SCHEDULE: Deerfield Entities Report Significant AdaptHealth Stake

Deerfield Management and affiliated funds disclose beneficial ownership of 8.48% of AdaptHealth Corp.'s Class A Common Stock, including convertible preferred shares.

Summary

• Deerfield Management Company, L.P. and James E. Flynn beneficially own an aggregate of 23,863,685 shares of AdaptHealth Corp.'s Class A Common Stock, representing 8.48% of the class.
• This aggregate ownership includes 11,457,730 shares of Class A Common Stock and 12,405,955 shares issuable upon conversion of 120,405.55 shares of Series B-1 Convertible Preferred Stock.
• Deerfield Mgmt, L.P. and Deerfield Partners, L.P. each beneficially own 11,544,108 shares, representing 7.21% of the Class A Common Stock.
• Deerfield Mgmt IV, L.P. and Deerfield Private Design Fund IV, L.P. each beneficially own 12,319,577 shares, representing 4.90% of the Class A Common Stock.
• The terms of the Series B-1 Convertible Preferred Stock restrict conversion if it would cause the holder's beneficial ownership to exceed 4.9% of the total outstanding Class A Common Stock (the "Ownership Cap").
• Reporting persons disclaim beneficial ownership of shares issuable upon conversion to the extent that such conversion would cause their aggregate beneficial ownership to exceed the Ownership Cap.
• The reporting persons have agreed to file this Schedule 13G jointly and may be deemed to constitute a group for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934.

Sentiment

Score: 6

Explanation: The filing is a factual report of beneficial ownership by an institutional investor group. While it indicates significant investment, which is generally positive, the presence of an 'Ownership Cap' on convertible shares introduces a slight complexity. The overall sentiment is neutral to slightly positive due to the institutional backing.

Positives

• Significant institutional investment by Deerfield Management, a specialized healthcare investment firm, indicates confidence in AdaptHealth Corp.'s prospects.
• The investment structure, including both direct common stock and convertible preferred stock, suggests a strategic and potentially long-term interest in the company.

Negatives

• The "Ownership Cap" on the Series B-1 Convertible Preferred Stock limits the immediate full conversion of all preferred shares into common stock, potentially restricting Deerfield's direct voting power from these specific shares if the cap is reached.

Risks

• The conversion of Series B-1 Convertible Preferred Stock is subject to an "Ownership Cap" of 4.9%, which could limit the reporting persons' ability to fully convert their preferred shares into common stock if it would exceed this threshold.
• The disclaimer of beneficial ownership for shares exceeding the Ownership Cap upon conversion introduces complexity regarding the ultimate voting and dispositive power of the full reported amount of convertible shares.

Corporate Governance

Stakeholder Impact

• Shareholders: The significant ownership by Deerfield entities could signal institutional confidence and potentially influence future strategic decisions or governance, although the ownership cap on convertible shares introduces a nuance to their immediate voting power from those specific shares.

Key Dates

Keywords

AdaptHealth Corp., Class A Common Stock, Schedule 13G, Beneficial Ownership, Deerfield Management, Convertible Preferred Stock, Institutional Investor, Healthcare Investment, Ownership Cap