SEC Filing | Option Care Health, Inc.

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bios-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2024
			OR
☐			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: 001-11993

https://cdn.kscope.io/91e415dbe1d9a6f825394beb90ac50a1-OPCH_Logo.jpg

OPTION CARE HEALTH, INC.

(Exact name of registrant as specified in its charter)

Delaware

05-0489664

(State of incorporation)

(I.R.S. Employer Identification No.)

3000 Lakeside Dr.

Suite 300N,

Bannockburn,

60015

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

312-940-2443

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


Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	OPCH	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☑ No ☐

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 ☑ No ☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

On April 19, 2024, there were 173,816,267 shares of the registrant’s Common Stock outstanding.

TABLE OF CONTENTS


		Page Number
PART I

Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets	5
	Unaudited Condensed Consolidated Statements of Comprehensive Income	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 5.	Other Information	29
Item 6.	Exhibits	30

SIGNATURES		30

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to "Option Care Health," the “Company,” “we,” “us” and “our” refer to Option Care Health, Inc. and its consolidated subsidiaries.

Forward-Looking Statements

This Form 10-Q includes forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, without limitation, statements concerning our expectations regarding industry and macroeconomic trends and our operating performance. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. If any of these risks materialize, or if any of our assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”). Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Form 10-Q. Any forward-looking statement made by us in this Form 10-Q speaks only as of the date hereof. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

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OPTION CARE HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)


	March 31, 2024		December 31, 2023
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	219,513	$	343,849
Accounts receivable, net	573,650		377,658
Inventories	241,948		274,004
Prepaid expenses and other current assets	94,603		98,744
Total current assets	1,129,714		1,094,255

NONCURRENT ASSETS:
Property and equipment, net	120,969		120,630
Operating lease right-of-use asset	87,789		84,159
Intangible assets, net	19,317		20,092
Referral sources, net	307,482		315,304
Goodwill	1,540,246		1,540,246
Other noncurrent assets	44,045		42,349
Total noncurrent assets	2,119,848		2,122,780
TOTAL ASSETS	$	3,249,562	$	3,217,035

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	485,736	$	426,513
Accrued compensation and employee benefits	42,624		92,508
Accrued expenses and other current liabilities	83,383		75,010
Current portion of operating lease liability	19,209		18,278
Current portion of long-term debt	6,000		6,000
Total current liabilities	636,952		618,309

NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion	1,056,282		1,056,650
Operating lease liability, net of current portion	89,207		85,484
Deferred income taxes	37,884		34,920
Other noncurrent liabilities	89		—
Total noncurrent liabilities	1,183,462		1,177,054
Total liabilities	1,820,414		1,795,363

STOCKHOLDERS’ EQUITY:
Preferred stock; $0.0001 par value; 12,500,000 shares authorized, no shares outstanding as of March 31, 2024 and December 31, 2023	—		—
Common stock; $0.0001 par value: 250,000,000 shares authorized, 183,397,817 shares issued and 173,816,056 shares outstanding as of March 31, 2024; 182,905,559 shares issued and 174,575,537 shares outstanding as of December 31, 2023	18		18
Treasury stock; 9,581,761 and 8,330,022 shares outstanding, at cost, as of March 31, 2024 and December 31, 2023, respectively	(295,396)		(255,107)
Paid-in capital	1,205,693		1,204,270
Retained earnings	502,304		457,513
Accumulated other comprehensive income	16,529		14,978
Total stockholders’ equity	1,429,148		1,421,672
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,249,562	$	3,217,035

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

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OPTION CARE HEALTH, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


	Three Months Ended March 31,
	2024		2023
NET REVENUE	$	1,146,052	$	1,015,848
COST OF REVENUE	907,552		786,843
GROSS PROFIT	238,500		229,005

OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses	154,742		147,866
Depreciation and amortization expense	14,728		14,514
Total operating expenses	169,470		162,380
OPERATING INCOME	69,030		66,625

OTHER INCOME (EXPENSE):
Interest expense, net	(13,202)		(13,834)
Equity in earnings of joint ventures	1,125		1,437
Other, net	2		1
Total other expense	(12,075)		(12,396)

INCOME BEFORE INCOME TAXES	56,955		54,229
INCOME TAX EXPENSE	12,164		15,021
NET INCOME	$	44,791	$	39,208

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Change in unrealized gain (loss) on cash flow hedges, net of income tax (expense) benefit of $(454) and $1,152, respectively	$	1,551	$	(3,443)
OTHER COMPREHENSIVE INCOME (LOSS)	1,551		(3,443)
NET COMPREHENSIVE INCOME	$	46,342	$	35,765

EARNINGS PER COMMON SHARE:
Earnings per share, basic	$	0.26	$	0.22
Earnings per share, diluted	$	0.26	$	0.21

Weighted average common shares outstanding, basic	173,928		181,262
Weighted average common shares outstanding, diluted	175,624		182,735

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

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OPTION CARE HEALTH, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)


	Three Months Ended March 31,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	44,791	$	39,208
Adjustments to reconcile net income to net cash (used in) provided by operations:
Depreciation and amortization expense	15,305		15,225
Non-cash operating lease costs	7,663		5,540
Deferred income taxes - net	2,964		8,626
Amortization of deferred financing costs	1,132		1,083
Equity in earnings of joint ventures	(1,125)		(1,437)
Stock-based incentive compensation expense	9,605		5,988
Capital distribution from equity method investments	750		2,500
Other adjustments	108		198
Changes in operating assets and liabilities:
Accounts receivable, net	(195,992)		(17,812)
Inventories	32,056		(25,362)
Prepaid expenses and other current assets	4,878		9,977
Accounts payable	59,223		70,127
Accrued compensation and employee benefits	(49,884)		(28,356)
Accrued expenses and other current liabilities	6,811		14,831
Operating lease liabilities	(6,651)		(5,271)
Other noncurrent assets and liabilities	(418)		(5,313)
Net cash (used in) provided by operating activities	(68,784)		89,752

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(5,820)		(5,760)
Net cash used in investing activities	(5,820)		(5,760)

CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options, vesting of restricted stock, and related tax withholdings	(8,182)		(1,902)
Repayments of debt principal	(1,500)		(1,500)
Purchase of company stock	(40,050)		(75,000)
Other financing activities	—		(2,000)
Net cash used in financing activities	(49,732)		(80,402)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(124,336)		3,590
Cash and cash equivalents - beginning of the period	343,849		294,186
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	219,513	$	297,776

Supplemental disclosure of cash flow information:
Cash paid for interest	$	12,173	$	11,161
Cash paid for income taxes	$	2	$	—
Cash paid for operating leases	$	7,085	$	6,527

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

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OPTION CARE HEALTH, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS)


	Preferred Stock		Common Stock		Treasury Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance - December 31, 2022	$	—	$	18	$	(2,403)	$	1,176,906	$	190,423	$	21,159	$	1,386,103
Exercise of stock options, vesting of restricted stock, and related tax withholdings	—		—		—		(1,902)		—		—		(1,902)
Stock-based incentive compensation	—		—		—		5,988		—		—		5,988
Purchase of company stock	—		—		(75,735)		—		—		—		(75,735)
Net income	—		—		—		—		39,208		—		39,208
Other comprehensive loss	—		—		—		—		—		(3,443)		(3,443)
Balance - March 31, 2023	$	—	$	18	$	(78,138)	$	1,180,992	$	229,631	$	17,716	$	1,350,219

Balance - December 31, 2023	$	—	$	18	$	(255,107)	$	1,204,270	$	457,513	$	14,978	$	1,421,672
Exercise of stock options, vesting of restricted stock, and related tax withholdings	—		—		—		(8,182)		—		—		(8,182)
Stock-based incentive compensation	—		—		—		9,605		—		—		9,605
Purchase of company stock, and related tax effects	—		—		(40,289)		—		—		—		(40,289)
Net income	—		—		—		—		44,791		—		44,791
Other comprehensive income	—		—		—		—		—		1,551		1,551
Balance - March 31, 2024	$	—	$	18	$	(295,396)	$	1,205,693	$	502,304	$	16,529	$	1,429,148

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

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OPTION CARE HEALTH, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND PRESENTATION OF FINANCIAL STATEMENTS

Corporate Organization and Business — Option Care Health, and its wholly-owned subsidiaries, provides infusion therapy and other ancillary health care services through a national network of 93 full service pharmacies and 84 stand-alone ambulatory infusion suites. The Company contracts with managed care organizations, third-party payers, hospitals, physicians, and other referral sources to provide pharmaceuticals and complex compounded solutions to patients for intravenous delivery in the patients’ homes or other nonhospital settings. The Company operates in one segment, infusion services. The Company’s stock is listed on the Nasdaq Global Select Market as of March 31, 2024.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States and contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for interim financial reporting. The results of operations for the interim periods presented are not necessarily indicative of the results of operations for the entire year. These unaudited condensed consolidated financial statements do not include all of the information and notes to the financial statements required by GAAP for complete financial statements and should be read in conjunction with the 2023 audited consolidated financial statements, including the notes thereto, as presented in our Form 10-K.

Principles of Consolidation — The Company’s unaudited condensed consolidated financial statements include the accounts of Option Care Health, Inc. and its subsidiaries. All intercompany transactions and balances are eliminated in consolidation.

The Company has investments in companies that are 50% owned and are accounted for as equity-method investments. The Company’s share of earnings from equity-method investments is included in the line entitled “Equity in earnings of joint ventures” in the unaudited condensed consolidated statements of comprehensive income. See Equity-Method Investments within Note 2, Summary of Significant Accounting Policies, for further discussion of the Company’s equity-method investments.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of March 31, 2024, cash equivalents consisted of money market funds.

Prepaid Expenses and Other Current Assets — Included in prepaid expenses and other current assets are rebates receivable from pharmaceutical and medical supply manufacturers of $49.1 million and $52.0 million as of March 31, 2024 and December 31, 2023, respectively.

Equity-Method Investments — The Company’s investments in certain unconsolidated entities are accounted for under the equity method. The balance of these investments is included in other noncurrent assets in the accompanying condensed consolidated balance sheets. As of March 31, 2024 and December 31, 2023, the balance of the investments was $21.3 million and $20.9 million, respectively. The balance of these investments is increased to reflect the Company’s capital contributions and equity in earnings of the investees. The balance of these investments is decreased to reflect the Company’s equity in losses of the investees and for distributions received that are not in excess of the carrying amount of the investments. The Company’s proportionate share of earnings or losses of the investees is recorded in equity in earnings of joint ventures in the accompanying unaudited condensed consolidated statements of comprehensive income. The Company’s proportionate share of earnings was $1.1 million and $1.4 million for the three months ended March 31, 2024 and 2023, respectively. Distributions from the investees are treated as cash inflows from operating activities in the unaudited condensed consolidated statements of cash flows. During the three months ended March 31, 2024 and 2023, the Company received distributions from the investees of $0.8 million and $2.5 million, respectively. See Note 15, Related-Party Transactions, for discussion of related-party transactions with these investees.

Concentrations of Business Risk — The Company generates revenue from managed care contracts and other agreements with commercial third-party payers. Revenue related to the Company’s largest payer was approximately 14% for the three months ended March 31, 2024 and 2023. There were no other managed care contracts that represent greater than 10% of revenue for the periods presented.

For the three months ended March 31, 2024 and 2023, approximately 12% of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. As of March 31, 2024 and December 31, 2023, approximately 14% and 12%, respectively, of the Company’s accounts receivable was related to these programs. Governmental programs pay for services based on fee schedules and rates that are determined by the related governmental agency. Laws and regulations pertaining to government programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change in the near term.

The Company does not require its patients or other payers to carry collateral for any amounts owed for goods or services provided. Other than as discussed above, concentration of credit risk relating to trade accounts receivable is limited due to the Company’s diversity of patients and payers. Further, the Company generally does not provide charity care; however, Option Care Health offers a financial assistance program for patients that meet certain defined hardship criteria.

For the three months ended March 31, 2024 and 2023, approximately 66% and 72%, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors. Although there are a limited number of suppliers, the Company believes that other vendors could provide similar products on comparable terms. However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or operating results.

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3. REVENUE

The following table sets forth the net revenue earned by category of payer for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31,
	2024		2023
Commercial payers	$	988,043	$	873,911
Government payers	138,310		122,789
Patients	19,699		19,148
Net revenue	$	1,146,052	$	1,015,848

4. INCOME TAXES

During the three months ended March 31, 2024 and 2023, the Company recorded tax expense of $12.2 million and $15.0 million, respectively, which represents an effective tax rate of 21.4% and 27.7%, respectively. The variance in the Company’s effective tax rate of 21.4% for the three months ended March 31, 2024, compared to the federal statutory rate of 21%, is primarily attributable to the difference between federal and state tax rates, various non-deductible expenses, and a change in state valuation allowance. During the three months ended March 31, 2024, the Company released $2.2 million of state valuation allowance. The variance in the Company’s effective tax rate of 27.7% for the three months ended March 31, 2023, compared to the federal statutory rate of 21%, is primarily attributable to difference between federal and state tax rates, as well as various non-deductible expenses.

The Company maintains a valuation allowance of $4.2 million against certain state net operating losses. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. In making this assessment, the Company considers the scheduled reversal of deferred tax liabilities, including the effect in available carryback and carryforward periods, projected taxable income, and tax-planning strategies. On a quarterly basis, the Company evaluates all positive and negative evidence in determining if the valuation allowance is fairly stated.

The Company’s tax expense of $12.2 million and $15.0 million for the three months ended March 31, 2024 and March 31, 2023, respectively, consists of quarterly federal and state tax liabilities as well as recognized deferred federal and state tax expense.

The Company has accumulated federal net operating loss carryovers that are subject to one or more Internal Revenue Code (“Code”) Section 382 limitations. This may limit the Company’s ability to utilize its federal net operating losses.

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5. EARNINGS PER SHARE

The Company presents basic and diluted earnings per share for its common stock. Basic earnings per share is calculated by dividing the net income of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss and the weighted average number of shares of common stock outstanding for the effects of all potentially dilutive securities.

The earnings are used as the basis of determining whether the inclusion of common stock equivalents would be anti-dilutive. The computation of diluted shares for the three months ended March 31, 2024 and 2023 includes the effect of shares that would be issued in connection with warrants, stock options, restricted stock awards and performance stock unit awards, as these common stock equivalents are dilutive to the earnings per share recorded in those periods.

The following table presents the Company’s common stock equivalents that were excluded from the calculation of earnings per share as they would be anti-dilutive:


	Three Months Ended March 31,
	2024	2023
Stock option awards	880,815	871,491
Restricted stock awards	279,144	342,894
Performance stock unit awards	149,561	90,159

The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income	$	44,791	$	39,208
Denominator:
Weighted average number of common shares outstanding	173,928		181,262
Earnings per common share:
Earnings per common share, basic	$	0.26	$	0.22

The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):


	Three Months Ended March 31,
	2024		2023
Numerator:
Net income	$	44,791	$	39,208
Denominator:
Weighted average number of common shares outstanding	173,928		181,262
Effect of dilutive securities	1,696		1,473
Weighted average number of common shares outstanding, diluted	175,624		182,735
Earnings per common share:
Earnings per common share, diluted	$	0.26	$	0.21

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6. LEASES

During the three months ended March 31, 2024 and 2023, the Company incurred operating lease expenses of $7.9 million and $7.0 million, respectively, including short-term lease expenses, which were included as a component of selling, general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income. As of March 31, 2024, the weighted-average remaining lease term was 7.0 years and the weighted-average discount rate was 6.36%.

Operating leases mature as follows (in thousands):


Fiscal Year Ended December 31,	Minimum Payments
2024	$	19,522
2025	25,120
2026	22,276
2027	18,617
2028	12,198
Thereafter	42,303
Total lease payments	140,036
Less: interest	(31,620)
Present value of lease liabilities	$	108,416

During the three months ended March 31, 2024, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the unaudited condensed consolidated statements of cash flow of $11.3 million related to increases in the operating lease right-of-use assets and operating lease liabilities. As of March 31, 2024, the Company did not have any significant operating or financing leases that had not yet commenced.

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7. PROPERTY AND EQUIPMENT

Property and equipment was as follows as of March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024		December 31, 2023
Infusion pumps	$	36,484	$	36,943
Equipment, furniture and other	24,685		23,593
Leasehold improvements	100,109		99,725
Computer software, purchased and internally developed	50,982		50,572
Assets under development	33,159		33,668
	245,419		244,501
Less: accumulated depreciation	(124,450)		(123,871)
Property and equipment, net	$	120,969	$	120,630

Depreciation expense is recorded within cost of revenue and operating expenses within the unaudited condensed consolidated statements of comprehensive income, depending on the nature of the underlying fixed assets. The depreciation expense included in cost of revenue relates to revenue-generating assets, such as infusion pumps. The depreciation expense included in operating expenses is related to infrastructure items, such as furniture, computer and office equipment, and leasehold improvements. The following table presents the amount of depreciation expense recorded in cost of revenue and operating expenses for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31,
	2024		2023
Depreciation expense in cost of revenue	$	576	$	711
Depreciation expense in operating expenses	6,120		6,012
Total depreciation expense	$	6,696	$	6,723

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8. GOODWILL AND OTHER INTANGIBLE ASSETS

There was no change in the carrying amount of goodwill for the three months ended March 31, 2024.

The carrying amount and accumulated amortization of intangible assets consist of the following as of March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024		December 31, 2023
Gross intangible assets:
Referral sources	$	514,388	$	514,388
Trademarks/names	39,136		39,136
Other amortizable intangible assets	985		995
Total gross intangible assets	554,509		554,519

Accumulated amortization:
Referral sources	(206,906)		(199,084)
Trademarks/names	(20,423)		(19,698)
Other amortizable intangible assets	(381)		(341)
Total accumulated amortization	(227,710)		(219,123)
Total intangible assets, net	$	326,799	$	335,396

Amortization expense for intangible assets was $8.6 million and $8.5 million for the three months ended March 31, 2024 and 2023, respectively.

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9. INDEBTEDNESS

Long-term debt consisted of the following as of March 31, 2024 (in thousands):


	Principal Amount		Discount		Debt Issuance Costs		Net Balance
Revolver Facility	$	—	$	—	$	—	$	—
First Lien Term Loan	586,500		(6,636)		(9,209)		570,655
Senior Notes	500,000		—		(8,373)		491,627
	$	1,086,500	$	(6,636)	$	(17,582)	1,062,282
Less: current portion							(6,000)
Total long-term debt							$	1,056,282

Long-term debt consisted of the following as of December 31, 2023 (in thousands):


	Principal Amount		Discount		Debt Issuance Costs		Net Balance
Revolver Facility	$	—	$	—	$	—	$	—
First Lien Term Loan	588,000		(6,974)		(9,678)		571,348
Senior Notes	500,000		—		(8,698)		491,302
	$	1,088,000	$	(6,974)	$	(18,376)	1,062,650
Less: current portion							(6,000)
Total long-term debt							$	1,056,650

The interest rate on the First Lien Term Loan was 8.19% and 8.21% as of March 31, 2024 and December 31, 2023, respectively. The weighted average interest rate incurred on the First Lien Term Loan was 8.20% and 7.28% for the three months ended March 31, 2024 and 2023, respectively. The interest rate on the Senior Notes was 4.375% as of March 31, 2024 and December 31, 2023. The weighted average interest rate incurred on the Senior Notes was 4.375% for the three months ended March 31, 2024 and 2023.

Long-term debt matures as follows (in thousands):


Fiscal Year Ended December 31,	Minimum Payments
2024	$	4,500
2025	6,000
2026	6,000
2027	6,000
2028	564,000
Thereafter	500,000
Total	$	1,086,500

During the three months ended March 31, 2024 and 2023, the Company engaged in hedging activities to limit its exposure to changes in interest rates. See Note 10, Derivative Instruments, for further discussion.

The following table presents the estimated fair values of the Company’s debt obligations as of March 31, 2024 (in thousands):


Financial Instrument	Carrying Value as of March 31, 2024		Markets for Identical Item (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
First Lien Term Loan	$	570,655	$	—	$	588,729	$	—
Senior Notes	491,627		—		456,250		—
Total debt instruments	$	1,062,282	$	—	$	1,044,979	$	—

See Note 11, Fair Value Measurements, for further discussion.

On December 7, 2023, the Company entered into the second amendment to the amended and restated First Lien Credit Agreement dated as of October 27, 2021 (“First Lien Credit Agreement Amendment”). The First Lien Credit Agreement Amendment, among other things, provides for revolving credit commitments by the applicable Revolving Credit Lenders in an aggregate amount of $400.0 million (the “Revolver Facility”), pursuant to which such lenders have agreed to make Revolving Credit Loans to the Company. As of March 31, 2024, the Company had $5.3 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $394.7 million.

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10. DERIVATIVE INSTRUMENTS

The Company uses derivative financial instruments for hedging and non-trading purposes to limit the Company’s exposure to increases in interest rates related to its variable interest rate debt. Use of derivative financial instruments in hedging programs subjects the Company to certain risks, such as market and credit risks. Market risk represents the possibility that the value of the derivative financial instrument will change. In a hedging relationship, the change in the value of the derivative financial instrument is offset to a great extent by the change in the value of the underlying hedged item. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual, amount of the Company’s derivative financial instruments is used to measure interest to be paid or received and does not represent the Company’s exposure due to credit risk. Credit risk is monitored through established approval procedures, including reviewing credit ratings when appropriate.

In October 2021, the Company entered into an interest rate cap hedge with a notional amount of $300 million for a 5-year term beginning November 30, 2021. The hedge partially offsets risk associated with the First Lien Term Loan’s variable interest rate. The interest rate cap instrument perfectly offsets the terms of the interest rates associated with the variable interest rate of the First Lien Term Loan.

The following table summarizes the amount and location of the Company’s derivative instruments in the condensed consolidated balance sheets (in thousands):


	Fair Value - Derivatives in Asset Position
Derivative	Balance Sheet Caption	March 31, 2024		December 31, 2023
Interest rate cap designated as cash flow hedge	Prepaid expenses and other current assets	$	10,421	$	9,746
Interest rate cap designated as cash flow hedge	Other noncurrent assets	11,513		10,183
Total derivative assets		$	21,934	$	19,929

The gain (loss) associated with the change in the fair value of the effective portion of the hedging instrument is recorded in other comprehensive income (loss). The following table presents the pre-tax gain (loss) from derivative instruments recognized in other comprehensive income (loss) in the Company’s unaudited condensed consolidated statements of comprehensive income (in thousands):


	Three Months Ended March 31,
Derivative	2024		2023
Interest rate cap designated as cash flow hedge	$	2,005	$	(4,595)

The following table presents the amount and location of pre-tax income recognized in the Company’s unaudited condensed consolidated statements of comprehensive income related to the Company’s derivative instruments (in thousands):


		Three Months Ended March 31,
Derivative	Income Statement Caption	2024		2023
Interest rate cap designated as cash flow hedge	Interest expense, net	$	2,980	$	2,352

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11. FAIR VALUE MEASUREMENTS

Fair value measurements are determined by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurements) and gives the lowest priority to unobservable inputs (Level 3 measurements). The categories within the valuation hierarchy are described as follows:

•Level 1 — Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities.

•Level 2 — Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

•Level 3 — Inputs to the fair value measurement are unobservable inputs or valuation techniques.

While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

First Lien Term Loan: The fair value of the First Lien Term Loan is derived from a broker quote on the loans in the syndication (Level 2 inputs). See Note 9, Indebtedness, for further discussion of the carrying amount and fair value of the First Lien Term Loan.

Senior Notes: The fair value of the Senior Notes is derived from a broker quote (Level 2 inputs). See Note 9, Indebtedness, for further discussion of the carrying amount and fair value of the Senior Notes.

Interest Rate Cap: The fair value of the interest rate cap is derived from the interest rates prevalent in the market and future expectations of those interest rates (Level 2 inputs). The Company determines the fair value of the investments based on quoted prices from third-party brokers. See Note 10, Derivative Instruments, for further discussion of the fair value of the interest rate cap.

Money Market Funds: The fair value of the money market funds is derived from the closing price reported by the fund sponsor and classified as cash and cash equivalents on the Company’s condensed consolidated balance sheets (Level 1 inputs).

There were no other material assets or liabilities measured at fair value at March 31, 2024 and December 31, 2023.

12. COMMITMENTS AND CONTINGENCIES

The Company is involved in legal proceedings and is subject to investigations, inspections, audits, inquiries, and similar actions by governmental authorities, arising in the normal course of the Company’s business. Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. From time to time, the Company may also be involved in legal proceedings as a plaintiff involving antitrust, tax, contract, intellectual property, and other matters. Gain contingencies, if any, are recognized when they are realized.

The results of legal proceedings are often uncertain and difficult to predict, and the costs incurred in litigation can be substantial, regardless of the outcome. The Company does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s condensed consolidated balance sheets.

However, substantial unanticipated verdicts, fines, and rulings may occur. As a result, the Company may from time to time incur judgments, enter into settlements, or revise expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations in the period in which the amounts are accrued and/or its cash flows in the period in which the amounts are paid.

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13. STOCK-BASED INCENTIVE COMPENSATION

Equity Incentive Plans — Under the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), approved at the annual meeting by the BioScrip, Inc. (“BioScrip”) stockholders on May 3, 2018 and amended and restated on May 19, 2021, the Company may issue, among other things, incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, stock grants, and performance units to key employees and directors, resulting in a total of 9,101,734 shares of common stock authorized for issuance. The 2018 Plan is administered by the Company’s Compensation Committee, a standing committee of the Company’s Board of Directors. The Company had stock options, restricted stock units and performance stock units outstanding related to the 2018 Plan as of March 31, 2024 and 2023. During the three months ended March 31, 2024 and 2023, total stock-based incentive compensation expense recognized by the Company related to the 2018 Plan was $9.6 million and $6.0 million, respectively.

14. STOCKHOLDERS’ EQUITY

2017 Warrants — During the three months ended March 31, 2024 and 2023, warrant holders did not elect to exercise any warrants to purchase shares of common stock. As of March 31, 2024 and December 31, 2023, the remaining warrant holders are entitled to purchase 51,838 shares of common stock.

2015 Warrants — During the three months ended March 31, 2024 and 2023, warrant holders exercised an immaterial number of warrants to purchase shares of common stock. As of March 31, 2024 and December 31, 2023, the remaining warrant holders are entitled to purchase 13,365 and 13,888 shares of common stock, respectively.

Share Repurchase Program — The Company’s Board of Directors approved a share repurchase program of up to an aggregate $500.0 million of common stock of the Company. Under the share repurchase program, repurchases may occur in any number of methods depending on timing, market conditions, regulatory requirements, and other corporate considerations. The share repurchase program has no specified expiration date.

During the three months ended March 31, 2024 and 2023, the Company purchased 1,251,739 and 2,475,166 shares of common stock for an average share price of $31.96 and $30.30, totaling $40.0 million and $75.0 million, respectively. All repurchased shares became treasury stock. As of March 31, 2024, the Company is authorized to repurchase up to a remaining $210.0 million of common stock of the Company.

15. RELATED-PARTY TRANSACTIONS

Transactions with Equity-Method Investees — The Company provides management services to its joint ventures such as accounting, invoicing and collections in addition to day-to-day managerial support of the operations of the businesses. The Company recorded management fee income of $1.5 million and $1.3 million for the three months ended March 31, 2024 and 2023, respectively. Management fees are recorded in net revenues in the accompanying unaudited condensed consolidated statements of comprehensive income. During the three months ended March 31, 2024 and 2023, the Company received distributions from the investees of $0.8 million and $2.5 million, respectively.

The Company had amounts due from its joint ventures of $1.0 million as of March 31, 2024. The Company had amounts due to its joint ventures of $0.5 million and due from its joint ventures of $0.1 million as of December 31, 2023. Receivables were included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Payables were included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. These balances primarily relate to cash collections received by the Company on behalf of the joint ventures, offset by certain pharmaceutical inventories and other expenses paid for by the Company on behalf of the joint ventures.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context requires otherwise, references in this report to "Option Care Health," the “Company,” “we,” “us” and “our” refer to Option Care Health, Inc. and its consolidated subsidiaries. Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to assist the reader in understanding and assessing significant changes and trends related to our results of operations and financial condition. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the related notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Form 10-Q”). Certain statements in this Item 2 of Part I of this Form 10-Q, and in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Form 10-K”), may cause our actual results, financial position, and cash and cash equivalents generated from operations to differ materially from these forward-looking statements.

Business Overview

Option Care Health, and its wholly-owned subsidiaries, provides infusion therapy and other ancillary health care services through a national network of 177 locations around the United States. The Company contracts with managed care organizations, third-party payers, hospitals, physicians, and other referral sources to provide pharmaceuticals and complex compounded solutions to patients for intravenous delivery in the patients’ homes or other nonhospital settings. Our services are provided in coordination with, and under the direction of, the patient’s physician. Our multidisciplinary team of clinicians, including pharmacists, nurses, and dietitians work with the physician to develop a plan of care suited to each patient’s specific needs. We provide home infusion services consisting of anti-infectives, nutrition support, bleeding disorder therapies, immunoglobulin therapy, and other therapies for chronic and acute conditions.

Update on the Impact of the Change Healthcare Cybersecurity Incident

As previously disclosed, Change Healthcare, a subsidiary of UnitedHealth Group, experienced an incident on February 21, 2024, in which a cybersecurity threat actor gained access to some of its information technology systems (“Change Healthcare Cybersecurity Incident”). Since the time of the system disruption, Option Care Health has worked continuously to find alternative processes to help maintain patient care and overall operations.

As of March 31, 2024, the Company has not identified any compromise or unauthorized access of its systems or networks due to this third party incident. As of the end of the first quarter of 2024, the Company reconnected to certain applications maintained by Change Healthcare and resumed claims submission to several payers and utilized alternative platforms for the majority of its claims. The Company continues to work through accumulated unprocessed claims and to establish full recovery with Change Healthcare’s applications.

During the first quarter of 2024, the Company did not experience a material financial impact from the Change Healthcare Cybersecurity Incident on the financial results as reported. The impact to the first quarter financial results was primarily related to cash flows from operations, which are expected to be recognized later in 2024, additional labor costs to support continued operations, and higher net interest expense due to lower-than-expected interest-bearing cash balances. The Company continues to maintain strong liquidity and, having resumed submission of claims to payers, has determined that the Change Healthcare Cybersecurity Incident is not reasonably likely to materially impact the Company, including its business operations, financial condition or results of operations.

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Composition of Results of Operations

The following results of operations include the accounts of Option Care Health and our subsidiaries for the three months ended March 31, 2024 and 2023.

Gross Profit

Gross profit represents our net revenue less cost of revenue.

Net Revenue. Infusion and related health care services revenue is reported at the estimated net realizable amounts from third-party payers and patients for goods sold and services rendered. When pharmaceuticals are provided to a patient, revenue is recognized upon delivery of the goods. When nursing services are provided, revenue is recognized when the services are rendered.

Due to the nature of the health care industry and the reimbursement environment in which the Company operates, certain estimates are required to record revenue and accounts receivable at their net realizable values at the time goods or services are provided. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payers may result in adjustments to amounts originally recorded.

Cost of Revenue. Cost of revenue consists of the actual cost of pharmaceuticals and other medical supplies dispensed to patients. In addition to product costs, cost of revenue includes warehousing costs, purchasing costs, depreciation expense relating to revenue-generating assets, such as infusion pumps, shipping and handling costs, and wages and related costs for the pharmacists, nurses, and all other employees and contracted workers directly involved in providing service to the patient.

The Company receives volume-based rebates and prompt payment discounts from some of its pharmaceutical and medical supplies vendors. These payments are recorded as a reduction of inventory and are accounted for as a reduction of cost of revenue when the related inventory is sold.

Operating Costs and Expenses

Selling, General and Administrative Expenses. Selling, general and administrative expenses consist principally of salaries for administrative employees that directly and indirectly support the operations, occupancy costs, marketing expenditures, insurance, and professional fees.

Depreciation and Amortization Expense. Depreciation within this caption relates to fixed assets and amortization relates to intangibles. Depreciation of revenue-generating assets, such as infusion pumps, is included in cost of revenue.

Other Income (Expense)

Interest Expense, Net. Interest expense consists principally of interest payments on the Company’s outstanding borrowings under the First Lien Term Loan, Revolver Facility, Senior Notes, amortization of discount and deferred financing fees, payments associated with the interest rate cap, and interest income earned on cash and cash equivalents. Refer to the “Liquidity and Capital Resources” section below for further discussion of these outstanding borrowings.

Equity in Earnings of Joint Ventures. Equity in earnings of joint ventures consists of our proportionate share of equity earnings or losses from equity investments in two infusion joint ventures with health systems.

Other, Net. Other income (expense) primarily includes activity related to non-operating income and expenses.

Income Tax Expense. The Company is subject to taxation in the United States and various states. The Company’s income tax expense is reflective of the current federal and state tax rates.

Change in Unrealized Gain (Loss) on Cash Flow Hedge, Net of Income Tax (Expense) Benefit. Change in unrealized gain (loss) on cash flow hedge, net of income tax (expense) benefit, consists of the gain (loss) associated with the changes in the fair value of derivatives designated as hedging instruments related to the interest rate cap hedge, net of income taxes.

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Results of Operations

The following table presents Option Care Health’s consolidated results of operations for the three months ended March 31, 2024 and 2023 (in thousands, except for percentages):


	Three Months Ended March 31,
	2024				2023
	Amount		% of Revenue		Amount		% of Revenue
NET REVENUE	$	1,146,052	100.0	%	$	1,015,848	100.0	%
COST OF REVENUE	907,552		79.2	%	786,843		77.5	%
GROSS PROFIT	238,500		20.8	%	229,005		22.5	%

OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses	154,742		13.5	%	147,866		14.6	%
Depreciation and amortization expense	14,728		1.3	%	14,514		1.4	%
Total operating expenses	169,470		14.8	%	162,380		16.0	%
OPERATING INCOME	69,030		6.0	%	66,625		6.6	%

OTHER INCOME (EXPENSE):
Interest expense, net	(13,202)		(1.2)	%	(13,834)		(1.4)	%
Equity in earnings of joint ventures	1,125		0.1	%	1,437		0.1	%
Other, net	2		—	%	1		—	%
Total other expense	(12,075)		(1.1)	%	(12,396)		(1.2)	%

INCOME BEFORE INCOME TAXES	56,955		5.0	%	54,229		5.3	%
INCOME TAX EXPENSE	12,164		1.1	%	15,021		1.5	%
NET INCOME	$	44,791	3.9	%	$	39,208	3.9	%

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Change in unrealized gain (loss) on cash flow hedges, net of income tax (expense) benefit of ($454) and $1,152, respectively	1,551		0.1	%	(3,443)		(0.3)	%
OTHER COMPREHENSIVE INCOME (LOSS)	1,551		0.1	%	(3,443)		(0.3)	%
NET COMPREHENSIVE INCOME	$	46,342	4.0	%	$	35,765	3.5	%

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Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

The following tables present selected consolidated comparative results of operations from Option Care Health’s unaudited condensed consolidated financial statements for the three months ended March 31, 2024 and 2023.

Gross Profit


	Three Months Ended March 31,
	2024			2023			Variance

	(in thousands, except for percentages)
Net revenue	$	1,146,052		$	1,015,848		$	130,204	12.8	%
Cost of revenue	907,552			786,843			120,709		15.3	%
Gross profit	$	238,500		$	229,005		$	9,495	4.1	%
Gross profit margin	20.8		%	22.5		%

The increase in net revenue was primarily driven by organic growth in the Company’s portfolio of therapies, consisting of acute revenue that had single-digit growth relative to the prior year while chronic revenue grew in the mid-teens. The increase in cost of revenue was primarily driven by the growth in revenue, therapy mix, and acute drug supply chain disruption, as well as the comparable impact of certain temporary favorable therapy pricing dynamics in the prior year. The decrease in gross profit margin was primarily due to the same comparable impact of certain temporary favorable pricing dynamics in the prior year that did not continue into 2024.

Operating Expenses


	Three Months Ended March 31,
	2024		2023		Variance

	(in thousands, except for percentages)
Selling, general and administrative expenses	$	154,742	$	147,866	$	6,876	4.7	%
Depreciation and amortization expense	14,728		14,514		214		1.5	%
Total operating expenses	$	169,470	$	162,380	$	7,090	4.4	%

The increase in selling, general and administrative expenses during the three months ended March 31, 2024 is primarily due to an increase in salaries, benefits, and equity compensation; however, these expenses have declined as a percentage of revenue to 13.5% for the three months ended March 31, 2024 compared to 14.6% for the three months ended March 31, 2023, due to the Company’s focus on leveraging existing infrastructure to control spending.

Other Income (Expense)


	Three Months Ended March 31,
	2024		2023		Variance

	(in thousands, except for percentages)
Interest expense, net	$	(13,202)	$	(13,834)	$	632	(4.6)	%
Equity in earnings of joint ventures	1,125		1,437		(312)		(21.7)	%
Other, net	2		1		1		100.0	%
Total other expense	$	(12,075)	$	(12,396)	$	321	(2.6)	%

The decrease in interest expense, net during the three months ended March 31, 2024 was primarily attributable to additional interest income generated from our cash and cash equivalents, partially offset by an increase in the Company’s First Lien Term Loan variable interest rate, compared to three months ended March 31, 2023. See Note 9, Indebtedness, of the condensed consolidated financial statements for further information.

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Income Tax Expense


	Three Months Ended March 31,
	2024		2023		Variance

	(in thousands, except for percentages)
Income tax expense	$	12,164	$	15,021	$	(2,857)	(19.0)	%

The Company recorded income tax expense of $12.2 million and $15.0 million for the three months ended March 31, 2024 and 2023, respectively, which represents an effective tax rate of 21.4% and 27.7%, respectively. The variance in the Company’s effective tax rate of 21.4% for the three months ended March 31, 2024, compared to the federal statutory rate of 21%, is primarily attributable to the difference between federal and state tax rates, various non-deductible expenses, and a change in state valuation allowance. The variance in the Company’s effective tax rate of 27.7% for the three months ended March 31, 2023, compared to the federal statutory rate of 21%, is primarily attributable to the difference between federal and state tax rates, as well as various non-deductible expenses.

Net Income and Other Comprehensive Income (Loss)


	Three Months Ended March 31,
	2024		2023		Variance

	(in thousands, except for percentages)
Net income	$	44,791	$	39,208	$	5,583	14.2	%
Other comprehensive income (loss), net of tax:
Changes in unrealized gain (loss) on cash flow hedges, net of income taxes	1,551		(3,443)		4,994		145.0	%
Other comprehensive income (loss)	1,551		(3,443)		4,994		145.0	%
Net comprehensive income	$	46,342	$	35,765	$	10,577	29.6	%

The change in net income was attributable to organic growth from additional revenue related to the factors described in the above sections.

For the three months ended March 31, 2024 and 2023, the change in unrealized gain on cash flow hedges, net of income taxes was related to the change in fair market value of the $300.0 million interest rate cap hedge executed in October 2021.

Net comprehensive income increased to $46.3 million for the three months ended March 31, 2024, compared to net comprehensive income of $35.8 million for the three months ended March 31, 2023, primarily as a result of the changes in net income discussed above.

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Liquidity and Capital Resources

For the three months ended March 31, 2024 and the twelve months ended December 31, 2023, the Company’s primary sources of liquidity were cash and cash equivalents of $219.5 million and $343.8 million, respectively. As of March 31, 2024 and December 31, 2023, the Company had $394.7 million of borrowings available under its credit facilities (net of $5.3 million undrawn letters of credit issued and outstanding). During the three months ended March 31, 2024, the Company’s cash flows from operations were impacted by the Change Healthcare Cybersecurity Incident. See the caption “Update on the Impact of the Change Healthcare Cybersecurity Incident” included in this Form 10-Q for further discussion. During the twelve months ended December 31, 2023, the Company’s cash flows from operations enabled investments in pharmacy, infusion suites, and information technology infrastructure to support growth and create additional capacity in the future, as well as to pursue acquisitions and share repurchases.

The Company’s primary uses of cash and cash equivalents include supporting our ongoing business activities, investment in capital expenditures in both facilities and technology, the pursuit of acquisitions, and share repurchases. Ongoing operating cash outflows are associated with procuring and dispensing drugs, personnel and other costs associated with servicing patients, as well as paying cash interest on outstanding debt and cash taxes. Ongoing investing cash flows are primarily associated with capital projects related to business acquisitions, the improvement and maintenance of our pharmacy facilities and investment in our information technology systems. Ongoing financing cash flows are primarily associated with the quarterly principal payments on our outstanding debt, along with potential future share repurchases.

Our business strategy includes the deployment of capital to pursue acquisitions that complement our existing operations. We continue to evaluate acquisition opportunities and view acquisitions as a key part of our growth strategy. The Company historically has funded its acquisitions with cash and cash equivalents with the exception of the BioScrip merger. The Company may require additional capital in excess of current availability in order to complete future acquisitions. It is impossible to predict the amount of capital that may be required for acquisitions, and there is no assurance that sufficient financing for these activities will be available on acceptable terms.

Short-Term and Long-Term Liquidity Requirements

The Company’s ability to make principal and interest payments on any borrowings under our credit facilities and our ability to fund planned capital expenditures will depend on our ability to generate cash and cash equivalents in the future, which to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based on our current level of operations and planned capital expenditures, we believe that our existing cash and cash equivalents balances and expected cash flows generated from operations will be sufficient to meet our operating requirements over the next 12 months and beyond. We may require additional borrowings under our credit facilities and alternative forms of financings or investments to achieve our longer-term strategic plans.

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Credit Facilities

The Company’s Revolver Facility provides for borrowings up to $400.0 million. The Revolver Facility matures on the date that is the earlier of (i) December 7, 2028 and (ii) the date that is 91 days prior to the stated maturity date applicable to any Term B Loans. Borrowings under the Revolver Facility will bear interest at a rate equal to, at the option of the Company, either (i) the Term Secured Overnight Financing Rate (“SOFR”) applicable thereto plus the Applicable Rate or (ii) the then-applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the First Lien Credit Agreement Amendment, (A) for Term SOFR Loans, 1.75%, or (B) for Base Rate Loans, 0.75% and (ii) thereafter, the Applicable Rate for Term SOFR Loans and Base Rate Loans, based upon the Total Net Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent pursuant to the terms of the credit agreement. As of March 31, 2024, the Company had $5.3 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $394.7 million.

The principal balance of the First Lien Term Loan is repayable in quarterly installments of $1.5 million plus interest, with a final payment of all remaining outstanding principal due on October 27, 2028. The quarterly principal payments commenced in March 2022. Under the First Lien Credit Agreement Amendment, interest on the First Lien Term Loan is payable monthly on either (i) SOFR (with a floor of 0.50% per annum) plus an applicable margin of 2.75% for Term SOFR Loans (as such term is defined in the First Lien Credit Agreement Amendment); or (ii) a base rate determined in accordance with the First Lien Credit Agreement Amendment, plus 1.75% for Base Rate Loans (as such term is defined in the First Lien Credit Agreement Amendment).

The Senior Notes bear interest at a rate of 4.375% per annum and are payable semi-annually in arrears on October 31 and April 30 of each year, which began on April 30, 2022. The Senior Notes mature on October 31, 2029.

Interest payments over the course of long-term debt obligations total an estimated $341.8 million based on final maturity dates of the Company’s credit facilities. Interest payments are calculated based on current rates as of March 31, 2024. Actual payments are based on changes in SOFR and exclude the interest rate cap derivative instrument.

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Cash Flows

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

The following table presents selected data from Option Care Health’s unaudited condensed consolidated statements of cash flows:


	Three Months Ended March 31,
	2024		2023		Variance

	(in thousands)
Net cash (used in) provided by operating activities	$	(68,784)	$	89,752	$	(158,536)
Net cash used in investing activities	(5,820)		(5,760)		(60)
Net cash used in financing activities	(49,732)		(80,402)		30,670
Net (decrease) increase in cash and cash equivalents	(124,336)		3,590		(127,926)
Cash and cash equivalents - beginning of period	343,849		294,186		49,663
Cash and cash equivalents - end of period	$	219,513	$	297,776	$	(78,263)

Cash Flows from Operating Activities

The use of cash in operating activities during the three months ended March 31, 2024, as compared to the cash provided by operating activities in the three months ended March 31, 2023, is primarily due to changes in accounts receivable as a result of the Change Healthcare Cybersecurity Incident, with lesser impacts from accrued compensation and employee benefits, accrued expenses and other current liabilities, which were partially offset by higher net income and higher inventory turnover.

Cash Flows from Investing Activities

The increase in cash used in investing activities during the three months ended March 31, 2024 is primarily related to an increase in capital expenditures as compared to the three months ended March 31, 2023.

Cash Flows from Financing Activities

The decrease in cash used in financing activities is primarily related to the Company’s $40.0 million repurchase of common stock during the three months ended March 31, 2024, whereas the three months ended March 31, 2023 activity primarily related to the Company’s $75.0 million repurchase of common stock.

Critical Accounting Policies and Estimates

The Company prepares its unaudited condensed consolidated financial statements in accordance with GAAP, which requires the Company to make estimates and assumptions. The Company evaluates its estimates and assumptions on an ongoing basis. Estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making assumptions about the carrying values of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period presented. The Company’s actual results may differ from these estimates, and different assumptions or conditions may yield different estimates.

There have been no material changes to the Company’s critical accounting policies and estimates as presented in our Form 10-K, which are hereby incorporated by reference.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our exposure to market risk from those included in our Form 10-K, which is hereby incorporated by reference.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports we file or submit under the 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 the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, management evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2024. Based on that evaluation, the Company’s Chief Executive Officer and its Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2024.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

For a summary of legal proceedings, refer to Note 12, Commitments and Contingencies, of the unaudited condensed consolidated financial statements included in Item 1 of this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes to the risk factors affecting our business, financial condition or results of operations from those set forth in Part I, Item 1A. “Risk Factors” in our Form 10-K. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and/or operating results, except for the updated risk factor below:

Delays in reimbursement may adversely affect our liquidity, cash flows and results of operations.

The reimbursement process for the services we provide is complex, resulting in delays between the time we bill for a service and receipt of payment that can be significant. Reimbursement and procedural issues often require us to resubmit claims multiple times and respond to multiple administrative requests before payment is remitted. The collection of accounts receivable is challenging and requires constant focus and involvement by management and ongoing enhancements to information systems and billing center operating procedures. While management believes that our controls and processes are satisfactory, there can be no assurance that collections of accounts receivable will continue at historical rates. The risks associated with third-party payers and the inability to collect outstanding accounts receivable could have a material adverse effect on our liquidity, cash flows, and results of operations. For example, in the first quarter of 2024, Change Healthcare, a subsidiary of UnitedHealth Group, experienced a cybersecurity incident that disrupted its operations, causing us to disconnect from certain Change Healthcare applications until the end of the quarter, preventing us from processing claims for services and reducing our cash flows from operations in the first quarter of 2024, which are now expected to be recognized later in 2024.

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

Issuer Purchases of Equity Securities

The Company’s Board of Directors approved a share repurchase program of up to an aggregate $500 million of common stock of the Company. This program has no specified expiration date.

The following table provides certain information with respect to the Company’s repurchases of common stock from January 1, 2024 through March 31, 2024:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
January 1, 2024 - January 31, 2024	756,893	$	31.82	756,893	$	225,913,205
February 1, 2024 - February 29, 2024	494,846	32.16		494,846	210,000,136
March 1, 2024 - March 31, 2024	—	—		—	210,000,136
	1,251,739	$	31.96	1,251,739	$	210,000,136

Item 5. Other Information

Adoption, Modification and Termination of Rule 10b5-1 Plans and Certain Other Trading Arrangements

No director or officer of the Company has adopted, modified or terminated a Rule 10b5-1 plan or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024.

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Item 6. Exhibits

(a) Exhibits.


Exhibit Number			Description
10.1			Form of Option Care Health, Inc. Non-Qualified Stock Option Certificate (Executive) (filed herewith).
10.2			Form of Option Care Health, Inc. Restricted Stock Unit Certificate (Executive) (filed herewith).
10.3			Form of Option Care Health, Inc. Performance Stock Unit Certificate (Executive) (filed herewith).
10.4			Form of Option Care Health, Inc. Restricted Stock Unit Certificate (Directors) (filed herewith).
31.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS			XBRL Instance Document
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			XBRL Taxonomy Extension Labels Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
104			XBRL Formatted Cover Page

SIGNATURES

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


OPTION CARE HEALTH, INC.

Date: April 23, 2024			/s/ Michael Shapiro
Michael Shapiro
Chief Financial Officer and Executive Vice President (Principal Financial Officer and Duly Authorized Officer)

Document

OPTION CARE HEALTH, INC.
NON-QUALIFIED STOCK OPTION CERTIFICATE

THIS NON-QUALIFIED STOCK OPTION CERTIFICATE (this “Option Certificate”) is made as of [__] (the “Grant Date”) between Option Care Health, Inc., a Delaware corporation (the “Company”), and [__] (the “Awardee”).

WHEREAS, the Company has established the Option Care Health, Inc. Amended and Restated 2018 Equity Incentive Plan (as amended and restated from time to time, the “Plan”), a copy of which has been provided to Awardee;

WHEREAS, the Plan provides for the making of stock and other equity based Awards, including grants of Options to purchase shares of Company common stock, $0.0001 par value per share, of the Company (“Stock”);

WHEREAS the Company desires to afford the Awardee an opportunity to purchase Stock as provided in accordance with this Certificate and the provisions of the Plan;

NOW THEREFORE, the following terms and conditions apply to this grant of Options in accordance with the terms and conditions of the Plan and subject to the provisions of this Certificate:

1.Grant of Option. The Company hereby grants to the Awardee the right and option (the “Option”) to purchase all or any part of [__] shares of Stock (the “Shares”). The Option is in all respects limited and conditioned as provided in this Certificate, and is subject to the terms and conditions of the Plan now in effect and as they may be amended from time to time, in accordance with the Plan (which terms and conditions are and automatically shall be incorporated by reference and shall control in the event of any conflict with any other terms of this Option Certificate). It is intended that this Option be a non-qualified stock option (“NQSO”) and not an incentive stock option (“ISO”) as such term is defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.Exercise Price. The exercise price per share of the Shares under the Option shall be [__].

3.Term. Unless earlier terminated pursuant to any provision of the Plan or of this Option Certificate, the Option shall expire on the ten (10) year anniversary of the Grant Date (the “Expiration Date”). The Option shall not be exercisable on or after the Expiration Date. Notwithstanding anything in this Option Certificate to the contrary, in the event the Awardee will not be permitted to exercise the Option on the date immediately prior to the Expiration Date because exercising the Option and selling the Stock acquired upon exercise of the Option would contravene applicable federal or state insider trading laws or regulations or other applicable federal or state securities laws or regulations (collectively, the “Securities Laws”) or would contravene the Company’s blackout or insider trading policies, then the term of the Option shall be extended for a period of thirty (30) days beginning on the first date that the Awardee is again permitted to exercise the Option under the Securities Laws and the Company’s blackout and insider trading policies.

4.Vesting and Exercise of Option.

(a)The Option will vest and may be exercised as to [INSERT VESTING SCHEDULE], in each case rounded to the nearest whole share. The portion of the Option that vests and becomes exercisable in accordance with the foregoing shall remain exercisable, subject to the provisions contained in the Plan and in this Option Certificate until the expiration of the term of the Option as set forth in Section 3.

(b)Notwithstanding any provision of the Plan to the contrary, in the event the Option is assumed or substituted by a successor in connection with a Change in Control, upon a Qualifying Termination the unvested portion of the Option will fully vest. For this purpose, a “Qualifying Termination” will mean an involuntary termination of Awardee’s employment without Cause during the 12-month period following a Change in Control. For this purpose, “Cause” will have the meaning given to such term in an employment or other similar agreement entered into by Awardee with the Company, or, in the absence of such an agreement, with respect to Awardee, will mean the occurrence of any one or more of the following reasons: (i) the commission of a felony or other crime involving moral turpitude; (ii) the commission of any act or omission involving dishonesty, disloyalty or fraud with respect to the Company; (iii) reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs (whether or not at the workplace) or other repeated conduct causing the Company substantial public disgrace or substantial economic harm; (iv) unsatisfactory performance of Awardee’s duties for the Company, as determined by the Board in its good-faith discretion; (v) any intentional act or omission aiding or abetting a competitor, supplier or customer of the Company to the material disadvantage of the Company; (vi) breach of fiduciary duty or willful misconduct with respect to the Company; (vii) any other material breach of this Certificate or (viii) Awardee engaging in illegal business practices or other practices contrary to the written policies of the Company, including, without limitation, sexual misconduct, harassment or discrimination.

(c)All vesting of Awardee’s Option under this Section 4 is further conditioned upon Awardee having remained in the continuous employment of the Company through the applicable vesting date. If Awardee does not remain in the continuous employment of the Company, with the exception of Sections 4(b) and 4(d), then Awardee will immediately forfeit any unvested portion of the Option in their entirety for no consideration, without any further action of the Company.

(d)Notwithstanding any provisions of this Certificate to the contrary, if Participant’s employment with the Company terminates due to Awardee’s Retirement, then the unvested portion of the Option shall continue to vest in accordance with the vesting schedule set forth in this Section 4. For purpose of this Award, “Retirement” or “Retire” means that the Awardee voluntarily resigns employment and (i) has reached fifty-eight (58) years of age; (ii) has provided ten (10) years of continuous employment with the Company; (iii) has provided to the Company at least six (6) months advance written notice of intent to Retire, (iv) been continuously employed by the Company for at least twelve (12) months following the Date of Grant and is in good standing with the Company on the date of termination of employment, (v) complies with all applicable post-employment covenants, and (vi) if requested by the Company, provides the Company with a release of claims in such form as required by the Company in its discretion.

5.Method of Exercising Option. Subject to the terms and conditions of this Option Certificate and the Plan, the Option may be exercised upon written notice to the Company or the

securities broker then designated by the Company, and the form of such notice shall be provided by the Company upon request. Such notice shall state the election to exercise the Option and the number of shares of Stock with respect to which it is being exercised; shall be signed by the person or persons so exercising the Option; shall, if the Company so requests, be accompanied by the investment certificate referred to in Section 6 of this Certificate and shall be accompanied by payment of the full Option price of such Shares.

The Option price shall be paid to the Company:

(a)In cash, or in its equivalent;

(b)In Stock previously acquired by the Awardee, provided that if such shares of Stock were acquired through exercise of a stock option, such shares have been held by the Awardee for a period of more than 12 months on the date of exercise;

(c)In Stock newly acquired by the Awardee upon exercise of the Option; or

(d)In any combination of (a), (b) and (c) above.

In addition, the Option price may also be paid (i) through any cashless exercise procedure then available to any other Director or Key Employee (as defined in the Plan); or (ii) by withholding Stock otherwise issuable in connection with the exercise of the Option.

In the event such Option price is paid, in whole or in part, in Stock, the portion of the Option price so paid with Stock shall be equal to the “fair market value” of such shares of Stock on the date of exercise of the Option, as such “fair market value” is determined as set forth in the Plan.

Upon receipt of such notice and payment, the Company, as promptly as practicable, shall deliver or cause to be delivered a certificate or certificates representing the shares with respect to which the Option is so exercised. The certificate or certificates for the shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option (or, if the Option shall be exercised by the Awardee and if the Awardee shall so request in the notice exercising the Option, shall be registered in the name of the Awardee and the Awardee’s spouse, jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. All shares that shall be purchased upon the exercise of this Option shall be fully paid and non-assessable by the Company.

6.Shares to be Purchased for Investment. Unless the Company has notified the Awardee that a registration statement covering the shares to be acquired upon the exercise of the Option has become effective under the Securities Act of 1933 and the Company has not thereafter notified the Awardee that such registration is no longer effective, or unless counsel to the Company shall be otherwise satisfied that the Awardee would be permitted under applicable law to immediately resell shares acquired upon the exercise of the Option, it shall be a condition to any exercise of the Option that the shares acquired upon such exercise be acquired for investment and not with a view to distribution, and the person effecting such exercise shall submit to the Company a certificate of such investment intent, together with such other evidence supporting the same as the Company may request. The Company shall be entitled to restrict the transferability of the shares issued upon any such exercise to the extent necessary to avoid a risk of violation of the Securities Act

of 1933 (or of any rules or regulations promulgated thereunder) or of any state laws or regulations. Such restrictions may, at the option of the Company, be noted or set forth in full on the share certificates.

7.Non-Transferability of Option. The Option is not assignable or transferable, in whole or in part, by the Awardee otherwise than by the laws of descent and distribution or in accordance with the procedures set forth in Section 13 of the Plan. During the lifetime of the Awardee the Option shall be exercisable only by the Awardee or by Awardee’s guardian or legal representative or Awardee’s permitted assignee or transferee.

8.Termination of Employment. If the Awardee’s employment with the Company and all Affiliates (as defined in the Plan) is terminated for any reason other than death, disability or Retirement, the Option may be exercised, to the extent of the number of shares which were vested on the date of such termination of employment, by the Awardee at any time on or prior to ninety (90) days following the termination date (the “Post-Termination Period”). The Post-Termination Period shall be twelve (12) months if the Awardee’s employment with the Company and all Affiliates is terminated due to disability or death. In the event of Awardee’s Retirement, the Post-Termination Period shall be [__] years. Notwithstanding this Section 8, the Post-Termination Period may be extended if such an extension it set forth in any severance agreement or other agreement then in effect between the Company and the Awardee. However, no Post-Termination Period may extend the Expiration Date of the Option set forth in Section 3.

9.Withholding of Taxes. The obligation of the Company to deliver shares of Stock upon the exercise of the Option shall be subject to applicable federal, state and local tax withholding requirements.

No Stock will be delivered to an Awardee upon exercise of the Option unless Awardee has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of the Stock. Awardee hereby authorizes the Company to withhold from payroll or other amounts payable to Awardee any sums required to satisfy such withholding tax obligations, and otherwise agrees to satisfy such obligations in accordance with the provisions of Section 19.3 of the Plan. If the exercise of the Option is subject to the withholding requirements of applicable federal tax laws, the Committee may permit the Awardee, subject to the provisions of the Plan and such additional withholding rules (the “Withholding Rules”) as shall be adopted by the Committee, to satisfy the minimum federal, state and local withholding tax, in whole or in part, by electing to have the Company withhold (or by returning to the Company) shares of Stock, which shares shall be valued, for this purpose, at their fair market value on the date of exercise of the Option (or, if later, the date on which the Awardee recognizes ordinary income with respect to such exercise) (the “Determination Date”). An election to use shares of Stock to satisfy tax withholding requirements must be made in compliance with and subject to the Withholding Rules, and the Committee may not withhold shares in excess of the number necessary to satisfy the maximum federal, state and local income tax withholding requirements. In the event shares of Stock previously acquired under the exercise of an ISO are used to satisfy such withholding requirement, such shares of Stock must have been held by the Awardee for a period of not less than the holding period described in Section 422(a)(1) of the Code on the Determination Date, or if such shares of Stock were previously acquired through exercise of a stock option, such option was granted to the Awardee at least six months prior to the Determination Date.

10.Miscellaneous.

(a)The Company and Awardee shall execute such further instruments and take such action as may reasonably be necessary to carry out the intent of this Option Certificate, as may be determined by the Committee.

(b)Neither the Plan nor this Option Certificate nor any provisions under either shall be construed so as to grant Awardee any right to remain in the employ of the Company.

(c)This Option Certificate shall be construed in accordance with, and its interpretation shall be governed by applicable federal law, and otherwise by the laws of the State of Delaware.

(d)The headings contained in this Option Certificate are for reference purposes only and shall not affect in any way the meaning or interpretation of this Option Certificate.

(e)Notwithstanding anything in this Certificate or in the Plan to the contrary, the Option granted to Awardee pursuant to this Certificate and Stock obtained upon exercise of the Option shall be subject to mandatory forfeiture, recovery by the Company or other action pursuant to any compensation recovery policy adopted by the Company or any Affiliate at any time, including, but not limited to, any policy adopted to comply with the requirements of Section 10D of the Exchange Act, the SEC’s final rules thereunder (Listing Standards for Recovery of Erroneously Awarded Compensation, 87 Fed. Reg. 73076-73142) and any applicable listing rules or other rules and regulations implementing the foregoing, or any other applicable laws which impose mandatory recoupment or forfeiture of incentive compensation. This Certificate will be automatically amended by the Committee to comply with any such compensation recovery policy.

(f)The Company may deliver any documents related to this Option Award by electronic means and request your acceptance of this Certificate by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.

IN WITNESS WHEREOF, the Company has caused this Non-Qualified Stock Option Certificate to be duly executed by its officers on the day and year first above written.

OPTION CARE HEALTH, INC.

By:

Its:

By signing this Certificate or otherwise accepting this Certificate in a manner approved by the Company, you agree to all the terms and conditions described above and in the Plan document.

Accepted and agreed:

Document

OPTION CARE HEALTH, INC.
RESTRICTED STOCK UNIT CERTIFICATE

THIS RESTRICTED STOCK UNIT CERTIFICATE (this “Certificate”) evidences the grant by Option Care Health, Inc., a Delaware corporation (the “Company”) of Restricted Stock Units of the Company to [__] (“Awardee”) on [__] (the “Grant Date”) as follows:

WHEREAS, the Plan provides for the making of stock and other equity based Awards; WHEREAS, the Plan and the Award contemplated hereby has been approved by the Company’s Compensation Committee (the “Committee”); and

WHEREAS, the Company desires to grant to Awardee Restricted Stock Units in accordance with the terms and conditions of the Plan and subject to the provisions of this Certificate.

NOW, THEREFORE, the following terms and conditions apply to this grant of Restricted Stock Units:

1.Grant of Restricted Stock Units. Subject to the terms and conditions of this Certificate and of the Plan, Awardee is hereby granted an Award of [__] Restricted Stock Units (the “Restricted Stock Units”), which include the right to be issued the number of shares of Stock equal to the Restricted Stock Units, subject to the restrictions and vesting conditions set forth in this Certificate.

2.Delivery and Settlement. As soon as reasonably practicable following the vesting of the Restricted Stock Units as set forth in Section 3 of this Certificate but in any event by no later than sixty days following the date on which such vesting occurs, the Company will issue in the name of Awardee shares of Stock in settlement of such vested Restricted Stock Units. Upon settlement of a vested Restricted Stock Unit in Stock, such vested Restricted Stock Unit will be deemed cancelled and Awardee shall have no further rights to payment of any kind in respect of such Restricted Stock Unit.

3.Issuance and Vesting Schedule.

(a)As of the Grant Date, all of the Restricted Stock Units are considered unvested Restricted Stock Units and are subject to forfeiture in their entirety for no consideration. Unvested Restricted Stock Units will vest and be settled [INSERT VESTING SCHEDULE], in each case rounded to the nearest whole share.

(b)Notwithstanding any provision of the Plan to the contrary, in the event the Restricted Stock Units are assumed or substituted by a successor in connection with a Change in Control, upon a Qualifying Termination all unvested Restricted Stock Units will vest and be settled in accordance with Section 2. For this purpose, a “Qualifying Termination” will mean an

involuntary termination of Awardee’s service without Cause during the 12-month period following a Change in Control. For this purpose, “Cause” will have the meaning given to such term in an employment or other similar agreement entered into by Awardee with the Company, or, in the absence of such an agreement, with respect to Awardee, will mean the occurrence of any one or more of the following reasons: (i) the commission of a felony or other crime involving moral turpitude; (ii) the commission of any act or omission involving dishonesty, disloyalty or fraud with respect to the Company; (iii) reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs (whether or not at the workplace) or other repeated conduct causing the Company substantial public disgrace or substantial economic harm; (iv) unsatisfactory performance of Awardee’s duties for the Company, as determined by the Board in its good-faith discretion; (v) any intentional act or omission aiding or abetting a competitor, supplier or customer of the Company to the material disadvantage of the Company; (vi) breach of fiduciary duty or willful misconduct with respect to the Company; (vii) any other material breach of this Certificate or (viii) Awardee engaging in illegal business practices or other practices contrary to the written policies of the Company, including, without limitation, sexual misconduct, harassment or discrimination.

(c)All vesting of Awardee’s Restricted Stock Units under Section 3(a) and Section 3(c) is further conditioned upon Awardee having remained in the continuous employment of the Company through the Vesting Date or the consummation of a Change in Control, as applicable. If Awardee does not remain in the continuous employment of the Company, with the exception of 3(d), through such applicable date, then Awardee will immediately forfeit any unvested Restricted Stock Units in their entirety for no consideration, without any further action of the Company.

(d) Notwithstanding any provisions of this Certificate to the contrary, if Participant’s service with the Company terminates due to Participant’s Retirement, then the Participant’s unvested portion of the Award shall continue to vest in accordance with the vesting schedule defined herein, and the Restricted Stock Units shall settle after each vesting date in accordance with Section 2. For purpose of this Award, “Retirement” or “Retire” means that the Awardee voluntarily resigns employment and (i) has reached fifty-eight (58) years of age; (ii) has provided ten (10) years of continuous employment with the Company; (iii) has provided to the Company at least six (6) months advance written notice of intent to Retire and continues to provide services to the Company through such notice period, (iv) continuously provided services to the Company for at least twelve (12) months following the Date of Grant and is in good standing with the Company on the date of termination of service, (v) complies with all applicable post-employment covenants, and (vi) if requested by the Company, provides the Company with a release of claims in such form as required by the Company in its discretion.

4.Restrictions.

(a)The Restricted Stock Units and any rights granted with respect to them may not be sold, pledged or otherwise transferred.

(b)Except as may be otherwise provided for in Section 3 above or in any agreement between the Company and Awardee, if Awardee’s service as an employee of the Company terminates, any unvested Restricted Stock Units will be forfeited in their entirety for no consideration by Awardee.

5.Rights as Shareholder. Subject to the terms and conditions of this Certificate, Awardee will be issued the number of shares of Stock equal to the number of Restricted Stock Units that are deemed to have vested as provided in Section 2. Awardee will have all of the rights of a holder of Stock with respect to such shares of Stock from and after, but not before, the date that Awardee delivers any other documents required by the Company and such shares of Stock are issued to Awardee as set forth in this Certificate. No cash dividends or dividend equivalents will accrue on the Restricted Stock Units.

6.Taxes. Awardee acknowledges and agrees that he or she is solely responsible for any and all taxes that may be assessed by any taxing authority arising in any way from the award, the grant of the Restricted Stock Units and the issuance of shares of Stock and that the Company shall not be liable for any such assessments. The grant of the award, the vesting of the Restricted Stock Units, and the settlement of the Restricted Stock Units in Stock may give rise to taxable income subject to withholding. No Stock will be delivered to an Awardee in settlement of vested Restricted Stock Units unless Awardee has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of the Stock. Awardee hereby authorizes the Company to withhold from payroll or other amounts payable to Awardee any sums required to satisfy such withholding tax obligations, and otherwise agrees to satisfy such obligations in accordance with the provisions of Section 19.3 of the Plan. Awardee may elect to satisfy such withholding tax obligation by having the Company retain shares of Stock having a fair market value equal to the Company’s minimum withholding obligation. Awardee represents that he or she has consulted any tax adviser(s) that he or she deems advisable in connection with his or her grant of the Restricted Stock Units and acquisition of the Stock.

(b) The provisions of this Certificate and the Plan are intended to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (“Section 409A”), and accordingly, to the maximum extent permitted, this Certificate and the Plan shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained in this Certificate to the contrary, Awardee shall not be considered to have terminated service with the Company for purposes of any payments under this Certificate which are subject to Section 409A until Awardee would be considered to have incurred a Separation from Service from the Company within the meaning of Section 409A. Each amount to be paid or benefit to be provided under this Certificate shall be construed as a separate and distinct payment for purposes of Section 409A. If payment under this Award is to be made within a designated period which does not begin and end within one calendar year, the Awardee does not have a right to designate the taxable year of the payment.

7.Miscellaneous.

(a)The Company and Awardee shall execute such further instruments and take such action as may reasonably be necessary to carry out the intent of this Certificate, as may be determined by the Committee.

(b)Any notice required or permitted under this Certificate by the Company shall be given in writing and shall be deemed effectively given upon delivery to Awardee at his or her address then on file with the Company.

(c)Neither the Plan nor this Certificate nor any provisions under either shall be construed so as to grant Awardee any right to remain in the employ of the Company.

(d)This Certificate and the terms and conditions of the Plan (as amended from time to time in accordance with the terms of the Plan), which are hereby incorporated by reference, constitute the terms and conditions with respect to the Restricted Stock Units and are binding upon the Company, its subsidiaries, affiliates and successors, and Awardee and Awardee’s heirs, executors, administrators and successors.

(e)Notwithstanding anything in this Certificate or in the Plan to the contrary, the award granted to Awardee pursuant to this Certificate and stock obtained upon settlement shall be subject to mandatory forfeiture, recovery by the Company or other action pursuant to any compensation recovery policy adopted by the Company or any Affiliate at any time, including, but not limited to, any policy adopted to comply with the requirements of Section 10D of the Exchange Act, the SEC’s final rules thereunder (Listing Standards for Recovery of Erroneously Awarded Compensation, 87 Fed. Reg. 73076-73142) and any applicable listing rules or other rules and regulations implementing the foregoing, or any other applicable laws which impose mandatory recoupment or forfeiture of incentive compensation. This Certificate will be automatically amended by the Committee to comply with any such compensation recovery policy.

(f)This Certificate shall be construed in accordance with, and its interpretation shall be governed by applicable federal law, and otherwise by the laws of the State of Delaware.

(g)The headings contained in this Certificate are for reference purposes only and shall not affect in any way the meaning or interpretation of this Certificate. Any references to sections in this Certificate shall be to sections of this Certificate unless otherwise expressly stated as part of such reference.

(h)The Company may deliver any documents related to this Restricted Stock Unit Award by electronic means and request your acceptance of this Certificate by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.

8.Capitalized Terms. Each capitalized term used but not defined in this Certificate has the meaning assigned to such term in the Plan.

9.Restrictive Covenants. I understand and agree that this Certificate will not take effect unless and until I sign an Option Care Non-Competition and/or Non-Solicitation and/or Confidentiality Agreement with the Company (“Restrictive Covenant Agreement”). If I do not sign the Restrictive Covenant Agreement, this Certificate shall not be effective and I shall not be entitled to the benefits provided for in this Certificate. I further understand and agree that, to the extent required by applicable law, a certain amount of the equity award is provided as

consideration in exchange for signing the Restrictive Covenant Agreement. If I do not sign the Restrictive Covenant Agreement I will not be entitled to this equity payment.

IN WITNESS WHEREOF, the Company has caused this Restricted Stock Certificate to be duly executed by its officers thereunto on the day and year first above written.

OPTION CARE HEALTH, INC.

By:

Its:

By signing this Certificate or otherwise accepting this Certificate in a manner approved by the Company, you agree to all the terms and conditions described above and in the Plan document.

Accepted and agreed:

Document

OPTION CARE HEALTH, INC.
PERFORMANCE STOCK UNIT CERTIFICATE

THIS PERFORMANCE STOCK UNIT CERTIFICATE (this “Certificate”) evidences the grant by Option Care Health, Inc., a Delaware corporation (the “Company”) of Performance Stock Units of the Company to [__] (“Awardee”) on [__] (the “Grant Date”) as follows:

WHEREAS, the Company desires to grant to Awardee Performance Stock Units in accordance with the terms and conditions of the Plan and subject to the provisions of this Certificate.

NOW, THEREFORE, the following terms and conditions apply to this grant of Performance Stock Units:

1.Grant of Performance Stock Units. Subject to the terms and conditions of this Certificate and of the Plan, Awardee is hereby granted an Award with a number of [__] Performance Stock Units (the “Target Number”), which include the right to be issued the number of shares of Stock equal to the Earned Performance Stock Units, subject to the restrictions and vesting conditions set forth in this Certificate. The number of Performance Stock Units that become Earned Performance Stock Units (as defined below) (up to a maximum of two times the Target Number of Performance Stock Units) will be determined by the level of achievement of the Performance Goals in accordance with Annex I attached hereto.

2.Delivery and Settlement. As soon as reasonably practicable following the vesting of the Performance Stock Units as set forth in Section 3 of this Certificate but in any event by no later than sixty days following the date on which such vesting occurs, the Company will issue in the name of Awardee shares of Stock in settlement of the Earned Performance Stock Units. Upon settlement of an Earned Performance Stock Unit in Stock, such Performance Stock Unit will be deemed cancelled and Awardee shall have no further rights to payment of any kind in respect of such Performance Stock Unit.

3.Issuance and Vesting Schedule.

(a)As of the Grant Date, all of the Performance Stock Units are considered unvested and unearned Performance Stock Units and are subject to forfeiture in their entirety for no consideration. Unless otherwise set forth in Section 3(c), (i) Performance Stock Units that are earned in accordance with Annex I (such earned Performance Stock Units, the “Earned Performance Stock Units”) will vest on the [__] anniversary of the Grant Date (the “Vesting Date”), and (ii) any Performance Stock Units that do not become Earned Performance Stock Units

in accordance with Annex I will be forfeited in their entirety for no consideration on the date the Committee certifies the achievement of the Performance Goals. The Committee will certify the achievement of the Performance Goals no later than [DATE].

(b)All vesting of Awardee’s Performance Stock Units under this Section 3 is further conditioned upon Awardee having remained in the continuous employment of the Company through the Vesting Date. Unless otherwise set forth in Section 3(c) or 3(d), if Awardee does not remain in the continuous employment of the Company through the Vesting Date, then Awardee will immediately forfeit any Performance Stock Units (whether or not such Performance Stock Units are Earned Performance Stock Units) in their entirety for no consideration, without any further action of the Company.

(c)Notwithstanding any provision of the Plan to the contrary, (i) in the event of a Change in Control that occurs during the Performance Period, then the Target Number of the Performance Stock Units will be deemed Earned Performance Stock Units and vest as of such Change in Control and be settled in accordance with Section 2; and (ii) in the event of a Change in Control that occurs after the Performance Period, but before the Vesting Date, then the Earned Performance Stock Units will vest as of such Change in Control and be settled in accordance with Section 2. The balance of the Performance Stock Units that are not earned or do not vest upon a Change in Control shall be immediately forfeited and cancelled for no consideration.

(d)Notwithstanding any provisions of this Certificate to the contrary, if Participant’s service with the Company terminates due to Participant’s Retirement, then Participant shall receive a pro-rated portion of Earned Performance Units, with such amount determined by dividing the number of actively employed days after the Grant Date by one thousand and ninety-five (1,095), and multiplying the quotient by the number of any Earned Performance Stock Units following the end of the Performance Period, which shall vest on the Vesting Date unless earlier vested in accordance with Section 3(c) and be settled pursuant to Section 2. For purpose of this Award, “Retirement” or “Retire” means that the Awardee voluntarily resigns employment and (i) has reached fifty-eight (58) years of age; (ii) has provided ten (10) years of continuous employment with the Company; (iii) has provided to the Company at least six (6) months advance written notice of intent to Retire and continues to provide services to the Company through such notice period, (iv) continuously provided services to the Company for at least twelve (12) months following the Grant Date and is in good standing with the Company on the date of termination of service, (v) complies with all applicable post-employment covenants, and (vi) if requested by the Company, provides the Company with a release of claims in such form as required by the Company in its discretion.

4.Restrictions.

(a)The Performance Stock Units and any rights granted with respect to them may not be sold, pledged or otherwise transferred.

(b)Except as may be otherwise provided for in Section 3 above or in any agreement between the Company and Awardee, if Awardee’s service as an employee of the Company

terminates, any unvested Performance Stock Units will be forfeited in their entirety for no consideration by Awardee.

5.Rights as Shareholder. Subject to the terms and conditions of this Certificate, Awardee will be issued the number of shares of Stock equal to the Earned Performance Stock Units as provided in Section 2. Awardee will have all of the rights of a holder of Stock with respect to such shares of Stock from and after, but not before, the date that Awardee delivers any other documents required by the Company and such shares of Stock are issued to Awardee as set forth in this Certificate. No cash dividends or dividend equivalents will accrue on the Performance Stock Units.

6.Taxes.

(a) Awardee acknowledges and agrees that he or she is solely responsible for any and all taxes that may be assessed by any taxing authority arising in any way from the award, the grant of the Performance Stock Units and the issuance of shares of Stock and that the Company shall not be liable for any such assessments. The grant of the award, the vesting of the Performance Stock Units, and the settlement of the Earned Performance Stock Units in Stock may give rise to taxable income subject to withholding. No Stock will be delivered to an Awardee in settlement of vested Restricted Stock Units unless Awardee has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of the Stock. Awardee hereby authorizes the Company to withhold from payroll or other amounts payable to Awardee any sums required to satisfy such withholding tax obligations, and otherwise agrees to satisfy such obligations in accordance with the provisions of Section 19.3 of the Plan. Awardee may elect to satisfy such withholding tax obligation by having the Company retain shares of Stock having a fair market value equal to the Company’s minimum withholding obligation. Awardee represents that he or she has consulted any tax adviser(s) that he or she deems advisable in connection with his or her grant of the Performance Stock Units and acquisition of the shares.

(b) The provisions of this Award and the Plan are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (“Section 409A”), and accordingly, to the maximum extent permitted, this Certificate and the Plan shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained in this Certificate to the contrary, Awardee shall not be considered to have terminated service with the Company for purposes of any payments under this Certificate which are subject to Section 409A until Awardee would be considered to have incurred a Separation from Service from the Company within the meaning of Section 409A. Each amount to be paid or benefit to be provided under this Certificate shall be construed as a separate and distinct payment for purposes of Section 409A. If payment under this Award is to be made within a designated period which does not begin and end within one calendar year, the Awardee does not have a right to designate the taxable year of the payment.

7.Miscellaneous.

(c)Neither the Plan nor this Certificate nor any provisions under either shall be construed so as to grant Awardee any right to remain in the employ of the Company.

(d)This Certificate and the terms and conditions of the Plan (as amended from time to time in accordance with the terms of the Plan), which are hereby incorporated by reference, constitute the terms and conditions with respect to the Performance Stock Units and are binding upon the Company, its subsidiaries, affiliates and successors, and Awardee and Awardee’s heirs, executors, administrators and successors.

(f)This Certificate shall be construed in accordance with, and its interpretation shall be governed by applicable federal law, and otherwise by the laws of the State of Delaware.

8.Capitalized Terms. Each capitalized term used but not defined in this Certificate has the meaning assigned to such term in the Plan.

extent required by applicable law, a certain amount of the equity award is provided as consideration in exchange for signing the Restrictive Covenant Agreement. If I do not sign the Restrictive Covenant Agreement I will not be entitled to this equity payment.

IN WITNESS WHEREOF, the Company has caused this Performance Stock Unit Certificate to be duly executed by its officers thereunto on the day and year first above written.

OPTION CARE HEALTH, INC.

By:

Its:

Accepted and agreed:

ANNEX I
PERFORMANCE METRICS

Document

OPTION CARE HEALTH, INC.
RESTRICTED STOCK UNIT CERTIFICATE

THIS RESTRICTED STOCK UNIT CERTIFICATE (this “Certificate”) evidences the grant by Option Care Health, Inc., a Delaware corporation (the “Company”) of Restricted Stock Units of the Company to [__] (the “Participant”) on [__] (the “Grant Date”) as follows:

WHEREAS, the Company has established the Option Care Health, Inc. Amended and Restated 2018 Equity Incentive Plan (as amended from time to time, the “Plan”);

WHEREAS, the Plan provides for the grant of stock and other equity based Awards; and

WHEREAS, the Company desires to grant Restricted Stock Units to the Participant in accordance with the terms and conditions of the Plan and subject to the provisions of this Certificate, as approved by the Management Development & Compensation Committee (the “Committee”) of the Company’s Board of Directors.

NOW, THEREFORE, the following terms and conditions apply to the grant of Restricted Stock Units:

1.Grant of Restricted Stock Units. Subject to the terms and conditions of this Certificate and of the Plan, the Participant is hereby granted an Award of [__] Restricted Stock Units (the “Restricted Stock Units”), which include the right to be issued the number of shares of Stock equal to the Restricted Stock Units, subject to the restrictions and vesting conditions set forth in this Certificate.

2.Issuance of Shares of Stock. As soon as reasonably practicable following the vesting of the Restricted Stock Units as set forth in Section 3 of this Certificate but in any event by no later than ninety days following the date on which such vesting occurs, the Company will issue in the name of the Participant shares of Stock in settlement of such vested Restricted Stock Units. Upon settlement of a vested Restricted Stock Unit in a share of Stock, such vested Restricted Stock Unit will be deemed cancelled and the Participant shall have no further rights to payment of any kind in respect of such Restricted Stock Unit. The Participant will have all of the rights of a holder of Stock with respect to such shares of Stock from and after the issuance of the shares of Stock to the Participant and the Participant becomes a stockholder of record with respect to such shares.

3.Vesting Schedule. As of the Grant Date, all of the Restricted Stock Units are considered unvested Restricted Stock Units, unless one of the vesting conditions set forth in this Section 3 is satisfied.

(a)Unvested Restricted Stock Units will vest and become non-forfeitable to [__] of the shares of Stock (rounded to the nearest whole share) on [__] so that the Restricted Stock Units shall vest and become non-forfeitable as to all shares of Stock on the [__] such anniversary of the date hereof, subject to the Participant’s continued service on the Board through such date.

(b)In the event of a Change in Control, the Restricted Stock Units will vest and become non-forfeitable as to 100% of the shares of Stock immediately prior to such Change in Control, subject to the Participant’s continued service on the Board through such date; provided, that if the Change in Control is not a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations, then the Restricted Stock Units shall vest upon such Change in Control and shall be settled at the times specified in Section 3(a) or 3(c) of this Certificate, as applicable.

(c)In the event the Participant’s service on the Board terminates for any reason other than the removal of the Participant for Cause (as defined below), the Restricted Stock Units will vest and become non-forfeitable as to 100% of the shares of Stock on the termination date. In the event the Participant’s service on the Board is terminated due to a removal of the Participant for Cause (as defined below), any unvested Restricted Stock Units will be forfeited in their entirety for no consideration to the Participant. For this purpose, “Cause” (A) shall have the meaning set forth in an applicable director agreement or similar agreement between the Participant and the Company or (B) if no such agreement exists or “Cause” is not defined in such agreement, shall mean (i) the Participant’s continued failure substantially to perform the Participant’s duties (other than as a result of total or partial incapacity due to physical or mental illness) for a period of ten (10) days following written notice by the Company to Participant of such failure, (ii) dishonesty in the performance of the Participant’s duties, (iii) an act or acts on the Participant’s part constituting (x) a felony under the laws of the United States or any state thereof or (y) a misdemeanor involving moral turpitude, (iv) the Participant’s willful malfeasance or willful misconduct in connection with the Participant’s duties or any act or omission which is injurious to the financial condition or business reputation of the Company or any of subsidiaries, or (v) a breach of any covenant regarding confidential information, solicitation, or competitive activity, or any fiduciary duty of the Participant.

4.Restrictions. The Restricted Stock Units and any rights granted with respect thereto hereunder may not be sold, pledged or otherwise transferred other than in accordance with Section 13 of the Plan.

5.Miscellaneous.

(a)The Company and the Participant shall execute such further instruments and take such action as may reasonably be necessary to carry out the intent of this Certificate, as may be determined by the Committee.

(b)Any notice required or permitted under this Certificate by the Company shall be given in writing and shall be deemed effectively given upon delivery to Participant at his or her address then on file with the Company.

(c)This Certificate and the terms and conditions of the Plan (as amended from time to time in accordance with the terms of the Plan), which are hereby incorporated by reference, constitute the terms and conditions with respect to the Restricted Stock Units and are binding upon the Company, its subsidiaries, affiliates and successors, and the Participant and the Participant’s heirs, executors, administrators and successors.

(d)This Certificate shall be construed in accordance with, and its interpretation shall be governed by applicable federal law, and otherwise by the laws of the State of Delaware.

(e)The headings contained in this Certificate are for reference purposes only and shall not affect in any way the meaning or interpretation of this Certificate. Any references to sections in this Certificate shall be to sections of this Certificate unless otherwise expressly stated as part of such reference.

(f)The Company may deliver any documents related to this Restricted Stock Unit Award by electronic means and request your acceptance of this Certificate by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan

through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.

6.Capitalized Terms. Each capitalized term used but not defined in this Certificate has the meaning assigned to such term in the Plan.

OPTION CARE HEALTH, INC.

By:

Its:

By signing this Certificate or otherwise accepting this Certificate in a manner approved by the Company, you agree to all the terms and conditions described above and in the Plan document.

Accepted and agreed:

Document

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Rademacher, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Option Care Health, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 23, 2024

/s/ John Rademacher

John Rademacher

President, Chief Executive Officer and Principal Executive Officer

Document

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Shapiro, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Option Care Health, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 23, 2024

/s/ Michael Shapiro

Michael Shapiro

Chief Financial Officer and Principal Financial Officer

Document

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Option Care Health, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Rademacher, Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 23, 2024

/s/ John Rademacher

John Rademacher

President, Chief Executive Officer and Principal Executive Officer

Document

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Option Care Health, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Shapiro, Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 23, 2024

/s/ Michael Shapiro

Michael Shapiro

Chief Financial Officer and Principal Financial Officer