What the changes say
- Government funding concentration is more prominent, with Colorado and California producing 70.2% of fiscal 2026 capitation revenue.
- InnovAge highlights adverse government audits, including compliance costs, business changes and potential effects on growth.
- New pharmacy operations and increased AI use create execution, reimbursement, margin and regulatory risks.
- The filing removes standalone risks on Nasdaq listing, broad healthcare spending, political reactions and general legal compliance.
What changed since the prior 10-K
New
- NewRisks Related to Our Business
Our dependence on Medicare and Medicaid exposes us to risks from government funding reductions, legislative changes including the Reconciliation Act, and federal and state budgetary pressures
Medicare and Medicaid funding, state budgets and PACE commitments could reduce revenue; Colorado and California represented 70.2% of fiscal 2026 capitation revenue.
- NewRisks Related to Our Business
in adverse findings that have negatively affected and continue to affect our business, including our results of operations, liquidity, financial condition and reputation
Government audits and investigations may find deficiencies, increasing compliance costs, requiring business changes and harming growth, finances or reputation.
- NewRisks Related to Our Business
Our acquisition of certain pharmacy assets and the management of our own pharmacy services exposes us to novel risks
InnovAge’s new pharmacy business may face management, reimbursement and third-party dependence problems that prevent expected cost savings.
- NewRisks Related to Our Business
Our use of AI and machine learning technologies, and the use of such technologies by our third-party vendors, may expose us to operational, competitive, regulatory, legal and reputational risks that could adversely affect our business, financial condition and results of operations
AI tools used for care, coding, scheduling and analytics may fail, be delayed or require costly investment, limiting fiscal 2027 margin protection.
- NewRisks Related to Our Common Stock
securities convertible into equity or shares of preferred stock. In addition, we may seek to expand operations in the future to other markets which we would expect to finance through a combination of additional issuances of equity, corporate indebtedness and/or cash from operations
Future debt, preferred stock or equity offerings could dilute shareholders, subordinate common stockholders or make financing more costly or unpredictable.
Dropped
- DroppedRisks Related to Our Business
chain and our business will depend on their timing, duration and magnitude, which may be changed at any time and with little or no prior notice
- DroppedRisks Related to Our Business
Our centers will continue to be subject to federal and state audits, and there is no guarantee that future audits will not find deficiencies similar to, or different from, the ones found in connection with prior audits
- DroppedRisks Related to Our Business
Our revenues and operations are dependent upon a limited number of government payors, particularly Medicare and Medicaid
- DroppedRisks Related to Our Business
State and federal efforts to reduce healthcare spending could adversely affect our financial condition and results of operations
- DroppedRisks Related to Our Business
We recently completed the acquisition of certain pharmacy assets and we have no previous experience managing our own pharmacy services
Political shifts and stakeholder reactions to InnovAge’s Medicare and Medicaid advocacy.
- DroppedRisks Related to Regulation
Allegations that we have failed to adhere to all of the complex government laws and regulations that apply to our business have had, and could in the future have, a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and stock price
Audit consequences including enrollment sanctions, government refunds, corrective action plans and fines.
- DroppedRisks Related to Our Common Stock
stock as part of a sale of us and ultimately might affect the market price of our common stock. In addition, this concentration of ownership may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant shareholders
- DroppedRisks Related to Our Common Stock
If we are unable to comply with the continued listing requirements of the Nasdaq, our common stock could be delisted, affecting our common stock’s market price and liquidity and reducing our ability to raise capital
Reworded
- 95% rewrittenRisks Related to Our Business
Our records and other information and materials submitted to government payors may contain inaccurate or unsupportable information applicable to participants’ risk scores, which could cause us to overstate or understate our revenue and subject us to repayment obligations or penalties
The risk now specifies CMS-HCC methodology and cites PACE risk-adjustment regulations, while providing less detail on documentation errors and retroactive adjustments.
Was: Our records and submissions to government payors may contain inaccurate or unsupportable information regarding risk adjustment scores of participants, which could cause us to overstate or understate our revenue and subject us to repayment obligations or penalties
- 87% rewrittenRisks Related to Our Common Stock
Future offerings of debt or equity securities by us may materially adversely affect the market price of our common stock
The financing risk now adds preferred-stock liquidation and dividend priorities, convertible-security adjustments and uncertainty over offering timing and structure.
- 76% rewrittenRisks Related to Our Common Stock
Our Principal Shareholders control us, and their interests may conflict with our interests and those of our other shareholders
Principal Shareholder ownership declined from approximately 83% to 82%, while the control and conflict risk remains unchanged.
- 61% rewrittenRisks Related to Our Business
Our growth strategy is partially dependent upon our ability to identify and successfully complete acquisitions, joint ventures and other strategic partnerships
The growth discussion updates recent Florida joint ventures, removes older acquisition examples and adds partnerships with stakeholders and care providers in target geographies.
- 60% rewrittenRisks Related to Our Business
We are subject to legal proceedings, enforcement actions and litigation, malpractice and privacy disputes, which are costly to defend and could materially harm our business and results of operations
The litigation discussion now expressly covers strategic transactions, replacing the prior reference to potential and completed acquisitions.
- 57% rewrittenRisks Related to Our Business
Our overall business results have been, and we expect will continue to be, impacted by ongoing macroeconomic, geopolitical and industry-related challenges, including labor shortages, labor competition, inflation, and supply chain disruption as a result of tariffs and trade disputes
The workforce risk now specifically adds changing federal immigration policy and enforcement as a threat to direct-care staffing.
Was: Our overall business results have been, and we expect will continue to be, impacted by ongoing macroeconomic and industry-related challenges, including labor shortages, labor competition, inflation, tariffs and trade disputes
- 56% rewrittenRisks Related to Our Business
Reductions in PACE reimbursement rates, changes in risk adjustment methodologies, or changes in the rules governing PACE programs could have a material adverse effect on our financial condition and results of operations
The risk emphasizes federal and state reimbursement methodologies and adds statutory, regulatory and administrative changes alongside funding and payment reductions.
Was: Reductions in PACE reimbursement rates or changes in the rules governing PACE programs could have a material adverse effect on our financial condition and results of operations
- 44% rewrittenRisks Related to Our Business
To increase our revenue, our business strategy includes expanding the number of centers and participants in our network. In order to support such growth, we must recruit and retain a sufficient number of new participants
Substantively unchanged: competition for frail dual-eligible seniors and state eligibility-verification delays remain the enrollment risks.
- 39% rewrittenRisks Related to Our Business
We have experienced, and expect to continue experiencing, increased costs and expenditures in the future
- 37% rewrittenRisks Related to Our Indebtedness and Liquidity
Our existing indebtedness could adversely affect our business
- 36% rewrittenRisks Related to Our Common Stock
We qualify as a “smaller reporting company” and we have elected to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors
Was: We qualify as an “emerging growth company” and a “smaller reporting company” and we have elected to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors
- 36% rewrittenRisks Related to Our Common Stock
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock
- 33% rewrittenRisks Related to Regulation
Federal and state manuals, policies, and other guidance may affect our operations
- 32% rewrittenRisks Related to Regulation
If we are unable to effectively adapt to changes in the healthcare industry, including changes to laws and regulations regarding or affecting U.S. healthcare reform, our business could be harmed
- 32% rewrittenRisks Related to Our Business
The healthcare industry is highly competitive and, if we are not able to compete effectively, our business could be harmed
- 32% rewrittenRisks Related to Regulation
In addition to the provisions of the FCA, the federal government can use several criminal statutes to prosecute persons who are alleged to have submitted false or fraudulent claims for payment to the federal government
- 29% rewrittenRisks Related to Regulation
Laws regulating the corporate practice of medicine could restrict the manner in which we are permitted to conduct our business, and the failure to comply with such laws could subject us to penalties or require a restructuring of our business
- 25% rewrittenRisks Related to Our Common Stock
Our stock price is volatile
All 38 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business
- 01Our growth strategy may not prove viable and we may fail to realize expected results therefrom fully or at all
- 02Our growth strategy is partially dependent upon our ability to identify and successfully complete acquisitions, joint ventures and other strategic partnerships61% rewritten
- 03To increase our revenue, our business strategy includes expanding the number of centers and participants in our network. In order to support such growth, we must recruit and retain a sufficient number of new participants44% rewritten
- 04Our overall business results have been, and we expect will continue to be, impacted by ongoing macroeconomic, geopolitical and industry-related challenges, including labor shortages, labor competition, inflation, and supply chain disruption as a result of tariffs and trade disputes57% rewritten
- 05Under our PACE contracts, we assume all of the risk that the cost of providing services will exceed our compensation
- 06We have experienced, and expect to continue experiencing, increased costs and expenditures in the future39% rewritten
- 07Our dependence on Medicare and Medicaid exposes us to risks from government funding reductions, legislative changes including the Reconciliation Act, and federal and state budgetary pressuresNew
- 08Reductions in PACE reimbursement rates, changes in risk adjustment methodologies, or changes in the rules governing PACE programs could have a material adverse effect on our financial condition and results of operations56% rewritten
- 09in adverse findings that have negatively affected and continue to affect our business, including our results of operations, liquidity, financial condition and reputationNew
- 10We are subject to legal proceedings, enforcement actions and litigation, malpractice and privacy disputes, which are costly to defend and could materially harm our business and results of operations60% rewritten
- 11Our records and other information and materials submitted to government payors may contain inaccurate or unsupportable information applicable to participants’ risk scores, which could cause us to overstate or understate our revenue and subject us to repayment obligations or penalties95% rewritten
- 12We depend on our senior management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business
- 13If certain of our suppliers do not meet our needs, if we are not reimbursed or adequately reimbursed for medical products we purchase or if we are unable to effectively access new technology or medical products, our ability to effectively provide the services we offer could be negatively impacted
- 14Our acquisition of certain pharmacy assets and the management of our own pharmacy services exposes us to novel risksNew
- 15If we fail to manage our operations effectively, we may be unable to execute our business plan, maintain effective levels of service and participant satisfaction or adequately address competitive challenges
- 16The healthcare industry is highly competitive and, if we are not able to compete effectively, our business could be harmed32% rewritten
- 17Our presence is currently limited to six states, with a significant percentage of our operations in the States of California and Colorado. As a result, we are particularly susceptible to regulatory issues and reduction in budget appropriations for our services or any other adverse developments in that state
- 18Our use of AI and machine learning technologies, and the use of such technologies by our third-party vendors, may expose us to operational, competitive, regulatory, legal and reputational risks that could adversely affect our business, financial condition and results of operationsNew
- 19A failure to accurately estimate incurred but not reported medical expenses could adversely affect our results of operations
- 20We lease half of our centers and may experience risks relating to lease termination, lease expense escalators, lease extensions and special charges
- 21A pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide, as well as weather and other factors, have affected, and could in the future adversely affect our business
Risks Related to Regulation
- 22Federal and state manuals, policies, and other guidance may affect our operations33% rewritten
- 23In addition to the provisions of the FCA, the federal government can use several criminal statutes to prosecute persons who are alleged to have submitted false or fraudulent claims for payment to the federal government32% rewritten
- 24If we are unable to effectively adapt to changes in the healthcare industry, including changes to laws and regulations regarding or affecting U.S. healthcare reform, our business could be harmed32% rewritten
- 25Laws regulating the corporate practice of medicine could restrict the manner in which we are permitted to conduct our business, and the failure to comply with such laws could subject us to penalties or require a restructuring of our business29% rewritten
Risks Related to Our Indebtedness and Liquidity
- 26Our existing indebtedness could adversely affect our business37% rewritten
- 27Additionally, our indebtedness exposes us to risks relating to fluctuations in interest rates, which can increase borrowing costs
- 28Our failure to raise additional capital or generate cash flows necessary to expand our operations and invest in participant services in the future could reduce our ability to compete successfully and harm our results of operations
Risks Related to Our Common Stock
- 29Our operating results have fluctuated and may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause such results to fall below any guidance, targets or goals we provide
- 30Our stock price is volatile25% rewritten
- 31Our Principal Shareholders control us, and their interests may conflict with our interests and those of our other shareholders76% rewritten
- 32We qualify as a “smaller reporting company” and we have elected to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors36% rewritten
- 33Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our current management, even if beneficial to our shareholders
- 34Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock36% rewritten
- 35In addition, we have registered shares of common stock that we may issue under our equity compensation plans. Such shares can be freely sold in the public market upon issuance, subject to vesting, and Rule 144 under the Securities Act
- 36Our Board has in the past approved, and may in the future approve, a share repurchase program that would subject us to certain risks, which could be exacerbated because our stock is thinly traded
- 37Future offerings of debt or equity securities by us may materially adversely affect the market price of our common stock87% rewritten
- 38securities convertible into equity or shares of preferred stock. In addition, we may seek to expand operations in the future to other markets which we would expect to finance through a combination of additional issuances of equity, corporate indebtedness and/or cash from operationsNew
Other InnovAge Holding 10-Ks
- FY2025 10-K risk factors41 risks8 new14 dropped22 reworded
InnovAge added risks regarding a new pharmacy business acquisition, credit agreement covenants, and Nasdaq listing requirements.
Filed Sep 09, 2025 - FY2024 10-K risk factors47 risks
InnovAge relies almost entirely on fixed PMPM government capitation payments through Medicare and Medicaid PACE programs. Operations face high geographic concentration in Colorado and complex healthcare regulatory compliance risks. Growth depends heavily on recruitment, retention, and strategic acquisitions following past sanctions.
Filed Sep 10, 2024
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.