Cano Health (CANO) Enters Interim NOL Order

As previously disclosed in a Current Report on Form 8-K filed by Cano Health (NYSE: CANO) February 5, 2024 (the “Previous 8-K”), on February 4, 2024, Cano Health, Inc. (the “Company”) and certain of its direct and indirect subsidiaries (such subsidiaries, together with the Company, the “Debtors”) commenced filing voluntary petitions (the “Chapter 11 Cases”) in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) seeking relief under Chapter 11 of the U.S. Code (the “Bankruptcy Code”). The Chapter 11 Cases are being jointly administered under Case No. 24-10164. The Debtors continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In connection with the commencement of their Chapter 11 Cases, the Debtors filed a number of motions with the Bankruptcy Court. Among these was a motion to establish certain procedures to protect any potential value of the Company’s net operating loss carryforwards and other tax attributes (the “NOLs,” and such motion, the “NOL Motion”). On February 7, 2024, the Bankruptcy Court entered the Interim NOL Order. All capitalized terms not defined herein have the meanings ascribed to such terms in the Stock Procedures (as defined below and attached hereto as Exhibit 99.2).

The Interim NOL Order establishes certain procedures (the “Stock Procedures”) with respect to direct and indirect trading and transfers of shares of the Company’s Class A common stock (the “Common Stock”) in order to protect any potential value of the Company’s NOLs for use in connection with the reorganization. As approved on an interim basis, in certain circumstances, the Stock Procedures restrict transactions involving, and require notices of the holdings of and proposed transactions by, any person or group of persons that is or, as a result of such a transaction, would become, a “Substantial Stockholder” of the Company’s Common Stock. The Debtors may, in consultation with the Ad Hoc First Lien Group, waive, in writing, any and all restrictions, stays, and notification procedures set forth in the Stock Procedures. For purposes of the Stock Procedures, a “Substantial Stockholder” is any person or entity (within the meaning of applicable regulations promulgated by the U.S. Department of the Treasury, including certain persons making a coordinated acquisition of stock) that beneficially owns (including Options to acquire and direct or indirect ownership) at least 225,509 shares of Common Stock (representing approximately 4.75% of all issued and outstanding shares of the Company’s Common Stock as of the petition date in the Chapter 11 Cases). For the avoidance of doubt, by operation of the definition of beneficial ownership, an owner of an Option to acquire Common Stock may be treated as the owner of such Common Stock. Any prohibited acquisition or other transfer of Common Stock (including directly or indirectly, and Options to acquire beneficial ownership of Common Stock) will be null and void ab initio and may lead to contempt, compensatory damages, punitive damages, or sanctions being imposed by the Bankruptcy Court. A hearing to consider entry of an order granting the relief requested in the NOL Motion on a final basis shall be held on March 7, 2024 at 10:00 a.m. (Eastern Time).

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