering by MPH and the increase of the revolving credit facility under the senior secured credit facilities from $100.0 million to $450.0 million and (b) the repayment of all outstanding

~~Table of Contents~~

~~7.125% Notes and $369.0 million of indebtedness under MPH's term loan facility with the net proceeds of the 5.750% Notes offering, together with cash on hand, which occurred on October 29, 2020;~~

"Revolver G"B" are to the revolving credit facility in conjunction with Term Loan G;B and maturing on August 24, 2026;

"~~Revolving~~revolving credit facility" are to MPH's $450.0 million senior secured revolving credit ~~facility maturing on June 7, 2023;~~facility;

"SEC" are to the United States Securities and Exchange Commission;

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"Second Merger Sub" are to Music Merger Sub II, LLC, a Delaware limited liability company and direct, wholly owned subsidiary of the Company;

"Senior Convertible PIK Notes" are the 6.00% / 7.00% Convertible Senior PIK Toggle Notes due 2027;

"Senior PIK Notes" are to the 8.500% / 9.250% Senior PIK Toggle Notes due 2022 issued by Polaris Intermediate Corp. on November 21, 2017. All of the outstanding Senior PIK Notes were redeemed on October 8, 2020;

"senior secured credit facilities" are to MPH's senior secured credit facilities which, before August 24, 2021, consist of (a) a $2,341.0 million term loan facility maturing on June 7, 2023 and (b) a $450.0 million revolving credit facility maturing on June 7, ~~2023;~~2023, and as of and after August 24, 2021 consist of (a) a $1,325.0 million term loan facility maturing on September 1, 2028 and (b) a $450.0 million revolving credit facility maturing on August 24, 2026;

"Sponsor" are to Churchill Sponsor III, LLC, a Delaware limited liability company and an affiliate of M. Klein and Company in which certain of Churchill's directors and officers hold membership interests;

"Sponsor Note" are to the unsecured promissory note issued by the Company to the Sponsor in an aggregate principal amount of $1,500,000. The Sponsor converted the unpaid balance of the Sponsor Note into Working Capital Warrants in connection with the Closing;

"Subscription Agreements" are to, collectively, the (a) common stock subscription agreements entered into (i) by and between Churchill and the PIF and (ii) by and among Churchill, Holdings and MultiPlan Parent, on the one hand, and certain investment funds, on the other hand, in each case, dated as of July 12, 2020 and entered into in connection with the Common PIPE Investment and (b) subscription agreements, dated as of July 12, 2020, entered into in connection with the Convertible PIPE Investment;

"Term Loan B" are to a term loan payable borrowed on August 24, 2021 in the amount of $1,325.0 million with a group of lenders due and payable on September 1, 2028;

"Term Loan G" are to a term loan payable borrowed on June 7, 2016 in the amount of $3,500.0 million with a group of lenders ~~due~~ and ~~payable~~was repaid in full on ~~June 7, 2023;~~August 24, 2021;

"Transactions" are to the Mergers, together with the other transactions contemplated by the Merger Agreement and the related agreements;

"Transaction-related expenses" represents transaction costs, including those related to the Transactions and the acquisitions of HST and DHP.

"~~Units" are to~~Unvested Founder Shares" represents 12,404,080 of the Sponsor founder shares that were unvested as of October 8, 2020 in connection with the Merger Agreement and will re-vest at such time as, during the period starting on October 8, 2021 and ending on October 8, 2025, the closing price of our ~~stock-based compensation granted to employees~~Class A common stock exceeds $12.50 per share for any forty (40) trading days in ~~the form of Units~~a sixty (60) consecutive day period. Such founder shares that do not re-vest on or before October 8, 2025 will be forfeited and ~~Holdings' Class B Units;~~cancelled.

"warrants" are to the Public Warrants, the Private Placement Warrants, the PIPE Warrants and the Working Capital Warrants;

"we," "our" or "us" are to MultiPlan and its consolidated subsidiaries; and

"Working Capital Warrants" are to the warrants to purchase Churchill's Class A common stock pursuant to the terms of the Sponsor Note, on terms identical to the terms of the Private Placement Warrants.

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Part I. Financial Information

Item 1. Financial Statements

MULTIPLAN CORPORATION

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

June 30,
2021 December 31,
2020
Assets
Current assets:
Cash and cash equivalents $ 147,971 $ 126,755
Trade accounts receivable, net 61,127 63,198
Prepaid expenses 16,657 17,708
Prepaid taxes 54,148 0
Other current assets, net 1,377 1,193
Total current assets 281,280 208,854
Property and equipment, net 199,616 187,631
Operating lease right-of-use assets 28,839 31,339
Goodwill 4,365,785 4,257,336
Other intangibles, net 3,455,372 3,584,187
Other assets 7,934 14,231
Total assets $ 8,338,826 $ 8,283,578
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 10,586 $ 15,261
Accrued interest 29,596 31,528
Accrued taxes 0 10,176
Operating lease obligation, short-term 6,833 6,439
Accrued compensation 35,244 21,843
Other accrued expenses 29,506 27,251
Total current liabilities 111,765 112,498
Long-term debt 4,882,240 4,578,488
Operating lease obligation, long-term 24,717 27,499
Private Placement Warrants and unvested founder shares 147,780 106,595
Deferred income taxes 837,073 900,633
Other liabilities 187 0
Total liabilities 6,003,762 5,725,713
Commitments and contingencies (Note 6) 0 0
Shareholders’ equity:
Shareholder interests
Preferred stock, $0.0001 par value — 10,000,000 shares authorized; 0 shares issued 0 0
Common stock, $0.0001 par value — 1,500,000,000 shares authorized; 665,033,300 and 664,183,318 issued; 655,612,160 and 655,075,355 shares outstanding 66 66
Additional paid-in capital 2,304,954 2,530,410
Retained earnings 121,977 116,999
Treasury stock — 9,421,140 and 9,107,963 shares (91,933) (89,610)
Total shareholders’ equity 2,335,064 2,557,865
Total liabilities and shareholders’ equity $ 8,338,826 $ 8,283,578


	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	354,310	$	185,328
Restricted cash	2,777		3,051
Trade accounts receivable, net	94,005		99,905
Prepaid expenses	17,078		24,910
Prepaid taxes	—		5,064
Other current assets, net	1,139		999
Total current assets	469,309		319,257
Property and equipment, net	222,022		213,238
Operating lease right-of-use assets	24,108		30,104
Goodwill	4,363,121		4,363,070
Other intangibles, net	3,114,756		3,285,037
Other assets, net	22,505		9,701
Total assets	$	8,215,821	$	8,220,407
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	12,137	$	13,005
Accrued interest	55,199		55,685
Accrued taxes	3,066		—
Operating lease obligation, short-term	7,072		6,883
Current portion of long-term debt	13,250		13,250
Accrued compensation	30,689		25,419
Other accrued expenses	26,585		27,666
Total current liabilities	147,998		141,908
Long-term debt	4,877,670		4,879,144
Operating lease obligation, long-term	20,414		26,725
Private Placement Warrants and Unvested Founder Shares	66,408		74,000
Deferred income taxes	694,395		753,825
Other liabilities	83		135
Total liabilities	5,806,968		5,875,737
Commitments and contingencies (Note 6)	0		0
Shareholders’ equity:
Shareholder interests
Preferred stock, $0.0001 par value — 10,000,000 shares authorized; no shares issued	—		—
Common stock, $0.0001 par value — 1,500,000,000 shares authorized; 666,176,911 and 665,456,180 issued; 639,059,505 and 638,338,774 shares outstanding	67		67
Additional paid-in capital	2,318,353		2,311,660
Retained earnings	282,602		225,112
Treasury stock — 27,117,406 and 27,117,406 shares	(192,169)		(192,169)
Total shareholders’ equity	2,408,853		2,344,670
Total liabilities and shareholders’ equity	$	8,215,821	$	8,220,407

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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MULTIPLAN CORPORATION

Unaudited Condensed Consolidated Statements of ~~Loss~~Income (Loss) and Comprehensive ~~Loss~~Income (Loss)

(in thousands, except share and per share data)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues	Revenues	$	276,272	$	206,880	$	531,136	$	458,902	Revenues	$	290,128	$	276,272	$	588,174	$	531,136
Costs of services (exclusive of depreciation and amortization of intangible assets shown below)	Costs of services (exclusive of depreciation and amortization of intangible assets shown below)	44,368		51,894		84,098		96,579		Costs of services (exclusive of depreciation and amortization of intangible assets shown below)	49,977		44,368		97,049		84,098
General and administrative expenses	General and administrative expenses	39,927		36,066		71,923		57,767		General and administrative expenses	40,085		39,927		72,673		71,923
Depreciation	Depreciation	17,008		15,135		33,173		29,641		Depreciation	17,171		17,008		33,767		33,173
Amortization of intangible assets	Amortization of intangible assets	85,167		83,514		169,875		167,027		Amortization of intangible assets	85,127		85,167		170,281		169,875
Total expenses	Total expenses	186,470		186,609		359,069		351,014		Total expenses	192,360		186,470		373,770		359,069
Operating income	Operating income	89,802		20,271		172,067		107,888		Operating income	97,768		89,802		214,404		172,067
Interest expense	Interest expense	64,004		86,050		127,721		177,015		Interest expense	72,696		64,004		144,141		127,721
Interest income	Interest income	(7)		(77)		(11)		(148)		Interest income	(46)		(7)		(58)		(11)

Gain on investments	Gain on investments	(25)		0		(25)		0		Gain on investments	—		(25)		(289)		(25)
Change in fair value of Private Placement Warrants and unvested founder shares		81,560		0		41,185		0
Net (loss) income before income taxes		(55,730)		(65,702)		3,197		(68,979)
(Benefit) provision for income taxes		(8,798)		(9,456)		4,252		(10,139)
Net loss		$	(46,932)	$	(56,246)	$	(1,055)	$	(58,840)
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares										Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares	5,149		81,560		(7,592)		41,185
Net income (loss) before taxes										Net income (loss) before taxes	19,969		(55,730)		78,202		3,197
Provision (benefit) for income taxes										Provision (benefit) for income taxes	6,457		(8,798)		20,712		4,252
Net income (loss)										Net income (loss)	$	13,512	$	(46,932)	$	57,490	$	(1,055)

Weighted average shares outstanding – Basic	Weighted average shares outstanding – Basic	655,609,718		415,700,000		655,361,621		415,700,000		Weighted average shares outstanding – Basic	639,001,506		655,609,718		638,750,938		655,361,621
Weighted average shares outstanding – Diluted	Weighted average shares outstanding – Diluted	655,609,718		415,700,000		655,361,621		415,700,000		Weighted average shares outstanding – Diluted	640,097,349		655,609,718		639,709,247		655,361,621

Net loss per share – Basic		$	(0.07)	$	(0.14)	$	(0.00)	$	(0.14)
Net loss per share – Diluted		$	(0.07)	$	(0.14)	$	(0.00)	$	(0.14)
Net income (loss) per share – Basic										Net income (loss) per share – Basic	$	0.02	$	(0.07)	$	0.09	$	(0.00)
Net income (loss) per share – Diluted										Net income (loss) per share – Diluted	$	0.02	$	(0.07)	$	0.09	$	(0.00)

Comprehensive loss		$	(46,932)	$	(56,246)	$	(1,055)	$	(58,840)
Comprehensive income (loss)										Comprehensive income (loss)	$	13,512	$	(46,932)	$	57,490	$	(1,055)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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MULTIPLAN CORPORATION

Unaudited Condensed Consolidated Statements of Shareholders' Equity

(in thousands, except share data)

Three Months Ended June 30, 2021
Common Stock Issued Additional Paid-in Capital Retained
Earnings Treasury stock Total
Shareholders’
Equity
Shares Amount Shares Amount
Balance at beginning of period 664,277,068 $ 66 $ 2,297,504 $ 168,909 (9,144,461) $ (89,874) $ 2,376,605
2020 Omnibus Incentive Plan 756,232 — 7,474 — — — 7,474
Tax withholding related to vesting of equity awards — — (24) — (276,679) (2,059) (2,083)
Net loss — — — (46,932) — — (46,932)
Balance at end of period 665,033,300 $ 66 $ 2,304,954 $ 121,977 (9,421,140) $ (91,933) $ 2,335,064
Three Months Ended June 30, 2020
Common Stock Issued Additional Paid-in Capital Retained
Earnings Treasury stock Total
Shareholders’
Equity
Shares Amount Shares Amount
Balance at beginning of period(1)
415,700,000 $ 42 $ 1,356,975 $ 634,968 — $ — $ 1,991,985
Class B Unit expense — — 27,911 — — — 27,911
Net loss — — — (56,246) — — (56,246)
Balance at end of period(1)
415,700,000 $ 42 $ 1,384,886 $ 578,722 — $ — $ 1,963,650
Six Months Ended June 30, 2021
Common Stock Issued Additional Paid-in Capital Retained
Earnings Treasury stock Total
Shareholders’
Equity
Shares Amount Shares Amount
Balance at beginning of period 664,183,318 $ 66 $ 2,530,410 $ 116,999 (9,107,963) $ (89,610) $ 2,557,865
Effect of ASU 2020-06 — — (233,874) 6,033 — — (227,841)
2020 Omnibus Incentive Plan 849,982 — 8,442 — — — 8,442
Tax withholding related to vesting of equity awards — — (24) — (313,177) (2,323) (2,347)
Net loss — — — (1,055) — — (1,055)
Balance at end of period 665,033,300 $ 66 $ 2,304,954 $ 121,977 (9,421,140) $ (91,933) $ 2,335,064
Six Months Ended June 30, 2020
Common Stock Issued Additional Paid-in Capital Retained
Earnings Treasury stock Total
Shareholders’
Equity
Shares Amount Shares Amount
Balance at beginning of period(1)
415,700,000 $ 42 $ 1,347,614 $ 637,562 — $ — $ 1,985,218
Class B Unit expense — — 37,272 — — — 37,272
Net loss — — — (58,840) — — (58,840)
Balance at end of period(1)
415,700,000 $ 42 $ 1,384,886 $ 578,722 — $ — $ 1,963,650

~~(1)~~ ~~The shares of the Company's common stock, prior to the Transactions, have been retroactively restated as shares reflecting the exchange ratio established in the Transactions.~~


	Three Months Ended June 30, 2022

	Common Stock Issued			Additional Paid-in Capital		Retained Earnings		Treasury stock			Total Shareholders’ Equity
	Shares	Amount						Shares	Amount

Balance at beginning of period	666,045,694	$	67	$	2,314,488	$	269,090	(27,117,406)	$	(192,169)	$	2,391,476

2020 Omnibus Incentive Plan	131,217	—		4,104		—		—	—		4,104
Tax withholding related to vesting of equity awards	—	—		(239)		—		—	—		(239)
Net income	—	—		—		13,512		—	—		13,512
Balance at end of period	666,176,911	$	67	$	2,318,353	$	282,602	(27,117,406)	$	(192,169)	$	2,408,853

	Three Months Ended June 30, 2021

	Common Stock Issued			Additional Paid-in Capital		Retained Earnings		Treasury stock			Total Shareholders’ Equity
	Shares	Amount						Shares	Amount

Balance at beginning of period	664,277,068	$	66	$	2,297,504	$	168,909	(9,144,461)	$	(89,874)	$	2,376,605

2020 Omnibus Incentive Plan	756,232	—		7,474		—		—	—		7,474
Tax withholding related to vesting of equity awards	—	—		(24)		—		(276,679)	(2,059)		(2,083)
Net loss	—	—		—		(46,932)		—	—		(46,932)
Balance at end of period	665,033,300	$	66	$	2,304,954	$	121,977	(9,421,140)	$	(91,933)	$	2,335,064

	Six Months Ended June 30, 2022

	Common Stock Issued			Additional Paid-in Capital		Retained Earnings		Treasury stock			Total Shareholders’ Equity
	Shares	Amount						Shares	Amount

Balance at beginning of period	665,456,180	$	67	$	2,311,660	$	225,112	(27,117,406)	$	(192,169)	$	2,344,670

2020 Omnibus Incentive Plan	720,731	—		8,889		—		—	—		8,889
Tax withholding related to vesting of equity awards	—	—		(2,196)		—		—	—		(2,196)
Net income	—	—		—		57,490		—	—		57,490
Balance at end of period	666,176,911	$	67	$	2,318,353	$	282,602	(27,117,406)	$	(192,169)	$	2,408,853

	Six Months Ended June 30, 2021

	Common Stock Issued			Additional Paid-in Capital		Retained Earnings		Treasury stock			Total Shareholders’ Equity
	Shares	Amount						Shares	Amount

Balance at beginning of period	664,183,318	$	66	$	2,530,410	$	116,999	(9,107,963)	$	(89,610)	$	2,557,865

Cumulative effect of ASU 2020-06 on the accounting for convertible instruments	—	—		(233,874)		6,033		—	—		(227,841)
2020 Omnibus Incentive Plan	849,982	—		8,442		—			—		8,442
Tax withholding related to vesting of equity awards	—	—		(24)		—		(313,177)	(2,323)		(2,347)
Net loss	—	—		—		(1,055)		—	—		(1,055)
Balance at end of period	665,033,300	$	66	$	2,304,954	$	121,977	(9,421,140)	$	(91,933)	$	2,335,064

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

MULTIPLAN CORPORATION

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)


		Six Months Ended June 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Operating activities:	Operating activities:					Operating activities:
Net loss		$	(1,055)	$	(58,840)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net income (loss)						Net income (loss)	$	57,490	$	(1,055)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:						Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	Depreciation	33,173		29,641		Depreciation	33,767		33,173
Amortization of intangible assets	Amortization of intangible assets	169,875		167,027		Amortization of intangible assets	170,281		169,875
Amortization of the right-of-use asset	Amortization of the right-of-use asset	3,525		4,578		Amortization of the right-of-use asset	3,339		3,525
Stock-based compensation	Stock-based compensation	8,442		37,272		Stock-based compensation	7,234		8,442
Deferred income taxes	Deferred income taxes	303		(7,890)		Deferred income taxes	(59,481)		303
Non-cash interest costs	Non-cash interest costs	5,805		9,098		Non-cash interest costs	5,192		5,805

Gain on equity investments						Gain on equity investments	(289)		—
Loss on disposal of property and equipment	Loss on disposal of property and equipment	685		101		Loss on disposal of property and equipment	2,785		685
Change in fair value of Private Placement Warrants and unvested founder shares		41,185		0
(Gain) loss on change in fair value of Private Placement Warrants and Unvested Founder Shares						(Gain) loss on change in fair value of Private Placement Warrants and Unvested Founder Shares	(7,592)		41,185
Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions:	Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions:					Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions:
Accounts receivable, net	Accounts receivable, net	4,952		23,067		Accounts receivable, net	5,900		4,952
Prepaid expenses and other assets	Prepaid expenses and other assets	2,468		(941)		Prepaid expenses and other assets	9,888		2,468
Prepaid taxes	Prepaid taxes	(54,148)		(5,556)		Prepaid taxes	5,064		(54,148)
Operating lease obligation	Operating lease obligation	(3,417)		(4,790)		Operating lease obligation	(5,403)		(3,417)
Accounts payable and accrued expenses and other	Accounts payable and accrued expenses and other	(7,404)		(900)		Accounts payable and accrued expenses and other	7,464		(7,404)
Net cash provided by operating activities	Net cash provided by operating activities	204,389		191,867		Net cash provided by operating activities	235,639		204,389
Investing activities:	Investing activities:					Investing activities:
Purchases of property and equipment	Purchases of property and equipment	(36,787)		(34,866)		Purchases of property and equipment	(43,399)		(36,787)
Proceeds from sale of investment	Proceeds from sale of investment	5,641		0		Proceeds from sale of investment	289		5,641
Purchase of equity investments						Purchase of equity investments	(15,000)		—
HST Acquisition, net of cash acquired	HST Acquisition, net of cash acquired	(28)		0		HST Acquisition, net of cash acquired	—		(28)
DHP Acquisition, net of cash acquired	DHP Acquisition, net of cash acquired	(149,676)		0		DHP Acquisition, net of cash acquired	—		(149,676)
Net cash used in investing activities	Net cash used in investing activities	(180,850)		(34,866)		Net cash used in investing activities	(58,110)		(180,850)
Financing activities:	Financing activities:					Financing activities:

Repayments of Term Loan B						Repayments of Term Loan B	(6,625)		—

Borrowings on revolving credit facility		0		98,000
Repayment of revolving credit facility		0		(98,000)

Purchase of treasury stock		(2,323)		0
Taxes paid on settlement of vested share awards						Taxes paid on settlement of vested share awards	(2,196)		(2,323)

Borrowings (payments) on finance leases, net		0		34
Net cash (used in) provided by financing activities		(2,323)		34
Net increase in cash and cash equivalents		21,216		157,035
Cash and cash equivalents at beginning of period		126,755		21,825
Cash and cash equivalents at end of period		$	147,971	$	178,860

Net cash used in financing activities						Net cash used in financing activities	(8,821)		(2,323)
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	168,708		21,216
Cash, cash equivalents and restricted cash at beginning of period						Cash, cash equivalents and restricted cash at beginning of period	188,379		126,755
Cash, cash equivalents and restricted cash at end of period						Cash, cash equivalents and restricted cash at end of period	$	357,087	$	147,971

Cash and cash equivalents						Cash and cash equivalents	$	354,310	$	147,971
Restricted cash						Restricted cash	2,777		—
Cash, cash equivalents and restricted cash at end of period						Cash, cash equivalents and restricted cash at end of period	$	357,087	$	147,971

Noncash investing and financing activities:	Noncash investing and financing activities:					Noncash investing and financing activities:
Purchases of property and equipment not yet paid	Purchases of property and equipment not yet paid	$	3,913	$	2,664	Purchases of property and equipment not yet paid	$	4,589	$	3,913
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	1,025	$	467	Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	40	$	1,025
Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest	Interest	$	(123,115)	$	(167,836)	Interest	$	(139,013)	$	(123,115)
Income taxes, net of refunds	Income taxes, net of refunds	$	(68,766)	$	(3,407)	Income taxes, net of refunds	$	(72,452)	$	(68,766)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

1.General Information and Basis of Accounting

General Information

~~MultiPlan Corporation, formerly known as Churchill Capital Corp III (formerly known as Butler Acquisition Corp), was incorporated in Delaware~~We are a provider of data analytics and technology-enabled solutions designed to bring affordability, efficiency and fairness to the U.S. healthcare industry. We do so through services focused on ~~October 30, 2019~~reducing medical cost and ~~formed~~improving payment accuracy for the ~~purpose~~payors of ~~effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or morebusinesses.~~

~~On July 12, 2020, Churchill entered into~~healthcare, which are health insurers, self-insured employers and other health plan sponsors (typically through their health plan administrators), and, indirectly, the ~~Merger Agreement by and among First Merger Sub, Second Merger Sub, Holdings, and MultiPlan Parent. On October 8, 2020,~~plan members who are the Merger Agreement was consummated and the Transactions were completed. In connection with the Transactions, Churchill changed its name to MultiPlan Corporation and the New York Stock Exchange ticker symbols for its Class A common stock and warrants to "MPLN" and "MPLN.WS", respectively.

~~The Transactions were accounted for as a reverse recapitalization. Under this method~~consumers of accounting, Churchill has been treated as the acquired company for financial reporting purposes. This determination was primarily based on our existing stockholders being the majority stockholders and holding majority voting power in the combined company, our senior management comprising the majority of the senior management of the combined company, and our ongoing operations comprising the ongoing operations of the combined company. Accordingly, for accounting purposes, the Transactions were treated as the equivalent of MultiPlan issuing shares for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill were recognized at fair value (which were consistent with carrying value), with no goodwill or other intangible assets recorded. Operations prior to the Transactions in these financial statements are those of Polaris and the retained earnings of Polaris has been carried forward after the Transactions. Earnings per share calculations for all periods prior to the Transactions have been retrospectively adjusted for the equivalent number of shares reflecting the exchange ratio established in the Transactions.healthcare services.

Throughout the notes to the unaudited condensed consolidated financial statements, unless otherwise noted, "we," "us," "our", "MultiPlan", and the "Company" and similar terms refer to Polaris and its subsidiaries prior to the consummation of the Transactions, and MultiPlan and its subsidiaries after the Transactions.

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements of MultiPlan Corporation have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Certain information and disclosures required by accounting principles generally accepted in the United States (GAAP) for complete consolidated financial statements have been condensed or omitted pursuant to the SEC’s rules and regulations, although management believes that the disclosures are adequate and make the information presented not misleading. The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of MultiPlan Corporation and the notes thereto, included in the Company’s ~~2020~~2021 Annual Report. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), necessary for a fair statement of the Company’s financial position as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, and its results of operations for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 and cash flows for the six months ended June 30, ~~2021~~2022 and ~~2020~~2021 have been included.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the Company's estimates. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, revenue recognition, recoverability of long-lived assets, goodwill, valuation of Private Placement Warrants and ~~unvested founder shares,~~Unvested Founder Shares, valuation of stock-based compensation awards and income taxes.

~~Table of Contents~~

~~MULTIPLAN CORPORATION~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

COVID-19

COVID-19 has negatively impacted our business, results of operations and financial condition ~~during 2020 and~~since the ~~three and six months ended June 30, 2021. Effects from COVID-19 began to impact our business in~~ first quarter of 2020 ~~with~~as various federal, state, and local governments and private entities ~~mandating~~mandated, and in some cases continue to mandate, restrictions on travel, restrictions on public gatherings, closure of non-essential commerce, and shelter in place orders. The Company experienced an approximately 4.6% decline in revenues for the year ended December 31, 2020 compared to 2019 primarily due to reduced volume from customers as a result of restrictions on elective medical procedures and non-essential medical services. For the three and six months ended June 30, ~~2021,~~2022, the ~~Company's~~Company’s revenues continue to be negatively impacted ~~but~~as a result of the medical charges received on non-COVID-19 claims from customers not yet reaching pre-COVID-19 pandemic levels due to fewer elective medical procedures and non-essential medical services. Such negative impacts, however, have been to a lesser extent compared to the same period in 2020 and 2021 as vaccination rates have increased and most restrictions on medical services have been lifted. The extent of the ultimate impact of COVID-19 will depend on the severity and duration of the evolving pandemic. Future developments remain uncertain, including the number of confirmed cases, the emergence of highly contagious variants, and any actions taken by federal, state and local governments such as economic relief efforts, as well as U.S. and global economies, consumer behavior and healthcare utilization patterns.

Segment Reporting

Operating segments are defined as components of an entity for which separate financial information is available and regularly reviewed by the chief operating decision maker. The Company manages its operations as a single segment for the

Table of Contents

MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

purposes of assessing performance and making decisions. The Company's singular focus is being a leading value-added provider of data analytics and technology-enabled end-to-end cost management, payment and revenue integrity solutions to the U.S. healthcare industry.

In addition, all of the Company's revenues and long-lived assets are attributable to operations in the United States for all periods presented.

Revenue Recognition

Disaggregation of Revenue

The following table presents revenues disaggregated by services and contract types:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Revenues	Revenues									Revenues
Network Services		$	72,073	$	61,544	$	141,438	$	135,126
Network-Based Services										Network-Based Services	$	63,420	$	72,073	$	132,044	$	141,438
PSAV	PSAV	55,297		46,250		109,539		103,407		PSAV	49,282		55,297		101,245		109,539
PEPM	PEPM	14,062		13,591		27,577		27,871		PEPM	12,801		14,062		27,739		27,577
Other	Other	2,714		1,703		4,322		3,848		Other	1,337		2,714		3,060		4,322
Analytic-Based Services		170,793		122,453		327,953		274,096
Analytics-Based Services										Analytics-Based Services	193,294		170,793		389,412		327,953
PSAV	PSAV	166,602		122,117		319,680		273,308		PSAV	187,517		166,602		377,809		319,680
PEPM	PEPM	4,191		336		8,273		788		PEPM	5,777		4,191		11,603		8,273
Payment and Revenue Integrity Services	Payment and Revenue Integrity Services	33,406		22,883		61,745		49,680		Payment and Revenue Integrity Services	33,414		33,406		66,718		61,745
PSAV	PSAV	33,267		22,858		61,547		49,636		PSAV	33,295		33,267		66,479		61,547
PEPM	PEPM	139		25		198		44		PEPM	119		139		239		198
Total Revenues	Total Revenues	$	276,272	$	206,880	$	531,136	$	458,902	Total Revenues	$	290,128	$	276,272	$	588,174	$	531,136

Due to the nature of our arrangements, certain estimates may be constrained if it is probable that a significant reversal of revenue will occur when the uncertainty is resolved. For our percentage of savings contracts, portions of revenue that is recognized and collected in a reporting period may be returned or credited in subsequent periods. These credits are the result of payers not utilizing the discounts that were initially calculated, or differences between the Company’s estimates of savings achieved for a customer and the amounts self-reported in the following month by that same customer. Significant judgment is used in constraining estimates of variable consideration, and is based upon both client-specific and aggregated factors that include historical billing and adjustment data, client contract terms, and performance guarantees. We update our estimates at the end of each reporting period as additional information becomes available. There have not been any material changes to estimates of variable consideration for performance obligations satisfied prior to the six months ended June 30, ~~2021.~~

~~Table of Contents~~

~~MULTIPLAN CORPORATION~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

2022.

The timing of payments from customers from time to time generates contract assets or contract liabilities, however these amounts are immaterial in all periods presented.

~~Stock-Based Compensation~~

~~The Company's awards are granted via the 2020 Omnibus Incentive Plan in the form of Employee RS, Employee RSUs, Employee NQSOs (together "employee awards"), and Director RSUs.~~

Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as compensation expense for employee awards, net of forfeitures, over the applicable requisite service period of the stock award using the straight-line method for awards with only service conditions. The compensation expense for Director RSUs is recognized in the same period(s) and in the same manner as if the Company had paid cash in exchange for the goods or services instead of a share-based award.

~~We determine the fair value of the Employee RS, Employee RSUs and Director RSUs with time based vesting using the value on our common stock on the date of the grant.~~

~~We determine the fair value of Employee NQSOs using a Black-Scholes option model while taking into consideration the price of the Company's Class A common stock and vesting conditions.~~

Certain assumptions used in the model are subjective and require significant management judgment, and include the (i) risk-free rate, (ii) volatility, and (iii) expected term. Changes in these assumptions can materially affect the estimate of the grant date fair value of the Employee NQSOs and ultimately compensation expenses. The Company has historically been a private company and lacked sufficient company-specific historical and implied volatility information. Therefore, it estimated its expected stock volatility based on the implied volatility of our publicly traded financial instruments and the historical volatility of a publicly traded set of peer companies. The risk-free interest rate is based on the interpolated 5 and 7 year U.S. Treasury constant maturity yields.

~~See Note 7 Stock-Based Compensation below for further information.~~

~~New Accounting Pronouncements~~

We consider the applicability and impact of all ASUs and applicable authoritative guidance. The ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on our unaudited condensed consolidated financial statements.

~~New Accounting Pronouncements Recently Adopted~~

ASU 2020-06, Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ~~On August 5, 2020, the FASB issued ASU 2020-06,~~ Debt — Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. The amendments simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted. The Company adopted this new accounting standard on January 1, 2021 on a modified retrospective basis. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of the standard resulted in a reclassification to long-term debt of $297.9 million, corresponding to the equity component of $233.9 million previously recorded in additional paid-in capital, the deferred taxes related to the equity component as of January 1, 2021 of $70.1 million, and a cumulative-effect adjustment to increase retained earnings as of January 1, 2021 by $6.0 million, which reflects the elimination of the discount amortization related to the equity component in prior periods, net of deferred taxes. See Note 3 Long-Term Debt below for additional information on the impact of this adoption.

~~Table of Contents~~

~~MULTIPLAN CORPORATION~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~New Accounting Pronouncements Issued but Not Yet Adopted~~

~~ASU 2020-04 and 2021-01, Reference Rate Reform (Topic 848) and Reference Rate Reform (Topic 848): Scope.~~ ~~In March 2020, the FASB issued ASU No. 2020-04,~~ ~~Reference Rate Reform (Topic 848)~~, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, ~~Reference Rate Reform (Topic 848): Scope~~, which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company has a term loan and a revolving credit loan for which the interest rates are indexed on the LIBOR. The guidance did not have an impact on our financial position, results of operations or disclosures at transition, but we will continue to evaluate its impact on contracts and hedging relationships modified on or before December 31, 2022.

2.~~Business Combinations~~Investments

~~DHP Acquisition~~

~~On February 26, 2021,~~In June 2022, the Company, ~~completed~~acquired for cash consideration of $15.0 million, a minority interest of Abacus Insights, Inc., a leading data management and interoperability platform that enables health plans and their providers to standardize data across the ~~acquisition of DHP,~~healthcare ecosystem by providing a highly secure unified data infrastructure that maximizes analytics enablement to reduce costs and improve outcomes.

The investment does not have a readily determinable fair value and the Company has elected to record the investment at cost, less impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions for an ~~analytics and technology company offering healthcare revenue and payment integrity services. The Company acquired 100 percent~~identical or similar investment of the ~~voting equity interest of DHP. The acquisition strengthens MultiPlan's service offering in~~same issuer. During the ~~payment integrity market with new~~three and ~~complementary services~~six months ended June 30, 2022, there were no observable price changes or impairments recorded. Refer to ~~help its payor customers manage the overall cost of care and improve their competitiveness. It also adds revenue integrity services~~Note 5 Fair Value Measurements for ~~plans that receive premiums from the Centers for Medicare and Medicaid Services.~~

The DHP acquisition was accounted for as a business combination using the acquisition method of accounting. As a result of the DHP acquisition and the application of purchase accounting, DHP's identifiable assets and liabilities were adjusted to their fair market values as of the acquisition date. The amount of DHP goodwill that is deductible for income tax purposes is $48.0 million.

~~The following table summarizes the consideration transferred to acquire DHP and the amounts of identified assets acquired and liabilities assumed at the acquisition date:~~


~~(in thousands)~~
~~Total consideration transferred in cash~~	$	~~151,776~~

~~Cash and cash equivalents~~	~~2,100~~
~~Trade accounts receivable, net~~	~~2,993~~
~~Prepaid expenses~~	~~369~~
~~Other current assets, net~~	~~119~~
~~Property and equipment, net(1)~~	~~9,056~~
~~Other assets~~	~~276~~
~~Other intangibles, net(2)~~	~~41,060~~
~~Accounts payable~~	~~(458)~~
~~Other accrued expenses~~	~~(5,209)~~
~~Deferred income taxes~~	~~(6,215)~~
~~Long-Term Liabilities~~	~~(553)~~
~~Total identifiable net assets~~	~~43,538~~

~~Goodwill~~	$	~~108,238~~

~~(1)Includes capitalized software of $8.9 million and other tangible assets of $0.2 million.~~additional information.

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MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

~~(2)Includes client relationships of $39.8 million and trade names of $1.2 million.~~

~~The preliminary purchase price allocation for the business combination is subject to adjustment as valuation analyses, primarily related to property and equipment and intangible assets, are finalized.~~

The results of operations and financial condition of DHP have been included in the Company's consolidated results from the date of acquisition. Through June 30, 2021, DHP's impact on revenues and net earnings was not material and as a result no pro forma disclosures were required.

In connection with the DHP acquisition, the Company incurred transaction costs. The transaction costs have been expensed as incurred and these amounts totaling $0.1 million and $4.7 million, respectively, for the three and six months ended June 30, 2021, are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of loss and comprehensive loss.

3.Long-Term Debt

As of June 30, ~~2021,~~2022, and December 31, ~~2020,~~2021, long-term debt consisted of the following:


							Key Terms				June 30, 2022				December 31, 2021
(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	Character	Priority	Maturity	Coupon
Term Loan G		$	2,341,000	$	2,341,000
Term Loan B						Term Loan B	Term Loan	Senior Secured	9/1/2028(1)	Variable(2)			$	1,315,063			$	1,321,688
5.50% Senior Secured Notes						5.50% Senior Secured Notes	Notes	Senior Secured	9/1/2028	5.50%	1,050,000				1,050,000
5.750% Notes	5.750% Notes	1,300,000		1,300,000		5.750% Notes	Notes	Senior Unsecured	11/1/2028	5.750%	1,300,000				1,300,000
Senior Convertible PIK Notes	Senior Convertible PIK Notes	1,300,000		1,300,000		Senior Convertible PIK Notes	Convertible Notes(3)	Senior Unsecured	10/15/2027	Cash Interest 6.00%, PIK Interest 7.00%	1,300,000				1,300,000
Finance lease obligations, non-current	Finance lease obligations, non-current	119		92		Finance lease obligations, non-current	Other	Senior Secured	2022-2024	3.38% - 20.31%	30				71
Long-term debt	Long-term debt	4,941,119		4,941,092		Long-term debt					4,965,093				4,971,759
Discount – Term Loan G		(3,094)		(3,831)
Less: current portion of long-term debt						Less: current portion of long-term debt					(13,250)				(13,250)
Discount - Term Loan B						Discount - Term Loan B					(12,005)				(12,864)
Discount – Senior Convertible PIK Notes	Discount – Senior Convertible PIK Notes	(29,674)		(329,494)		Discount – Senior Convertible PIK Notes					(25,690)				(27,715)
Debt issuance costs, net:
Term Loan G		(7,494)		(9,666)
5.750% Notes		(18,617)		(19,613)
Less: debt discounts, net						Less: debt discounts, net					(37,695)				(40,579)
Debt issuance costs - Term Loan B						Debt issuance costs - Term Loan B					(6,538)				(7,008)
Debt issuance costs - 5.50% Senior Secured Notes						Debt issuance costs - 5.50% Senior Secured Notes					(13,408)				(14,188)
Debt issuance costs - 5.750% Notes						Debt issuance costs - 5.750% Notes					(16,532)				(17,590)
Less: debt issuance costs, net						Less: debt issuance costs, net					(36,478)				(38,786)
Long-term debt, net	Long-term debt, net	$	4,882,240	$	4,578,488	Long-term debt, net					$	4,877,670			$	4,879,144

~~Term Loan~~(1)Beginning December 31, 2021 and ~~Revolver~~

For all our debt agreements with an interest rate dependent on LIBOR, the Company is currently assessing and monitoring how transitioning from LIBOR to an alternative reference rate may affect the Company beyond 2023.

~~During the six months ended June 30, 2020,~~quarterly thereafter, we shall repay a ~~correcting adjustment~~principal amount of ~~$2.3 million was made to increase interest expense to account for acceleration of debt issuance cost due to principal prepayments made on~~ the Term Loan GB equal to 0.25% of the initial aggregate principal of $1,325.0 million. These scheduled principal repayments may be reduced by any voluntary or mandatory prepayments made in accordance with the ~~years 2017, 2018~~credit agreement.

(2)Interest on Term Loan B and ~~2019.~~

~~Senior Convertible PIK Notes~~

~~Prior~~Revolver B is calculated, at MPH's option, as (a) LIBOR (or, with respect to the ~~adoption~~term loan facility only, 0.50%, whichever is higher), plus the applicable margin, or (b) the highest rate of ~~ASU 2020-06~~(1) prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the LIBOR for an interest period of one month, plus 1.00% and (4) 0.50% for Term Loan B and 1.00% for Revolver B, in each case, plus an applicable margin of 4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on ~~January 1, 2021, the nature~~MPH's first lien debt to consolidated EBITDA ratio. The interest rate in effect for Term Loan B was 5.82% as of ~~the notes required management to separate the~~June 30, 2022.

(3)The Senior Convertible PIK Notes are convertible into ~~liability and equity components. ASU 2020-06’s elimination~~shares of ~~the beneficial~~Class A common stock based on a $13.00 conversion guidance resulted in "recombining" the equity and debt components of the Senior Convertible PIK Notes into a single liability. As a result, $297.9 million of the discount on the liability created by recognition of a component of the convertible debt in equity was eliminated. See Note 1 General Information and Basis of Accounting above for additional detail.price, subject to customary anti-dilution adjustments.

4.Private Placement Warrants and Unvested Founder Shares

The Company classifies the Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares as a liability on its unaudited condensed consolidated balance sheets as these instruments are precluded from being indexed to our own stock given the terms allow for a settlement that does not meet the scope of the fixed-for-fixed exception in Accounting Standards Codification 815.

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MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

The Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares were initially recorded at fair value on the date of consummation of the Transactions and are subsequently adjusted to fair value at each subsequent reporting date. The fair value

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~~MULTIPLAN CORPORATION~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

of the ~~unvested founder shares~~Unvested Founder Shares and unvested Private Placement Warrants is obtained using a Monte Carlo model and the fair value of the remaining Private Placement Warrants is obtained using a Black Scholes model, together referenced as the "option pricing" model. The Company will continue to adjust the liability for changes in fair value for the founder shares until the earlier of the re-vesting or forfeiture of these instruments. The Company will continue to adjust the liability for changes in fair value for the Private Placement Warrants until the warrant is equity classified.

As of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the fair value of the Private Placement Warrants ~~were $62.2 million and $44.5 million, respectively,~~ and the ~~fair value of the unvested founder shares were $85.6 million and $62.1 million, respectively.~~ Unvested Founder Shares were:


(in thousands)	June 30, 2022		December 31, 2021
Private Placement Warrants	$	30,188	$	38,028
Unvested Founder Shares	36,220		35,972

For the three and six months ended June 30, ~~2021,~~2022, the change in fair values was primarily due to the decrease in the expected stock volatility and ~~primarily as a result~~the passage of time over that period, partially offset by the ~~variations~~increase in thestock price of the Company's Class A common ~~stock over those periods,~~stock. The accompanying unaudited condensed consolidated statements of income (loss) and comprehensive income (loss) include loss and (gains) related to the change in fair value of the Private Placement Warrants ~~increased by $32.9 million~~ and ~~$17.7 million, respectively,~~Unvested Founder Shares for the three and ~~the fair value of the unvested founder shares increased by $48.7 million~~six months ended June 30, 2022 and $23.5 million, respectively. The corresponding loss is recognized within change in fair value of Private Placement Warrants and unvested founder shares in the unaudited condensed consolidated statements of loss and comprehensive loss.2021 as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Private Placement Warrants	$	932	$	32,936	$	(7,840)	$	17,741
Unvested Founder Shares	4,217		48,624		248		23,444
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares	$	5,149	$	81,560	$	(7,592)	$	41,185

5.Fair Value Measurements

Fair value measurements are based on the premise that fair value represents an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value:

•Level 1 — Quoted prices in active markets for identical assets or liabilities on the reporting date.

•Level 2 — Inputs, other than quoted prices in active markets (Level 1), that are observable for the asset or liability, either directly or indirectly.

•Level 3 — Unobservable inputs in which there is little or no market data, which require the entity to develop its own assumptions

Financial instruments

Certain financial instruments which are not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable and accounts payable, which approximate fair value due to their short-term nature. The financial instrument that potentially subjects the Company to concentrations of credit risk consists primarily of accounts receivable.

~~We estimate~~Cash and cash equivalents as of June 30, 2022 included money market funds of $150.0 million, which were valued based on Level 1 measurements using quoted prices in active markets for identical assets. Our cash and cash equivalents as of December 31, 2021 did not include money market funds.

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MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2022 and December 31, 2021, the Company's carrying amount and fair value of long-term debt consisted of the following:


	June 30, 2022				December 31, 2021
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Liabilities:
Term Loan B, net of discount	$	1,303,058	$	1,205,329	$	1,308,824	$	1,294,312
5.50% Senior Secured Notes	1,050,000		936,600		1,050,000		1,029,680
5.750% Notes	1,300,000		1,080,300		1,300,000		1,245,436
Senior Convertible PIK Notes, net of discount	1,274,310		1,061,500		1,272,285		1,245,958
Finance lease obligations	30		30		71		71
Total Liabilities	$	4,927,398	$	4,283,759	$	4,931,180	$	4,815,457

As of June 30, 2022, the fair value of long-term debt, including current maturities of finance lease obligations, was obtained using quoted prices in active markets. As such, this is considered a Level 1 fair value measurement.

As of December 31, 2021, we estimated the fair value of long-term debt, including current maturities of finance lease obligations, based on estimates using present value techniques that ~~are~~were significantly affected by the assumptions used concerning the amount and timing of estimated future cash flows and discount rates that reflect varying degrees of risk. Assumptions ~~include~~included interest rates currently available for instruments with similar terms as well as the five, seven, and eight-year Treasury bill rates. As such, this iswas considered a Level 2 fair value measurement.

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~~MULTIPLAN CORPORATION~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~As of June 30, 2021 and December 31, 2020, the Company's carrying amount and fair value of long-term debt consisted of the following:~~

June 30, 2021 December 31, 2020
(in thousands) Carrying
Amount Fair Value Carrying
Amount Fair Value
Liabilities:
Term Loan G, net of discount $ 2,337,906 $ 2,341,876 $ 2,337,169 $ 2,390,720
5.750% Notes 1,300,000 1,273,988 1,300,000 1,300,000
Convertible Notes, net of discount(1)
1,270,326 1,255,746 970,506 970,506
Finance lease obligations 119 119 92 92
Total Liabilities $ 4,908,351 $ 4,871,729 $ 4,607,767 $ 4,661,318

~~(1)See Note 1 General Information and Basis of Accounting and Note 3 Long-Term Debt for further detail.~~

Recurring fair value measurements

The Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares are measured at fair value on a recurring basis. The fair value of these instruments was determined based on significant inputs not observable in the market which would represent a level 3 measurement within the fair value hierarchy. The Company uses an option pricing simulation to estimate the fair value of these instruments.

Non-recurring fair value measurements

We also measure certain non-financial assets at fair value on a nonrecurring basis, primarily goodwill and long-lived tangible and intangible assets, in connection with periodic evaluations for potential impairment. We estimate the fair value of these assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements. There were no material impairment charges for these assets for fiscal years ~~2021~~2022 and ~~2020.~~2021.

Our non-marketable equity securities using the measurement alternative are adjusted to fair value on a non-recurring basis. Adjustments are made when observable transactions for identical or similar investments of the same issuer occur, or due to impairment. These securities are classified as Level 2 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date. At June 30, 2022, the carrying amount of these alternative investments, recorded under Other assets, net in the unaudited condensed consolidated balance sheets, was $15.0 million. There were no write-ups due to observable price changes or write-downs due to impairment in the current period.

6.Commitments and Contingencies

Commitments

The Company has certain irrevocable letters of credit used to satisfy real estate lease agreements for ~~three~~3 of our offices in lieu of security deposits in the amount of $1.8 million outstanding as of June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Claims and Litigation

The Company is a defendant in various lawsuits and other pending and threatened litigation and other adversarial matters as well as regulatory investigations, all of which have arisen in the ordinary course of ~~business as well as regulatory investigations.~~business. While the ultimate outcome

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MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

with respect to such proceedings cannot be predicted with certainty, the Company does not believe they will result, individually or in the aggregate, in a material adverse effect upon our financial condition or results of operations, or cash flows.

On March 25, 2021 and April 9, 2021, we were named as a defendant in 2 putative class action lawsuits relating to the Transactions that have since been consolidated under the caption In Re MultiPlan Corp. Stockholders Litigation,, Consolidated C.A. No. ~~2021-0300-MTZ~~2021-0300-LWW (Del.Ch) (“("Delaware Stockholder ~~Litigation”~~Litigation"). The Delaware Stockholder Litigation asserts breach of fiduciary duty claims and aiding and abetting breach of fiduciary duty claims against the former directors of the Churchill board, the Sponsor, KG and M. Klein ~~(the “Churchill Defendants”~~(collectively, the "Churchill Defendants") and the Company. The Delaware Stockholder Litigation complaint alleges that the Transactions were a product of an unfair process by Churchill, which was allegedly impacted by conflicts of interest, resulting in mispricing of the Transactions. The complaint seeks, among other things, damages, certain equitable relief including the reopening of redemptions, and attorneys’ fees and costs. ~~On June 18, 2021, the~~The Company and the Churchill Defendants ~~each~~ filed ~~opening briefs in support of their respective~~ motions to dismiss the complaint.

~~In addition,~~ On January 3, 2022, the ~~putative securities class action complaint captioned~~ ~~Samuel Paradis v. MultiPlan Corporation et. al., No. 1:21-cv-1853 (E.D.N.Y.)~~Chancery Court issued a ruling granting in part the Company’s motion to dismiss and denying the motion to dismiss filed ~~on April 6, 2021 in~~by the ~~United States District Court for~~Churchill Defendants. The Company is therefore dismissed from the ~~Eastern District of New York was voluntarily dismissed on June 3, 2021. On June 4, 2021, a putative securities class action complaint captioned~~ ~~Steve Kong v. MultiPlan Corporation et al., No. 2:21-cv-3186 (E.D.N.Y.) was filed in the United States District Court for the Eastern District of New York. The Kong lawsuit~~Delaware Stockholder Litigation, which is ~~brought~~proceeding against the ~~Company; our Chief Executive Officer, Mr. Mark Tabak, and our Chief~~

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~~MULTIPLAN CORPORATION~~

~~Notes~~Churchill Defendants. The Company has agreed to ~~Unaudited Condensed Consolidated Financial Statements~~

Financial Officer, Mr. David Redmond, as well as individuals and entities involved in the Transactions, including Glenn August and Michael Klein, each of whom currently serve on our Board. The complaint asserts claims for violations of Sections 10(b), 14(a), and 20(a)indemnify certain of the ~~Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9 promulgated thereunder and seeks damages based on alleged material misrepresentations and omissions concerning~~Churchill Defendants with respect to the Transactions and in our public disclosures. The proposed class period is July 12, 2020, through November 10, 2020, inclusive. On June 21, 2021, the District Court appointed plaintiff One68 Global Master Fund, LP as lead plaintiff.Delaware Stockholder Litigation.

We accrue for costs associated with certain contingencies, including, but not limited to, settlement of legal proceedings, regulatory compliance matters and self-insurance exposures when such costs are probable and reasonably estimable. Such accruals are included in other accrued expenses on the accompanying unaudited condensed consolidated balance sheets. In addition, we accrue for legal fees incurred in defense of asserted litigation and regulatory matters as such legal fees are incurred. To the extent it is probable under our existing insurance coverage that we are able to recover losses and legal fees related to contingencies, we record such recoveries concurrently with the accrual of the related loss or legal fees. Significant management judgment is required to estimate the amounts of such contingent liabilities and the related insurance recoveries. In our determination of the probability and ability to estimate contingent liabilities and related insurance recoveries we consider the following: litigation exposure based on currently available information, consultations with external legal counsel, adequacy and applicability of existing insurance coverage and other pertinent facts and circumstances regarding the contingency. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved; and such changes are recorded in the accompanying unaudited condensed consolidated statements of ~~loss~~income (loss) and comprehensive ~~loss~~income (loss) during the period of the change and appropriately reflected in other accrued liabilities on the accompanying unaudited condensed consolidated balance sheets.

7.~~Stock-Based Compensation~~Basic and Diluted Earnings (Loss) Per Share

~~On October 8, 2020,~~Basic and diluted earnings (Loss) per share was calculated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands, except number of shares and per share data)	2022		2021		2022		2021
Numerator for earnings per share calculation
Net Income (Loss)	$	13,512	$	(46,932)	$	57,490	$	(1,055)
Denominator for earnings per share calculation
Weighted average number of shares outstanding – basic	639,001,506		655,609,718		638,750,938		655,361,621
Effect of stock-based compensation	1,095,843		—		958,309		—
Weighted average number of shares outstanding – diluted	640,097,349		655,609,718		639,709,247		655,361,621
Income (Loss) per share – basic and diluted:
Net income (loss) per share – basic	$	0.02	$	(0.07)	$	0.09	$	(0.00)
Net income (loss) per share – diluted	$	0.02	$	(0.07)	$	0.09	$	(0.00)

As of the ~~Company’s stockholders approved~~three and six months ended June 30, 2022 and 2021, we have excluded from the calculation of diluted net income per share the instruments whose effect would have been anti-dilutive, including (i) 58,500,000 warrants outstanding, (ii) 100,000,000 shares which may be issued upon conversion of the Senior Convertible PIK Notes, and (iii) 12,404,080 Unvested Founder Shares. Additionally, we have excluded from the calculation of diluted net income (loss) per share awards within the 2020 Omnibus Incentive Plan, ~~which previously had~~whose effect would have been ~~approved by the Company’s board~~anti-dilutive of ~~directors subject to stockholder approval. The Incentive Plan permits the granting of stock options, stock appreciation rights, restricted stock~~12,939,954 and ~~restricted stock units to the Company’s employees and directors for up to 85,850,000 shares of Class A common stock.~~

~~During the six months ended June 30, 2021, activity under the 2020 Omnibus Incentive Plan is summarized in the table below:~~

Employee RS Director RSUs Employee RSUs Employee NQSOs
Nonvested as of December 31, 2020 1,468,750 42,847 0 0
Awarded 133,689 87,275 2,870,671 2,442,113
Vested (796,875) (48,061) (7,812) 0
Forfeited (671,875) 0 0 0
Nonvested as of June 30, 2021 133,689 82,061 2,862,859 2,442,113

~~Compensation cost charged to expense related to share-based compensation arrangements was $7.5 million and $8.4 million and $27.9 million and $37.3 million~~ 5,520,722 for the three and six months ended June 30, 2022 and 2021, ~~and 2020,~~ respectively.

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MULTIPLAN CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

8.~~Basic and Diluted Earnings and Loss Per Share~~

~~Basic and diluted earnings and loss per share was calculated as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
($ in thousands, except number of shares and per share data) 2021 2020 2021 2020
Numerator for earnings per share calculation
Net Loss $ (46,932) $ (56,246) $ (1,055) $ (58,840)
Denominator for earnings per share calculation
Weighted average number of shares outstanding – basic 655,609,718 415,700,000 655,361,621 415,700,000
Effect of stock-based compensation 0 0 0 0
Weighted average number of shares outstanding – diluted 655,609,718 415,700,000 655,361,621 415,700,000
Loss per share – basic and diluted:
Net loss per share – basic $ (0.07) $ (0.14) $ (0.00) $ (0.14)
Net loss per share – diluted $ (0.07) $ (0.14) $ (0.00) $ (0.14)

Earnings per share calculations for all periods prior to the Transactions have been retrospectively restated to the equivalent number of shares reflecting the exchange ratio established in the reverse recapitalization. Subsequent to the Transactions, earnings per share will be calculated based on the weighted average number of shares of common stock then outstanding.

As of the three and six months ended June 30, 2021, we have excluded from the calculation of diluted net loss per share the instruments whose effect would have been anti-dilutive given the Company's losses and because contingencies for vesting have not been met, including (i) 58,500,000 warrants outstanding, (ii) 100,000,000 shares which may be issued upon conversion of the Senior Convertible PIK Notes, (iii) 12,404,080 unvested founder shares, and (iv) 5,520,722 unvested 2020 Omnibus Incentive Plan awards. Therefore, the weighted average number of shares outstanding used to calculate both basic and diluted net loss per share is the same.

~~There were 0 warrants, options, unvested founder shares, or 2020 Omnibus Incentive Plan awards for the three and six months ended June 30, 2020.~~

9.Related Party Transactions

The accompanying unaudited condensed consolidated statements of ~~loss~~income (loss) and comprehensive ~~loss~~income (loss) include expenses and revenues to and from related parties for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Revenues	Revenues	$	872	$	476	$	1,439	$	1,036	Revenues	$	395	$	872	$	1,038	$	1,439
Total revenues from related parties	Total revenues from related parties	872		476		1,439		1,036		Total revenues from related parties	395		872		1,038		1,439
Cost of services	Cost of services	(49)		0		(739)		(583)		Cost of services	(290)		(49)		(602)		(739)
General and administrative	General and administrative	(148)		(50)		(413)		(100)		General and administrative	—		(148)		—		(413)
Total expense from related parties	Total expense from related parties	$	(197)	$	(50)	$	(1,152)	$	(683)	Total expense from related parties	$	(290)	$	(197)	$	(602)	$	(1,152)

The accompanying unaudited condensed consolidated balance sheets include accruals from related parties as of June 30, ~~2021~~2022 and December 31, ~~2020~~2021 as follows:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	June 30, 2022		December 31, 2021
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	2,300	$	2,725	Accounts payable	$	1,726	$	2,297
Total liabilities from related parties	Total liabilities from related parties	$	2,300	$	2,725	Total liabilities from related parties	$	1,726	$	2,297

In ~~2021~~2022 and ~~2020,~~2021, the related party transactions included the following:

•The Company purchased PPO network services from a company controlled by Hellman & Friedman LLC, an affiliate of H&F, to supplement our provider network. We also recognize revenues from that same company for the use of our provider network and other claims processing services.

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~~MULTIPLAN CORPORATION~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

•The Company has obtained insurance brokered through a company controlled by Hellman & Friedman LLC.

•The Company reimburses Hellman & Friedman LLC for reasonable out of pocket expenses that include travel, lodging, meals, and any similar expenses.

•Companies controlled or managed by members of the Board have participated in the PIPE Investment, including the Senior Convertible PIK Notes.

•~~The Company purchased advisory services in connection with the Transactions from companies controlled or managed by members of the Board.~~

2017

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes thereto contained elsewhere in this Quarterly Report and together with the information included in the Company’s ~~2020~~2021 Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties; the results described below are not necessarily indicative of the results to be expected in any future periods.

Cautionary Note Regarding Forward-looking ~~Statement~~sStatements

All statements other than statements of historical fact included in this Quarterly Report including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects as well as estimates of industry growth for the next quarter and beyond. When used in this Quarterly Report, words such as ~~“anticipate,~~“believes,” ~~“believe,~~“estimates,” ~~“estimate,~~“anticipates,” ~~“expect,~~“expects,” ~~“intend”~~“seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology represent forward-looking statements that include matters that are not historical facts. They may appear in a number of places throughout this Quarterly Report and ~~similar expressions, as they relate to us or the Company’s management, identify~~these forward-looking ~~statements.~~statements reflect management’s expectations regarding our future growth, results of operations, operational and financial performance and business prospects and opportunities. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting our business. Factors that may impact such forward-looking statements include:

•the ~~beliefs~~impact of COVID-19 and its related effects on our projected results of operations, financial performance or other financial metrics;

•loss of our customers, particularly our largest customers;

•decreases in our existing market share or the size of our Preferred Provider Organization (“PPO”) networks;

•effects of competition;

•effects of pricing pressure;

•the inability of our customers to pay for our services;

•decreases in discounts from providers;

•the loss of our existing relationships with providers;

•the loss of key members of our management ~~as well as assumptions made by,~~team;

•pressure to limit access to preferred provider networks;

•the ability to achieve the goals of our strategic plans and recognize the anticipated strategic, operational, growth and efficiency benefits when expected;

•our ability to identify, complete and successfully integrate acquisitions;

•changes in our industry;

•interruptions or security breaches of our information ~~currently available~~technology systems and other cyber security attacks;

•our ability to protect proprietary applications;

•our inability to expand our network infrastructure;

•our ability to maintain effective internal controls over financial reporting;

•our ability to continue to attract, motivate and retain a large number of skilled employees, and adapt to the ~~Company’s management. Actual~~effects of inflationary pressure on wages;

•changes in our regulatory environment, including healthcare law and regulations;

•the expansion of privacy and security laws;

•heightened enforcement and investigations activity by government agencies;

•our ability to pay interest and principal on our notes and other indebtedness;

•the possibility that we may be adversely affected by other political, economic, business, and/or competitive factors;

•other factors disclosed in this Quarterly Report; and

•other factors beyond our control.

The forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results ~~could differ~~or performance to be materially different from those ~~contemplated~~expressed or implied by ~~the~~these forward-looking ~~statements as a result of a variety of~~statements. These risks and uncertainties ~~including~~include, but are not limited to, those ~~discussed~~factors referred to under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report or as described in our ~~2020~~2021 Annual Report. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not undertake noany obligation to update or revise any forward-looking ~~statement.~~statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Company Overview

MultiPlan is a leading ~~value-added~~ provider of data analytics and technology-enabled ~~end-to-end cost management, payment~~solutions designed to bring affordability, efficiency and ~~revenue integrity solutions~~fairness to the ~~U.S.~~United States healthcare industry. We do so through services focused on reducing medical cost and improving payment accuracy for the payors of healthcare, which are ~~also one~~health insurers, self-insured employers and other health plan sponsors (typically through their health plan administrators), and, indirectly, the plan members who are the consumers of ~~the largest independent PPOs~~healthcare services.

Founded initially in ~~the U.S., with contracted providers in all 50 states~~1980 as a New York-based hospital network, MultiPlan has evolved both organically and ~~the District~~through acquisition into a national organization offering three categories of Columbia. We are committed to helping healthcare payors manage the cost of care, improve their competitiveness and inspire positive change. Leveraging sophisticated technology, data analytics and a team-rich industry experience, MultiPlan interprets clients' needs and customizes innovative solutions through the following offerings:services:

•Analytics-Based Services: data-driven algorithms which detect claims over-charges and either negotiate or recommend ~~or negotiate~~ fair ~~reimbursement;~~reimbursement using a variety of data sources and pricing algorithms;

•Network-Based Services: contracted discounts with healthcare providers ~~including~~to form one of the largest independent preferred provider organizations ("PPO") in the United States ~~and~~with over 1.3 million providers under contract, as well as outsourced network development and/or management services; and

•Payment and Revenue Integrity Services: data, technology, and clinical expertise deployed to identify and remove improper and unnecessary charges before or after claims are paid, or to identify and help restore and preserve underpaid premium dollars.

~~Our~~Although the end beneficiary of our services are employers and other plan sponsors and their health plan members, our direct customers ~~almost entirely~~ are ~~payors.~~mostly health plan administrators ("Payors"). We offer these ~~payors~~Payors a single electronic gateway to a comprehensive set of services in each of the above three categories, ~~(Analytics-Based~~ ~~Services, Network-Based Services, and Payment and Revenue Integrity Services),~~ which are used in combination or individually to reduce the medical cost burden on ~~healthcare payors~~their health plan customers and ~~patients~~members while fostering fair and efficient payments to the providers.These comprehensive offerings have enabled us to maintain long-term relationships with a number of our customers, including relationships of over 25 years with some of the ~~nation’s~~nation's largest ~~commercial payors.~~Payors. For the six months ended June 30, ~~2021~~2022 and year ended December 31, ~~2020~~2021 our ~~expansive network included access to over 1.2 million healthcare providers. Our~~ comprehensive services identified approximately ~~$9.9~~$11.2 billion and ~~$18.8~~$21.7 billion in ~~poten~~potential med~~tial medical~~ical cost savings, ~~in the six months ended June 30, 2021 and year ended December 31, 2020,~~ respectively.

We believe our solutions provide a strong value proposition to Payors, their health plan customers and healthcare consumers, as well as to providers. Overall, our service offerings aim to reduce healthcare costs in a manner that is orderly, efficient and fair to all parties. In addition, because in most instances the fee for our services is directly linked to the savings we identify, our revenue model is aligned with the interests of our customers.

Uncertainty Relating to the COVID-19 Pandemic

As discussed above in Note 1 General Information and Basis of Accounting of the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report, COVID-19 has negatively impacted our business, results of operations and financial condition ~~during 2020 and~~since the ~~six months ended June 30, 2021~~.

~~We temporarily closed all~~first quarter of our offices and restricted travel due to concern for our employees' health and safety and also in compliance with state orders. Most of our approximately 2,300 employees continue to work remotely. Other than these

~~modifications, we have not experienced any material changes to our operations including receiving and processing transactions with our customers as a result of COVID-19.~~2020.

Effects from COVID-19 began to impact our business in first quarter 2020 with various federal, state, and local governments and private entities mandating restrictions on travel, restrictions on public gatherings, closure of non-essential commerce, and shelter in place orders. ~~The Company experienced an approximately 4.6% decline~~We temporarily closed all of our offices and restricted travel in ~~revenues for the year ended December 31,~~ 2020 ~~compared to 2019 primarily~~and 2021 due to ~~reduced volume from~~concern for our employees’ health and safety and also in compliance with state orders. Most of our approximately 2,500 employees continue to work remotely. Other than these modifications, we have not experienced any material changes to our operations including receiving and processing transactions with our customers as a result of ~~restrictions~~COVID-19.

For the three and six months ended June 30, 2022, the Company’s revenues continue to be negatively impacted as a result of the medical charges received on non-COVID-19 claims from customers not yet reaching pre-COVID-19 pandemic levels due to fewer elective medical procedures and non-essential medical services. ~~For the three and six months ended June 30, 2021, the Company's revenues continue to be negatively impacted, but~~Such negative impacts, however, are to a lesser extent compared to the same period in 2020 and 2021, as vaccination rates have increased and most restrictions on medical services have been lifted. The extent of the ultimate impact of COVID-19 will depend on the severity and duration of the evolving pandemic. Future developments remain uncertain, including the number of confirmed cases, the emergence of highly contagious variants, and any actions taken by federal, state and local governments such as economic relief efforts, as well as U.S. and global economies, consumer behavior and healthcare utilization patterns.

In connection with the COVID-19 pandemic, the CARES Act was enacted on March 27, 2020 and included certain changes to corporate income taxes. Specifically, the CARES Act provided numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain payroll tax credits associated with the retention of employees. We assessed these impacts and noted the largest impact is due to the tax law change related to the interest disallowance rules retroactive to 2019. The other aspects of the CARES Act did not have a material effect on us.

Factors Affecting Our Results of Operations

Medical Cost Savings -

Our business and revenues are driven by the ability to lower medical costs through claims savings for our customers. The medical charges of those claims can influence our ability to generate claim savings.

The following table presents the medical charges processed and the potential savings identified for the periods presented:


		Six Months Ended June 30,				Six Months Ended June 30,	Change
(in billions)			2021	2020
(in millions)					(in millions)		2022		2021
Medical charges processed(1)(3)	Medical charges processed(1)(3)		$56.7	$49.6	Medical charges processed(1)(3)		$	63,560.1	$	57,383.9	10.8	%
Potential medical cost savings(2)(3)	Potential medical cost savings(2)(3)		$9.9	$9.0	Potential medical cost savings(2)(3)		$	11,196.9	$	10,522.4	6.4	%

While the medical charges processed on claims received from customers have increased, the medical charges on our non-COVID-19 services have not yet returned to pre-pandemic levels as a result of fewer elective medical procedures and non-essential medical services. A portion of this increase is the result of medical charges and related savings for COVID-19 services, such as COVID-19 testing, treatment, and vaccines, which were higher in the three and six months ended June 30, 2022 as compared to the three and six months ended June 30, 2021.

_____________________________

(1)Medical charges processed represent the aggregate dollar amount of claims processed by our cost management and payment accuracy solutions in the period presented. The dollar amount of the claim for purposes of this calculation is the dollar amount of the claim prior to any reductions that may be made as a result of the claim being processed by our ~~cost management~~ solutions. Medical charges processed ~~excludes~~exclude medical charges processed by ~~HST and DHP.~~DHP in both time periods.

(2)Potential medical cost savings represent the aggregate amount of potential savings in dollars identified by our cost management and payment accuracy solutions in the period presented. Since certain of our fees are based on the amount of savings achieved by our customers, and our customers are the final adjudicator of the claims and may choose not to reduce claims or reduce claims by only a portion of the potential savings identified, potential medical cost savings may not directly correlate with the amount of fees earned in connection with the processing of such claims. Potential medical cost savings exclude potential medical cost savings identified by ~~HST and DHP.~~DHP in both time periods.

(3)Changes to previously reported medical charges processed and potential medical cost savings are due to claim development such as client claim resubmissions or cancellation of claims. Examples of these changes include, but are not limited to, adjudication changes, billing changes, and elimination of claims that were later determined to be invalid. In second quarter 2021, we introduced a change in reporting methodology to exclude from the current and prior periods certain claims, the inclusion of which distorts the underlying trends in our core claim processing activities. We believe this change in methodology improves the comparability of current and prior periods.

2220

Our medical charges processed and potential medical cost savings figures may not be directly comparable from period to period due to the completion and integration of acquisitions made in a particular period.

Components of Results of Operations

Revenues

We generate revenues from several sources including: (i) Network-Based Services that process claims at a discount compared to billed fee-for-service rates and by using an extensive network, (ii) Analytics-Based Services that use our leading and proprietary information technology platform to offer customers solutions to reduce medical costs, ~~(ii) Network-Based Services that process claims at a discount compared to billed fee-for-service rates and by using an extensive network~~ and (iii) Payment and Revenue Integrity Services that use data, technology, and clinical expertise to identify improper, unnecessary and excessive charges. Payors typically compensate us through either a PSAV achieved or a PEPM rate.

Costs of Services (exclusive of depreciation and amortization of intangible assets)

Costs of services (exclusive of depreciation and amortization of intangible assets) consist of all costs specifically associated with claims processing activities for customers, sales and marketing, and the development and maintenance of our networks, analytics-based services, and payment and revenue integrity services. Two of the largest components in costs of services are personnel expenses and access and bill review fees. Access and bill review fees include fees for accessing non-owned third-party provider networks, expenses associated with vendor fees for database access and systems technology used to reprice claims, and outsourced services. Third-party network expenses are fees paid to non-owned provider networks used to supplement our owned network assets to provide more network claim savings to our customers.

General and Administrative Expenses

General and administrative expenses include corporate management and governance functions composed of general management, legal, treasury, tax, real estate, financial reporting, auditing, benefits and human resource administration, communications, public relations, billing and information management. In addition, general and administrative expenses include taxes, insurance, advertising, transaction costs, and other general expenses.

Depreciation Expense

Depreciation expense consists of depreciation and amortization of property and equipment related to our investments in leasehold improvements, furniture and equipment, computer hardware and software, and internally generated capitalized software development costs. We provide for depreciation and amortization on property and equipment using the straight-line method to allocate the cost of depreciable assets over their estimated useful lives.

Amortization of intangible assets

Amortization of intangible assets includes amortization of the value of our customer relationships, provider network, technology, and trademarks which were identified in valuing the intangible assets in connection with the June 6, 2016 acquisition by H&F, as well as recent acquisitions ~~by the Company. The acquisitions~~ of HST and DHP ~~contributed to an increase in intangibles recorded on~~by the ~~balance sheet of $32.2 million and $41.1 million, respectively, for customer relationships, trade names, and technology.~~Company.

Interest expense

Interest expense consists of accrued interest and related interest payments on our outstanding long-term debt and amortization of debt issuance costs ~~discounts~~ and ~~premiums.~~discounts.

Interest income

Interest income consists primarily of bank interest.

~~Change~~Loss (gain) on change in fair value of Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares

The Company ~~remeasures~~re-measures at each reporting period the fair value of the Private Placement Warrants and ~~unvested founder shares.~~Unvested Founder Shares. The ~~change~~changes in fair value ~~of $81.6 million and $41.2 million for the three and six months ended June 30, 2021, respectively, was~~are primarily due to the ~~change~~changes in the stock price of the Company's Class A common stock, the expected stock volatility and the passage of time over the reporting period.

Income tax expense

Income tax expense ~~(benefit)~~

~~Income tax expense (benefit)~~ consists of federal, state, and local income taxes.

Non-GAAP Financial Measures

We use EBITDA, Adjusted EBITDA and Adjusted EPS to evaluate our financial performance. EBITDA, Adjusted EBITDA and adjusted EPS are financial measures that are not presented in accordance with GAAP. We believe the presentation of these non-GAAP financial measures provides useful information to investors in assessing our financial condition and results of operations across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our financial operating results of our core business.

These measurements of financial performance have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, they may not be comparable to other similarly titled measures of other companies. Some of these limitations are:

•such measures do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

•such measures do not reflect changes in, or cash requirements for, our working capital needs;

•such measures do not reflect the significant interest expense, or cash requirements necessary to service interest or principal payments on our debt;

•such measures do not reflect any cash requirements for any future replacement of depreciated assets;

•such measures do not reflect the impact of stock-based compensation upon our results of operations;

•such measures do not reflect our income tax (benefit) expense or the cash requirements to pay our income taxes;

•such measures do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

•other companies in our industry may calculate these measures differently from how we do, limiting their usefulness as a comparative measure.

In evaluating EBITDA, Adjusted EBITDA and Adjusted EPS, you should be aware that in the future we may incur expenses similar to those eliminated in the presentation.

EBITDA, Adjusted EBITDA, and Adjusted EPS are widely used measures of corporate profitability eliminating the effects of financing and capital expenditures from the operating results. We define EBITDA as net income (loss) adjusted for interest expense, interest income, income tax ~~(benefit)~~ expense, depreciation, amortization of intangible assets, and non-income taxes. We define Adjusted EBITDA as EBITDA further adjusted to eliminate the impact of certain items that we do not consider to be indicative of our core business, including other expenses, net, loss (gain) on change in fair value of Private Placement Warrants and ~~unvested founder shares,~~Unvested Founder Shares, transaction related expenses, ~~loss (gain) on the debt extinguishment, loss (gain)~~gain on investments and stock-based compensation. See our unaudited condensed consolidated financial statements included in this Quarterly Report for more information regarding these adjustments. Adjusted EBITDA is used in our agreements governing our outstanding indebtedness for debt covenant compliance purposes. Our Adjusted EBITDA calculation is consistent with the definition of Adjusted EBITDA used in our debt instruments.

Adjusted EPS is used in reporting to our Board and executive management and as a component of the measurement of our performance. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year basis. Adjusted EPS is defined as net income (loss) adjusted for amortization of intangible assets, stock-based compensation, transaction related expenses, gain on investments, other expense, loss (gain) on ~~investments, loss (gain) on debt extinguishment, other expense,~~ change in fair value of Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares and tax effect of adjustments to arrive at Adjusted net income divided by our basic weighted average number of shares outstanding.

2422

The following table presents a reconciliation of net ~~loss~~income (loss) to EBITDA and Adjusted EBITDA for the periods presented:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021

Net loss		$	(46,932)	$	(56,246)	$	(1,055)	$	(58,840)
Net income (loss)										Net income (loss)	$	13,512	$	(46,932)	$	57,490	$	(1,055)
Adjustments:	Adjustments:									Adjustments:
Interest expense	Interest expense	64,004		86,050		127,721		177,015		Interest expense	72,696		64,004		144,141		127,721
Interest income	Interest income	(7)		(77)		(11)		(148)		Interest income	(46)		(7)		(58)		(11)
Income tax provision (benefit)		(8,798)		(9,456)		4,252		(10,139)
Income tax provision										Income tax provision	6,457		(8,798)		20,712		4,252
Depreciation	Depreciation	17,008		15,135		33,173		29,641		Depreciation	17,171		17,008		33,767		33,173
Amortization of intangible assets	Amortization of intangible assets	85,167		83,514		169,875		167,027		Amortization of intangible assets	85,127		85,167		170,281		169,875
Non-income taxes	Non-income taxes	489		481		1,002		920		Non-income taxes	440		489		993		1,002
EBITDA	EBITDA	$	110,931	$	119,401	$	334,957	$	305,476	EBITDA	$	195,357	$	110,931	$	427,326	$	334,957
Adjustments:	Adjustments:									Adjustments:
Other expenses		4,182		149		5,399		297
Change in fair value of Private Placement Warrants and unvested founder shares		81,560		—		41,185		—
Other expenses, net										Other expenses, net	2,543		53		1,653		711
Integration expenses										Integration expenses	1,024		4,129		2,696		4,688
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares										Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares	5,149		81,560		(7,592)		41,185
Transaction-related expenses	Transaction-related expenses	1,206		2,338		6,431		2,698		Transaction-related expenses	1,457		1,206		4,012		6,431
Gain on investments	Gain on investments	(25)		—		(25)		—		Gain on investments	—		(25)		(289)		(25)

Stock-based compensation	Stock-based compensation	7,474		27,911		8,442		37,272		Stock-based compensation	4,104		7,474		7,234		8,442
Adjusted EBITDA	Adjusted EBITDA	$	205,328	$	149,799	$	396,389	$	345,743	Adjusted EBITDA	$	209,634	$	205,328	$	435,040	$	396,389

Material differences between MultiPlan Corporation and MPH for the three and six months ended June 30, ~~2021~~2022 include differences in interest expense, loss (gain) on change in fair value of Private Placement Warrants and ~~unvested founder shares,~~Unvested Founder Shares, and stock-based compensation. For the three and six months ended June 30, ~~2021,~~2022, interest expense for MultiPlan Corporation is ~~$20.5~~$20.3 million and ~~$40.9~~$40.8 million higher than interest expense for MPH, respectively, due to interest expense incurred by MultiPlan Corporation on the Senior Convertible PIK ~~Notes (issued~~Notes. The loss (gain) on ~~October 8, 2020), respectively. For the three and six months ended June 30, 2021, the~~ change in fair value of Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares, and stock-based compensation are recorded in the parent company MultiPlan Corporation and not in the MPH operating company and therefore the entire amount represents ~~a $81.6 million and $41.2 million difference~~differences between MultiPlan Corporation and MPH, respectively. In the three and six months ended June 30, 2021, stock-based compensation for MultiPlan Corporation represents a difference of $7.5 million and $8.4 million between MultiPlan Corporation and MPH, respectively.MPH.

2523

The following table presents a reconciliation of net ~~loss~~income (loss) to Adjusted EPS for the periods presented:


($ in thousands, except share and per share amounts)	($ in thousands, except share and per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,				($ in thousands, except share and per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021

Net loss		$	(46,932)	$	(56,246)	$	(1,055)	$	(58,840)
Net income (loss)										Net income (loss)	$	13,512	$	(46,932)	$	57,490	$	(1,055)
Adjustments:	Adjustments:									Adjustments:
Amortization of intangible assets	Amortization of intangible assets	85,167		83,514		169,875		167,027		Amortization of intangible assets	85,127		85,167		170,281		169,875
Stock-based compensation	Stock-based compensation	7,474		27,911		8,442		37,272		Stock-based compensation	4,104		7,474		7,234		8,442
Transaction-related expenses	Transaction-related expenses	1,206		2,338		6,431		2,698		Transaction-related expenses	1,457		1,206		4,012		6,431
Gain on investments	Gain on investments	(25)		—		(25)		—		Gain on investments	—		(25)		(289)		(25)

Other expenses		4,182		149		5,399		297
Change in fair value of Private Placement Warrants and unvested founder shares		81,560		—		41,185		—
Other expenses, net										Other expenses, net	2,543		53		1,653		711
Integration expenses										Integration expenses	1,024		4,129		2,696		4,688
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares										Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares	5,149		81,560		(7,592)		41,185
Estimated tax effect of adjustments	Estimated tax effect of adjustments	(24,336)		(20,640)		(47,200)		(40,802)		Estimated tax effect of adjustments	(23,199)		(24,336)		(45,688)		(47,200)
Adjusted net income	Adjusted net income	$	108,296	$	37,026	$	183,052	$	107,652	Adjusted net income	$	89,717	$	108,296	$	189,797	$	183,052

Weighted average shares outstanding - Basic		655,609,718		415,700,000		655,361,621		415,700,000
Weighted average shares outstanding – Basic										Weighted average shares outstanding – Basic	639,001,506		655,609,718		638,750,938		655,361,621

Net loss per share – basic		$	(0.07)	$	(0.14)	$	(0.00)	$	(0.14)

Net income (loss) per share – basic										Net income (loss) per share – basic	$	0.02	$	(0.07)	$	0.09	$	(0.00)
Adjusted EPS	Adjusted EPS	$	0.17	$	0.09	$	0.28	$	0.26	Adjusted EPS	$	0.14	$	0.17	$	0.30	$	0.28

Factors Affecting the Comparability of our Results of Operations

As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods and may not be directly comparable from period to period. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

~~The Transactions~~

On July 12, 2020, Churchill entered into the Merger Agreement by and among First Merger Sub, Second Merger Sub, Holdings, and MultiPlan Parent. On October 8, 2020, the Merger Agreement was consummated and the Transactions were completed.

The Transactions were accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Churchill was treated as the "acquired" company for financial reporting purposes with MultiPlan Parent determined to be the accounting acquiror. This determination was primarily based on the existing MultiPlan Parent stockholders being the majority stockholders and holding majority voting power in the combined company, MultiPlan Parent's senior management comprising the majority of senior management of the combined company, and the ongoing operations of MultiPlan Parent comprising the ongoing operations of the combined company. Accordingly, for accounting purposes, the Transactions were treated as the equivalent of MultiPlan Parent issuing shares for the net assets of Churchill, accompanied by a recapitalization. The net assets of Churchill were recognized at fair value (which were consistent with carrying value), with no goodwill or other intangible assets recorded. See Note 1 General Information and Basis of Accounting of the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report for further information on the Transactions.

~~As a consequence of the Transactions, we became the successor to a SEC-registered and NYSE-listed company.~~

~~HST Acquisition~~

On November 9, 2020, the Company acquired HST, a healthcare technology company that enables value-driven health benefit plan designs featuring reference-based pricing and tools to engage health plan members and providers in making the

~~best use of available benefits both before and after care delivery. The Company acquired 100 percent of the voting equity interests of HST.~~

The results of operations and financial condition of HST have been included in the Company's consolidated results from the date of acquisition. Through June 30, 2021, HST's impact on revenues and net earnings was not material.

DHP Acquisition

On February 26, 2021, the Company completed the acquisition of DHP, an analytics and technology company offering healthcare payment and revenue integrity services. The Company acquired 100 percent of the voting equity interest of DHP. The acquisition strengthens MultiPlan's service offering in the payment integrity market with new and complementary services to help its ~~payor~~Payor customers manage the overall cost of care and improve their competitiveness. It also adds revenue integrity services for plans that receive premiums from the Centers for Medicare and Medicaid Services.

The results of operations and financial condition of DHP have been included in the Company's consolidated results from the date of acquisition. ~~Through~~In 2021 and for the three and six months ended June 30, ~~2021,~~2022, DHP's impact on revenues and net earnings was not material. In connection with the DHP acquisition, the Company incurred transaction costs of ~~$0.6 million for the year ended December 31, 2020 and~~ $0.1 million and $4.7 million for the ~~three and~~ six months ended June 30, 2022 and 2021, respectively. The ~~transaction costs~~transaction-related expenses have been expensed as incurred and are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of ~~loss~~income (loss) and comprehensive ~~loss.~~income (loss).

Debt Refinancings, Repayments and Repricing

~~We made~~On August 24, 2021, MPH issued new senior secured credit facilities composed of $1,325.0 million of Term Loan B and $450.0 million of a Revolver B, and $1,050.0 million in aggregate principal ~~prepayment~~amount of 5.50% Senior Secured Notes. MPH used the net proceeds from Term Loan B, issued with a discount of 1.00%, and the 5.50% Senior Secured Notes to repay all of the outstanding balance of its Term Loan G for a total redemption price of $2,354.6 million, and pay fees and expenses in connection therewith.

Interest on Term Loan B and Revolver B is calculated, at MPH’s option, as (a) LIBOR (or, with respect to Term Loan B only, 0.50%, if higher), plus the ~~amount~~applicable margin, or (b) the highest rate of ~~$369.0 million~~(1) the prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the LIBOR for an interest period of one month, plus 1.00% and (4) 0.50% for Term Loan B and 1.00% for

Revolver B, in each case, plus an applicable margin of 4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on ~~October 29, 2020. This prepayment reduces~~MPH’s first lien debt to consolidated EBITDA ratio. The interest ~~expense~~rate in effect for Term Loan B was 5.82% as of June 30, 2022 and the interest rate in effect for Term Loan G ~~for this~~was 3.75% as of June 30, 2021.

The Company is obligated to pay a commitment fee on the average daily unused amount of Revolver B. The annual commitment fee can range from an annual rate of 0.25% to 0.50% based on the Company's first lien debt to consolidated EBITDA ratio, as defined in the agreement.

The interest rate on the 5.50% Senior Secured Notes is fixed at 5.50%, and ~~future time periods.~~is payable semi-annually on March 1 and September 1 of each year.

For all our debt agreements with an interest rate dependent on LIBOR, we are currently assessing and monitoring how transitioning from LIBOR to an alternative reference rate may affect us past 2023.

In connection with the issuance of our debt instruments, the Company incurred specific expenses, ~~related to raising the debt,~~ including commissions, fees and expenses of investment bankers and underwriters, registration and listing fees, accounting and legal fees pertaining to the financing and other external, and incremental expenses paid to advisors that were directly attributable to realizing the proceeds of the debt issues. These costs were capitalized and are being amortized over the term of the related debt using the effective interest method. The amortization of the debt issuance costs ~~premiums~~ and discounts are included in interest expense in the accompanying unaudited condensed consolidated statements of ~~loss~~income (loss) and comprehensive ~~loss.~~

In the years ended December 31, 2019, 2018, and 2017, we did not recognize expense for the portions of debt issuance costs related to the amounts of the principal loan prepayments of Term Loan G made in each year, which resulted in an understatement of long-term debt of $2.3 million as of December 31, 2019. We corrected this error as an out-of-period adjustment resulting in an overstatement of interest expense of $2.3 million in the ~~six months ended June 30, 2020~~income (loss).

On October 8, 2020, the Company issued and sold $1,300.0 million in aggregate principal amount of the Senior Convertible PIK Notes. The Senior Convertible PIK Notes were issued with a 2.5% discount and a maturity date of October 15, 2027. The Senior Convertible PIK Notes will accrue interest at a rate per annum equal to six percent (6.00%) with respect to Cash Interest and seven percent (7.00%) with respect to PIK Interest. The Company must elect prior to the third business day prior to any interest payment date to pay Cash Interest or PIK Interest for such interest period; provided that prior to any such election, the Company is deemed to have selected Cash Interest.

On October 8, 2020, we redeemed the Senior PIK Notes in full at a redemption price of 102.000% of the principal amount plus accrued and unpaid interest for a total redemption price of $1,237.6 million.

On October 29, 2020, MPH issued $1,300.0 million in aggregate principal amount of its 5.750% Notes and redeemed the 7.125% Notes in full at a redemption price of 103.563% of the principal amount plus accrued and unpaid interest for a total redemption price of $1,661.3 million. The Company also entered into an amendment to increase the commitments under its senior secured revolving credit facility from $100.0 million to $450.0 million.

Stock-Based Compensation

Prior to the consummation of the Transactions, we were a wholly owned subsidiary of Holdings and our stock-based compensation was granted to employees in the form of Units via a Class B Unit Award Agreement. The fair value of the Units was remeasured at each reporting period. The consummation of the Transactions constituted a definitive Liquidity Event under the agreements governing the Unit awards and as a result the incentive plan was liquidated. For the three and six months ended June 30, 2020, the Company recorded stock-based compensation expense under the Class B Unit Award Agreement of $27.9

~~million and $37.3 million, respectively, in the accompanying unaudited condensed consolidated statements of loss and comprehensive loss.~~

~~After~~Since the consummation of the Transactions, the Company ~~operates~~has operated under the 2020 Omnibus Incentive Plan effective October 8, 2020. To date, awards granted under the 2020 Omnibus Incentive Plan have been in the form of Employee RS, Employee RSUs, Fixed Value RSUs, Employee NQSOs and Director RSUs. Stock-based compensation is measured at the grant date based on the fair value of the award.

During the six months ended June 30, ~~2021,~~2022, the Company has granted ~~2.4~~7.3 million Employee NQSOs, ~~2.9~~3.9 million Employee RSUs ~~0.1 million Employee RS~~ and ~~0.1~~0.2 million Director RSUs under the 2020 Omnibus Incentive Plan. For the three and six months ended June 30, 2022 and 2021, the Company recorded stock-based compensation expense under the 2020 Omnibus Incentive Plan of $4.1 million and $7.2 million and $7.5 million and $8.4 million, respectively, in the accompanying unaudited condensed consolidated statements of ~~loss~~income (loss) and comprehensive ~~loss.~~income (loss).

2825

Results of Operations for the Three and Six Months Ended June 30, ~~2021~~2022 and ~~2020~~2021

The following table provides the results of operations for the periods indicated:

Three Months Ended June 30, Change Six Months Ended June 30, Change
($ in thousands) 2021 2020 $ % 2021 2020 $ %
Revenues
Network Services $ 72,073 $ 61,544 $ 10,529 17.1 % $ 141,438 $ 135,126 $ 6,312 4.7 %
Analytics-Based Services 170,793 122,453 48,340 39.5 % 327,953 274,096 53,857 19.6 %
Payment and Revenue Integrity Services 33,406 22,883 10,523 46.0 % 61,745 49,680 12,065 24.3 %
Total Revenues $ 276,272 $ 206,880 $ 69,392 33.5 % $ 531,136 $ 458,902 $ 72,234 15.7 %
Costs of services (exclusive of depreciation and amortization of intangible assets shown below)
Personnel expenses excluding stock-based compensation 37,565 32,180 5,385 16.7 % 70,197 63,784 6,413 10.1 %
Stock-based compensation 442 12,494 (12,052) (96.5) % 452 17,946 (17,494) (97.5) %
Personnel expenses including stock-based compensation 38,007 44,674 (6,667) (14.9) % 70,649 81,730 (11,081) (13.6) %
Access and bill review fees 3,221 3,668 (447) (12.2) % 6,936 7,306 (370) (5.1) %
Other cost of services expenses 3,140 3,552 (412) (11.6) % 6,513 7,543 (1,030) (13.7) %
Total costs of services (exclusive of depreciation and amortization of intangible assets shown below) 44,368 51,894 (7,526) (14.5) % 84,098 96,579 (12,481) (12.9) %
General and administrative expenses excluding stock-based compensation and transaction costs 31,689 18,311 13,378 73.1 % 57,502 35,743 21,759 60.9 %
Stock-based compensation 7,032 15,417 (8,385) (54.4) % 7,990 19,326 (11,336) (58.7) %
Transaction costs 1,206 2,338 (1,132) (48.4) % 6,431 2,698 3,733 138.4 %
Total general and administrative expenses 39,927 36,066 3,861 10.7 % 71,923 57,767 14,156 24.5 %
Depreciation expense 17,008 15,135 1,873 12.4 % 33,173 29,641 3,532 11.9 %
Amortization of intangible assets 85,167 83,514 1,653 2.0 % 169,875 167,027 2,848 1.7 %
Operating income 89,802 20,271 69,531 343.0 % 172,067 107,888 64,179 59.5 %
Interest expense 64,004 86,050 (22,046) (25.6) % 127,721 177,015 (49,294) (27.8) %
Interest income (7) (77) 70 90.9 % (11) (148) 137 92.6 %
Gain on investments (25) — (25) NM (25) — (25) NM
Change in fair value of Private Placement Warrants and unvested founder shares 81,560 — 81,560 NM 41,185 — 41,185 NM
Net (loss) income before income taxes (55,730) (65,702) 9,972 15.2 % 3,197 (68,979) 72,176 104.6 %
(Benefit) provision for income taxes (8,798) (9,456) 658 7.0 % 4,252 (10,139) 14,391 141.9 %
Net loss $ (46,932) $ (56,246) $ 9,314 16.6 % $ (1,055) $ (58,840) $ 57,785 98.2 %


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
($ in thousands)	2022		2021		$		%		2022		2021		$		%
Revenues
Network-Based Services	$	63,420	$	72,073	$	(8,653)	(12.0)	%	$	132,044	$	141,438	$	(9,394)	(6.6)	%
Analytics-Based Services	193,294		170,793		22,501		13.2	%	389,412		327,953		61,459		18.7	%
Payment and Revenue Integrity Services	33,414		33,406		8		0.0	%	66,718		61,745		4,973		8.1	%
Total Revenues	$	290,128	$	276,272	$	13,856	5.0	%	$	588,174	$	531,136	$	57,038	10.7	%






Costs of services (exclusive of depreciation and amortization of intangible assets shown below)	49,977		44,368		5,609		12.6	%	97,049		84,098		12,951		15.4	%



General and administrative expenses	40,085		39,927		158		0.4	%	72,673		71,923		750		1.0	%
Depreciation expense	17,171		17,008		163		1.0	%	33,767		33,173		594		1.8	%
Amortization of intangible assets	85,127		85,167		(40)		0.0	%	170,281		169,875		406		0.2	%
Operating income	97,768		89,802		7,966		8.9	%	214,404		172,067		42,337		24.6	%
Interest expense	72,696		64,004		8,692		13.6	%	144,141		127,721		16,420		12.9	%
Interest income	(46)		(7)		(39)		557.1	%	(58)		(11)		(47)		427.3	%

Gain on investments	—		(25)		25		100.0	%	(289)		(25)		(264)		NM
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares	5,149		81,560		(76,411)		(93.7)	%	(7,592)		41,185		(48,777)		(118.4)	%
Net income (loss) before taxes	19,969		(55,730)		75,699		135.8	%	78,202		3,197		75,005		NM
Provision (benefit) for income taxes	6,457		(8,798)		15,255		173.4	%	20,712		4,252		16,460		387.1	%
Net income (loss)	$	13,512	$	(46,932)	$	60,444	128.8	%	$	57,490	$	(1,055)	$	58,545	NM

_____________________

NM = Not meaningful

Revenues

Revenues increased by $13.9 million, or 5.0%, and $57.0 million, or 10.7%, respectively, for the three and six months ended June 30, 2022 as compared to revenues for the three and six months ended June 30, 2021. These increases in revenues were primarily related to increases in our Analytics-Based Services and Payment and Revenue Integrity revenues of $22.5 million and $66.4 million, respectively, offset by decreases in our Network-Based Services revenue of $8.7 million and $9.4 million, respectively, for the three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021, as explained below.

Network-Based Services revenues decreased $8.7 million, or 12.0%, and $9.4 million, or 6.6%, in the three and six months ended June 30, 2022, respectively, as compared to revenues for the three and six months ended June 30, 2021. These decreases in revenues were primarily related to client attrition and lower medical charges processed on Network-Based Services claims received from customers, resulting in lower savings for such customers contributing to decreases in revenues of $6.1 million and $8.3 million, respectively, for the three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021. The remaining decreases of $2.6 million and $1.1 million, respectively, are related to decreases in PEPM and other network revenues for the three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021.

~~Revenues~~

~~Revenues~~Analytics-Based Services revenues increased $22.5 million, or 13.2% and $61.5 million, or 18.7%, for the three and six months ended June 30, ~~2021 were~~ ~~$276.3 million~~2022, respectively, as compared to revenues of ~~$206.9 million~~for the three and six months ended June 30, ~~2020, representing an increase~~2021. These increases were primarily driven by higher medical charges from customers, resulting in higher savings for such customers. The increases in medical charges processed reflect, in part, a favorable decline of the effects of the COVID-19 pandemic during the three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021.

~~$69.4~~Payment and Revenue Integrity Services revenues were relatively flat for the three months ended June 30, 2022 and 2021, reflecting substantially consistent period over period performance for this service line. Payment and Integrity Services revenues increased $5.0 million, or ~~33.5%. This~~ ~~increase~~8.1%, for the six months ended inJune 30, 2022 as compared to revenues ~~was primarily due to the elimination of COVID-19 restrictions on medical services that were in place in second quarter 2020 and due to acquired revenues related to the acquisitions of DHP and HST of~~ ~~$11.7 million~~.

~~Revenues~~ for the six months ended June 30, 2021 ~~were~~ ~~$531.1 million~~ ~~as compared to revenues of~~ ~~$458.9 million~~ ~~for the six months ended June 30, 2020, representing an~~ ~~increase~~ of ~~$72.2 million, or~~ ~~15.7%. This~~ ~~increase~~ in revenues was primarily due to the elimination of COVID-19 restrictions on medical services that were in place in second quarter 2020 and acquired revenues related to the acquisitions of DHP and HST of ~~$18.9 million~~.

~~Network Services revenues for the~~ ~~three months ended~~ ~~June 30, 2021 were $72.1 million as compared to $61.5 million for the~~ ~~three months ended~~ ~~June 30, 2020, representing an increase of $10.5 million, or 17.1%. For the six months ended June 30, 2021, Network Services revenues were $141.4 million as compared to $135.1 million for the six months ended June 30, 2020, representing an increase of $6.3 million, or 4.7%.~~ I~~ncreases in Network Services revenues were~~ primarily due to increases in ~~claims volumes and changes in the mix~~ of ~~claims due to the lifting~~$5.7 million of ~~COVID-19 restrictions on medical services that were~~acquired revenues from DHP, offset by $0.8 million of net decreases in ~~place in second quarter 2020.~~

~~Analytics-Based Services revenues, including Financial Negotiations and Reference-Based Pricing~~ revenues for ~~the~~ ~~three months ended~~ ~~June 30, 2021 were $170.8 million~~ ~~as compared to~~ ~~$122.5 million~~ fo~~r the~~ ~~three months ended~~ ~~June 30, 2020, representi~~ng an ~~increase of~~ ~~$48.3 million, or 39.5%.~~ ~~For the six months ended June 30, 2021, Analytics-Based Services revenues were $328.0 million~~ ~~as compared to $274.1 million for the six months ended June 30, 2020, representing an increase of~~ ~~$53.9 million, or 19.6%. Increases~~this service line, primarily in the Analytics-Based Services revenues for both periods were primarily related to increases in claims volumes and changes in the mix of claims due to the lifting of COVID-19 restrictions on medical services that were in place in second quarter 2020 and partially due to the acquisition of HST.

~~Payment and Revenue Integrity Services revenues for the~~ ~~three months ended~~ ~~June 30, 2021 were $33.4 million as compared to $22.9 million for the~~ ~~three months ended~~ ~~June 30, 2020, representing an increase of $10.5 million, or 46.0%. For the six months ended June 30, 2021, revenues from~~ our Payment and Revenue Integrity Services were $61.7 million as compared to $49.7 million for the six months ended June 30, 2020, representing an increase of $12.1 million, or 24.3%. Increases in Payment and Revenue Integrity Services for both periods were primarily related to the acquisition of DHP and increases in claims volumes and changes in the mix of claims due to the lifting of COVID-19 restrictions on medical services that were in place in second quarter 2020.pre-payment integrity service line.

Costs of Services (exclusive of depreciation and amortization of intangible assets)

Three Months Ended June 30, Change Six Months Ended June 30, Change
($ in thousands) 2021 2020 $ % 2021 2020 $ %
Cost of services (exclusive of depreciation and amortization of intangible assets) $ 44,368 $ 51,894 $ (7,526) (14.5) % $ 84,098 $ 96,579 $ (12,481) (12.9) %
Less: stock-based compensation 442 12,494 (12,052) (96.5) % 452 17,946 (17,494) (97.5) %
Costs of services excluding stock-based compensation $ 43,926 $ 39,400 $ 4,526 11.5 % $ 83,646 $ 78,633 $ 5,013 6.4 %


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
($ in thousands)	2022		2021		$		%		2022		2021		$		%
Personnel expenses excluding stock-based compensation	$	41,612	$	37,565	$	4,047	10.8	%	$	80,769	$	70,197	$	10,572	15.1	%
Stock-based compensation	927		442		485		109.7	%	1,527		452		1,075		237.8	%
Personnel expenses including stock-based compensation	42,539		38,007		4,532		11.9	%	82,296		70,649		11,647		16.5	%
Access and bill review fees	3,999		3,221		778		24.2	%	7,757		6,936		821		11.8	%
Other cost of services expenses	3,439		3,140		299		9.5	%	6,996		6,513		483		7.4	%
Total costs of services	$	49,977	$	44,368	$	5,609	12.6	%	$	97,049	$	84,098	$	12,951	15.4	%

~~Costs~~The increases of $5.6 million, or 12.6%, and $13.0 million, or 15.4% in cost of services for the three and six months ended June 30, 2022, respectively, as compared to the three and six months ended June 30, 2021were primarily due to increases in personnel expenses, including stock-based compensation. The increase in personnel expenses, including contract labor, for the three months ended June 30, ~~2021 were $44.4 million~~2022, as compared to ~~$51.9 million for~~ the three months ended June 30, ~~2020, representing a decrease of $7.5 million, or 14.5%. This decrease~~2021, was primarily due to ~~decreases~~increases in stock-based compensation of $0.5 million and non-stock-based compensation-related personnel expenses of $4.0 million primarily due to increases in employee headcount and year-over-year compensation increases, due in part to salary increases to remain competitive in the market as a result of inflationary pressure on wages.

The increase in personnel expenses, ~~of $6.7 million primarily related to stock-based compensation as explained below and decreases in access and bill review fees of $0.4 million and other expenses of $0.4 million. Costs of services~~including contract labor, for the six months endedJune 30, ~~2021 were $84.1 million~~2022, as compared to $96.6 million for the six months ended June 30, 2020, representing a decrease of $12.5 million, or 12.9%. This decrease was due to decreases in personnel expenses of $11.1 million primarily related to stock-based compensation as explained below and decreases in access and bill review fees of $0.4 million and other expenses of $1.0 million.

~~Personnel expenses, including contract labor, were $38.0 million for~~ the ~~three~~six months ended June 30, 2021, ~~as compared to $44.7 million for the~~ ~~three months ended~~ ~~June 30, 2020, representing a decrease of $6.7 million, or 14.9%. This decrease~~ was primarily due to ~~decreases~~increases in stock-based compensation of ~~$12.1~~$1.1 million ~~partially offset by increases in other compensation related~~and non-stock-based compensation-related personnel expenses ~~including salaries, bonus, commissions, fringe benefits and contract labor~~ of $5.4 million. The change in stock-based compensation expense over these time periods was primarily the result of changes in the stock-based compensation plans as described above in the Factors Affecting the Comparability of our Results of Operations.

~~Personnel expenses, including contract labor, were $70.6~~$10.6 million, ~~for the six months ended June 30, 2021, as compared to $81.7 million for the six months ended June 30, 2020, representing a decrease of $11.1 million, or 13.6%. This decrease was~~ primarily due to decreases in stock-based compensation of $17.5 million, partially offset by increases in other compensation related expenses, including salaries, bonus, commissions, fringe benefits, and contract labor of $6.4 million. The change in stock-based compensation expense over these time periods was primarily the result of changes in the stock-based compensation plans as described above in the Factors Affecting the Comparability of our Results of Operations.

~~General and Administrative Expenses~~

Three Months Ended June 30, Change Six Months Ended June 30, Change
($ in thousands) 2021 2020 $ % 2021 2020 $ %
General and administrative expenses $ 39,927 $ 36,066 $ 3,861 10.7 % $ 71,923 $ 57,767 $ 14,156 24.5 %
Less: stock-based compensation 7,032 15,417 (8,385) (54.4) % 7,990 19,326 (11,336) (58.7) %
Less: transaction costs 1,206 2,338 (1,132) (48.4) % 6,431 2,698 3,733 138.4 %
General and administrative expenses excluding stock-based compensation and transaction costs $ 31,689 $ 18,311 $ 13,378 73.1 % $ 57,502 $ 35,743 $ 21,759 60.9 %
~~_____________________~~

~~NM = Not meaningful~~

~~General and administrative expenses for the~~ ~~three months ended~~ ~~June 30, 2021 were $39.9 million, as compared to $36.1 million for the three months ended June 30, 2020, representing an increase of~~a $3.9 million ~~or 10.7%. This~~increase in compensation-related expenses from the acquisition of DHP, which was acquired on February 26, 2021. The remaining $6.6 million increase was primarily due to increases in ~~integration costs~~employee headcount and year-over-year compensation increases, due in part to salary increases to remain competitive in the market as a result of ~~$4.1~~inflationary pressure on wages.

General and Administrative Expenses


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
($ in thousands)	2022		2021		$		%		2022		2021		$		%
General and administrative expenses excluding stock-based compensation and transaction-related expenses	$	35,451	$	31,689	$	3,762	11.9	%	$	62,954	$	57,502	$	5,452	9.5	%
Stock-based compensation	3,177		7,032		(3,855)		(54.8)	%	5,707		7,990		(2,283)		(28.6)	%
Transaction-related expenses	1,457		1,206		251		20.8	%	4,012		6,431		(2,419)		(37.6)	%
General and administrative expenses	$	40,085	$	39,927	$	158	0.4	%	$	72,673	$	71,923	$	750	1.0	%

The increase of $0.2 million, ~~increases~~or 0.4%, in general and administrative expenses for the three months endedJune 30, 2022, as compared to the three months endedJune 30, 2021was primarily due to an increase in personnel expenses of $0.2 million, an increase in insurance of ~~$1.8~~$0.6 million primarily related to higher D&O insurance asand Technology E&O insurance, an increase in the loss on disposal of assets of $2.2 million due to lease terminations and impairment of other assets, and a ~~result~~net increase in other expenses of ~~being~~$1.4 million, offset by a ~~public company, increases~~decrease in professional fees of ~~$2.7~~$1.1 million, ~~including higher~~primarily legal, audit, and consulting fees, ~~partially offset by decreases~~and a decrease in integration expenses of $3.1 million, primarily related to the acquisitions of HST and DHP. The increase in personnel expenses of ~~$1.6 million, decreases in transaction costs of $1.1 million and decreases in other expenses of $2.0 million. The decreases in personnel expenses of $1.6~~$0.2 million was due to ~~decreases~~an increase in compensation-related expenses of $4.1 million, primarily in contract labor, offset by a decrease in stock-based compensation of ~~$8.4 million, partially offset by increases in other compensation related expenses, including salaries, bonus, fringe benefits, and contract labor of $6.8~~$3.9 million.

~~General~~The increase of $0.8 million, or 1.0%, in general and administrative expenses for the six months endedJune 30, ~~2021 were $71.9 million~~2022, as compared to ~~$57.8 million for~~ the six months endedJune 30, ~~2020, representing an increase of $14.2 million, or 24.5%. This increase~~ 2021was primarily due to ~~increases~~an increase in personnel expenses of $5.0 million, an increase in insurance of $1.4 million primarily related to higher D&O insurance and Technology E&O insurance, an increase in the loss on disposal of assets of $1.9 million primarily related to lease terminations and impairment of other assets, and an increase in equipment lease and maintenance of $0.9 million and an increase in net other expenses of $1.0 million, offset by an increase in the capitalized software development offset of $3.8 million, an increase in miscellaneous gains of $1.2 million, a decrease in integration expenses of ~~$4.7~~$2.0 million, primarily related to the acquisitions of HST and DHP, ~~increases~~and a decrease in ~~transactions~~transaction costs of $3.7 million, increases in insurance of $3.6 million primarily related to higher D&O insurance as a result of being a public company, and increases in professional fees of $4.3 million including higher legal, audit, and consulting fees, partially offset by decreases personnel expenses of $1.1 million and decreases in other expenses of $1.0$2.4 million. The ~~decreases~~increase in personnel expenses of ~~$1.1~~$5.0 million was due to ~~decreases~~an increase in compensation-related expenses of $7.3 million, primarily in contract labor of $4.9 million and $2.4 million of employee compensation and related benefits, partially due to increases in employee headcount, offset by a decrease in stock-based compensation of ~~$11.3 million, partially offset by increases in other compensation related expenses, including salaries, bonus, fringe benefits, and contract labor of $10.2~~$2.3 million. The increases in transactions costs of $3.7 million were primarily due to costs associated with the acquisition of DHP on February 26, 2021. See Note 2 Business Combinations of the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional information regarding the acquisition of DHP.

Depreciation Expense

~~Depreciation~~The increases of $0.2 million, or 1.0%, and $0.6 million, or 1.8%, in depreciation expense ~~was $17.0 million~~ for the three and six months ended June 30, ~~2021,~~2022 as compared to ~~$15.1 million for~~ the three ~~months ended June 30, 2020, representing an increase of $1.9 million or 12.4%. Depreciation expense was $33.2 million for the~~and six months ended June 30, 2021 ~~as compared to $29.6 million~~ ~~for the~~ ~~six months ended~~ ~~June 30, 2020, representing an increase of $3.5 million, or 11.9%. This increase was~~were due to~~$36.8 million~~ ~~and~~ ~~$70.8 million~~ purchases of property and

equipment, including internally generated capitalized software in the three and six months ended June 30, ~~2021~~2022 and year ended December 31, ~~2020,~~2021, respectively, partially offset by assets that were written-off or became fully depreciated in the period.

Amortization of Intangible Assets

Amortization of intangible assets was ~~$85.2 million~~relatively flat for the three months ended June 30, ~~2021~~2022 as compared to ~~$83.5 million for~~ the three months ended June 30, ~~2020. Amortization~~2021. The amortization of intangible assets ~~was $169.9~~increased $0.4 million, or 0.2%, for the six months ended June 30, ~~2021~~2022, as compared to ~~$167.0 million for~~ the six months ended June 30, ~~2020. These increases of $1.7 million and $2.8 million, respectively,~~ 2021, primarily ~~relate~~due to the ~~acquisitions~~acquisition of ~~HST and~~ DHP. This expense represents the amortization of intangible assets, as explained above and in the notes to the unaudited condensed consolidated financial statements.

Interest Expense

~~Interest expense was~~The increases of $~~64.0~~8.7 million ~~for the three months ended June 30, 2021, as compared to~~, or 13.6% and $~~86.1 million~~ ~~for the three months ended June 30, 2020, representing a decrease of $22.0~~16.4 million, or ~~25.6%.~~12.9%, ~~Interest expense was~~ ~~$127.7 million for the six months ended June 30, 2021, as compared to $177.0 million for the six months ended June 30, 2020, representing a decrease of $49.3 million, or 27.8%. The decrease~~ in interest expense for ~~these time periods was due to a $369.0 million lower principal balance on Term Loan G in~~ the three and six months ended June 30, ~~2021~~,2022, respectively, as compared to the three and six months ended June 30, ~~2020. In addition,~~2021, were due to the increase in LIBOR interest rates and increase in interest rates due to the effect of the refinancing on ~~October 8, 2020 we redeemed our Senior PIK Notes (8.500% interest rate)~~August 24, 2021 when MPH issued new senior secured credit facilities composed of Term Loan B and Revolver B, and issued ~~Convertible PIK~~the 5.50% Senior Secured Notes, ~~(6.000% interest rate) and on October 29, 2020 we redeemed~~using the ~~7.125% Notes and issued 5.750% Notes, as explained below, resulting in overall lower annual~~net proceeds to repay all of the outstanding balance of Term Loan G. Our annualized weighted average cash interest ~~of approximately $70 million.~~rate increased by

~~In the years ended December 31, 2017, 2018 and 2019, we did not recognize expense for the portions of~~0.7% across our total debt issuance costs related to the amounts of the principal loan prepayments made in each year, which resulted in an understatement of long-term debt of $2.3 million as of December 31, 2019. We corrected this error as an out-of-period adjustment resulting in an overstatement of interest expense of $2.3 million in the six months ended June 30, ~~2020.~~2022 as compared to the same period in prior year.

As of June 30, ~~2021,~~2022, our long-term debt was ~~$4,882.2~~$4,877.7 million and included (i) ~~$2,341.0~~$1,301.8 million Term Loan G,B, discount on Term Loan GB of ~~$3.1~~$12.0 million, excluding the current portion of Term Loan B of $13.3 million (ii) $1,050.0 million of 5.50% Senior Secured Notes, (iii) $1,300.0 million of 5.750% Senior Notes, ~~(iii)~~(iv) $1,300.0 million of Senior Convertible PIK Notes, discount on Senior Convertible PIK Notes of ~~$29.7~~$25.7 million ~~(reduction in discount on Senior Convertible PIK Notes from December 30, 2020 relates to the adoption of ASU 2020-06 effective January 1, 2021)~~, and ~~(iv)~~(v) $0.1 million of long-term finance lease obligations, net of ~~(v)~~(vi) debt issue costs of ~~$26.1~~$36.5 million. As of June 30, 2022, our total debt had an annualized weighted average cash interest rate of 5.8%. As of June 30, 2021, our total debt had an annualized weighted average cash interest rate of ~~4.5%~~4.9%.

As of December 31, ~~2020,~~2021, our long-term debt was $4,879.1 million and included (i) $~~4,578.5 million~~ ~~and included (i) $2,341.0~~1,308.4 million Term Loan G,B, discount on Term Loan GB of ~~$3.8~~$12.9 million, excluding the current portion of Term Loan B of $13.3 million (ii) ~~$1,300.0~~$1,050.0 million of 5.50% Senior Secured Notes, (iii) $1,300.0 million of 5.750% Senior Notes, ~~(iii)~~(iv) $1,300.0 million of Senior Convertible PIK Notes, discount on Senior Convertible PIK Notes of ~~$329.5~~$27.7 million, and (iv) $0.1 million of long-term finance lease obligations, net of (v) debt issue costs of ~~$29.3~~$38.8 million. As of December 31, ~~2020,~~2021, our total debt had a weighted average cash interest rate of ~~4.9%~~4.6%.

~~Change in fair value of Private Placement Warrants and unvested founder shares~~

~~For the three and six months ended June 30, 2021, the~~Loss (gain) on change in fair value of Private Placement Warrants and ~~unvested founder shares was~~Unvested Founder Shares

~~$81.6 million and $41.2 million, respectively.~~The Company ~~remeasures at each reporting period~~re-measures the fair value of the Private Placement Warrants and ~~unvested founder shares.~~Unvested Founder Shares at each reporting period. From December 31, ~~2020~~2021 to June 30, ~~2021,~~2022, the fair value of the Private Placement Warrants decreased by $7.8 million and the ~~unvested founder shares~~fair value of the Unvested Founder Shares increased by ~~$17.7 million~~ ~~and~~ ~~$23.5 million, respectively.~~$0.2 million. The ~~increase~~decrease was primarily due to the ~~appreciation~~decrease in the expected stock volatility and the passage of time over that period partially offset by the increase in the stock price of the Company's Class A common stock ~~over that period.~~.

~~(Benefit)~~ Provision (benefit) for ~~Income Taxes~~income taxes

Net income before income taxes for the three months ended June 30, 2022 of $20.0 million generated a provision for income taxes of $6.5 million. Net loss before income taxes for the three months ended June 30, 2021 of ~~$55.7~~$55.7 million generated a benefit for income taxes of ~~$8.8 million.~~ $8.8 million.

Net ~~loss~~income before income taxes for the ~~three~~six months ended June 30, ~~2020~~2022 of ~~$65.7~~$78.2 million generated a ~~benefit~~provision for income taxes of ~~$9.5 million.~~

$20.7 million. Net income before income taxes for the six months ended June 30, 2021 of $3.2 million generated a provision for income taxes of $4.3 million. ~~Net loss before income taxes~~The effective tax rate for the six months ended June 30, ~~2020 of $69.0 million generated~~2022 differed from the statutory rate primarily due to a ~~benefit for income taxes of $10.1 million. Our~~non-deductible mark-to-market liability, limitations on executive compensation and state tax expense. The effective tax rate for the six months ended June 30, 2021 differed from the statutory rate primarily due to a non-deductible mark-to-market liability, impact of ~~our~~ acquisitions and changes in the ~~Company's~~Company’s deferred state tax rate due to operations and state tax expense. ~~Our effective tax rate for six months ended June 30, 2020 differed from the statutory rate primarily due to state taxes and stock-based compensation expense.~~

~~Net Loss~~

~~Net loss for the three months ended June 30, 2021 was $46.9 million as compared to net loss of $56.2 million for the three months ended June 30, 2020. Net loss for the~~ ~~six months ended~~ ~~June 30, 2021 was $1.1 million as compared to net loss of $58.8 million for the~~ ~~six months ended~~ ~~June 30, 2020. The changes in net loss for these time periods is explained in the sections above.~~

Liquidity and Capital Resources

As of June 30, ~~2021,~~2022, we had cash and cash equivalents of ~~$148.0~~$354.3 million ~~and $450.0~~and $448.2 million of ~~loan~~loan availability under the revolving credit facility. ~~In connection with~~On August 24, 2021, the ~~Refinancing,~~maturity of the ~~commitments under the Revolver G were increased~~revolving credit facility was extended from ~~$100.0 million~~June 7, 2023 to ~~$450.0 million and $369.0 million~~August 24, 2026. As of ~~indebtedness under the Term Loan G was repaid.~~ WeJune 30, 2022, we have three letters of credit totaling $1.8 million as of ~~June 30, 2021.~~utilization against the revolving credit facility. The three letters of credit are used to satisfy real estate lease agreements for three of our offices in lieu of security deposits. ~~Effective starting in fourth quarter 2020, these letters of credit are no longer utilized against the revolver.~~

~~As of December 31, 2020, we had cash and cash equivalents of~~ $126.8 million and $450.0 million of loan availability under the revolving credit facility. In March 2020, $98.0 million of borrowings were drawn on our Revolver G. This borrowing was a precautionary measure taken due to the uncertainty of the COVID-19 pandemic. As there were no liquidity i~~ssues related to COVID-19, the Revolver G and associated interest were repaid on June 25, 2020.~~

Our primary sources of liquidity are internally generated funds combined with our borrowing capacity under our ~~Revolver G.~~revolving credit facility. We believe that these sources will provide sufficient liquidity for us to meet our working capital, capital expenditure and other cash requirements for at least the next twelve months. We may from time to time at our sole discretion, purchase, redeem or retire our long-term debt, through tender offers, in privately negotiated or open market transactions or otherwise. We plan to finance our capital expenditures with cash from operations. Furthermore, our future liquidity and future ability to fund capital expenditures, working capital and debt requirements are also dependent upon our future financial performance, which is subject to many economic, commercial, financial and other factors that are beyond our control, including the ability of financial institutions to meet their lending obligations to us. If those factors significantly change, our business may not be able to generate sufficient cash flow from operations or future borrowings may not be available to meet our liquidity needs. We anticipate that to the extent we require additional liquidity as a result of these factors or in order to execute our strategy, it would be financed either by borrowings under our senior secured credit facilities, by other indebtedness, additional equity financings or a combination of the foregoing. We may be unable to obtain any such additional financing on reasonable terms or at all.

Cash Flow Summary

The following table is derived from our unaudited condensed consolidated statements of cash flows:


		Six Months Ended June 30,					Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Net cash flows provided by (used in):	Net cash flows provided by (used in):					Net cash flows provided by (used in):
Operating activities	Operating activities	$	204,389	$	191,867	Operating activities	$	235,639	$	204,389
Investing activities	Investing activities	$	(180,850)	$	(34,866)	Investing activities	$	(58,110)	$	(180,850)
Financing activities	Financing activities	$	(2,323)	$	34	Financing activities	$	(8,821)	$	(2,323)

Cash Flows from Operating Activities

Cash flows from operating activities provided $235.6 million for the ~~provided~~six months ended June 30, 2022 and ~~$204.4~~$204.4 million for the six months ended June 30, ~~2021 and $191.9 million for t~~2021. T~~he six months ended June 30, 2020. This $12.5~~his $31.3 million, or ~~6.5%~~15.3%, increase in cash flows from operating activities was primarily the result of ~~decreases~~an increase in net ~~loss~~income of ~~$57.8~~$58.5 million and ~~increases in adjustments for non-cash items of $23.2 million, offset by increases~~changes in net working capital of ~~$68.4~~$80.5 million offset by a decrease in adjustments for non-cash items of $107.8 million.

The ~~$23.2~~$107.8 million ~~increase~~decrease in non-cash items was primarily due to ~~increases~~a decrease in ~~deferred income taxes of $8.2 million,~~ the loss (gain) on change in fair value of Private Placement Warrants and ~~unvested founder shares~~Unvested Founder Shares of ~~$41.2~~$48.8 million, ~~increases~~a decrease in ~~depreciation~~deferred income taxes of ~~$3.5~~$59.8 million, ~~increases~~a decrease in stock-based compensation of $1.2 million, a decrease in non-cash interest costs of $0.6 million including decreases in debt issue costs, a gain on equity investments of $0.3 million, a decrease in amortization of ~~intangible assets~~right of ~~$2.8~~use asset of $0.2 million ~~and increases~~offset by an increase in loss on disposal of property and equipment of $2.1 million, an increase in depreciation of $0.6 million, ~~offset by decreases in stock-based compensation of $28.8 million, decreases in non-cash interest costs of $3.3 million including decreases in debt issue costs,~~ and ~~decreases~~an increase in amortization of ~~right~~intangible assets of ~~use asset of $1.1~~$0.4 million.

During the six months ended June 30, 2022, $22.9 million was provided by changes in net working capital including an increase in accounts payable and accrued expenses and other expenses of $7.5 million, a decrease in prepaid expenses and other assets of $9.9 million, a decrease in net accounts receivable of $5.9 million primarily due to timing of collections, and a decrease in prepaid taxes of $5.1 million, offset by decreases in operating lease obligations of $5.4 million. The increase in accounts payable and accrued expenses and other expenses was primarily due to increases of $5.3 million in accrued compensation expense primarily related to the Company's employee bonus program and $3.1 million related to the timing of tax payments throughout the year which increased our liabilities, offset by decreases in other accrued expenses of $0.9 million.

During the six months ended June 30, 2021, $57.5 million was used by changes in net working capital including increases in prepaid taxes of $54.1 million, decreases in accounts payable and accrued expenses and other of $7.4 million and decreases in operating lease obligations of $3.4 million, offset by decreases in prepaid expenses and other assets of $2.5 million and decreases in net accounts receivable of $5.0 million primarily due to timing of collections.

~~During~~Cash Flows from Investing Activities

For the six months ended June 30, ~~2020, $10.9~~2022, net cash of $58.1 million ~~was provided by changes~~was used in ~~net working capital~~investing activities including ~~decreases~~$43.4 million for purchases of property and equipment and capitalization of software development and the $15.0 million equity investment in net accounts receivable of $23.1 million primarily due to timing of collections, offset by increases in prepaid expenses and other assets of $0.9 million, increases in prepaid taxes of $5.6 million, decreases in operating lease obligations of $4.8 million, accounts payable and accrued expenses and other of $0.9 million.

~~Cash Flow from Investing Activities~~

Abacus. For the six months ended June 30, 2021, net cash of $180.9 million waswas used in investing activities including $149.7 million for the acquisition of DHP and $36.8 million for purchases of property and equipment and capitalization of software development, offset by proceeds from the sale of an investment of $5.6 million. ~~For~~

Cash Flows from Financing Activities

Cash flows used in financing activities for the six months ended June 30, ~~2020,~~2022 were $8.8 million consisting of repayments of Term Loan B of $6.6 million and $2.2 million of taxes paid on net ~~cash~~settlement of ~~$34.9 million was used in investing activities for purchases of property and equipment and capitalization of software development.~~

~~Cash Flow from Financing Activities~~vested share awards.

Cash flows used in financing activities for the six months ended June 30, 2021 were $2.3 million ~~consisting~~as a result of ~~purchases~~taxes paid on net settlement of ~~treasury stock.~~

~~Cash flows provided in financing activities for the six months ended June 30, 2020 consisted of $98.0 million of borrowings and repayments on Revolver G.~~vested share awards.

Term Loans and Revolvers

On August 24, 2021, MPH issued new senior secured credit facilities composed of $1,325.0 million of Term Loan B, $450.0 million of Revolver B, and $1,050.0 million in aggregate principal amount of 5.50% Senior Secured Notes. MPH used the net proceeds from Term Loan B, issued with a discount of 1.00%, and the 5.50% Senior Secured Notes to repay all of the outstanding balance of its Term Loan G of $2,341.0 million, and pay fees and expenses in connection therewith.

Interest on Term Loan GB and Revolver GB is calculated, at ~~our~~MPH's option, as (a) LIBOR (or, with respect to ~~the senior secured term loan facility~~Term Loan B only, ~~1.00%~~0.50%, ~~whichever is~~if higher), plus the applicable margin, or (b) the highest rate of (1) the prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the LIBOR for an interest period of one month plus 1.00% and (4) ~~2.00%~~0.50% for Term Loan GB and ~~0.00%~~1.00% for Revolver G,B, in each case, plus an applicable margin of ~~2.00%.~~4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on MPH's first lien debt to consolidated EBITDA ratio. The interest rate in effect for Term Loan B was 5.82% as of June 30, 2022 and the interest rate in effect for Term Loan G was 3.75% as of June 30, ~~2021~~2021.

Term Loan B matures on September 1, 2028 and ~~2020.~~Revolver B matures on August 24, 2026.

For all our debt agreements with an interest rate dependent on LIBOR, we are currently assessing and monitoring how transitioning from LIBOR to an alternative reference rate may affect us past 2023.

We are obligated to pay a commitment fee on the average daily unused amount of ~~Revolver G.~~our revolving credit facility. The annual commitment fee rate was 0.25% at June 30, ~~2021~~2022 and ~~2020.~~0.50% at December 31, 2021. The fee can range from an annual rate of 0.25% to 0.50% based on our leverage ratio, as defined in the agreement.

Senior Notes

On October ~~29,~~8, 2020, the ~~7.125%~~Company issued $1,300.0 million in aggregate principal amount of Senior Convertible PIK Notes. The Senior Convertible PIK Notes were ~~redeemed in full for~~issued with a ~~total redemption~~2.5% discount with a maturity date of October 15, 2027.

The Senior Convertible PIK Notes are convertible into shares of Class A common stock based on a $13.00 conversion price, ~~of $1,661.3 million, which included a redemption premium and accrued interest.~~subject to customary anti-dilution adjustments. The interest rate on the ~~7.125%~~Senior Convertible PIK Notes ~~was~~is fixed at ~~7.125%~~6% in cash and ~~was~~7% in kind, and is payable semi-annually on ~~June 1~~April 15 and ~~December 1~~October 15 of each year.

On October 29, 2020, the Company issued $1,300.0 million in aggregate principal amount of the 5.750% ~~Notes of $1,300.0 million.~~Notes. The 5.750% Notes are guaranteed on a senior unsecured basis jointly and severally by the Company and its subsidiaries and have a maturation date of November 1, 2028. The 5.750% Notes were issued at par. The interest rate on the 5.750% Notes is fixed at 5.750%, and is payable semi-annually on May 1 and November 1 of each year.

On October 8, 2020, the Senior PIK notes were redeemed in full for a total redemption price of $1,237.6 million, which included a redemption premium and accrued interest. The interest rate on the Senior PIK Notes was fixed at 8.5% and was payable semi-annually on June 1 and December 1 of each year.

~~On October 8, 2020, the Company~~August 24, 2021 MPH issued ~~and sold $1,300.0~~$1,050.0 million in aggregate principal amount of 5.50% Senior ~~Convertible PIK Notes. The Senior Convertible PIK~~Secured Notes ~~were issued~~ with a ~~2.5% discount with a maturity~~maturation date of ~~October 15, 2027. Prior to the adoption of ASU 2020-06 on January~~September 1, 2021, the nature of the notes required management to separate the Senior Convertible PIK Notes into liability and equity components. ASU 2020-06’s elimination of the beneficial conversion guidance resulted in "recombining" the equity and debt components of the Senior Convertible PIK Notes into a single liability. As a

result, $297.9 million of the discount on the liability created by recognition of a component of the convertible debt in equity was eliminated. See Note 1 General Information and Basis of Accounting and Note 3 Long-Term Debt of the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report for further detail.

~~The Senior Convertible PIK Notes are convertible into shares of Class A common stock based on a $13.00 conversion price, subject to customary anti-dilution adjustments.~~2028. The interest rate on the 5.50% Senior ~~Convertible PIK~~Secured Notes is fixed at ~~6% in cash and 7% in kind,~~5.50%, and is payable semi-annually on ~~April 15~~March 1 and ~~October 15~~September 1 of each year. The 5.50% Senior Secured Notes are guaranteed and secured as described below under "Guarantees and Security".

Debt Covenants and Events of Default

We are subject to certain affirmative and negative debt covenants under the debt agreements governing ~~the Term Loan G, the Revolver G and the 5.750% Notes~~our indebtedness that limit our ~~and~~and/or certain of our subsidiaries' ability to engage in specific types of transactions. These covenants limit our ~~and~~and/or certain of our subsidiaries' ability to, among other things:

•incur additional indebtedness or issue disqualified or preferred stock;

•pay certain dividends or make certain distributions on capital stock or repurchase or redeem capital stock;

•make certain loans, investments or other restricted payments;

•transfer or sell certain assets;

•incur certain liens;

•place restrictions on the ability of its subsidiaries to pay dividends or make other payments to us;

•guarantee indebtedness or incur other contingent obligations;

•prepay junior debt and make certain investments;

•consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or dispose of all or substantially all of its business units, assets or other properties; and

•engage in transactions with our affiliates.

~~In connection with~~Certain covenants related to the ~~Refinancing,~~5.50% Senior Secured Notes will cease to apply to the 5.50% Senior Secured Notes for so long as such notes have investment grade ratings from both Moody’s Investors Service, Inc. and S&P Global Ratings.

The Revolver Ratio ~~was amended~~is such that, if, as of the last day of any fiscal quarter of MPH, the aggregate amount of loans under the ~~Revolver G,~~revolving credit facility, letters of credit issued under the ~~Revolver G~~revolving credit facility (to the extent not cash collateralized or backstopped or, in the aggregate, in excess of $10.0 million) and swingline loans are outstanding and/or issued in an aggregate amount greater than 35% of the total commitments in respect of the ~~Revolver G~~revolving credit facility at such time, the ~~Revolver G~~revolving credit facility will require MPH to maintain a maximum first lien secured leverage ratio of 6.75 to 1.00. Our consolidated first lien debt to consolidated EBITDA ratio ~~was~~is 2.30 times, 2.90 times, ~~3.52 times,~~ and ~~3.14~~2.61 times as of June 30, ~~2021,~~ 2022, June 30, ~~2020,~~2021, and December 31, ~~2020,~~2021, respectively.

As of June 30, ~~2021, June 30, 2020,~~2022 and December 31, ~~2020~~2021 we were in compliance with all of the debt covenants.

The debt agreements governing the ~~Term Loan G,~~new senior secured credit facilities, the ~~Revolver G~~5.750% Notes and the ~~5.750%~~5.50% Senior Secured Notes contain customary events of default, subject to grace periods and exceptions, which include, among others, payment defaults, cross-defaults to certain material indebtedness, certain events of bankruptcy, material judgments, ~~and,~~ in the case of the debt ~~agreement~~agreements governing the ~~Term Loan G~~new senior secured credit facilities and the ~~Revolver G,~~5.50% Senior Secured Notes, failure of a guarantee on the liens on material collateral to remain in effect, in the case of the debt agreements governing the new senior secured credit facilities, any change of control. Upon the occurrence of an event of default under such debt agreements, the lenders and holders of such debt will be permitted to accelerate the loans and terminate the commitments, as applicable, thereunder and exercise other specified remedies available to the lenders and holders thereunder.

See the footnotes to the EBITDA and Adjusted EBITDA reconciliation table provided above under "Non-GAAP Financial Measures" for material differences between the financial information of MultiPlan and MPH.

Guarantees and Security

All obligations under the debt agreements governing Term Loan B, Revolver B and the 5.50% Senior Secured Notes are unconditionally guaranteed by MPH Acquisition Corp. 1, the direct holding company parent of MPH, and each existing and subsequently acquired or organized direct or indirect wholly owned U.S. organized restricted subsidiary of MPH (subject to certain exceptions). All such obligations, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by a first priority lien shared between the senior secured credit facilities and the 5.50% Senior Secured Notes on substantially all of MPH’s and the subsidiary guarantors’ tangible and intangible property, and a pledge of all of the capital stock of each of their respective subsidiaries.

Critical Accounting Policies

In preparing our Unaudited Condensed Consolidated Financial Statements, we are required to make judgments, assumptions and estimates, which we believe are reasonable and prudent based on the available facts and circumstances. These judgments, assumptions and estimates affect certain of our revenues and expenses and their related balance sheet accounts and disclosure of our contingent liabilities. We base our assumptions and estimates primarily on historical experience and consider known and projected trends. On an ongoing basis, we re-evaluate our selection of assumptions and the method of calculating our estimates. Actual results, however, may materially differ from our calculated estimates, and this difference would be reported in our current operations.

For a detailed description of our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our ~~2020~~2021 Annual Report. For a detailed discussion of our significant accounting policies, see Note 2 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in our ~~2020~~2021 Annual Report. As of June 30, ~~2021,~~2022, our critical accounting policies and estimates have not changed from those described in our ~~2020~~2021 Annual Report, except for the policies related to convertible notes, which changed as a result of the adoption of a new accounting pronouncement, and stock-based compensation, which changed as a result of the grant of stock options.Report.

Customer Concentration

~~Two~~Three customers individually accounted for ~~35%~~34%, 19% and ~~20%~~10% of revenues for the year ended December 31, ~~2020.~~2021. The loss of the business of one or more of our larger customers could have a material adverse effect on our results of operations. For further discussion on our customer concentration, please refer to Item 1A. “Risk Factors” in our 2021 Annual Report.

Recent Accounting Pronouncements

See Note 1 General Information and Basis of Accounting of the Notes to the unaudited condensed consolidated financial statements included in this Quarterly Report for additional information.

Quantitative and Qualitative Disclosure About Market Risk

See Item 3. Quantitative and Qualitative Disclosure about Market Risk below.

Internal Controls Over Financial Reporting

For further information on the Company’s internal controls over financial reporting see Item 4. Controls and Procedures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Reference is made to our ~~2020~~2021 Annual Report and in particular Item 7A.“Quantitative and Qualitative Disclosure about Market Risk” therein. As of June 30, ~~2021,~~2022, there were no material changes in the market risks described in our ~~2020~~2021 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including the Company’s principal executive officer and principal financial and accounting officer, the Company conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Based on this evaluation, our principal executive officer and principal financial and accounting officers have concluded that, as of June 30, 2022, our disclosure controls and procedures were ~~not~~designed at a reasonable assurance level and were effective ~~as of June 30, 2021, solely as a result of~~to provide reasonable assurance that the ~~following two material weaknesses~~information we are required to disclose in ~~internal control over financial reporting:~~

•~~We did not maintain a sufficient complement of resources with an appropriate level of accounting knowledge~~reports that we file or submit under the Exchange Act is recorded, processed, summarized and ~~experience commensurate with~~reported within the ~~financial reporting requirements for a public company, including condensed timelines to close~~time periods specified in the SEC rules and ~~sufficient oversight of internal controls over financial reporting.~~

•~~We did not maintain sufficient formal accounting policies, procedures,~~forms, and ~~controls for accounting~~that such information is accumulated and ~~financial reporting with respect to the requirements and application of public company financial reporting requirements, including accounting for debt and equity arrangements.~~

~~These material weaknesses, which continue to exist as of June 30, 2021, did not result in any material misstatements~~communicated to our ~~unaudited condensed consolidated~~management, including our principal executive officer and principal financial ~~statements for the three months ended June 30, 2021.~~

~~Remediation of Material Weaknesses~~

~~In 2020, the Company took the following actions~~and accounting officers, as appropriate, to ~~remediate the two material weaknesses:~~

•The Company hired a Senior Vice President and Chief Accounting Officer, a Vice President of Internal Audit, and an Assistant Vice President and Assistant General Counsel, Securities in September 2020, October 2020, and December 2020, respectively.

•The Company continues to evaluate the need for additional resources with the requisite knowledge of accounting and financial reporting while supplementing existing resources with temporary resources to assist with performing technical accounting activities.

•~~The Company engaged a professional services firm to assist in the design and documentation of formal policies, procedures and internal controls.~~

•~~The Company continues to formalize and implement accounting policies, procedures, and internal controls for financial close and reporting, in line with public company financial reporting requirements.~~

~~Building on our efforts during 2020, during the first half of 2021, the Company took the following additional actions:~~

•The Company hired a Senior Vice President of Finance and Investor Relations and strengthened the financial reporting and technical accounting team with individuals who have significant experience in technical accounting matters and internal controls.

•The Company prepared a risk assessment of key controls. Through this analysis, the Company is identifying areas where new controls are needed as well as areas where control enhancements to existing controls are necessary. The Company will further develop and implement these controls as part of the close process and will continue to enhance or modify these controls in future periods if needed.

•The Company started the evaluation of its key internal controls over financial reporting covering entity-level controls, business process controls, and IT general controls. Upon completion of the interim testing of key controls, Management will continue to assess its internal controls, remediate any identified deficiencies and continue to enhance its key financial reporting controls.

•The Company worked to strengthen the internal control environment for financial reporting by conducting training on policies and procedures, standardizing business practices, improving communication, leadership, and process improvement within various financial functional areas.

We believe the measures described above will facilitate the remediation of the control deficiencies we have identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to review, optimize and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above. These material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Accordingly, the material weaknesses are not remediated as of June 30, 2021.allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

~~Other than the measures described above, there~~There has been no change in our internal control over financial reporting during the ~~three~~six months ended June 30, ~~2021~~2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected.

3733

Part II - Other Information

Item 1. Legal Proceedings

We are a defendant in various lawsuits and other pending and threatened litigation and other adversarial matters as well as regulatory investigations, all of which have arisen in the ordinary course of ~~business as well as regulatory investigations.~~business. While the ultimate outcome with respect to such proceedings cannot be predicted with certainty, we believe they will not have a material adverse effect on our financial condition or results of operations.

On March 25, 2021 and April 9, 2021, we were named as a defendant in two putative class action lawsuits relating to the Transactions that have since been consolidated under the caption In Re MultiPlan Corp. Stockholders Litigation, Consolidated C.A. No. ~~2021-0300-MTZ~~2021-0300-LWW (Del.Ch) (“("Delaware Stockholder ~~Litigation”~~Litigation"). The Delaware Stockholder Litigation asserts breach of fiduciary duty claims and aiding and abetting breach of fiduciary duty claims against the former directors of the Churchill board, the Sponsor, KG and M. Klein ~~(the “Churchill Defendants”~~(collectively, the "Churchill Defendants") and the Company. The Delaware Stockholder Litigation complaint alleges that the Transactions were a product of an unfair process by Churchill, which was allegedly impacted by conflicts of interest, resulting in mispricing of the Transactions. The complaint seeks, among other things, damages, certain equitable relief including the reopening of redemptions, and attorneys’ fees and costs. ~~On June 18, 2021, the~~The Company and the Churchill Defendants ~~each~~ filed ~~opening briefs in support of their respective~~ motions to dismiss the complaint.

~~In addition,~~ On January 3, 2022, the ~~putative securities class action complaint captioned Samuel Paradis v. MultiPlan Corporation et. al., No. 1:21-cv-1853 (E.D.N.Y.)~~Chancery Court issued a ruling granting in part the Company’s motion to dismiss and denying the motion to dismiss filed ~~on April 6, 2021 in~~by the ~~United States District Court for~~Churchill Defendants. The Company is therefore dismissed from the Eastern District of New York was voluntarily dismissed on June 3, 2021. On June 4, 2021, a putative securities class action complaint captioned Steve Kong v. MultiPlan Corporation et al., No. 2:21-cv-3186 (E.D.N.Y.) was filed in the United States District Court for the Eastern District of New York. The Kong lawsuitDelaware Stockholder Litigation, which is ~~brought~~proceeding against the Company; our Chief Executive Officer, Mr. Mark Tabak, and our Chief Financial Officer, Mr. David Redmond, as well as individuals and entities involved in the Transactions, including Glenn August and Michael Klein, each of whom currently serve on our Board.Churchill Defendants. The ~~complaint asserts claims for violations of Sections 10(b), 14(a), and 20(a)~~Company has agreed to indemnify certain of the ~~Securities Exchange Act of 1934 and Rules 10b-5 and 14a-9 promulgated thereunder and seeks damages based on alleged material misrepresentations and omissions concerning~~Churchill Defendants with respect to the Transactions and in our public disclosures. The proposed class period is July 12, 2020, through November 10, 2020, inclusive. On June 21, 2021, the District Court appointed plaintiff One68 Global Master Fund, LP as lead plaintiff.Delaware Stockholder Litigation.

We cannot reasonably estimate a potential future loss or a range of potential future losses and have not recorded a contingent liability accrual in connection with these matters as of June 30, ~~2021.~~2022.

Item 1A. Risk Factors

There have been no material changes ~~except for the following,~~ during the six months ended June 30, ~~2021~~2022 to the risk factors previously disclosed in Item 1A. “Risk Factors” in the Company's ~~2020~~2021 Annual Report.

Our Private Placement Warrants and unvested founder shares are accounted for as derivative liabilities and changes in fair value for each period are reported in earnings, which may have an adverse effect on the market price of our Class A common stock.

As of June 30, 2021, we had Private Placement Warrants exercisable for an aggregate of 24,500,000 shares of our Class A common stock and unvested founder shares contingently issuable for an aggregate of 12,404,080 shares of our Class A common stock outstanding. We account for the Private Placement Warrants and unvested founder shares as liabilities. At each reporting period (i) the accounting treatment of the Private Placement Warrants and unvested founder shares will be re-evaluated for proper accounting treatment as a liability or equity and (ii) the fair value of the liability of the Private Placement Warrants and unvested founder shares will be remeasured and the change in the fair value of the liability will be recorded as Change in fair value of Private Placement Warrants and unvested founder shares in our Statements of Loss and Comprehensive Loss. Changes in the inputs and assumptions for the valuation model we use to determine the fair value of such liability may have a material impact on the estimated fair value of the embedded derivative liability. The share price of our Class A common stock represents the primary underlying variable that impacts the value of the derivative instruments. Additional factors that impact the value of the derivative instruments include the volatility of our stock price, risk-free rate and discount for lack of marketability. As a result, our consolidated financial statements and results of operations will fluctuate quarterly, based on various factors, such as the share price of our Class A common stock, many of which are outside of our control. In addition, we may change the underlying assumptions used in our valuation model, which could result in significant fluctuations in our results of operations. If our stock price is volatile, we expect that we will recognize non-cash gains or losses on the outstanding Private Placement Warrants, unvested founder shares or any other similar derivative instruments each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A common stock.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

We are permitted to repurchase shares to satisfy tax withholding obligations arising upon the vesting of certain restricted shares issued under the 2020 Omnibus Incentive Plan. The table below represents the Company’s repurchase of such shares at a cost of $2.1 million during the three months ended June 30, 2021.

Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Approximate Dollar Value of Shares that May Yet Be Purchased
April 1 - 30, 2021 276,679 $ 7.44 — $ —
May 1 - 31, 2021 — $ — — $ —
June 1 - 30, 2021 — $ — — $ —
Total 276,679 $ 7.44 — $ —

Item 6. Exhibits

Incorporated by Reference

Exhibit Number

Description

Form

File No.

Exhibit

Filing Date

31.1

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13-a - 14(a) and 15-d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13-a - 14(a) and 15-d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Principal Executive Officer Pursuant to 18 U.S.C. of Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Principal Financial Officer Pursuant to 18 U.S.C. of Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following financial information from MultiPlan Corporation's Quarterly Report on Form 10-Q for the six months ended June 30, ~~2021~~2022 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss), (iii) the Unaudited Condensed Statements of Changes in Stockholders' Equity, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Unaudited Condensed Consolidated Financial Statements.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+Denotes a management contract or compensatory arrangement.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August ~~6, 2021~~5, 2022


			MULTIPLAN CORPORATION

			By:			/s/ ~~David L. Redmond~~James M. Head
						~~David L. Redmond~~James M. Head
						Executive Vice President and Chief Financial Officer

4035


			Pages
Glossary			43
Part I. Financial Information
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets			87
Unaudited Condensed Consolidated Statements of ~~Loss~~Income (Loss) and Comprehensive ~~Loss~~Income (Loss)			98
Unaudited Condensed Consolidated Statements of Shareholders' Equity			109
Unaudited Condensed Consolidated Statements of Cash Flows			1110
Notes to Unaudited Condensed Consolidated Financial Statements			1211
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2218
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3733
Item 4. Controls and Procedures			3733
Part II - Other Information
Item 1. Legal Proceedings			3934
Item 1A. Risk Factors			39
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~			4034
Item 6. Exhibits			4034
Signature			4135


	June 30, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	147,971	$	126,755
Trade accounts receivable, net	61,127		63,198
Prepaid expenses	16,657		17,708
Prepaid taxes	54,148		0
Other current assets, net	1,377		1,193
Total current assets	281,280		208,854
Property and equipment, net	199,616		187,631
Operating lease right-of-use assets	28,839		31,339
Goodwill	4,365,785		4,257,336
Other intangibles, net	3,455,372		3,584,187
Other assets	7,934		14,231
Total assets	$	8,338,826	$	8,283,578
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	10,586	$	15,261
Accrued interest	29,596		31,528
Accrued taxes	0		10,176
Operating lease obligation, short-term	6,833		6,439
Accrued compensation	35,244		21,843
Other accrued expenses	29,506		27,251
Total current liabilities	111,765		112,498
Long-term debt	4,882,240		4,578,488
Operating lease obligation, long-term	24,717		27,499
Private Placement Warrants and unvested founder shares	147,780		106,595
Deferred income taxes	837,073		900,633
Other liabilities	187		0
Total liabilities	6,003,762		5,725,713
Commitments and contingencies (Note 6)	0		0
Shareholders’ equity:
Shareholder interests
Preferred stock, $0.0001 par value — 10,000,000 shares authorized; 0 shares issued	0		0
Common stock, $0.0001 par value — 1,500,000,000 shares authorized; 665,033,300 and 664,183,318 issued; 655,612,160 and 655,075,355 shares outstanding	66		66
Additional paid-in capital	2,304,954		2,530,410
Retained earnings	121,977		116,999
Treasury stock — 9,421,140 and 9,107,963 shares	(91,933)		(89,610)
Total shareholders’ equity	2,335,064		2,557,865
Total liabilities and shareholders’ equity	$	8,338,826	$	8,283,578


	Employee RS	Director RSUs	Employee RSUs	Employee NQSOs
Nonvested as of December 31, 2020	1,468,750	42,847	0	0
Awarded	133,689	87,275	2,870,671	2,442,113
Vested	(796,875)	(48,061)	(7,812)	0
Forfeited	(671,875)	0	0	0
Nonvested as of June 30, 2021	133,689	82,061	2,862,859	2,442,113


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced	Approximate Dollar Value of Shares that May Yet Be Purchased
April 1 - 30, 2021	276,679	$	7.44	—	$	—
May 1 - 31, 2021	—	$	—	—	$	—
June 1 - 30, 2021	—	$	—	—	$	—
Total	276,679	$	7.44	—	$	—