Starling Oncology, Inc.
For the period ended Mar 31, 2025. Filed May 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
STLN$3.62-46.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001799191-24-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001628280-25-025507
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 158 previous paragraphs and 143 current paragraphs.
93 unchanged; 21 reworded; 29 added; 36 removed; 8 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
The Oncology Institute, Inc. (“TOI”), originally founded in 2007, is a leading, national platform delivering integrated direct care and cost management to patients and payors who are experiencing or managing members undergoing treatment for cancer and other complex medical conditions.
Current report
Through wholly-owned subsidiaries and affiliated entities, TOI operates combined community clinics and infusion suites staffed with providers who administer latest-generation cancer treatments including chemotherapy, immunotherapy, oncolytics, and radiation oncology. Additionally, TOI provides coordinated case management, drug formulary management, and fully-delegated networks of care providers, all of which we use to drive improved treatment outcomes at the lowest possible cost to our patients and payors. Additionally, TOI operates a specialty pharmacy that includes both in-office and mail-order dispensing for complementary oral and self-injectable medications taken by our patients concurrent with their in-office cancer therapies. Given the scale, breadth, and depth of our oncological expertise, TOI also contributes significantly to clinical research in the fields of oncology, hematology, and supportive medications and devices.
Current report
The Company has 121 oncologists and mid-level professionals across 67 clinic locations located within five states: California, Florida, Arizona, Oregon and Nevada. The Company has contractual relationships with multiple payors, serving Medicare, including Medicare Advantage, Medi-Cal, and commercial patients.
Current report
The increase in patient services revenue was primarily due to a 1.4% increase in FFS revenue as well as a 0.8% increase in capitation revenue due to new capitation contracts and net new membership in existing contracts that more than offset two terminated contracts, offset by a 1.1% decrease in profit-sharing contract revenue.
Current report
The decrease in selling, general and administrative expense was primarily driven by a decrease in share-based compensation expense of 64.3%, a decrease of non-clinical payroll of 3.4%, a decrease in professional fees of 0.4%, and a decrease in insurance of 0.6%, offset by a 2.6% increase to office expenses and supplies related to the continued growth of our business.
Current report
Other Non-Operating Expense (Income)
Current report
The increase in interest expense was primarily the result of a prepayment related to the Senior Secured Convertible Note in which the Company recognized a loss of extinguishment of debt of $2,900 during the first quarter of 2025, offset by accretion related to marketable treasury securities.
Current report
•Tax payments and penalties
Current report
The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. In connection with the preparation of the condensed consolidated financial statements for the three months ended March 31, 2025, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to its ability to continue as a going concern within one year after the date of the issuance of such financial statements. The Company had cash and cash equivalents of $39,739 and an accumulated deficit of $230,398 at March 31, 2025, and a net loss of $19,585 and net cash used in operating of $4,988 for the three months ended March 31, 2025. In February 2025, the Company entered into an Amendment to the Facility Agreement (see Note 11 - Debt) in which the Company made a partial prepayment of approximately $20,000 together with accrued and unpaid interest. Among other items, the Amendment provided for the removal of the financial covenant that required the Company to hold at least $40,000 of cash and cash equivalents in accounts that are subject to control agreements in favor of the Agent. Additionally, on March 24, 2025, the Company entered into a securities purchase agreement for a private placement that resulted in gross proceeds of approximately $16,500 to the Company before deducting placement agent fees and offering expenses (see Note 13 - Stockholders' Equity). Additionally, the Company's lender and existing investor, entered into an exchange agreement, in which approximately $4,100 aggregate principal amount of the Company's senior secured convertible notes was exchanged for common-equivalent preferred stock and warrants for common stock.
Current report
The Company has also taken a number of other actions to increase cash flow. As one of our strategic priorities in 2024 and beyond, the Company implemented an initiative to eliminate cash burn. Due to efforts towards working capital management that saw improvements across receivables, inventory, and payables, the Company was able to improve cash flow from operations of approximately $9,800 from the fourth quarter of 2024 to the current quarter. Additionally, we generated an 11% reduction in SG&A expenses compared to the prior year same quarter directly as a result of our ongoing efforts to streamline operations, improve efficiency, and optimize our overhead resourcing.
Current report
Accordingly, the Company has concluded that it will have sufficient liquidity to fund its operations for at least one year from the date these consolidated financial statements are issued.
Current report
Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can be no assurance that such sources will be sufficient to satisfy its liquidity requirements in the future. If the Company cannot generate or obtain needed funds, it might be forced to make substantial reductions in its operating and capital expenses or pursue restructuring plans, which could adversely affect its business operations and ability to execute its current business strategy.
Current report
•Increase in amortization of debt issuance cost and debt discount of $3,315 due to the decrease of the convertible note principal in connection with the debt amendment and exchange agreement;
Current report
Net cash provided by investing activities decreased $19,590 for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to the increase in sales of marketable securities of $19,998 during the same period in the prior year, which did not occur in the current quarter.
Current report
Net cash used in financing activities increased $3,802 for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to principal payments on the convertible note of $20,000, partially offset by proceeds from the private placement offering of $15,359 during the three months ended March 31, 2025.
Current report
Critical Accounting Policies and Estimates
Current report
Our significant accounting policies are more fully described in the notes to our unaudited condensed consolidated financial statements elsewhere in this Quarterly Report on Form 10-Q. We believe that the following accounting policies reflects the most critical judgments and estimation uncertainty used in the preparation of our Condensed Consolidated Financial Results.
Current report
Income Taxes
Current report
The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse.
Current report
A valuation allowance is required when there is significant uncertainty as to whether certain deferred tax assets can be realized. The ability to realize deferred tax assets is dependent upon our ability to generate sufficient taxable income within the carryforward periods provided for in the tax law for each tax jurisdiction. We have considered the following possible sources of taxable income when assessing the realization of our deferred tax assets:
Current report
•future reversals of existing taxable temporary differences;
Current report
•future taxable income or loss, exclusive of reversing temporary differences and carryforwards;
Current report
•tax-planning strategies; and
Current report
•taxable income in prior carryback years.
Current report
We will continue to reevaluate the continued need for a valuation allowance. Relevant factors include:
Current report
•current financial performance;
Current report
•our ability to meet short-term and long-term financial and taxable income projections;
Current report
•the overall market environment; and
Current report
•the volatility and trends in the industry in which we operate.
Removed paragraphs (36)
Previous report
The Company is a leading value-based oncology company that manages community-based oncology practices for the Company and for independent oncology practices that together serve patients at 86 clinic locations across 14 markets andfour states throughout the United States. Additionally, the Company has commenced operations in Oregon in October 2024. Our community-based oncology practices are staffed with 131 oncologists andadvanced practice providers. 72 of these clinics are staffed with 120 providers employed by our affiliated physician-owned professional corporations, referred to as the "TOI PCs", which provided care for more than 64,000 patients in 2024 and managed a population of approximately 1.9 million patients under value-based agreements as of September 30, 2024. The Company also provides management services on behalf of 14 clinic locations owned by independent oncology practices. The Company's mission is to heal and empower cancer patients through compassion, innovation, and state-of-the-art medical care.
Previous report
Operationally, the Company’s medical centers provide a complete suite of medical oncology services including: physician services, in-house infusion and pharmacy, clinical trials, radiation, educational seminars, support groups, counseling, and 24/7 patient assistance. Many of our services, such as managing clinical trials, palliative care programs and stem cell transplants, are traditionally accessed through academic and tertiary care settings, while the TOI PCs bring these services to patients in a community setting. As scientific research progresses and more treatment options become available, cancer care is shifting from acute care episodes to chronic disease management. With this shift, it is increasingly important for high-quality, high-value cancer care to be available in a local community setting to all patients in need.
Previous report
As a value-based oncology company, the Company seeks to deliver both better quality care and lower cost of care. The Company works to accomplish this goal by reducing wasteful, inefficient or counterproductive care that drives up costs but does not improve outcomes. The Company believes payors and employers are aligned with the value-based model due to its enhanced access, improved outcomes, and lower costs. Patients under the Company's affiliated providers’ care can benefit from evidence-based and personalized care plans, gain access to sub-specialized care in convenient community locations, and lower out-of-pocket costs. The Company believes its affiliated providers enjoy the stability and predictability of a large multi-state practice, are not incentivized or pressured to overtreat when it may be inconsistent with a patient’s goals of care, and can focus on practicing outstanding evidence-based medicine, rather than business building.
Previous report
The decrease in patient services revenue was primarily due to a 1.6% decrease in FFS revenue and a 5.6% decrease in capitation revenue during the third quarter of 2024. This was primarily due to fluctuations in members and loss of contract. During the three months ended September 30, 2024, we signed an additional 3 capitated contracts across 2 states, including both medical and radiation oncology services. We added a second capitation contract in Florida which is direct to a health plan partner, as well as our first capitation contract in Oregon. Year to date, we have now signed 13 new capitation contracts across the organization. We also achieved certification to begin radio-pharmaceutical therapy in our California radiation oncology practice. This will be an important driver of growth and margin for our radiation oncology business going forward, and we are one of the few community-based practices on the West Coast to offer this service which traditionally occurs in the hospital setting. We are targeting a December 2024 go-live for this important new therapeutic service at TOI. With the recent execution of our capitation contracts, we expect significant improvement in our net loss in Q4 and beyond. We are well-positioned to handle substantial growth in the markets we serve without needing to add more providers or increase overhead costs.
Previous report
The increase in dispensary revenue was primarily due to a 86.5% increase in the number of prescriptions filled primarily related to the California pharmacy, offset by a 3.5% decrease in the average revenue per fill. We are continuing to set new monthly fill records and now project revenue of more than $75 million from our California Pharmacy.
Previous report
The increase in patient services cost was primarily due to a 4.8% increase in clinical payroll costs due to growth and provider count offset by a 4.0% decrease in intravenous drug costs, as well as a 0.9% decrease in medical supply cost.
Previous report
Intravenous drug costs are in line with normal seasonality and we expect improvement in the margins as the year progresses as additional rebates are achieved through volume-based tiering in our contractual pricing.
Previous report
The goodwill impairment charges were $0 during the three and nine months ended September 30, 2024, compared to $0 and $16,867 during the three and nine months ended September 30, 2023. See Note 18 for additional detail.
Previous report
The decrease in selling, general and administrative expense was primarily driven by a 12.2% decrease in salaries and benefits, a 2.1% decrease in business development expenses, offset by a 8.8% increase in operational expenses due to the growth of CA pharmacy business. This decrease is a direct result of our ongoing efforts to streamline operations, improve efficiency, and optimize our cost structure. We are confident that these cost-management efforts, combined with our robust top-line growth, will continue to strengthen our financial performance and position in the quarters ahead.
Previous report
The decrease in selling, general and administrative expense was primarily driven by a 7.9% decrease in salaries and benefits, a 2.3% decrease in business development expenses, offset by a 7.0% increase in operational expenses due to the growth of CA pharmacy business.
Previous report
Other Expenses (Income)
Previous report
The increase in net interest expense for the three and nine months ended September 30, 2024 was the result of the decrease in interest income related to marketable treasury securities.
Previous report
The increase in change in fair value of liabilities was primarily due to a $256 reduction in gain as a result of the decrease in fair value of derivative warrant and conversion option derivative liabilities for the nine months ended September 30, 2024.
Previous report
Other, net
Previous report
The change in other, net was primarily due to unrealized gains on marketable securities compared to the same period in 2023.
Previous report
•Income tax expense,
Previous report
•Goodwill impairment charges
Previous report
(2)Practice acquisition-related costs were comprised of consulting and legal fees incurred to perform due diligence, execute, and integrate acquisitions of various oncology practices.
Previous report
(2)Practice acquisition-related costs were comprised of consulting and legal fees incurred to perform due diligence, execute, and integrate acquisitions of various oncology practices.
Previous report
To date, the Company has financed its operations principally through debt facilities, issuances of equity securities and payments received from various payors. As of September 30, 2024, the Company had $47,402 of cash and cash equivalents.
Previous report
The Company expects to incur operating losses and generate negative cash flows from operations for the foreseeable future due to the investments management intends to continue to make in expanding operations and sales and marketing and due to additional general and administrative expenses management expects to incur in connection with operating as a public company. As a result, the Company may require additional capital resources to execute strategic initiatives to grow the business.
Previous report
Management believes that its cash and cash equivalents on hand will be sufficient to fund the Company's operating and capital needs for at least the next 12 months. Management's assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. The Company's actual results could vary because of, and its future capital requirements will depend on, many factors, including our growth rate, the timing and extent of spending to open or acquire new clinics and expand into new markets and the expansion of sales and marketing activities. The Company may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. The Company has based this estimate on assumptions that may prove to be wrong, and the Company could use its available capital resources sooner than management currently expects. The Company may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to management or at all. If unable to raise additional capital when desired, or if the Company cannot expand operations or otherwise capitalize on business opportunities because of the Company's lack of sufficient capital, the Company's business, results of operations, and financial condition would be adversely affected.
Previous report
Outside of the aforementioned, and any transactions made in the ordinary course of business, there have been no significant changes to our material cash requirements as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous report
•Goodwill impairment of $16,867 for the nine months ended September 30, 2023 that did not occur in the current year,
Previous report
•Cash used by inventories decreased $6,485 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 due to reduction in inventory days on hands.
Previous report
•Cash used by prepaid and other current assets increased $2,736 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily due to timing.
Previous report
We have implemented targeted initiatives to optimize our working capital going forward. We are improving our receivables management and are in the process of renegotiating payment terms with key suppliers. The goal is to reduce our days sales outstanding (DSO), while also extending our days payable outstanding (DPO) through ongoing negotiations with our vendors. These efforts are for long and short-term improvement in cash flow from operations and improving liquidity.
Previous report
Net cash provided by investing activities decreased $3,047 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 due to a $9,019 decrease in net sales of marketable securities, offset by a $5,972 decrease in cash used in practice acquisitions in and purchases of property and equipment.
Previous report
Net cash used in financing activities decreased $1,738 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily due to a decrease of $2,008 related to payments made for financing of insurance payments and a $1,019 decrease in common stock repurchases offset by a $1,413 increase of deferred consideration liability payments during the nine months ended September 30, 2024.
Previous report
Critical Accounting Policies
Previous report
Leases
Previous report
The Company evaluates whether an arrangement is or contains a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of an identified asset for a period of time in exchange for consideration. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. The Company applied certain practical expedients permitted under the transition guidance, including the package of practical expedients, which permits the Company not to reassess its prior conclusions related to lease identification, lease classification, and initial direct costs capitalization. The Company solely acts as a lessee and its leases primarily consist of operating leases for its real estate in the states in which the Company operates. The Company has other operating or financing leases for various clinical and non-clinical equipment.
Previous report
Generally, upon the commencement of a lease, the Company will record a right-of-use (“ROU”) asset and lease liability. An ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company uses its incremental borrowing rate, based on the information available at the later of adoption, inception, or modification in determining the present value of lease payments. ROU assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components as a single lease component for all underlying classes of assets. As a result, the fixed payments that would otherwise be allocable to the non-lease components are account for as lease payments and included in the measurement of the Company’s right-of-use asset and lease liability.
Previous report
Lease arrangements with an initial term of 12 months or less are considered short-term leases and are not recorded on the balance sheet. The short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The lease term includes any period covered by renewal options available that the Company is reasonably certain to exercise and any options to terminate the lease that the Company is not reasonably certain to exercise.
Previous report
Direct Costs of Sales
Previous report
Direct cost of sales primarily consists of wages paid to clinical personnel and other health professionals, oral and IV drug costs, and other medical supplies used to provide patient care. Costs for clinical personnel wages are expensed as incurred and costs for inventory and medical supplies are expensed when used, generally by applying the specific identification method.
Reworded paragraphs (21)
Previous wording
Selling, general and administrative expenses include employee-related expenses, including both clinic and field support staff as well as central administrative and corporate staff. These expenses include salaries and related costs and stock-based compensation for our executives and physicians. The Company's selling, general and administrative expenses also include occupancy costs, technology infrastructure, operations, clinical and quality support, finance, legal, human resources, and business development. Following the consummation of the Business Combination, general and administrative expenses have increased, and the Company expects continued increases over time, due to the additional legal, accounting, insurance, investor relations and other costs that the Company incurs as a public company, as well as other costs associated with continuing to grow the business. While the Company expects its selling, general and administrative expenses to increase in absolute dollars in the foreseeable future. Such expenses are on average expected to decrease as a percentage of revenue over the long term.
Current wording
Selling, general and administrative expenses include employee-related expenses, including both clinic and field support staff as well as central administrative and corporate staff. These expenses include salaries and related costs and stock-based compensation for our executives and physicians. The Company's selling, general and administrative expenses also includes occupancy costs, technology infrastructure, operations, clinical and quality support, finance, legal, human resources, and business development. Following the consummation of the Business Combination, general and administrative expenses have increased, and the Company expects continued increases over time, due to the additional legal, accounting, insurance, investor relations and other costs that the Company incurs as a public company, as well as other costs associated with continuing to grow the business. While the Company expects its selling, general and administrative expenses to increase in absolute dollars in the foreseeable future. such expenses are on average expected to decrease as a percentage of revenue over the long term.
Previous wording
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Comparison of the Three Months Ended March 31, 2025 and 2024
Previous wording
The increase in dispensary revenue was primarily due to a 82.5% increase in the number of prescriptions filled primarily related to the California pharmacy, offset by a 4.9% decrease in the average revenue per fill.
Current wording
The increase in dispensary revenue was primarily due to a 32.2% increase in the number of fills due to the continued growth in the attachment of prescriptions to our patient visits, offset by a 6.0% decrease in the average revenue per fill.
Previous wording
The increase in clinical trials and other revenue was primarily due to an increase in other revenue compared to the three months ended September 30, 2023.
Current wording
The decrease in clinical trials and other revenue was due to a decrease in both clinical trials and other revenue, compared to the three months ended March 31, 2024. The decrease in other revenue was primarily due to lower gain-sharing under certain shared savings arrangements TOI is party to.
Previous wording
The increase in patient services cost was primarily due to a 5.1% increase in clinical payroll costs due to growth and provider count as well as a 1.5% increase in intravenous drug costs, driven by the Company's patient mix and volume.
Current wording
The decrease in patient services cost was primarily due to a 1.7% decrease in intravenous drug costs, driven by the Company's patient mix and volume, as well as 2.6% decrease in clinical payroll costs as the Company adjusts physician compensation to better match performance, as well as increases use of advanced practice providers which results in a more efficient labor mix.
Previous wording
The increase in dispensary cost was primarily due to a 86.5% increase in the number of prescriptions filled and by a 2.0% increase in the average cost of the prescriptions filled.
Current wording
The increase in dispensary cost was primarily due to a 32.2% increase in the number of prescriptions filled offset by a 8.1% decrease in the average cost of the prescriptions filled.
Previous wording
The decrease in change in fair value of liabilities was primarily due to no change in the fair value of conversion option derivative liabilities for the three months ended September 30, 2024, compared to $1,284 loss for the three months ended September 30, 2023.
Current wording
The increase in the fair value of liabilities was primarily due to a $3,309 unfavorable increase in the fair value of conversion option derivative liabilities for the three months ended March 31, 2025, compared to zero change in the fair value of the derivative warrant and conversion option derivative liabilities for the three months ended March 31, 2024.
Previous wording
The following tables provide a reconciliation of net loss, the most closely comparable GAAP financial measure, to Adjusted EBITDA:
Current wording
The following tables provide a reconciliation of net income (loss), the most closely comparable GAAP financial measure, to Adjusted EBITDA:
Previous wording
(1)During the three months ended September 30, 2024, non-cash addbacks were primarily comprised of non-cash rent of $104 offset by net credit loss of $2. During the three months ended September 30, 2023, non-cash addbacks were primarily comprised of net bad debt expense of $32 offset by non-cash rent of $45.
Current wording
(1)During the three months ended March 31, 2025, non-cash addbacks was primarily comprised of non-cash rent of $163. During the three months ended March 31, 2024, non-cash addbacks were primarily comprised of net credit losses of $12 and non-cash rent of $(51).
Previous wording
(3)Deferred consideration payments for practice acquisitions that are contingent upon the seller’s future employment at the Company.
Current wording
(2)Deferred consideration payments for practice acquisitions that are contingent upon the seller’s future employment at the Company.
Previous wording
(4)Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees, and related to certain non-recurring advisory projects during the three months ended September 30, 2024. During the three months ended September 30, 2023, these fees related to non-recurring advisory projects, including software implementations.
Current wording
(3)Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees, and related to certain advisory projects during the three months ended March 31, 2025. During the three months ended March 31, 2024, these fees related to advisory projects and software implementations.
Previous wording
(5)Infrastructure and workforce costs were comprised of recruiting expenses to build out corporate infrastructure of $218 and $701, software implementation fees of $0 and $37, severance expenses resulting from cost rationalization programs of $67 and $633, temporary labor of $142 and $310 and non-recurring legal fees related to infrastructure build out of $948 and $2 during the three months ended September 30, 2024 and 2023, respectively.
Current wording
(4)Infrastructure and workforce costs were comprised of recruiting expenses to build out corporate infrastructure of $277 and $376, software implementation fees of $0 and $16, severance expenses resulting from cost rationalization programs of $140 and $10, temporary labor of $180 and $252 and legal fees related to infrastructure build out of $782 and $529 during the three months ended March 31, 2025 and 2024, respectively.
Previous wording
(6)Transaction costs incurred during the three months ended September 30, 2023 were comprised of consulting, legal, administrative and regulatory fees associated with non-recurring due diligence projects.
Current wording
(5)Transaction costs incurred during the three months ended March 31, 2024 were comprised of consulting, legal, administrative and regulatory fees associated with non-recurring due diligence projects.
Previous wording
Significant changes impacting net cash and cash equivalents used in operating activities for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was due to $12,833 reduction in net loss and the following changes to the non-cash net loss adjustments:
Current wording
Significant changes impacting net cash and cash equivalents used in operating activities for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 were as follows:
Previous wording
•A $256 reduction in gains related to the change in the fair value of liabilities for the nine months ended September 30, 2024;
Current wording
•Increase in loss of $3,352 related to the change in the fair value of liabilities for the three months ended March 31, 2025 with no change occurring in the same quarter prior year;
Previous wording
•Share based compensation for the nine months ended September 30, 2024 decreased by $3,868 compared to the nine months ended September 30, 2023;
Current wording
•Share based compensation for the three months ended March 31, 2025 decreased by $2,629 compared to the three months ended March 31, 2024;
Previous wording
•Cash used by accounts receivable increased $3,485 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 due to timing and the growth in the Company's pharmacy business;
Current wording
•Cash used by accounts receivable increased $15,415 for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to improvements in revenue cycle management in the current quarter and overall delays in the collection of accounts receivable in the same quarter prior year; and
Previous wording
•Cash provided by accounts payable, accrued expenses and income taxes payable increased $8,751 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily due to the timing of the payment activities; and
Current wording
•Cash provided by accounts payable, accrued expenses and income taxes payable decreased by $4,101 for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to working capital management; and
Previous wording
The Company's material cash requirements for the following five years consist of debt servicing requirements, operating leases and deferred acquisition and contingent consideration. Additionally, the Company is subject to certain outside claims and litigation arising out of the ordinary course of business, however, no such litigation requires future cash expenditure as of September 30, 2024.
Current wording
The Company's material cash requirements for the following five years consist of debt servicing requirements, operating leases and other miscellaneous administrative expenses. Additionally, the Company is subject to certain outside claims and litigation arising out of the ordinary course of business, however, no such litigation requires future cash expenditure as of March 31, 2025.
Previous wording
(2) Other is comprised of finance leases.
Current wording
(2) Other is comprised of finance leases and D&O insurance premiums.
Previous wording
The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.
Current wording
Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ significantly from these estimates under different assumptions or conditions.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
The decrease in patient services revenue was primarily due to a 1.7% decrease in FFS revenue.
Previous report — wording carried elsewhere
The increase in clinical trials and other revenue was primarily due to an increase in other revenue compared to the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
The increase in dispensary cost was primarily due to a 82.5% increase in the number of prescriptions filled and by a 1.4% increase in the average cost of the prescriptions filled.
Previous report — wording carried elsewhere
(1)During the nine months ended September 30, 2024, non-cash addbacks were primarily comprised of non-cash rent of $261, offset by net reversal of bad debt recovery of $51. During the nine months ended September 30, 2023, non-cash addbacks were primarily comprised of non-cash rent of $120 and net credit losses of $31 .
Previous report — wording carried elsewhere
(3)Deferred consideration payments for practice acquisitions that are contingent upon the seller’s future employment at the Company.
Previous report — wording carried elsewhere
(4)Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees, and related to certain non-recurring advisory projects during the nine months ended September 30, 2024. During the nine months ended September 30, 2023, these fees related to non-recurring advisory projects, including software implementations.
Previous report — wording carried elsewhere
(5) Infrastructure and workforce costs were primarily comprised of non-recurring legal fees related to infrastructure build out of $3,307 and 2,035, recruiting expenses to build out corporate infrastructure of $930 and $1,593, severance expenses resulting from cost rationalization programs of $219 and $898, and temporary labor of $468 and $1,217 during the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
(6)Transaction costs incurred during the nine months ended September 30, 2024 were comprised of consulting, legal, administrative and regulatory fees associated with non-recurring due diligence projects.