0001558370-21-006838 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 10, 2021
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
Entity File Number	001-40159
Entity Registrant Name	InnovAge Holding Corp.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-0710819
Entity Address State Or Province	CO
Entity Address, Address Line One	8950 E. Lowry Boulevard
Entity Address, City or Town	Denver
Entity Address, Postal Zip Code	80230
City Area Code	844
Local Phone Number	803-8745
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	INNV
Security Exchange Name	NASDAQ
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		135,516,513
Entity Central Index Key	0001834376
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Current Assets
Cash and cash equivalents	$ 201,527	$ 112,904
Restricted cash	2,236	1,661
Accounts receivable, net of allowance ($7,741 - March 31, 2021 and $6,384 - June 30, 2020)	44,356	46,312
Prepaid expenses and other	3,626	4,311
Income tax receivable	131	1,743
Total current assets	251,876	166,931
Noncurrent Assets
Property and equipment, net	141,515	102,494
Investments	2,645	2,645
Deposits and other	3,611	3,003
Equity method investments	848	13,245
Goodwill	124,217	116,139
Other intangible assets, net	6,683	5,177
Total noncurrent assets	279,519	242,703
Total assets	531,395	409,634
Current Liabilities
Accounts payable and accrued expenses	33,223	28,875
Reported and estimated claims	30,735	30,291
Due to Medicaid and Medicare	25,054	12,244
Current portion of long-term debt	2,852	1,938
Current portion of capital lease obligations	2,121	1,496
Contingent consideration		1,789
Total current liabilities	93,985	76,633
Noncurrent Liabilities
Deferred tax liability, net	5,817	9,282
Capital lease obligations	5,727	4,091
Other non-current liabilities	2,390	1,446
Long-term debt, net of debt issuance costs	72,415	210,432
Total liabilities	180,334	301,884
Commitments and Contingencies (See Note 10)
Stockholders' Equity
Common stock, $0.001 par value, 500,000,000 authorized as of March 31, 2021 and June 30, 2020; 135,516,513 and 132,718,461 issued shares as of March 31, 2021 and June 30, 2020, respectively;	136	133
Additional paid-in capital	323,127	36,338
Retained earnings	4,820	64,737
Less: Treasury stock (0 and 102,030 shares of common stock at $0.0 and $1.89 per share as of March 31, 2021 and June 30, 2020, respectively)		(193)
Total InnovAge Holding Corp.	328,083	101,015
Noncontrolling interests	22,978	6,735
Total stockholders' equity	351,061	107,750
Total liabilities and stockholders' equity	$ 531,395	$ 409,634

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
Condensed Consolidated Balance Sheets
Allowance for loss	$ 7,741	$ 6,384
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	500,000,000	500,000,000
Common stock issued (in shares)	135,516,513	132,718,461
Treasury stock (in shares)	0	102,030
Treasury stock cost per share (in dollars per share)	$ 0.0	$ 1.89

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Revenues
Total revenues	$ 156,308	$ 144,770	$ 466,184	$ 414,700
Expenses
External provider costs	75,389	71,022	224,215	204,387
Cost of care, excluding depreciation and amortization	39,565	39,285	115,922	114,465
Sales and marketing	5,592	4,628	14,335	14,405
Corporate, general and administrative	18,595	14,028	105,901	42,417
Depreciation and amortization	3,311	2,769	9,262	8,310
Equity loss		163	1,343	203
Other operating expenses (income)	19,222	(99)	18,211	(250)
Total expenses	161,674	131,796	489,189	383,937
Operating Income (Loss)	(5,366)	12,974	(23,005)	30,763
Other Income (Expense)
Interest expense, net	(4,876)	(2,361)	(17,061)	(11,287)
Loss on extinguishment of debt	(13,488)		(14,479)
Gain on equity method investment	10,871		10,871
Other income (expense)	(2,267)	244	(2,222)	(735)
Total other expense	(9,760)	(2,117)	(22,891)	(12,022)
Income (Loss) Before Income Taxes	(15,126)	10,857	(45,896)	18,741
Provision (Benefit) for Income Taxes	(4,264)	2,867	5,159	4,954
Net Income (Loss)	(10,862)	7,990	(51,055)	13,787
Less: net loss attributable to noncontrolling interests	(352)	(148)	(595)	(394)
Net Income (Loss) Attributable to InnovAge Holding Corp.	$ (10,510)	$ 8,138	$ (50,460)	$ 14,181
Weighted-average number of common shares outstanding - basic	121,324,980	132,616,431	119,619,806	132,616,431
Weighted-average number of common shares outstanding - diluted	121,324,980	134,368,002	119,619,806	133,792,985
Net income (loss) per share - basic	$ (0.09)	$ 0.06	$ (0.42)	$ 0.11
Net income (loss) per share - diluted	$ (0.09)	$ 0.06	$ (0.42)	$ 0.11
Capitation revenue
Revenues
Total revenues	$ 155,835	$ 144,174	$ 464,294	$ 412,724
Other service revenue
Revenues
Total revenues	$ 473	$ 596	$ 1,890	$ 1,976

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Noncontrolling Interests	Total
Balances, Beginning at Jun. 30, 2019	$ 133	$ 35,795	$ 38,459	$ (193)	$ 7,248	$ 81,442
Balances, Beginning (in shares) at Jun. 30, 2019	132,718,461			102,030
Stock-based compensation		407				407
Net income (loss)			14,181		(394)	13,787
Balances, Ending at Mar. 31, 2020	$ 133	36,202	52,640	$ (193)	6,854	95,636
Balances, Ending (in shares) at Mar. 31, 2020	132,718,461			102,030
Balances, Beginning at Dec. 31, 2019	$ 133	36,067	44,502	$ (193)	7,002	87,511
Balances, Beginning (in shares) at Dec. 31, 2019	132,718,461			102,030
Stock-based compensation		135				135
Net income (loss)			8,138		(148)	7,990
Balances, Ending at Mar. 31, 2020	$ 133	36,202	52,640	$ (193)	6,854	95,636
Balances, Ending (in shares) at Mar. 31, 2020	132,718,461			102,030
Balances, Beginning at Jun. 30, 2020	$ 133	36,338	64,737	$ (193)	6,735	107,750
Balances, Beginning (in shares) at Jun. 30, 2020	132,718,461			102,030
Treasury stock transaction				$ (77,603)		(77,603)
Treasury stock transaction (in shares)				16,095,819
Treasury stock retirement	$ (16)	(77,780)		$ 77,796
Treasury stock retirement (in shares)	(16,197,849)			(16,197,849)
Stock Option Cancellation, Value			(9,457)			(9,457)
Time based awards- option cancelation		(32,358)				(32,358)
Stock-based compensation		1,102				1,102
Reclassification of warrant liability		2,264				2,264
Capital Contributions		20,000				20,000
Initial public offering of common stock	$ 19	373,561				373,580
Initial public offering of common stock (in shares)	18,995,901
Consolidation of equity method investment					16,838	16,838
Net income (loss)			(50,460)		(595)	(51,055)
Balances, Ending at Mar. 31, 2021	$ 136	323,127	4,820		22,978	351,061
Balances, Ending (in shares) at Mar. 31, 2021	135,516,513
Balances, Beginning at Dec. 31, 2020	$ 133	24,552	15,330	$ (77,796)	6,492	(31,289)
Balances, Beginning (in shares) at Dec. 31, 2020	132,718,461			16,197,849
Treasury stock retirement	$ (16)	(77,780)		$ 77,796
Treasury stock retirement (in shares)	(16,197,849)			(16,197,849)
Stock-based compensation		530				530
Reclassification of warrant liability		2,264				2,264
Initial public offering of common stock	$ 19	373,561				373,580
Initial public offering of common stock (in shares)	18,995,901
Consolidation of equity method investment					16,838	16,838
Net income (loss)			(10,510)		(352)	(10,862)
Balances, Ending at Mar. 31, 2021	$ 136	$ 323,127	$ 4,820		$ 22,978	$ 351,061
Balances, Ending (in shares) at Mar. 31, 2021	135,516,513

Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jul. 27, 2020	Mar. 31, 2021	Mar. 31, 2021
Condensed Consolidated Statements of Shareholders' Equity
Payments of Stock Issuance Costs	$ 22,600	$ 25,334	$ 25,334

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating Activities
Net income (loss)	$ (51,055)	$ 13,787
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss (gain) on disposal of assets	2	1,021
Provision for uncollectible accounts	4,144	3,909
Depreciation and amortization	9,262	8,310
Gain on consolidation	(10,871)
Loss on extinguishment of long-term debt	8,494
Amortization of deferred financing costs	948	412
Stock based compensation	1,102	407
Change in fair value of warrants	2,264
Deferred income taxes	(3,464)	313
Equity loss	1,343	203
Change in fair value of contingent consideration		(250)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable, net	(1,402)	(6,929)
Prepaid expenses and other	635	274
Income taxes receivable	1,613	2,562
Deposits and other	(606)	689
Accounts payable and accrued expenses	7,717	1,372
Reported and estimated claims	114	(816)
Due to Medicaid and Medicare	12,732	(5,245)
Deferred revenue		2
Net cash provided by (used in) operating activities	(17,028)	20,021
Investing Activities
Purchases of property and equipment	(14,083)	(9,088)
Proceeds from the sale of equipment		169
Proceeds from net working capital settlements		1,129
Purchase of intangible assets	(2,000)
Net cash used in investing activities	(16,083)	(7,790)
Financing Activities
Distribution to owners	(9,458)
Owner contributions	20,000
Payments on capital lease obligations	(1,685)	(850)
Proceeds from long-term debt	375,000	25,000
Principal payments on long-term debt	(512,649)	(1,447)
Payment of debt issuance costs	(8,896)
Proceeds from initial public offering of common stock	373,580
Treasury stock purchase	(77,603)
Payments Under Acquisition Agreement	(3,622)
Payments related to option cancelation	(32,358)
Net cash provided by financing activities	122,309	22,703
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS & RESTRICTED CASH	89,198	34,934
CASH, CASH EQUIVALENTS & RESTRICTED CASH BEGINNING OF PERIOD	114,565	61,196
CASH, CASH EQUIVALENTS & RESTRICTED CASH END OF PERIOD	203,763	96,130
Supplemental Cash Flows Information
Interest paid	16,251	10,330
Income taxes paid	7,047	2,080
Prepayment penalty on extinguishment of debt	6,000
Property and equipment included in accounts payable	224
Property and equipment purchased under capital leases	$ 3,517	$ 1,115

Business

9 Months Ended

Mar. 31, 2021

Business

Business

Note 1:Business

InnovAge Holding Corp. (formerly, TCO Group Holdings, Inc.) and certain wholly owned subsidiaries were formed as for-profit corporations effective May 13, 2016, for the purpose of purchasing all the outstanding common stock of Total Community Options, Inc. d/b/a InnovAge, which was formed in May 2007. In connection with this purchase, Total Community Options, Inc. and certain of its subsidiaries converted from not-for-profit organizations to for-profit corporations, and Total Community Options Foundation, Inc. (“Foundation”) and Johnson Adult Day Program, Inc. (“Johnson”), both not-for-profit organizations, separated from Total Community Options, Inc. In connection with the initial public offering, which occurred in March 2021, we changed the name of our company from TCO Group Holdings, Inc. to InnovAge Holding Corp.

InnovAge Holding Corp. and its subsidiaries, which are headquartered in Denver, Colorado and employ approximately 2,100 people, have a strong record of innovation, quality, and sensitivity to the needs of participants and staff. The Company manages, and in many cases directly provides, a broad range of medical and ancillary services for seniors in need of care and support to safely live independently in their homes and communities, including in-home care services (skilled, unskilled and personal care); in-center services such as primary care, physical therapy, occupational therapy, speech therapy, dental services, mental health and psychiatric services, meals, and activities; transportation to the Program of All-Inclusive Care for the Elderly (“PACE”) center and third-party medical appointments; and care management. The Company manages its business as one reportable segment, PACE.

The Company serves approximately 6,700 PACE participants, making it the largest PACE provider in the United States of America (the “U.S.”) based upon participants served, and operates eighteen PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia.

PACE is a fully-capitated managed care program, which serves the frail elderly, and predominantly dual-eligible, population in a community-based service model. InnovAge is obligated to provide and participants receive all needed healthcare services through an all-inclusive, coordinated model of care, and the Company is at risk for 100% of healthcare costs incurred with respect to the care of its participants. PACE programs receive capitation payments directly from Medicare Parts C and D, Medicaid, Veterans Administration (“VA”), and private pay sources. Additionally, under the Medicare Prescription Drug Plan, the Centers for Medicare and Medicaid Services (“CMS”) share part of the risk for providing prescription medication to the Company’s participants.

On March 3, 2021, the Company’s Registration Statement on Form S-1 with respect to the Company’s initial public offering (“IPO”) of shares of common stock, par value $0.001 per share, was declared effective by the Securities and Exchange Commission (“SEC”). The Company’s common stock began trading on March 3, 2021 on the Nasdaq Stock Market LLC (“NASDAQ”) under the ticker symbol “INNV”.

On March 8, 2021, we completed our IPO in which we issued and sold 16,666,667 shares of our common stock at an offering price of $21.00 per share. In addition, the underwriters had the option to purchase 2,500,000 additional shares of common stock, and on March 9, 2021, the underwriters exercised the option to purchase 2,329,234 shares of common stock. We received net proceeds of $373.6 million, after deducting underwriting discounts and commissions of $23.9 million and deferred offering costs of $1.4 million. Deferred, direct offering costs were capitalized and consisted of fees and expenses incurred in connection with the sale of our common stock in the IPO, including the legal, accounting, printing and other offering related costs. Upon completion of the IPO, these deferred offering costs were reclassified from current assets to stockholders’ equity and recorded against the net proceeds from the offering.

Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2:Summary of Significant Accounting Policies

The Company described its significant accounting policies in Note 2 of the notes to consolidated financial statements for the year ended June 30, 2020, which were included in the IPO Prospectus. During the nine months ended March 31, 2021, there were no significant changes to those accounting policies. Those policies impacted by the new accounting pronouncements adopted during the period are further described below in “Recent Accounting Pronouncements.”

Basis of Preparation and Principles of Consolidation

The unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such regulations. These financial statements have been prepared on a basis consistent with the accounting principles applied for the fiscal year ended June 30, 2020. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. The consolidated financial statements include the accounts of InnovAge, its wholly owned subsidiaries, and variable interest entities (“VIEs”) for which it is the primary beneficiary and entities for which it has a controlling interest. All intercompany accounts and transactions have been eliminated in consolidation.

The Company does not have any components of comprehensive income and comprehensive income is equal to net income reported in the statements of operations for all periods presented.

Property and Equipment

Property and equipment were comprised of the following as of March 31, 2021 and June 30, 2020:


	Estimated
(In thousands)	Useful Lives	March 31, 2021		June 30, 2020
Land	N/A	$	11,980	$	8,580
Buildings and leasehold improvements	10 - 40 years or term of lease		104,727		79,514
Software	3 - 5 years		12,355		11,387
Equipment and vehicles	3 - 7 years		35,201		28,814
Construction in progress	N/A		19,257		7,069
			183,520		135,364
Less accumulated depreciation and amortization			(42,005)		(32,870)
Total property and equipment, net		$	141,515	$	102,494

Depreciation of $8.8 million and $7.8 million was recorded during the nine months ended March 31, 2021 and 2020, respectively.

Revenue Recognition

The Company’s PACE operating unit provides comprehensive health care services to participants on the basis of fixed or capitated fees per participant that are paid monthly by Medicare, Medicaid, the VA, and private pay sources. Medicaid and Medicare capitation revenues are based on per-member, per-month capitation rates under the PACE program. Capitation payments are recognized as revenue in the period in which they relate.

Capitation payments received for PACE participants under Medicare Advantage plans are subject to retroactive premium risk adjustments based upon various factors. The Company estimates the amount of current-year adjustments in revenues. Any corresponding retroactive adjustments by CMS are recorded as final settlements are determined.

Capitation revenues may be subject to adjustment as a result of examination by government agencies or contractors.

The audit process and the resolution of significant related matters as a result of these examinations often are not finalized until several years after the services are rendered. Any adjustments resulting from these examinations are recorded in the period the Company is notified of them.

At times, the Company accepts participants into the program pending final authorization from Medicaid. If Medicaid coverage is later denied and there are no alternative resources available to pay for services, the participant is disenrolled. Any costs incurred on behalf of these participants were nominal for the nine months ended March 31, 2021 and 2020.

Capitated revenues consisted of the following sources for the nine months ended:


	March 31,		March 31,
	2021		2020
Medicaid	53	%	56	%
Medicare	46	%	43	%
Private pay and other	1	%	1	%
Total	100	%	100	%

The Company also provides prescription drug benefits in accordance with Medicare Part D. Monthly payments received from CMS and the participants represent the bid amount for providing prescription drug coverage. The portion received from CMS is subject to risk sharing through Medicare Part D risk-sharing corridor provisions. These risk-sharing corridor provisions compare costs targeted in the Company’s bid to actual prescription drug costs. The Company estimates and records a monthly adjustment to Medicare Part D revenues associated with these risk-sharing corridor provisions.

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to change, as well as government review. Failure to comply with these laws can expose the entity to significant regulatory action, including fines, penalties, and exclusion from the Medicare and Medicaid programs.

Coronavirus Pandemic (“COVID-19”)

In March 2020, the World Health Organization declared COVID-19 a pandemic. The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption. Governments in affected regions have implemented, and may continue to implement, safety precautions which include quarantines, travel restrictions, business closures, cancellations of public gatherings and other measures as they deem necessary. Many organizations and individuals, including the Company and its employees, continue to take additional steps to avoid or reduce infection, including limiting travel and working from home. These measures are disrupting normal business operations both in and outside of affected areas and have had significant negative impacts on businesses worldwide. As a PACE company, we have been and will continue to be impacted by the effects of COVID-19; however, we remain committed to carrying out our mission of caring for our participants. We continue to closely monitor the impact of COVID-19 on all aspects of our business, including the impacts to our employees, participants and suppliers; however, at this time, we are unable to estimate the ultimate impact the pandemic will have on our consolidated financial condition, results of operations or cash flows.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into legislation. The CARES Act provides for $100.0 billion to healthcare providers, including hospitals on the front

lines of the COVID-19 pandemic. Under the CARES Act, the state of Pennsylvania signed into law the Act 24 of 2020, which allocates $10.0 million of funding from the federal CARES Act to managed long term care organizations. Funding from the Act 24 of 2020 must be used to cover necessary COVID-19 related costs incurred between March 1, 2020 and November 30, 2020 for entities in operation as of March 31, 2020. We received $2.0 million in funding under the Act 24 of 2020. Of this amount, $1.0 million was allocated to InnovAge centers in Pennsylvania and $0.7 million was recognized as of June 20, 2020. The remaining unrecognized balance of $0.3 million was recognized during the nine months ended March 31, 2021 as a reduction of expense within the consolidated statement of operations. The CARES Act also provides for the temporary suspension of the automatic 2% reduction of Medicare claim reimbursements (sequestration) for the period of May 1, 2020 through December 31, 2021.

Recent Accounting Pronouncements

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09 Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance when it becomes effective. Subsequent to the issuance of ASU 2014-09, the FASB also issued several updates related to ASU 2014-09 including deferring its adoption date. As per the latest ASU 2020-05, issued by the FASB, the entities who have not yet issued or made available for issuance the financial statements as of June 3, 2020 can defer the new guidance for one year. This guidance is effective for the annual reporting period beginning July 1, 2020, and interim reporting periods within the annual reporting period beginning July 1, 2021. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company plans on applying the modified retrospective method of adoption for this guidance. The Company is in the process of evaluating the impact that the pronouncement will have on the consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”) which outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize almost all of their leases on the balance sheet by recording a lease liability and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. As per the latest ASU 2020-05 issued by FASB, the entities who have not yet issued or made available for issuance the financial statements as of June 3, 2020 can defer the new guidance for one year. The Company will be adopting this guidance for the annual reporting period beginning July 1, 2022, and interim reporting periods within the annual reporting period beginning July 1, 2023. This will require application of the new accounting guidance at the beginning of the earliest comparative period presented in the year of adoption. The Company is in the process of evaluating the impact that the pronouncement will have on the consolidated financial statements.

Financial Instruments

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which requires entities to use a current expected credit loss (“CECL”) model to measure impairment for most financial assets that are not recorded at fair value through net income. Under the CECL model, an entity will estimate lifetime expected credit losses considering available relevant information about historical events, current conditions and supportable forecasts. The CECL model does not apply to available-for-sale debt securities. This guidance also expands the required credit loss disclosures and will be applied using a modified retrospective approach by recording a cumulative effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

The Company will adopt this guidance for the annual and interim reporting periods beginning July 1, 2023. The Company has not determined the effect of the standard on its ongoing financial reporting.

In June 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (“Subtopic 470-20”) and Derivatives and Hedging – Contracts in Entity’s Own Equity (“Subtopic 815-40”). This ASU amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. These amendments seek to remove certain requirements from the settlement guidance and clarify scope requirements. The ASU is effective for public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company will adopt this guidance for the annual and interim reporting periods beginning July 1, 2021. The Company has not determined the effect of the standard on its ongoing financial reporting.

Non-employee awards

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which simplifies the accounting for share-based payments granted to nonemployees for goods and services. The Company will be adopting this guidance for the annual reporting period beginning July 1, 2020, and interim reporting periods within the annual reporting period beginning July 1, 2021. The Company has not determined the effect of the standard on its ongoing financial reporting.

We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements.

Equity

9 Months Ended

Mar. 31, 2021

Equity

Equity

Note 3:Equity

Equity owner transaction

On July 27, 2020, InnovAge Holding Corp. (formerly TCO Group Holdings, Inc.), Ignite Aggregator LP (“Purchaser”), and the former equity holders of InnovAge Holding Corp. (“Sellers”) entered into a Securities Purchase Agreement (the “Agreement”), effective July 27, 2020. Under the terms of the Agreement, the Sellers sold a portion of their equity interest to the Purchaser. The Purchaser and the Sellers then contributed their equity interests in the Company to a newly formed limited partnership, TCO Group Holdings, L.P. (the “LP”) resulting in the Company being wholly owned by the LP.

Concurrently with the entry into the Agreement, the Company amended and restated its 2016 Credit Agreement (as defined below), see Note 8 for further discussion. A portion of the proceeds from the 2016 Credit Agreement were used by the Company to repurchase 16,095,819 shares of its common stock for $77.6 million from certain members of management, including certain members of the Board of Directors, and certain members of our equity partner. The common stock was then recognized as Treasury stock. The Treasury stock was retired in March 2021, see Note 14.

Additionally, as part of the Agreement, the Company executed an Option Cancellation Agreement (the “Cancellation Agreement”), which canceled the Company’s common stock option awards of 16,994,975 granted under the 2016 Incentive Plan for $74.6 million. Such cancellation resulted in a settlement of the awards. Vesting of the contingent performance-based awards was not deemed probable at the time of the settlement resulting in the settlement of the contingent performance-based awards being recorded as Corporate, general and administrative. Vesting of the time vesting awards was deemed probable at the time of the settlement resulting in a portion of the settlement of the time vesting awards being recorded as Corporate, general and administrative expense and the remainder being recorded as a reduction to Additional paid-in capital. Of the total settlement, $42.2 million was recorded as Corporate, general and administrative expense and $32.4 million was recorded as a reduction to Additional paid-in capital. The Cancellation Agreement resulted in the option holders receiving the same amount of cash that they would have received had they exercised their options, participated in the repurchase described above and sold their remaining shares.

As part of the transaction, the Company incurred $22.6 million in transaction costs, of which $13.1 million was recognized as Corporate, general and administrative expense and $9.5 million was recognized as a distribution to owner as the costs were paid on behalf of the owners.

Capital Contribution

On October 15, 2020 Finback Pace, LP contributed $20.0 million for an investment in the LP, which in turn contributed the funds to the Company.

Variable Interest Entity

9 Months Ended

Mar. 31, 2021

Variable Interest Entity

Variable Interest Entity

Note 4:Variable Interest Entity

The Company’s operations also include a Senior Housing unit that primarily includes the accounts of Continental

Community Housing (“CCH”), the general partner of Pinewood Lodge, LLP (“ PWD”); a 0.01% partnership interest each in PWD and InnovAge Senior Housing Thornton, LLC (“SH1”), both of which were organized to develop, construct, own, maintain, and operate certain apartment complexes intended for rental to low-income elderly individuals aged 62 or older.

PWD is a VIE, but the Company is not the primary beneficiary. The Company does not have the power to direct the activities that most significantly impact the economic performance of PWD. Accordingly, the Company does not consolidate PWD. PWD is accounted for using the equity method of accounting and is recorded in Equity method investments in the accompanying consolidated balance sheets. The equity earnings of PWD are insignificant. The balance of the Company’s investment in PWD is $0.8 million which represents the maximum exposure to loss.

SH1 is a VIE. The Company is the primary beneficiary of SH1 and consolidates SH1. The Company is the primary beneficiary of SH1 as it has the power to direct the activities that are most significant to SH1 and has an obligation to absorb losses or the right to receive benefits from SH1. The most significant activity of SH1 is the operation of the housing facility. The Company has provided a subordinated loan to SH1 and has provided a guarantee for a convertible term loan held by SH1.

The following table shows the assets and liabilities of SH1 as of March 31, 2021 and June 30, 2020:

In thousands (000’s)


	March 31,		June 30,
Assets/Liabilities	2021		2020
Cash and cash equivalents	$	498	$	435
Accounts receivable		3		1
Prepaid expenses and other		13		7
Property, plant and equipment, net		10,143		10,501
Deposits and other, net		386		376
Accounts payable and accrued expenses		279		199
Current portion long-term debt		39		38
Noncurrent liabilities		454		454
Long-term debt, net of debt issuance costs		3,838		3,901

Nonconsolidated Entities

9 Months Ended

Mar. 31, 2021

Nonconsolidated Entities

Nonconsolidated Entities

Note 5:Nonconsolidated Entities

Prior to January 1, 2021, the Company had two nonconsolidated equity method investments, PWD, see Note 4 for further discussion, and InnovAge California Pace-Sacramento, LLC (“InnovAge Sacramento”).

On March 18, 2019, in connection with the formation of InnovAge Sacramento, the joint venture with Adventist Health System/West (“Adventist”) and Eskaton Properties, Incorporated (“Eskaton”), the Company contributed $9.0 million in cash and land valued at $4.2 million for a 59.9% membership interest in the joint venture,

InnovAge Sacramento. Further, Adventist contributed $5.8 million in cash and Eskaton contributed $3.0 million in cash for membership interests of 26.41% and 13.69%, respectively. The Company made an additional contribution of $52,000 dollars to obtain an additional 0.1% membership interest in the joint venture. With the acquisition of the additional 0.1% membership interest, the Company obtained control of InnovAge Sacramento effective January 1, 2021. Accordingly, beginning January 1, 2021, the results of InnovAge Sacramento are included in our consolidated results of operations.

The InnovAge California PACE-Sacramento LLC Limited Liability Company Agreement (the “JV Agreement”) includes numerous provisions whereby, if certain conditions are met, the joint venture may be required to purchase, at fair market value, certain members’ interests or certain members’ may be required to purchase, at fair market value, the interests of certain other members. As of March 31, 2021, none of the conditions specified in the JV Agreement had been met.

At the consummation of the JV Agreement, the Company issued warrants (the “Sacramento Warrants”) to purchase 5% of its issued and outstanding common stock to Adventist Health System/West at a par value of $0.001 per share and an exercise price equal to the fair market value per share at the time of exercise of this warrant. The Sacramento Warrants fully vest on the exercise date, which is defined as the date on which Adventist has made aggregate capital contributions in an amount greater than $25.0 million to one or more joint venture entities in which Adventist and the Company hold equity (the “Investment Threshold”).

On February 9, 2021, we entered into an amendment agreement with our joint venture partner Adventist to amend the Sacramento Warrants. The amendment removes the Investment Threshold requirement and grants Adventist the right to purchase up to $15.0 million of our common stock at an exercise price equal to the initial public offering price. The warrant is exercisable for one year beginning on the date of the consummation of the IPO. As of March 31, 2021, Adventist had not exercised any warrants.

At inception, the Sacramento Warrants were initially determined to be equity-based payments to nonemployees and as such the measurement date for these warrants was considered to be the date when the Investment Threshold is reached. At the time of the amendment, due to the removal of the Investment Threshold, the warrants were evaluated under ASC 815-40, Contracts in an Entity’s Own Equity, which resulted in a liability classification from the date of the amendment through completion of our IPO, due to the variable amount of shares which could be issued. Upon completion of the IPO, the number of shares to be issued were no longer variable, which resulted in the warrants being recorded in equity. A charge of $2.3 million, representing the fair value of the warrants from inception through the date of completion of the IPO, was recorded in other income (expense) in the condensed consolidated statement of operations.

We obtained control of InnovAge Sacramento through acquisition of an additional 0.1% membership interest, which we consider to be a step acquisition, whereby the Company remeasured the previously held equity method investment to fair value. This resulted in a gain on consolidation of $10.9 million, which is recorded in gain on equity method investment in the condensed consolidated statement of operations. The fair value of the previously held equity investments was determined using a discounted cash flow model.

We accounted for the transaction as a business combination, which requires that we record the assets acquired and liabilities assumed at fair value. The amount by which the purchase price exceeds the fair value of the net assets acquired is recorded as goodwill.

The fair value of the assets acquired and net liabilities assumed in the step acquisition are as follows as of January 1, 2021:


	January 1,
(In thousands)	2021
Assets:
Cash	$	646
Accounts receivable		786
Property and equipment, net		30,667
Goodwill		8,078
Total assets		40,177

Liabilities:
Accounts payable		530
Reported and estimated claims		330
Due to Medicaid and Medicare		77
Capital leases		428
Other liabilities		48
Total liabilities	$	1,413

The following table sets forth the results of InnovAge Sacramento for the six months ended December 31, 2020. The results of InnovAge Sacramento are consolidated beginning January 1, 2021.


	Six Months Ended
(In thousands)	December 31, 2020
Revenue:
Total revenue	$	2,297
Less: members’ interest		921
The Company’s interest		1,376
Cost of operations:
Total cost of operations		4,538
Less: members’ interest		1,820
The Company’s interest		2,718
The Company’s interest in net income (loss)	$	(1,342)

The overall operations for InnovAge Sacramento were insignificant during the three and nine months ended March 31, 2021.

Goodwill and Other Intangible Assets

9 Months Ended

Mar. 31, 2021

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 6:Goodwill and Other Intangible Assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired, amounted to $124.2 million at March 31, 2021 and $116.1 million as of June 30, 2020. The increase of $8.1 million resulted from the consolidation of InnovAge Sacramento beginning on January 1, 2021. Pursuant to ASC 350, “Intangibles – Goodwill and Other,” we review the recoverability of goodwill annually as of April 1 or whenever significant events or changes occur which might impair the recovery of recorded amounts. For purposes of the annual goodwill impairment assessment, the Company has identified three reporting units. There were no indicators of impairment identified and no goodwill impairments recorded during the nine months ended March 31, 2021 and 2020.

The Company has Other intangible assets, net that are both definite and indefinite lived. Other intangible assets that are definite-lived are amortized over their useful lives. Other intangible assets that are definite-lived amounted to $6.6 million at both March 31, 2021 and June 30, 2020 and associated accumulated amortization amounted to $1.9 million and $1.4 million at March 31, 2021 and June 30, 2020, respectively. The Company

recorded amortization expense of $0.2 and $0.5 million for both the three and nine months ended March 31, 2021 and 2020, respectively.

On October 20, 2020, the Company paid $2.0 million for the right to serve PACE members in Florida, which was recognized within the consolidated balance sheet as Other intangible assets, net and are indefinite-lived.

We review the recoverability of other intangible assets in conjunction with long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. There were no intangible asset impairments recorded during the nine months ended March 31, 2021 and 2020.

Leases

9 Months Ended

Mar. 31, 2021

Leases

Leases

Note 7:Leases

Property and equipment includes property under various capital leases. These leases have expiration dates ranging from January 2021 to September 2025, varying interest rates, and generally include an option to purchase the equipment at fair value at the end of the underlying lease period. The Company’s capital leases included the following at March 31, 2021 and June 30, 2020:

In thousands (000’s)


	March 31, 2021		June 30, 2020
Equipment	$	13,777	$	9,845
Less accumulated depreciation		(6,848)		(4,829)
Balance as of end of period	$	6,929	$	5,016

Certain of the Company’s property and equipment is leased under operating leases. Total rental expense under operating leases was $1.4 million and $3.5 million for the three and nine months ended March 31, 2021, respectively, and $1.5 million and $3.8 million for the three and nine months ended March 31, 2020, respectively.

Future minimum lease payments for fiscal years beginning with remainder of fiscal year 2021 for capital leases having initial terms of more than one year and noncancelable operating leases were as follows:


			Operating Leases
	Capital Leases		Minimum Lease
(In thousands)	Obligations		Payments
Amount remaining in 2021	$	713	$	866
2022		2,527		4,138
2023		2,468		4,410
2024		1,941		4,052
2025		1,169		3,592
Thereafter		144		13,704
Total		8,962	$	30,762
Less amount representing interest		1,114
Total minimum lease payments		7,848
Less current maturities		2,121
Noncurrent maturities	$	5,727

Long Term Debt

9 Months Ended

Mar. 31, 2021

Long Term Debt

Long Term Debt

Note 8. Long Term Debt

Long-term debt consisted of the following at March 31, 2021 and June 30, 2020:


In thousands (000’s)	March 31, 2021		June 30, 2020
Senior secured borrowings:
Senior secured term loan	$	75,000	$	187,625
Revolving credit facility		—		25,000
Convertible term loan		2,377		2,401
Total debt		77,377		215,026
Less unamortized debt issuance costs		2,110		2,656
Less current maturities		2,852		1,938
Long-term debt, net of debt issuance costs	$	72,415	$	210,432

The Company originally entered into a senior secured borrowing agreement (the “2016 Credit Agreement”) on May 13, 2016, that consisted of a senior secured term loan for $75.0 million and a revolving credit facility for $20.0 million. The 2016 Credit Agreement was subsequently amended on May 2, 2019 to increase the senior secured term loan to $190.0 million and a revolving credit facility for $30.0 million and a delayed draw term loan facility (“DDTL”) for $45.0 million. The senior secured term loan and the DDTL had a maturity date of May 2, 2025, and the revolving credit facility had a maturity date of May 2, 2024.

On July 27, 2020, the Company amended and restated the 2016 Credit Agreement once again to increase the senior secured term loan to $300.0 million, the revolving credit facility to $40.0 million and to terminate the DDTL. The maturity date of the revolving credit facility was extended to July 27, 2025, the senior secured term loan was extended to July 27, 2026, and there were updates to certain covenants contained in the existing credit agreement. Principal was paid each calendar quarter in an amount equal to 0.25% of the aggregate outstanding principal amount.

The structure of the amendment to the 2016 Credit Agreement as amended on July 27, 2020 led to an extinguishment of debt for certain lenders and a modification of debt for other lenders. The total debt structure extinguishment for certain lenders was $57.1 million which led to the write off of $1.0 million in debt issuance costs which was recorded in loss on extinguishment of debt for the nine months ended March 31, 2021. The total debt structure that was modified was $250.0 million, while the new debt issued was $50.0 million, which resulted in $9.1 million of debt issuance costs being capitalized.

On March 8, 2021, concurrently with the closing of the IPO, the Company entered into a new credit agreement (the “2021 Credit Agreement”) that replaced the 2016 Credit Agreement. The 2021 Credit Agreement consists of a senior secured term loan of $75.0 million and a revolving credit facility of $100.0 million. The maturity date of the revolving credit facility is March 8, 2026 and of the senior secured term loan, March 8, 2026. The 2021 Credit Agreement includes a more lose set of covenants compared to the 2016 Credit Agreement. Loans under the 2021 Credit Agreement are secured by substantially all of the Company’s assets. Principal on the senior secured term loan is paid each calendar quarter beginning September 2021 in an amount equal to 1.25% of the initial term loan on closing date. Proceeds of the new senior secured loan, together with proceeds from the IPO, were used to repay amounts outstanding under the 2016 Credit Agreement.

The structure of the 2021 Credit Agreement led to a 2.0% prepayment fee as the cancellation of the 2016 Credit Agreement occurred prior to the first anniversary of the July 27, 2020 amendment of the 2016 Credit Agreement, an extinguishment of debt for certain lenders, and a modification of debt for other lenders. The total prepayment fee was $6.0 million and is recorded in loss on extinguishment of debt in the consolidated statements of operations. The total debt structure extinguishment for certain lenders was $250.0 million which led to the write off of $7.5 million in debt issuance costs which was recorded in loss on extinguishment of debt for the three months ended March 31, 2021. The total debt structure that was modified was $25.0 million related to each of

the term loan and the revolver, while the new debt issued was $50.0 million related to the term loan and $75.0 million related to the revolver. This resulted in $2.1 million of debt issuance costs being capitalized.

Any outstanding principal amounts under the 2021 Credit Agreement accrue interest at a variable interest rate. As of March 31, 2021, the interest rate on the senior secured term loan was 1.94%. At June 30, 2020 the interest rate on the senior secured term loan under the 2016 Credit Agreement was 6.0%. Prior to the entry into the 2021 Credit Agreement, the revolving credit facility fee accrued at 0.5%. Under the terms of the 2021 Credit Agreement, the revolving credit facility fee accrues at 0.25% of the average daily unused amount and is paid quarterly. There is also an immaterial administrative fee.

During fiscal year 2020, the Company borrowed $25.0 million under the revolving credit facility at an interest rate of 3.94%, to ensure sufficient funds available during the unknown time of the COVID-19 pandemic and for general corporate purposes. The Company repaid all outstanding amounts on the revolving credit facility and as of March 31, 2021 had no outstanding borrowings. The remaining capacity under the revolving credit facility as of March 31, 2021 is $100.0 million.

The 2021 Credit Agreement requires the Company to meet certain operational and reporting requirements, including, but not limited to, defined leverage and fixed-charge coverage ratios. Additionally, annual capital expenditures and permitted investments, including acquisitions, are limited to amounts specified in the Credit Agreement. The 2021 Credit Agreement also provides certain restrictions on dividend payments and other equity transactions and requires the Company to make prepayments under specified circumstances. The Company was in compliance with the covenants of the 2021 Credit Agreement and the 2016 Credit Agreement as of March 31, 2021 and June 30, 2020, respectively.

The deferred financing costs of $2.1 million are amortized over the term of the underlying debt and unamortized amounts have been offset against long-term debt in the consolidated balance sheets. Total deferred financing costs were $0.9 million and $0.4 million for the nine months ended March 31, 2021 and 2020, respectively.

On June 29, 2015, SH1 entered into a convertible term. Monthly principal and interest payments of $0.02 million commenced on September 1, 2015, and the loan bears interest at an annual rate of 6.68%. The remaining principal balance is due upon maturity, which is August 20, 2030. The loan is secured by a deed of trust to Public Trustee, assignment of leases and rents, security agreements, and SH1’s fixture filing.

Fair Value Measurements

9 Months Ended

Mar. 31, 2021

Fair Value Measurements

Fair Value Measurements

Note 9:Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants, at the measurement date. A fair value hierarchy was established that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources outside the reporting entity. Unobservable inputs are inputs that reflect the Company’s own assumptions based on market data and assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The sensitivity to changes in inputs and their impact on fair value measurements can be significant.

The three levels of inputs that may be used to measure fair value are:

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date

Level 2

Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the assets or liabilities

Level 3

Unobservable inputs to the valuation techniques that are significant to the fair value measurements of the assets or liabilities

Recurring Measurements

Effective August 7, 2018, the Company finalized the acquisition of New Courtland LIFE Program (“New Courtland”) in Pennsylvania. The Company paid a base purchase price of $30.0 million, subject to certain net working capital and closing adjustments plus contingent consideration of up to $20.0 million. Such contingent consideration will be paid over a specified period if certain conditions outlined in the Securities Purchase Agreement are met. These conditions are based upon the performance of the PACE centers acquired in the New Courtland acquisition for the two fiscal years following the acquisition, as well as potential payments to be made in the event of the Company being acquired, selling substantially all of its assets, or selling equity securities pursuant to an effective registration statement under the Securities Act of 1933. If all of the contingent consideration of $20.0 million is paid, the lease payments in certain real estate leases between the Company and New Courtland are reduced from their current amounts and allow the Company to exercise its option to purchase the leased buildings at fair market value, after the initial term of the lease.

On March 8, 2021, we completed our IPO, which satisfied the condition that the Company sell equity securities pursuant to an effective registration statement. Accordingly, $20.0 million of contingent consideration was paid under the terms of the Securities Purchase Agreement.

As of March 31, 2021, there are no amounts of contingent consideration outstanding.

Changes in fair value resulted in immaterial amounts recorded in other operating (income) expense within the consolidated statement of for the nine months ended March 31, 2021 and 2020, respectively.

There were no transfers in and out of Level 3 during the nine months ended March 31, 2021 and 2020. The Company’s policy is to recognize transfers as of the actual date of the event or change in circumstances.

Nonrecurring Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges that are required by U.S. GAAP. No such amounts were recorded during the nine months ended March 31, 2021 and 2020, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies

9 Months Ended

Mar. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 10: Commitments and Contingencies

Professional Liability

The Company pays fixed premiums for annual professional liability insurance coverage under a claims-made policy. Under such policy, only claims made and reported to the insurer are covered during the policy term, regardless of when the incident giving rise to the claim occurred. The Company records claim liabilities and expected recoveries, if any, at gross amounts. The Company is not currently aware of any unasserted claims or unreported incidents that are expected to exceed medical malpractice insurance coverage limits.

Litigation

From time to time, in the normal course of business, the Company is involved in or subject to legal proceedings related to its business. The Company regularly evaluates the status of claims and legal proceedings in which it is involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss may have been incurred, and to determine if accruals are appropriate. In the opinion of management, none of the claims and suits,

either individually or in the aggregate, are reasonably likely to have a material adverse effect on the Company's operations or consolidated financial statements. The Company expenses legal costs as such costs are incurred.

Retirement Plans

9 Months Ended

Mar. 31, 2021

Retirement Plans

Retirement Plans

Note 11: Retirement Plans

The Company offers its eligible employees a 401(k) Retirement Savings Plan (the “Plan”). The Company matches 50% of the employee contribution up to 4% of the employee’s compensation. Matching contributions were $0.4 million and $1.3 million for the three and nine months ended March 31, 2021, respectively, and $0.4 million and $1.3 million for the three and nine months ended March 31, 2020, respectively.

Effective January 1, 2016, InnovAge established a 409(a) Deferred Compensation Plan for key employees. Matching contributions were $0.1 million for both the three and nine months ended March 31, 2021 and zero and $0.1 million for the three and nine months ended March 31, 2020, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Stock-based Compensation

9 Months Ended

Mar. 31, 2021

Stock-based Compensation

Stock-based Compensation

Note 12: Stock-based Compensation

2016 Equity Incentive Plan

The Company maintained the 2016 Equity Incentive Plan (the “2016 Incentive Plan”) pursuant to which various stock-based awards may be granted to employees, directors, consultants, and advisers. The total number of shares of the Company’s common stock that is authorized under the 2016 Equity Incentive Plan was 17,836,636. As of June 30, 2020 a total of 16,994,976 awards had been granted. The 2016 Incentive Plan provided for the following general vesting terms:

(a)

Half vested over time (“Time Vesting Awards”). Awards vested on the first anniversary of the grant date in the range of 25% to 62.5%, and the remaining awards that vested over time vest ratably on a semiannual basis thereafter through the fourth anniversary of the grant date.

(b)

Half vested upon the attainment of certain performance-based criteria measured at the time the Company experiences a liquidity event, as defined by the 2016 Incentive Plan (“Contingent Performance-Based Awards”).

Stock options were exercisable over a period of time not to exceed 10 years from the date of grant.

Cancellation of Stock Option Awards Under 2016 Equity Incentive Plan

On July 27, 2020, TCO Group Holdings, Inc., Ignite Aggregator LP, and the equity holders of TCO Group Holdings, Inc. entered into a Securities Purchase Agreement, effective July 27, 2020. In addition, the Company amended and restated the 2016 Credit Agreement.

A portion of the proceeds from the 2016 Credit Agreement were used by the Company to repurchase 16,095,819 shares of its common stock from the certain members of management, the Board of Directors, and members of our equity partner. Additionally, as part of the Agreement, the Company executed the Cancellation Agreement which canceled the Company’s 16,994,976 common stock options which were granted under the 2016 Incentive Plan. The Cancellation Agreement resulted in the option holders receiving the same amount of cash that they would have received had they exercised their options, participated in the repurchase described above and sold their remaining shares.

A summary of the stock option activity for the nine months ended March 31, 2021, was as follows:

Time Vesting Awards


				Weighted-	Average
	Number of	Option		Average	Remaining
	Options	Price Range		Exercise Price	Term (in years)
Outstanding balance, June 30, 2020	8,497,488	$	1.00 - $ 2.35	1.26	6.76
Canceled	(8,497,488)	$	1.00 - $ 2.35	1.26	6.76
Outstanding balance, March 31, 2021	—

Contingent Performance-based Awards


				Weighted-Average
	Number of	Weighted-Average		Remaining
	Options	Exercise Price		Term (in years)
Outstanding balance, June 30, 2020	8,497,488	$	0.78	6.76
Canceled	(8,497,488)	$	0.78	6.76
Outstanding balance, March 31, 2021	—

Profits Interests

The LP maintains the 2020 Equity Incentive Plan (the “2020 Incentive Plan”), pursuant to which interests in the LP in the form of Class B Units (profits interests) may be granted to employees, directors, consultants, and advisers. A maximum number of 16,162,177 Class B Units are authorized for grant under the 2020 Incentive Plan. As of March 31, 2021, a total of 13,009,137 profits interests units have been granted.

These profits interests represented profits interest ownership in the LP tied solely to the accretion, if any, in the value of the LP following the date of issuance of such profits interests. Profits interests participated in any increase of LP value related to their profits interests after the hurdle value had been achieved and the LP profits interests received the agreed-upon return on their invested capital. The Company granted 13,009,137 and zero profits interests units during the nine months ended March 31, 2021 and 2020, respectively.

Each profits interests unit contains the following material terms:

(i)

The profits interests receive distributions (other than tax distributions) only upon a liquidity event, as defined, that exceed a threshold equivalent to the fair value of the LP, as determined by the Company’s Board of Directors, at the grant date.

(ii)

A portion of the units vest over a period of continuous employment or service (service-vesting units) while the other portion of the units only vest based on the level of aggregate multiple of invested capital and internal rate of return achieved by Ignite Aggregator upon a change of control of the Company, (performance-vesting units).

The performance-vesting units are subject to a market condition, which the Company incorporated as part of its determination of the grant date fair value of the units.

For performance-vesting units, the Company recognizes unit-based compensation expense when it was probable that the performance condition would be achieved. The Company will analyze if a performance condition was probable for each reporting period through the settlement date for units subject to performance vesting. For service-vesting units, the Company will recognize unit-based compensation expense over the requisite service period for each separately vested portion of the profits interests as if the unit was, in-substance, multiple units. The hurdle value per unit is $5.49 for both the performance-vesting and service-vesting units.

The Company uses the Monte Carlo option model to determine the fair value of the granted profits interests units. The stock price is based on the price realized in the equity owner transaction. Expected stock price volatility is based on consideration of indications observed from several publicly traded peer companies. The risk-free interest

rate is based on a treasury instrument whose term is consistent with the expected life of the unit. The dividend yield percentage is zero because the Company neither currently pays dividends nor intends to do so during the expected term. The expected term of the units represents the time the units are expected to be outstanding.

The following is a summary of profits interests transactions and number of units outstanding:

Time Vesting Units


		Weighted-
	Number of	Average
	Units	Grant Date FV
Outstanding balance, June 30, 2020	—
Granted	6,686,568		1.28
Forfeited	(99,307)		1.17
Outstanding balance, March 31, 2021	6,587,261	$	1.28

Performance-Vesting Units


		Weighted-
	Number of	Average
	Units	Grant Date FV
Outstanding balance, June 30, 2020	—
Granted	6,322,569	$	0.57
Forfeited	(99,307)		0.44
Outstanding balance, March 31, 2021	6,223,262	$	0.57

The fair value of the profits interests units granted during the nine months ended March 31, 2021 under the 2020 Incentive Plan, was based upon a Monte Carlo option pricing model using the assumptions in the following table (presented on a weighted average basis):


	2021
Expected volatility		44	%
Expected life (years) – Time vesting units		1.8
Interest rate		0.16	%
Dividend yield		0	%
Weighted-average fair values	$	1.28
Fair value of underlying stock	$	5.49

The total unrecognized compensation cost related to all profits interests units outstanding was $11.1 million. The unrecognized compensation cost related to the Time Vesting Units was $7.5 million and is expected to be recognized over a weighted-average period of 3.5 years. The unrecognized compensation cost related to the Performance-Vesting Units was $3.6 million and will be recorded when it is probable that the performance-based criteria will be met.

Compensation Expense

The Company recognizes stock-based compensation expense on a straight-line basis over the vesting period and includes such charges in employee benefits in the consolidated statements of operations.


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
(In thousands)	2021		2020		2021		2020
Stock options	$	—	$	135	$	45,387	$	407
Profits interest units		530		—		1,102		—
Total share-based compensation expense	$	530	$	135	$	46,489	$	407

Earnings per Share

9 Months Ended

Mar. 31, 2021

Earnings per Share

Earnings per Share

Note 13: Earnings per Share

Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding options, using the treasury stock method and the average market price of the Company’s common stock during the applicable period. When a loss from continuing operations exists, all dilutive securities and potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. When net income from continuing operations exists, performance-based units, are omitted from the calculation of diluted EPS until it is determined that the performance criteria has been met at the end of the reporting period.

The following table sets forth the computation of basic and diluted net loss per common share:


	Three Months Ended March 31,				Nine Months Ended March 31,
(In thousands, except share values)	2021		2020		2021		2020
Net income (loss) attributable to InnovAge Holding Corp.	$	(10,510)	$	8,138	$	(50,460)	$	14,181
Weighted average common shares outstanding (basic)		121,324,980		132,616,431		119,619,806		132,616,431
EPS (basic)	$	(0.09)	$	0.06	$	(0.42)	$	0.11

Dilutive shares		—		1,751,571		—		1,176,554
Weighted average common shares outstanding (diluted)		121,324,980		134,368,002		119,619,806		133,792,985
EPS (diluted)	$	(0.09)	$	0.06	$	(0.42)	$	0.11

Treasury Stock

9 Months Ended

Mar. 31, 2021

Treasury Stock.

Treasury Stock

Note 14: Treasury Stock

On July 27, 2020, as a part of the amendment and restatement of the 2016 Credit Agreement, a portion of the proceeds were used by the Company to repurchase 16,095,819 shares of its common stock from certain members of management, our Board of Directors and our equity partner, at $4.82 per share. As a result of the repurchase, $77.6 million was recorded as Treasury stock, see Note 3 for further discussion. In March 2021, the Company retired all outstanding shares of Treasury stock and at March 31, 2021 there were no shares of treasury stock outstanding.

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Taxes

Income Taxes

Note 15: Income Taxes

The Company recorded an income tax benefit of $(4.3) million and a tax provision of $2.9 million for the three months ended March 31, 2021 and 2020, respectively. The Company recorded an income tax provision of $5.2 million and $5.0 million for the nine months ended March 31, 2021 and 2020, respectively. This represents an effective tax rate of 28.2% and 26.4% for the three months ended March 31, 2021 and 2020, respectively. This represents an effective tax rate of (11.2)% and (26.4)% for the nine months ended March 31, 2021 and 2020, respectively.

The effective rate for the nine months ended March 31, 2021 was different from the federal statutory rate primarily due to disallowed officers’ compensation under Internal Revenue Code (“IRC”) Section 162(m), lobbying expenses, transaction costs, and payments of contingent consideration which occurred during the nine month period.

The Company assesses the valuation allowance recorded against deferred tax assets at each reporting date. The determination of whether a valuation allowance for deferred tax assets is appropriate requires the evaluation of positive and negative evidence that can be objectively verified. Consideration must be given to all sources of taxable income available to realize deferred tax assets, including, as applicable, the future reversal of existing

temporary differences, future taxable income forecasts exclusive of the reversal of temporary differences and carryforwards, taxable income in carryback years and tax planning strategies. In estimating income taxes, the Company assesses the relative merits and risks of the appropriate income tax treatment of transactions taking into account statutory, judicial, and regulatory guidance. As of the nine-month period ended March 31, 2021, the Company has determined that it is not “more likely than not” that the deferred tax assets associated with certain state net operating losses will be realized and as such continues to maintain a valuation allowance against these state deferred tax assets.

The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitation and technical corrections to tax depreciation methods for qualified improvement property. The Company continues to examine the impacts that the CARES Act may have on its business. While several of these provisions may impact the Company, there have not been any significant impacts noted through March 31, 2021.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Segment Reporting

9 Months Ended

Mar. 31, 2021

Segment Reporting

Segment Reporting

Note 16: Segment Reporting

The Company applies ASC Topic 280, "Segment Reporting," which establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about operations, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the Company’s chief executive officer, who is the chief operating decision maker (“CODM”), and for which discrete financial information is available. The Company has determined that it has five operating segments, three of which are related to the Company’s PACE offering. The PACE-related operating segments are based on three geographic divisions, which are West, Central, and East. Due to the similar economic characteristics, nature of services, and customers, we have aggregated our West, Central, and East operating segments into one reportable segment for PACE. The company’s remaining two operating segments relate to Homecare and Senior Housing, which are immaterial operating segments, and are shown below as "Other" along with certain corporate unallocated expenses.

The Company serves approximately 6,700 PACE participants, making it the largest PACE provider in the U.S. based upon participants served, and operates eighteen PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia. PACE, an alternative to nursing homes, is a managed care, capitated program, which serves the frail elderly in a community-based service model. Participants receive all medical services through a comprehensive, consolidated model of care. Capitation payments are received from Medicare parts C and D; Medicaid; VA, and private pay sources. The Company is at risk for all health and allied care costs incurred with respect to the care of its participants, although it does negotiate discounted rates with its provider network consisting of hospitals, nursing homes, assisted living facilities, and medical specialists. Additionally, under the Medicare Prescription Drug Plan, the CMS share part of the risk for providing prescription medication to the Company’s participants.

The Company evaluates performance and allocates capital resources to each segment based on an operating model that is designed to maximize the quality of care provided and profitability. The Company does not review assets by segment and therefore assets by segment are not disclosed below. For the periods presented, all of the Company’s long-lived assets were located in the U.S. and all revenue was earned in the U.S.

The Company’s management uses Center-level Contribution Margin as the measure for assessing performance of its segments. Center-level Contribution Margin is defined as total segment revenues less external provider costs and cost of care (excluding depreciation and amortization). The Company allocates corporate level expenses to its segments with a majority of the allocation going to the PACE segment.

The following table summarizes the operating results regularly provided to the CODM by reportable segment for the three months ended:


	March 31, 2021						March 31, 2020
(In thousands)	PACE		All other⁽¹⁾		Totals		PACE		All other⁽¹⁾		Totals
Capitation revenue	$	155,835	$	—	$	155,835	$	144,174	$	—	$	144,174
Other service revenue		(47)		520		473		(56)		652		596
Total revenues		155,788		520		156,308		144,118		652		144,770
External provider costs		75,389		—		75,389		71,022		—		71,022
Cost of care, excluding depreciation and amortization		38,867		698		39,565		38,559		726		39,285
Center-Level Contribution Margin		41,532		(178)		41,354		34,537		(74)		34,463
Overhead costs⁽²⁾		24,217		(30)		24,187		18,614		42		18,656
Depreciation and amortization		3,181		130		3,311		2,619		150		2,769
Equity loss		—		—		—		163		—		163
Other operating (income) expense		19,222		—		19,222		(99)		—		(99)
Interest expense, net		4,824		52		4,876		2,317		44		2,361
Loss on extinguishment of debt		13,488		—		13,488		—		—		—
Gain on equity method investment		(10,871)		—		(10,871)		—		—		—
Other expense (income)		2,267		—		2,267		(244)		—		(244)
Income (Loss) Before Income Taxes	$	(14,796)	$	(330)	$	(15,126)	$	11,167	$	(310)	$	10,857

The following table summarizes the operating results regularly provided to the CODM by reportable segment for the nine months ended:


	March 31, 2021						March 31, 2020
(In thousands)	PACE		All other⁽¹⁾		Totals		PACE		All other⁽¹⁾		Totals
Capitation revenue	$	464,294	$	—	$	464,294	$	412,724	$	—	$	412,724
Other service revenue		213		1,677		1,890		(1,112)		3,088		1,976
Total revenues		464,507		1,677		466,184		411,612		3,088		414,700
External provider costs		224,215		—		224,215		204,387		—		204,387
Cost of care, excluding depreciation and amortization		113,611		2,311		115,922		111,021		3,444		114,465
Center-Level Contribution Margin		126,681		(634)		126,047		96,204		(356)		95,848
Overhead costs⁽²⁾		120,249		(13)		120,236		56,846		(24)		56,822
Depreciation and amortization		8,901		361		9,262		7,525		785		8,310
Equity loss		1,343		—		1,343		201		2		203
Other operating (income) expense		18,211		—		18,211		(252)		2		(250)
Interest expense, net		16,919		142		17,061		11,025		262		11,287
Loss on extinguishment of debt		14,479		—		14,479		—		—		—
Gain on equity method investment		(10,871)		—		(10,871)		—		—		—
Other expense (income)		2,222		—		2,222		673		62		735
Income (Loss) Before Income Taxes	$	(44,772)	$	(1,124)	$	(45,896)	$	20,186	$	(1,445)	$	18,741

(1)

Center-level Contribution Margin from segments below the quantitative thresholds are attributable to two operating segments of the Company. Those segments consist of Homecare and Senior Housing. Neither of those segments has ever met any of the quantitative thresholds for determining reportable segments.

(2)

Overhead consists of the Sales and marketing and Corporate, general and administrative financial statement line items.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Related-party

9 Months Ended

Mar. 31, 2021

Related-party

Related-party

Note 17: Related-party

Pursuant to the PWD Amended and Restated Agreement of Limited Partnership, the general partner, who is a subsidiary of the Company (the “General Partner”), helped fund operating deficits and shortfalls of PWD in the form of a loan. At March 31, 2021 and June 30, 2020, $0.7 million and $0.6 million, respectively, was recorded in Deposits and other. Additionally, the general partner is paid an administration fee of $35,000 per year.

In accordance with the Management Service Agreement between the Company and the joint venture partner, the Company is responsible for the daily operations of the joint venture InnovAge Sacramento. For the six months ended December 31, 2020, the Company generated $0.3 million in management fee revenue, which was recorded in other service revenue. For the three months ended March 31, 2021, management fee revenue was eliminated in consolidation as the results of InnovAge Sacramento are consolidated effective January 1, 2021. Management fee revenue was insignificant during the nine months ended March 31, 2020.

Subsequent Events

9 Months Ended

Mar. 31, 2021

Subsequent Events

Subsequent Events

Note 18: Subsequent Events

The Company has evaluated subsequent events through May 11, 2021, the date on which the consolidated financial statements were issued.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2021

Summary of Significant Accounting Policies

Basis of Preparation and Principles of Consolidation

The Company does not have any components of comprehensive income and comprehensive income is equal to net income reported in the statements of operations for all periods presented.

Property and Equipment

Property and equipment were comprised of the following as of March 31, 2021 and June 30, 2020:


	Estimated
(In thousands)	Useful Lives	March 31, 2021		June 30, 2020
Land	N/A	$	11,980	$	8,580
Buildings and leasehold improvements	10 - 40 years or term of lease		104,727		79,514
Software	3 - 5 years		12,355		11,387
Equipment and vehicles	3 - 7 years		35,201		28,814
Construction in progress	N/A		19,257		7,069
			183,520		135,364
Less accumulated depreciation and amortization			(42,005)		(32,870)
Total property and equipment, net		$	141,515	$	102,494

Depreciation of $8.8 million and $7.8 million was recorded during the nine months ended March 31, 2021 and 2020, respectively.

Revenue Recognition

Capitation revenues may be subject to adjustment as a result of examination by government agencies or contractors.

Capitated revenues consisted of the following sources for the nine months ended:


	March 31,		March 31,
	2021		2020
Medicaid	53	%	56	%
Medicare	46	%	43	%
Private pay and other	1	%	1	%
Total	100	%	100	%

Coronavirus Pandemic ("COVID-19")

Coronavirus Pandemic (“COVID-19”)

Recent Accounting Pronouncements

Revenue Recognition

Leases

Financial Instruments

The Company will adopt this guidance for the annual and interim reporting periods beginning July 1, 2023. The Company has not determined the effect of the standard on its ongoing financial reporting.

Non-employee awards

We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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+ Details

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Mar. 31, 2021

Summary of Significant Accounting Policies

Schedule of useful life of property and equipment


	Estimated
(In thousands)	Useful Lives	March 31, 2021		June 30, 2020
Land	N/A	$	11,980	$	8,580
Buildings and leasehold improvements	10 - 40 years or term of lease		104,727		79,514
Software	3 - 5 years		12,355		11,387
Equipment and vehicles	3 - 7 years		35,201		28,814
Construction in progress	N/A		19,257		7,069
			183,520		135,364
Less accumulated depreciation and amortization			(42,005)		(32,870)
Total property and equipment, net		$	141,515	$	102,494

Schedule of source of revenue


	March 31,		March 31,
	2021		2020
Medicaid	53	%	56	%
Medicare	46	%	43	%
Private pay and other	1	%	1	%
Total	100	%	100	%

Variable Interest Entity (Tables)

9 Months Ended

Mar. 31, 2021

Variable Interest Entity

Schedule of Variable Interest Entity

In thousands (000’s)


	March 31,		June 30,
Assets/Liabilities	2021		2020
Cash and cash equivalents	$	498	$	435
Accounts receivable		3		1
Prepaid expenses and other		13		7
Property, plant and equipment, net		10,143		10,501
Deposits and other, net		386		376
Accounts payable and accrued expenses		279		199
Current portion long-term debt		39		38
Noncurrent liabilities		454		454
Long-term debt, net of debt issuance costs		3,838		3,901

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Nonconsolidated Entities (Tables)

9 Months Ended

Mar. 31, 2021

Nonconsolidated Entities

Schedule of proforma consolidated results

The overall operations for InnovAge Sacramento were insignificant during the three and nine months ended March 31, 2021.

InnovAge California Pace-Sacramento, LLC

Nonconsolidated Entities

Summary of the fair value of the assets acquired and net liabilities assumed


	January 1,
(In thousands)	2021
Assets:
Cash	$	646
Accounts receivable		786
Property and equipment, net		30,667
Goodwill		8,078
Total assets		40,177

Liabilities:
Accounts payable		530
Reported and estimated claims		330
Due to Medicaid and Medicare		77
Capital leases		428
Other liabilities		48
Total liabilities	$	1,413

Summarized income statement of Nonconsolidated Entities


	Six Months Ended
(In thousands)	December 31, 2020
Revenue:
Total revenue	$	2,297
Less: members’ interest		921
The Company’s interest		1,376
Cost of operations:
Total cost of operations		4,538
Less: members’ interest		1,820
The Company’s interest		2,718
The Company’s interest in net income (loss)	$	(1,342)

Leases (Tables)

9 Months Ended

Mar. 31, 2021

Leases

Schedule of Company's capital leases


	March 31, 2021		June 30, 2020
Equipment	$	13,777	$	9,845
Less accumulated depreciation		(6,848)		(4,829)
Balance as of end of period	$	6,929	$	5,016

Schedule of capital lease obligations


			Operating Leases
	Capital Leases		Minimum Lease
(In thousands)	Obligations		Payments
Amount remaining in 2021	$	713	$	866
2022		2,527		4,138
2023		2,468		4,410
2024		1,941		4,052
2025		1,169		3,592
Thereafter		144		13,704
Total		8,962	$	30,762
Less amount representing interest		1,114
Total minimum lease payments		7,848
Less current maturities		2,121
Noncurrent maturities	$	5,727

Schedule of operating lease minimum lease payments


			Operating Leases
	Capital Leases		Minimum Lease
(In thousands)	Obligations		Payments
Amount remaining in 2021	$	713	$	866
2022		2,527		4,138
2023		2,468		4,410
2024		1,941		4,052
2025		1,169		3,592
Thereafter		144		13,704
Total		8,962	$	30,762
Less amount representing interest		1,114
Total minimum lease payments		7,848
Less current maturities		2,121
Noncurrent maturities	$	5,727

Long Term Debt (Tables)

9 Months Ended

Mar. 31, 2021

Long Term Debt

Schedule of long-term debt


In thousands (000’s)	March 31, 2021		June 30, 2020
Senior secured borrowings:
Senior secured term loan	$	75,000	$	187,625
Revolving credit facility		—		25,000
Convertible term loan		2,377		2,401
Total debt		77,377		215,026
Less unamortized debt issuance costs		2,110		2,656
Less current maturities		2,852		1,938
Long-term debt, net of debt issuance costs	$	72,415	$	210,432

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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-Paragraph 2
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Stock-based Compensation (Tables)

9 Months Ended

Mar. 31, 2021

Stock-based Compensation

Summary of stock option activity


				Weighted-	Average
	Number of	Option		Average	Remaining
	Options	Price Range		Exercise Price	Term (in years)
Outstanding balance, June 30, 2020	8,497,488	$	1.00 - $ 2.35	1.26	6.76
Canceled	(8,497,488)	$	1.00 - $ 2.35	1.26	6.76
Outstanding balance, March 31, 2021	—


				Weighted-Average
	Number of	Weighted-Average		Remaining
	Options	Exercise Price		Term (in years)
Outstanding balance, June 30, 2020	8,497,488	$	0.78	6.76
Canceled	(8,497,488)	$	0.78	6.76
Outstanding balance, March 31, 2021	—

Summary of profits interests transactions and number of units outstanding


		Weighted-
	Number of	Average
	Units	Grant Date FV
Outstanding balance, June 30, 2020	—
Granted	6,686,568		1.28
Forfeited	(99,307)		1.17
Outstanding balance, March 31, 2021	6,587,261	$	1.28


		Weighted-
	Number of	Average
	Units	Grant Date FV
Outstanding balance, June 30, 2020	—
Granted	6,322,569	$	0.57
Forfeited	(99,307)		0.44
Outstanding balance, March 31, 2021	6,223,262	$	0.57

Schedule of Monte Carlo option pricing model using the fair value assumptions


	2021
Expected volatility		44	%
Expected life (years) – Time vesting units		1.8
Interest rate		0.16	%
Dividend yield		0	%
Weighted-average fair values	$	1.28
Fair value of underlying stock	$	5.49

Schedule of stock-based compensation expense


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
(In thousands)	2021		2020		2021		2020
Stock options	$	—	$	135	$	45,387	$	407
Profits interest units		530		—		1,102		—
Total share-based compensation expense	$	530	$	135	$	46,489	$	407

Earnings per Share (Tables)

9 Months Ended

Mar. 31, 2021

Earnings per Share

Schedule of earnings per share


	Three Months Ended March 31,				Nine Months Ended March 31,
(In thousands, except share values)	2021		2020		2021		2020
Net income (loss) attributable to InnovAge Holding Corp.	$	(10,510)	$	8,138	$	(50,460)	$	14,181
Weighted average common shares outstanding (basic)		121,324,980		132,616,431		119,619,806		132,616,431
EPS (basic)	$	(0.09)	$	0.06	$	(0.42)	$	0.11

Dilutive shares		—		1,751,571		—		1,176,554
Weighted average common shares outstanding (diluted)		121,324,980		134,368,002		119,619,806		133,792,985
EPS (diluted)	$	(0.09)	$	0.06	$	(0.42)	$	0.11

Segment Reporting (Tables)

9 Months Ended

Mar. 31, 2021

Segment Reporting

Schedule of operating results by reportable segments


	March 31, 2021						March 31, 2020
(In thousands)	PACE		All other⁽¹⁾		Totals		PACE		All other⁽¹⁾		Totals
Capitation revenue	$	155,835	$	—	$	155,835	$	144,174	$	—	$	144,174
Other service revenue		(47)		520		473		(56)		652		596
Total revenues		155,788		520		156,308		144,118		652		144,770
External provider costs		75,389		—		75,389		71,022		—		71,022
Cost of care, excluding depreciation and amortization		38,867		698		39,565		38,559		726		39,285
Center-Level Contribution Margin		41,532		(178)		41,354		34,537		(74)		34,463
Overhead costs⁽²⁾		24,217		(30)		24,187		18,614		42		18,656
Depreciation and amortization		3,181		130		3,311		2,619		150		2,769
Equity loss		—		—		—		163		—		163
Other operating (income) expense		19,222		—		19,222		(99)		—		(99)
Interest expense, net		4,824		52		4,876		2,317		44		2,361
Loss on extinguishment of debt		13,488		—		13,488		—		—		—
Gain on equity method investment		(10,871)		—		(10,871)		—		—		—
Other expense (income)		2,267		—		2,267		(244)		—		(244)
Income (Loss) Before Income Taxes	$	(14,796)	$	(330)	$	(15,126)	$	11,167	$	(310)	$	10,857

The following table summarizes the operating results regularly provided to the CODM by reportable segment for the nine months ended:


	March 31, 2021						March 31, 2020
(In thousands)	PACE		All other⁽¹⁾		Totals		PACE		All other⁽¹⁾		Totals
Capitation revenue	$	464,294	$	—	$	464,294	$	412,724	$	—	$	412,724
Other service revenue		213		1,677		1,890		(1,112)		3,088		1,976
Total revenues		464,507		1,677		466,184		411,612		3,088		414,700
External provider costs		224,215		—		224,215		204,387		—		204,387
Cost of care, excluding depreciation and amortization		113,611		2,311		115,922		111,021		3,444		114,465
Center-Level Contribution Margin		126,681		(634)		126,047		96,204		(356)		95,848
Overhead costs⁽²⁾		120,249		(13)		120,236		56,846		(24)		56,822
Depreciation and amortization		8,901		361		9,262		7,525		785		8,310
Equity loss		1,343		—		1,343		201		2		203
Other operating (income) expense		18,211		—		18,211		(252)		2		(250)
Interest expense, net		16,919		142		17,061		11,025		262		11,287
Loss on extinguishment of debt		14,479		—		14,479		—		—		—
Gain on equity method investment		(10,871)		—		(10,871)		—		—		—
Other expense (income)		2,222		—		2,222		673		62		735
Income (Loss) Before Income Taxes	$	(44,772)	$	(1,124)	$	(45,896)	$	20,186	$	(1,445)	$	18,741

(1)

(2)

Overhead consists of the Sales and marketing and Corporate, general and administrative financial statement line items.

Business (Details) $ / shares in Units, $ in Thousands					3 Months Ended	9 Months Ended
Business (Details) $ / shares in Units, $ in Thousands	Mar. 09, 2021 USD ($) shares	Mar. 09, 2021 USD ($)	Mar. 08, 2021 $ / shares shares	Jul. 27, 2020 USD ($)	Mar. 31, 2021 USD ($) employee $ / shares	Mar. 31, 2021 USD ($) employee Center item segment $ / shares	Mar. 03, 2021 $ / shares	Jun. 30, 2020 $ / shares
Segment Reporting Information [Line Items]
Number of employees \| employee					2,100	2,100
Par value per share \| $ / shares					$ 0.001	$ 0.001	$ 0.001	$ 0.001
Net proceeds						$ 373,580
Underwriting discounts and commissions				$ 22,600	$ 25,334	$ 25,334
IPO
Segment Reporting Information [Line Items]
Common stock issued \| shares			16,666,667
Offering price \| $ / shares			$ 21.00
Net proceeds		$ 373,600
Underwriting discounts and commissions		23,900
Deferred offering costs	$ 1,400	$ 1,400
Over-Allotment Option
Segment Reporting Information [Line Items]
Common stock issued \| shares			2,500,000
Underwriters exercised the option to purchase common stock \| shares	2,329,234
PACE
Segment Reporting Information [Line Items]
Number of reportable segments \| segment						1
Number of PACE participants \| item						6,700
Number of PACE centers excluding non-consolidating joint ventures \| Center						18
Percentage of obligation for health care costs						100.00%
Operating segments \| PACE
Segment Reporting Information [Line Items]
Number of reportable segments \| segment						1
Number of PACE participants \| item						6,700

Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Summary of Significant Accounting Policies
Property and equipment gross	$ 183,520		$ 135,364
Less accumulated depreciation and amortization	(42,005)		(32,870)
Balance as of end of period	141,515		102,494
Depreciation	8,800	$ 7,800
Land
Summary of Significant Accounting Policies
Property and equipment gross	11,980		8,580
Buildings and leasehold improvements
Summary of Significant Accounting Policies
Property and equipment gross	$ 104,727		79,514
Buildings and leasehold improvements \| Minimum
Summary of Significant Accounting Policies
Estimated Useful Lives	10 years
Buildings and leasehold improvements \| Maximum
Summary of Significant Accounting Policies
Estimated Useful Lives	40 years
Software
Summary of Significant Accounting Policies
Property and equipment gross	$ 12,355		11,387
Software \| Minimum
Summary of Significant Accounting Policies
Estimated Useful Lives	3 years
Software \| Maximum
Summary of Significant Accounting Policies
Estimated Useful Lives	5 years
Equipment and vehicles
Summary of Significant Accounting Policies
Property and equipment gross	$ 35,201		28,814
Equipment and vehicles \| Minimum
Summary of Significant Accounting Policies
Estimated Useful Lives	3 years
Equipment and vehicles \| Maximum
Summary of Significant Accounting Policies
Estimated Useful Lives	7 years
Construction in progress
Summary of Significant Accounting Policies
Property and equipment gross	$ 19,257		$ 7,069

Summary of Significant Accounting Policies - Capitated Revenues (Details)	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue percentage	100.00%	100.00%
Medicaid
Disaggregation of Revenue [Line Items]
Revenue percentage	53.00%	56.00%
Medicare
Disaggregation of Revenue [Line Items]
Revenue percentage	46.00%	43.00%
Private pay and other
Disaggregation of Revenue [Line Items]
Revenue percentage	1.00%	1.00%

Summary of Significant Accounting Policies - COVID-19 (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2021	Nov. 30, 2020
Summary of Significant Accounting Policies
Fund received, Covid 19	$ 2.0
Reimbursement amount allocated	$ 1.0	$ 1.0
Reimbursement amount recognized		$ 0.3	$ 0.7

Equity (Details) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
Equity (Details) - USD ($) $ in Thousands	Oct. 15, 2020	Jul. 27, 2020	Mar. 31, 2021	Mar. 31, 2021	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reduction in additional paid in capital			$ 323,127	$ 323,127	$ 36,338
Transaction costs		$ 22,600	$ 25,334	$ 25,334
Dividends		9,500
Investment in TCO Group Holdings, L.P
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Investment	$ 20,000
General and administrative expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Transaction costs		$ 13,100
Credit Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchase (in shares)		16,095,819
Repurchase		$ 77,600
Cancellation Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Corporate, general and administrative expense		42,200
Reduction in additional paid in capital		$ 32,400
2016 Incentive Plan \| Cancellation Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares cancelled (in shares)		16,994,975
Shares cancelled		$ 74,600

Variable Interest Entity (Details) $ in Millions	9 Months Ended
Variable Interest Entity (Details) $ in Millions	Mar. 31, 2021 USD ($)
PWD
Variable Interest Entity [Line Items]
Partnership interest (as a percent)	0.01%
Maximum exposure amount in VIE	$ 0.8
SH1
Variable Interest Entity [Line Items]
Partnership interest (as a percent)	0.01%

Variable Interest Entity - Schedule of Variable Interest Entity (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020	Mar. 18, 2019
Variable Interest Entity [Line Items]
Cash and cash equivalents	$ 201,527	$ 112,904	$ 9,000
Accounts receivable	44,356	46,312
Prepaid expenses and other	3,626	4,311
Property, plant and equipment, net	141,515	102,494
Deposits and other, net	3,611	3,003
Accounts payable and accrued expenses	33,223	28,875
Current portion of long-term debt	2,852	1,938
Long-term debt, net of debt issuance costs	72,415	210,432
SH1
Variable Interest Entity [Line Items]
Cash and cash equivalents	498	435
Accounts receivable	3	1
Prepaid expenses and other	13	7
Property, plant and equipment, net	10,143	10,501
Deposits and other, net	386	376
Accounts payable and accrued expenses	279	199
Current portion of long-term debt	39	38
Noncurrent liabilities	454	454
Long-term debt, net of debt issuance costs	$ 3,838	$ 3,901

Nonconsolidated Entities (Details)			9 Months Ended
Nonconsolidated Entities (Details)	Feb. 09, 2021 USD ($)	Mar. 18, 2019 USD ($) $ / shares	Mar. 31, 2021 USD ($) item $ / shares	Mar. 03, 2021 $ / shares	Jun. 30, 2020 USD ($) $ / shares
Nonconsolidated Entities
Number of equity method investments \| item			2
Cash		$ 9,000,000.0	$ 201,527,000		$ 112,904,000
Land		$ 4,200,000
Cash contributions			$ 20,000,000
Percentage of additional membership interest	0.10%	0.10%
Par value per share \| $ / shares			$ 0.001	$ 0.001	$ 0.001
Change in fair value of warrants	$ 2,300,000		$ 2,264,000
Gain on consolidation			$ 10,871,000
InnovAge Holding Corp.
Nonconsolidated Entities
Membership interest (as a percent)		59.90%
Percentage of investment acquired in joint venture		0.10%
Adventist Health System/West Joint Venture
Nonconsolidated Entities
Percentage of issued and outstanding equity interests		5.00%
Par value per share \| $ / shares		$ 0.001
Capital contributions		$ 25,000,000.0
Warrants right to purchase common stock	$ 15,000,000.0
Warrant exercise term	1 year
InnovAge California Pace-Sacramento, LLC
Nonconsolidated Entities
Cash contributions		$ 52,000
InnovAge California Pace-Sacramento, LLC \| Adventist Health System/West Joint Venture
Nonconsolidated Entities
Membership interest (as a percent)		26.41%
InnovAge California Pace-Sacramento, LLC \| Eskaton
Nonconsolidated Entities
Membership interest (as a percent)		13.69%
InnovAge California Pace-Sacramento, LLC \| Adventist Health System/West Joint Venture
Nonconsolidated Entities
Cash contributions		$ 5,800,000
InnovAge California Pace-Sacramento, LLC \| Eskaton
Nonconsolidated Entities
Cash contributions		$ 3,000,000.0

Nonconsolidated Entities - Summary of Fair Value of the Assets Acquired and Net Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jan. 01, 2021	Jun. 30, 2020
Assets:
Goodwill	$ 124,217		$ 116,139
InnovAge Sacramento
Assets:
Cash		$ 646
Accounts receivable		786
Property and equipment, net		30,667
Goodwill		8,078
Total Assets		40,177
Liabilities:
Accounts payable		530
Reported and estimated claims		330
Due to Medicaid and Medicare		77
Capital leases		428
Other liabilities		48
Total Liabilities		$ 1,413

Nonconsolidated Entities - Summary of Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Revenue:
Total revenues	$ 156,308	$ 144,770		$ 466,184	$ 414,700
Cost of operations:
Total cost of operations	161,674	131,796		489,189	383,937
The Company's interest in net income (loss)	$ (5,366)	$ 12,974		$ (23,005)	$ 30,763
InnovAge California Pace-Sacramento, LLC
Revenue:
Total revenues			$ 2,297
Less: members' interest			921
The Company's interest			1,376
Cost of operations:
Total cost of operations			4,538
Less: members' interest			1,820
The Company's interest			2,718
The Company's interest in net income (loss)			$ (1,342)

Goodwill and Other Intangible Assets (Details)			3 Months Ended	9 Months Ended
Goodwill and Other Intangible Assets (Details)	Jan. 01, 2021 USD ($)	Oct. 20, 2020 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 USD ($) item	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)
Goodwill and Other Intangible Assets
Goodwill			$ 124,217,000	$ 124,217,000		$ 116,139,000
Increase in goodwill	$ 8,100,000
Number of reporting units \| item				3
Impairment of goodwill				$ 0	$ 0
Definite-lived intangible assets			6,600,000	6,600,000		6,600,000
Accumulated amortization			1,900,000	1,900,000		$ 1,400,000
Amortization expense			$ 200,000		500,000
Payments to acquire intangible assets		$ 2,000,000.0		2,000,000
Intangible asset impairments				$ 0	$ 0

Leases - Assets Under Lease (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Operating Leased Assets [Line Items]
Equipment	$ 183,520		$ 183,520		$ 135,364
Less accumulated depreciation	(42,005)		(42,005)		(32,870)
Balance as of end of period	141,515		141,515		102,494
Rental expense	1,400	$ 1,500	3,500	$ 3,800
Equipment under capital leases
Operating Leased Assets [Line Items]
Equipment	13,777		13,777		9,845
Less accumulated depreciation	(6,848)		(6,848)		(4,829)
Balance as of end of period	$ 6,929		$ 6,929		$ 5,016

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Capital Leases Obligations
Amount Remaining in 2021	$ 713
2022	2,527
2023	2,468
2024	1,941
2025	1,169
Thereafter	144
Total	8,962
Less amount representing interest	1,114
Total minimum lease payments	7,848
Less current maturities	2,121
Noncurrent maturities	5,727
Operating Leases Minimum Lease Payments
Amount Remaining in 2021	866
2022	4,138
2023	4,410
2024	4,052
2025	3,592
Thereafter	13,704
Total	$ 30,762

Long Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Debt Instrument [Line Items]
Total debt	$ 77,377	$ 215,026
Less unamortized debt issuance costs	2,110	2,656
Less current maturities	2,852	1,938
Long-term debt, net of debt issuance costs	72,415	210,432
Revolving credit facility
Debt Instrument [Line Items]
Total debt	0	25,000
Senior secured term loan
Debt Instrument [Line Items]
Total debt	75,000	187,625
Convertible term loan
Debt Instrument [Line Items]
Total debt	$ 2,377	$ 2,401

Long Term Debt (Details) - USD ($) $ in Thousands					3 Months Ended	9 Months Ended
Long Term Debt (Details) - USD ($) $ in Thousands	Mar. 08, 2021	Mar. 07, 2021	Jul. 27, 2020	Sep. 01, 2015	Mar. 31, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	May 02, 2019	May 13, 2016
Debt Instrument [Line Items]
Loss on extinguishment of long-term debt						$ 8,494
Outstanding borrowings					$ 77,377	77,377	$ 215,026
Amortization of deferred financing costs						2,100
Total deferred financing costs					900	900		$ 400
Revolving credit facility
Debt Instrument [Line Items]
Loan amount					75,000	75,000
Outstanding borrowings					0	0	$ 25,000
Interest rate (as a percent)							3.94%
Remaining borrowing capacity					100,000	100,000
Revolving credit facility fee		0.50%
Senior secured term loan
Debt Instrument [Line Items]
Outstanding borrowings					75,000	75,000	$ 187,625
Convertible term loan
Debt Instrument [Line Items]
Outstanding borrowings					2,377	$ 2,377	$ 2,401
Interest rate (as a percent)				6.68%
Monthly principal and interest payments				$ 20
2016 Credit Agreement
Debt Instrument [Line Items]
Percentage of aggregate outstanding principal amount						0.25%
Debt extinguishment						$ 57,100
Loss on extinguishment of long-term debt						1,000
Modified debt					250,000	250,000
Outstanding borrowings					50,000	50,000
Total deferred financing costs					9,100	9,100
2016 Credit Agreement \| Revolving credit facility
Debt Instrument [Line Items]
Loan amount			$ 40,000						$ 30,000	$ 20,000
2016 Credit Agreement \| Senior secured term loan
Debt Instrument [Line Items]
Loan amount			300,000						190,000	$ 75,000
Interest rate (as a percent)							6.00%
2016 Credit Agreement \| Delayed draw term loan facility (DDTL)
Debt Instrument [Line Items]
Loan amount									$ 45,000
Termination of loan			$ 45,000
2021 Credit Agreement
Debt Instrument [Line Items]
Debt extinguishment					250,000
Loss on extinguishment of long-term debt					7,500
Modified debt					25,000	25,000
Outstanding borrowings					50,000	50,000
Total deferred financing costs					$ 2,100	$ 2,100
Prepayment fee (as a percent)						2.00%
Prepayment fee						$ 6,000
2021 Credit Agreement \| Revolving credit facility
Debt Instrument [Line Items]
Loan amount	$ 100,000
Revolving credit facility fee	0.25%
2021 Credit Agreement \| Senior secured term loan
Debt Instrument [Line Items]
Loan amount	$ 75,000
Percentage of aggregate outstanding principal amount	1.25%
Interest rate (as a percent)					1.94%	1.94%

Fair Value Measurements (Details) - USD ($)			9 Months Ended
Fair Value Measurements (Details) - USD ($)	Mar. 08, 2021	Aug. 07, 2018	Mar. 31, 2021	Mar. 31, 2020
Fair Value Measurements
Purchase price		$ 30,000,000.0
Contingent consideration		$ 20,000,000.0	$ 0
Contingent consideration paid	$ 20,000,000.0
Transfers into Level 3			0	$ 0
Transfers out of Level 3			$ 0	$ 0

Retirement Plans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Retirement Plans (Details) - USD ($) $ in Millions	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Employer match (percentage)			50.00%
Employee pay match (percentage)			4.00%
Matching contributions amount	$ 0.4	$ 0.4	$ 1.3	$ 1.3
Deferred Compensation Plan
Defined Benefit Plan Disclosure [Line Items]
Matching contributions amount	$ 0.1	$ 0.0	$ 0.1	$ 0.1

Stock-based Compensation - Equity Incentive Plan (Details) - shares	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Jul. 27, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Repurchase (in shares)	0		16,095,819
Contingent Performance-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares cancelled	8,497,488
2016 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized	17,836,636
Granted (in shares)		16,994,976
Expiration period	10 years
Repurchase (in shares)	16,095,819
Number of shares cancelled	16,994,976
2016 Equity Incentive Plan \| Time Vesting Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting	50.00%
2016 Equity Incentive Plan \| Contingent Performance-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting	50.00%
2016 Equity Incentive Plan \| Tranche One \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting	25.00%
2016 Equity Incentive Plan \| Tranche One \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting	62.50%

Stock-based Compensation - Time Vesting Awards (Details) - Time vesting awards - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
Number of Options
Outstanding balance, June 30, 2020	8,497,488
Cancelled	(8,497,488)
Outstanding balance, March 31, 2021		8,497,488
Option Price Range
Option price lower limit	$ 1.00	$ 1.00
Option price upper limit	2.35	2.35
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Outstanding balance, June 30, 2020		$ 1.26
Cancelled	$ 1.26
Average remaining term of outstanding awards (in years)		6 years 9 months 3 days
Average remaining term of cancelled awards (in years)	6 years 9 months 3 days

Stock-based Compensation - Contingent Performance-based Awards (Details) - Contingent Performance-Based Awards - $ / shares	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020
Number of Options
Outstanding balance, June 30, 2020	8,497,488
Cancelled	(8,497,488)
Outstanding balance, March 31, 2021		8,497,488
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Outstanding balance, June 30, 2020		$ 0.78
Cancelled	$ 0.78
Average remaining term of outstanding awards (in years)		6 years 9 months 3 days
Average remaining term of cancelled awards (in years)	6 years 9 months 3 days

Stock-based Compensation - Profits Interests (Details) - 2020 Equity Incentive Plan - $ / shares	6 Months Ended	9 Months Ended
	Dec. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized		16,162,177
Profits interests granted	13,009,137	13,009,137	0
Hurdle value per unit		$ 5.49

Stock-based Compensation - Profits Interests Transactions and Number of Units Outstanding (Details)	9 Months Ended
	Mar. 31, 2021 $ / shares shares
Time Vesting Units
Number of Units
Granted \| shares	6,686,568
Forfeited \| shares	(99,307)
Outstanding balance, March 31, 2021 \| shares	6,587,261
Weighted-Average Grant Date FV
Granted \| $ / shares	$ 1.28
Forfeited \| $ / shares	1.17
Outstanding balance, March 31, 2021 \| $ / shares	$ 1.28
Performance Vesting Units
Number of Units
Granted \| shares	6,322,569
Forfeited \| shares	(99,307)
Outstanding balance, March 31, 2021 \| shares	6,223,262
Weighted-Average Grant Date FV
Granted \| $ / shares	$ 0.57
Forfeited \| $ / shares	0.44
Outstanding balance, March 31, 2021 \| $ / shares	$ 0.57

Stock-based Compensation - Monte Carlo Option Pricing Model (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Mar. 31, 2021 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 11.1
Profits Interests Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	44.00%
Expected life (years) - Time vesting units	1 year 9 months 18 days
Interest rate	0.16%
Dividend yield	0.00%
Weighted-average fair values \| $ / shares	$ 1.28
Fair value of underlying stock \| $ / shares	$ 5.49
Time Vesting Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 7.5
Weighted-average period (in years)	3 years 6 months
Performance Vesting Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 3.6

Stock-based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 530	$ 135	$ 46,489	$ 407
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense		$ 135	45,387	$ 407
Profits Interests Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 530		$ 1,102

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Earnings per Share
Net income (loss) attributable to InnovAge Holding Corp.	$ (10,510)	$ 8,138	$ (50,460)	$ 14,181
Weighted average common shares outstanding (basic)	121,324,980	132,616,431	119,619,806	132,616,431
EPS (basic)	$ (0.09)	$ 0.06	$ (0.42)	$ 0.11
Dilutive Shares		1,751,571		1,176,554
Weighted average common shares outstanding (diluted)	121,324,980	134,368,002	119,619,806	133,792,985
EPS (diluted)	$ (0.09)	$ 0.06	$ (0.42)	$ 0.11

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Millions		9 Months Ended	12 Months Ended
	Jul. 27, 2020	Mar. 31, 2021	Jun. 30, 2020
Treasury Stock.
Repurchase (in shares)	16,095,819	0
Treasury stock cost per share (in dollars per share)	$ 4.82	$ 0.0	$ 1.89
Treasury stock, value	$ 77.6
Treasury stock shares	16,095,819	0

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Taxes
Income tax provision	$ (4,264)	$ 2,867	$ 5,159	$ 4,954
Effective tax rate (as a percent)	28.20%	26.40%	11.20%	26.40%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Segment Reporting (Details)	9 Months Ended
Segment Reporting (Details)	Mar. 31, 2021 Center item division segment
PACE
Segment Reporting Information [Line Items]
Number of operating segments	3
Number of reportable segments	1
Number of PACE participants \| item	6,700
Percentage of obligation for health care costs	100.00%
Operating segments
Segment Reporting Information [Line Items]
Number of operating segments	5
Operating segments \| PACE
Segment Reporting Information [Line Items]
Number of geographic divisions \| division	3
Number of reportable segments	1
Number of PACE participants \| item	6,700
Number of PACE centers \| Center	18
Operating segments \| Others
Segment Reporting Information [Line Items]
Number of operating segments	2

Segment Reporting - Operating Results (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Total Revenue	$ 156,308	$ 144,770	$ 466,184	$ 414,700
External provider costs	75,389	71,022	224,215	204,387
Cost of care, excluding depreciation and amortization	39,565	39,285	115,922	114,465
Equity loss		(163)	(1,343)	(203)
Other operating expenses (income)	19,222	(99)	18,211	(250)
Interest expense, net	4,876	2,361	17,061	11,287
Loss on extinguishment of debt			(8,494)
Gain on equity method investment	(10,871)		(10,871)
Other expense (income)	(2,267)	244	(2,222)	(735)
Income (Loss) Before Income Taxes	(15,126)	10,857	(45,896)	18,741
Capitation revenue
Segment Reporting Information [Line Items]
Total Revenue	155,835	144,174	464,294	412,724
Other service revenue
Segment Reporting Information [Line Items]
Total Revenue	473	596	1,890	1,976
PACE
Segment Reporting Information [Line Items]
Gain on equity method investment	(10,871)
Operating segments
Segment Reporting Information [Line Items]
Total Revenue	156,308	144,770	466,184	414,700
External provider costs	75,389	71,022	224,215	204,387
Cost of care, excluding depreciation and amortization	39,565	39,285	115,922	114,465
Center Level contribution Margin	41,354	34,463	126,047	95,848
Overhead Costs	24,187	18,656	120,236	56,822
Depreciation and Amortization	3,311	2,769	9,262	8,310
Equity loss		163	1,343	203
Other operating expenses (income)	19,222	(99)	18,211	(250)
Interest expense, net	4,876	2,361	17,061	11,287
Loss on extinguishment of debt	13,488		14,479
Gain on equity method investment			(10,871)
Other expense (income)	2,267	(244)	2,222	735
Income (Loss) Before Income Taxes	(15,126)	10,857	(45,896)	18,741
Operating segments \| Capitation revenue
Segment Reporting Information [Line Items]
Total Revenue	155,835	144,174	464,294	412,724
Operating segments \| Other service revenue
Segment Reporting Information [Line Items]
Total Revenue	473	596	1,890	1,976
Operating segments \| PACE
Segment Reporting Information [Line Items]
Total Revenue	155,788	144,118	464,507	411,612
External provider costs	75,389	71,022	224,215	204,387
Cost of care, excluding depreciation and amortization	38,867	38,559	113,611	111,021
Center Level contribution Margin	41,532	34,537	126,681	96,204
Overhead Costs	24,217	18,614	120,249	56,846
Depreciation and Amortization	3,181	2,619	8,901	7,525
Equity loss		163	1,343	201
Other operating expenses (income)	19,222	(99)	18,211	(252)
Interest expense, net	4,824	2,317	16,919	11,025
Loss on extinguishment of debt	13,488		14,479
Gain on equity method investment			(10,871)
Other expense (income)	2,267	(244)	2,222	673
Income (Loss) Before Income Taxes	(14,796)	11,167	(44,772)	20,186
Operating segments \| PACE \| Capitation revenue
Segment Reporting Information [Line Items]
Total Revenue	155,835	144,174	464,294	412,724
Operating segments \| PACE \| Other service revenue
Segment Reporting Information [Line Items]
Total Revenue	(47)	(56)	213	(1,112)
Operating segments \| Others
Segment Reporting Information [Line Items]
Total Revenue	520	652	1,677	3,088
Cost of care, excluding depreciation and amortization	698	726	2,311	3,444
Center Level contribution Margin	(178)	(74)	(634)	(356)
Overhead Costs	(30)	42	(13)	(24)
Depreciation and Amortization	130	150	361	785
Equity loss				2
Other operating expenses (income)				2
Interest expense, net	52	44	142	262
Other expense (income)				62
Income (Loss) Before Income Taxes	(330)	(310)	(1,124)	(1,445)
Operating segments \| Others \| Other service revenue
Segment Reporting Information [Line Items]
Total Revenue	$ 520	$ 652	$ 1,677	$ 3,088

Related-party (Details) - USD ($)	6 Months Ended	9 Months Ended
Related-party (Details) - USD ($)	Dec. 31, 2020	Mar. 31, 2021	Jun. 30, 2020
Related Party Transaction [Line Items]
Revenue from related parties		$ 35,000
Deposits and other
Related Party Transaction [Line Items]
Loans and leases receivable, related parties		$ 700,000	$ 600,000
Other service revenue
Related Party Transaction [Line Items]
Revenue from related parties	$ 300,000