Audit 348744

Title: Basis of Presentation and Summary of Accounting Policies Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes federal grant activity of Meritus Health, Inc. and subsidiaries (the Company) and is presented on the accrual basis of accounting. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, or 45 CFR Part 75 Appendix IX, Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes federal grant activity of Meritus Health, Inc. and subsidiaries (the Company) and is presented on the accrual basis of accounting. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, or 45 CFR Part 75 Appendix IX, Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the consolidated financial statements.

Title: Indirect Cost Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes federal grant activity of Meritus Health, Inc. and subsidiaries (the Company) and is presented on the accrual basis of accounting. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, or 45 CFR Part 75 Appendix IX, Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Company has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.