The Oncology Institute(US:TOI)2025-05-14 20:23Part I – Financial Information Item 1. Financial Statements (unaudited) The unaudited condensed consolidated financial statements for The Oncology Institute, Inc. (TOI) as of March 31, 2025, and for the three months ended March 31, 2025 and 2024. For the first quarter of 2025, the company reported total revenues of $104.4 million, an increase from $94.7 million in the prior year period, and a net loss of $19.6 million, slightly improved from a net loss of $19.9 million in Q1 2024. Total assets decreased to $164.0 million from $172.7 million at year-end 2024, while total liabilities also decreased. The company secured additional liquidity through a private placement and a debt amendment during the quarter Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $164.0 million, a decrease from $172.7 million at December 31, 2024. This was driven by a decrease in cash and cash equivalents from $49.7 million to $39.7 million. Total liabilities decreased to $158.9 million from $169.1 million, primarily due to a reduction in long-term debt. Total stockholders' equity increased from $3.6 million to $5.1 million Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $39,739 | $49,669 | | Accounts receivable, net | $49,320 | $48,335 | | Total current assets | $106,820 | $112,435 | | Total assets | $164,002 | $172,717 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $59,541 | $52,249 | | Long-term debt, net | $73,894 | $93,131 | | Total liabilities | $158,933 | $169,128 | | Total stockholders' equity | $5,069 | $3,589 | | Total liabilities and stockholders' equity | $164,002 | $172,717 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, total operating revenue increased to $104.4 million from $94.7 million in the prior-year period, driven by a 24% increase in dispensary revenue. The loss from operations narrowed to $(9.9) million from $(18.0) million year-over-year, due to revenue growth and an 11% reduction in SG&A expenses. The net loss was $19.6 million, or $(0.21) per share, compared to a net loss of $19.9 million, or $(0.22) per share, in Q1 2024 Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total operating revenue | $104,406 | $94,666 | | Patient services revenue | $53,068 | $52,453 | | Dispensary revenue | $49,293 | $39,679 | | Total operating expenses | $114,317 | $112,638 | | Selling, general and administrative | $25,376 | $28,452 | | Loss from operations | $(9,911) | $(17,972) | | Net loss | $(19,585) | $(19,889) | | Net loss per share, basic & diluted | $(0.21) | $(0.22) | Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2025, net cash used in operating activities was $5.0 million, a significant improvement from $15.9 million used in the prior-year period. Net cash used in investing activities was $0.2 million. Net cash used in financing activities was $4.7 million, primarily due to a $20.0 million principal payment on long-term debt, offset by $15.4 million in net proceeds from a private placement. Cash and cash equivalents decreased by $9.9 million during the quarter, ending at $39.7 million Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,988) | $(15,883) | | Net cash (used in) provided by investing activities | $(202) | $19,388 | | Net cash used in financing activities | $(4,740) | $(938) | | Net (decrease) increase in cash | $(9,930) | $2,567 | | Cash at beginning of period | $49,669 | $33,488 | | Cash at end of period | $39,739 | $36,055 | - The company made a $20.0 million principal payment on long-term debt and received $15.4 million in net proceeds from a private placement during Q1 202520 Notes to Condensed Consolidated Financial Statements The notes detail the company's business, accounting policies, and financial activities. Key events in Q1 2025 include amending its debt facility to remove a $40 million cash covenant and making a $20 million prepayment. The company also raised approximately $16.5 million in gross proceeds from a private placement. These actions improved liquidity, leading management to conclude it has sufficient funds for at least one year. A significant portion of revenue and payables are concentrated with a single payor and vendor, respectively. Subsequent to the quarter's end, the company entered an agreement to outsource its Clinical Trials segment operations - The company operates 67 clinics across five states with 121 oncologists and mid-level professionals23 - Management concluded it has sufficient liquidity for at least one year following a debt amendment, a $20 million debt prepayment, and a private placement that raised approximately $16.5 million in gross proceeds29 - Vendor A accounted for 99% of direct costs for the three months ended March 31, 2025, and 71% of gross payables as of that date63 - On February 26, 2025, the company amended its Facility Agreement, removing the $40 million minimum cash covenant and making a $20 million partial prepayment on its Senior Secured Convertible Note101103 - On March 24, 2025, the company entered into a securities purchase agreement for a private placement, resulting in gross proceeds of approximately $16.5 million138 - Subsequent to the quarter end, on March 31, 2025, the company entered into a Research Services Agreement with Helios CR, Inc., to operate the Clinical Trials segment under a profit-sharing arrangement, effective May 5, 2025184 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management reported a 10.3% increase in total operating revenue to $104.4 million for Q1 2025, driven by a 24.2% growth in dispensary revenue. The company improved its operational efficiency, evidenced by a narrowed operating loss of $(9.9) million compared to $(18.0) million in Q1 2024, and a reduction in SG&A expenses by 10.8%. Adjusted EBITDA improved to $(5.1) million from $(10.9) million year-over-year. The company successfully bolstered its liquidity through a debt amendment, a $20 million debt prepayment, and a private placement raising $16.5 million, leading management to affirm its going concern status for the next year Revenue Comparison (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Patient services | $53,068 | $52,453 | $615 | 1.2% | | Dispensary | $49,293 | $39,679 | $9,614 | 24.2% | | Clinical trials & other | $2,045 | $2,534 | $(489) | (19.3)% | | Total operating revenue | $104,406 | $94,666 | $9,740 | 10.3% | - The increase in dispensary revenue was primarily due to a 32.2% increase in the number of fills, partially offset by a 6.0% decrease in average revenue per fill205 - Selling, general and administrative (SG&A) expense decreased by 10.8% year-over-year, driven by a 64.3% reduction in share-based compensation expense and a 3.4% decrease in non-clinical payroll207210 Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(19,585) | $(19,888) | | Depreciation and amortization | $1,784 | $1,489 | | Interest expense, net | $5,570 | $1,985 | | Share-based compensation | $1,458 | $4,087 | | Changes in fair value of liabilities | $3,352 | $— | | Other adjustments | $2,300 | $1,478 | | Adjusted EBITDA | $(5,109) | $(10,940) | - The company improved cash flow from operations by approximately $9.8 million from Q4 2024 to Q1 2025 due to working capital management initiatives221 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are related to interest rates, inflation, and potential asset impairment. Interest rate risk affects the company's cash and cash equivalents ($39.7 million as of March 31, 2025), but is considered minimal due to the short-term nature of these holdings. Inflation poses a risk by potentially increasing the costs of drugs, labor, and other business expenses faster than anticipated. Impairment risk involves the potential write-down of goodwill or intangible assets, which is assessed annually or if indicators arise, and could be triggered by underperformance, economic disruption, or rising interest rates - The company identifies its main market risks as interest rate risk, inflation risk, and impairment risk252 - Interest rate risk is considered low due to the short-term nature of the company's $39.7 million in cash and cash equivalents253 - Inflation could adversely affect the company by increasing costs for drugs, clinical trials, and administration, potentially accelerating cash use254 - Impairment risk for goodwill and intangible assets is assessed annually and could result in a charge if reporting unit fair value falls below carrying value due to underperformance or adverse economic conditions257 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025. They concluded that these controls were effective in ensuring that information required for SEC reports is recorded, processed, and reported in a timely manner. There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls. The company acknowledges the inherent limitations of any control system, which can only provide reasonable, not absolute, assurance of achieving its objectives - As of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective258 - There were no material changes to the company's internal control over financial reporting during the first quarter of 2025259 Part II – Other Information Item 1. Legal Proceedings The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company states it is not currently involved in any legal proceedings that would have a material adverse effect on its business262 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes have been made to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2024263 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the reporting period - Not applicable264 Item 3. Defaults Upon Senior Securities This item is not applicable for the reporting period - Not applicable265 Item 4. Mine Safety Disclosures This item is not applicable for the reporting period - Not applicable266 Item 5. Other Information During the quarter ended March 31, 2025, no director or officer of the company adopted or terminated any Rule 10b5-1 trading plans or any non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the quarter267 Item 6. Exhibits This section lists all exhibits filed with or incorporated by reference into the Form 10-Q. Key exhibits include certifications by the Principal Executive Officer and Principal Financial Officer, and the Interactive Data File (XBRL) - This section provides a list of all exhibits filed as part of the quarterly report, including officer certifications and XBRL data files268269