UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
__________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
__________________________________________________________
(Exact name of registrant as specified in its charter)
__________________________________________________________
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||
(Address of principal executive offices and zip code) | ||||||||
( | ||||||||
(Registrant's telephone number, including area code) | ||||||||
__________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company ý
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition
On August 16, 2022, The Oncology Institute, Inc. (the "Company") issued a slide presentation which includes the Company's financial results for the six months ended June 30, 2022 and certain other financial information. A copy of the presentation is furnished hereto as Exhibit 99.1, which are incorporated by reference herein.
Item 7.01. Regulation FD Disclosure
On August 16, 2022, in conjunction with the slide presentation of its financial results, the Company provided updates regarding the Company’s business and guidance for the year ending December 31, 2022. The information provided above in “Item 2.02 - Results of Operations and Financial Condition” of this Current Report on Form 8-K (“Current Report”) is incorporated by reference into this Item 7.01.
The information contained in Items 2.02 and 7.01 of this Current Report and Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section.
Item 9.01 - Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 16, 2022
The Oncology Institute, Inc. | |||||
By: | /s/ Mihir Shah | ||||
Name: | Mihir Shah | ||||
Title: | Chief Financial Officer | ||||
Investor Presentation August 2022
Disclaimer Forward Looking Statements This presentation includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “preliminary,” “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “predict,” “potential,” “guidance,” “approximately,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics and projections of market opportunity and expectations. These statements are based on various assumptions and on the current expectations of The Oncology Institute, Inc. (“TOI”) and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of TOI. These forward-looking statements are subject to a number of risks and uncertainties, including the outcome of judicial and administrative proceedings to which TOI may become a party or governmental investigations to which TOI may become subject that could interrupt or limit TOI’s operations, result in adverse judgments, settlements or fines and create negative publicity; changes in TOI’s clients’ preferences, prospects and the competitive conditions prevailing in the healthcare sector; the risk that any required regulatory approvals could adversely affect TOI; failure to continue to meet stock exchange listing standards; the impact of COVID-19 on the TOI’s business; those factors discussed in the documents of TOI filed, or to be filed, with the SEC. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that TOI does not presently know or that TOI currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect TOI’s, plans or forecasts of future events and views as of the date of this press release. TOI anticipates that subsequent events and developments will cause TOI’s assessments to change. TOI does not undertake any obligation to update any of these forward-looking statements. These forward-looking statements should not be relied upon as representing TOI’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements Financial Information; Non-GAAP Financial Measures Some of the financial information and data contained in this presentation, such as Adjusted EBITDA, have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). TOI believes that the use of Adjusted EBITDA provides an additional tool to assess operational performance and trends in, and in comparing our financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. TOI’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented in this presentation in conjunction with TOI’s financial statements and the related notes thereto 2
TOI Investment Highlights 3 1. Oncology is a Large and Growing Market 2. Today’s Care Delivery System is Broken and Does Not Address Quality and Cost Issues 3. TOI is the First Mover Disrupting Oncology Care with a Unique Value-Based Model 4. Our Technology Platform is the First to Standardize and Align Care Delivery at Scale 5. We Have Proven Our Model with New Market Exportability 6. Our Future Growth and New Market Entry is Predictable, Repeatable and Scalable 7. We have Tremendous Near Term and Long-Term Growth Opportunities in Front of Us
Rising Cost of Oncology Care is a Massive Problem in the U.S. 4 U.S. Oncology Spend Growth Continues to Accelerate 18% of U.S. GDP and rising 2x spent per person compared to OECD average Yet, U.S. incidence of chronic illness and longevity are worse than average Healthcare is Unaffordable and Inefficient in the U.S. Massive Market with Accelerating Growth Driven by Misalignment, Complex and Variable Clinical Pathways and High-Cost Drugs $200bn+ estimated 2020 U.S. oncology spend 11 – 14% CAGR U.S. Oncology drug spending growth in the next four years 9.5% of U.S. adults have been diagnosed with cancer Sources: Cancer Epidemiology, Biomarkers & Prevention – American Association For Cancer Research, July 2020; National Center for Health Statistics; IQVIA Institute; National Health Expenditure Data – CMS; Spending on Health: Latest Trends – OECD, June 2018.
We Are Disrupting the Status Quo in Cancer Care 5 Our Disruptive Value-Based Oncology CareToday’s Traditional Fee-for-Service Oncology Care Incentivized by quality Incentivized to use high-value therapies Physician compensation model aligned to quality and patient satisfaction Practice tailored to address individualized patient needs Supported by patient and payors Aligned to support appropriate transitions to palliative and hospice care × Incentivized by volume × Incentivized to use high-cost therapies × Physician compensation model aligned to high cost × Practice tailored to profit × Supported by drug manufacturers and distributors × No incentives to utilize appropriate care transitions Our Healthcare System is Being Rebuilt with New Value-Based Care Models ×
$66 $270 2016A 2022B(3) We are a Leading Value-Based Oncology Care Platform 6 160+ Clinical Trials Giving Patients Cutting Edge Treatment Access ~51K Unique Patient Encounters in 2021 Who We Are Relationships with Leading Payors and Risk-Taking Providers Our Growth (Revenue, $ millions) 26.4% CAGR 4.1x 2016 Revenue (2) ~230K Patient Visits in 2021 >25% Reduction in Healthcare Costs(1) ~1.7 Lives Served Under Capitation 13 Current Markets >50% Revenue Generated from Value-Based Agreements in 2021 55 Locations in Five States 93 Oncologists and Mid- levels Note: (1) Compared to average medical oncology spend in our primary geographies (2) Based on cash basis unaudited financials (3) $270M is low-end 2022 guidance. Guidance herein is as of August 9, 2022 only
TOI is a Leading Value-Based Oncology Care Practice that is Aligning both Physicians and Payors with Incentives to Simultaneously Enhance Quality and Lower Costs Aligned with physicians, practice-based models are incentivized to over prescribe expensive therapeutics and over utilize care which results in higher costs Aligned with payors, benefit managers seek to change provider behavior which has limited success and typically results in an antagonistic relationship with physicians Traditional Care Our Value-Based Oncology Care Model is Disrupting the Market 7 Physician Practices Benefits Managers
Our Results are Peer-Reviewed and Published 8 Highly Effective in Delivering Quality, Value-Based Oncology Care > 25% Lower median total healthcare costs from diagnosis to death 75% Fewer Emergency Department visits in the last month of life 40% Fewer acute care facility deaths 14% Improvement in Patient Satisfaction 30% Lower inpatient admissions Study on TOI Patient Population Conducted by Researchers at Stanford University
Our Patient-Centric Focus Drives High Levels of Satisfaction 9 Highly Satisfied Patient Base Supports Care Delivery Model While Strengthening Payor Relationships Thousands of same-day patient surveys via text and email. Survey feedback loop to operations managers drives service excellence. “Thank you all for helping me through this life test…From the front desk to the specialist – when it comes to cancer, you are all needed and appreciated; your kindness and selflessness makes a world of difference to the patients and their families.” “Awesome place, from the support staff and Dr. Morrison. He was the BEST! Would highly recommend this clinic to everyone who needs it.” – Lynwood Clinic Patient – Downey Clinic Patient “I am very thankful and happy to have found his group. Dr. Baghian and staff are kind, compassionate, and knowledgeable. Everyone I have interacted with has made me feel as though they truly care about making sure I receive quality care in a timely manner. Exceptional!” – Riverside Clinic Patient Overall survey average 4.5/5 across all sites over 12 months.
Sources: Lay Healthcare Worker Led Cancer Screening Interventions and the Effect on Patient-Reported Satisfaction, Health Status, Healthcare Use, and Total Costs; Journal Of Oncology Practice; August 16, 2019. Note: (1) Compared to average Per Member Per Month costs in our primary geographies. >25% Reduction in Spend(1) We Use Multiple Levers to Reduce Cost of Care Experience in relatively low- cost California market Treatments High-Value Cancer Care Program Palliative and Hospice Collaboration Reduce practice pattern variability Access to clinical trials in the community Vertical integration of dispensary and scaled drug purchasing Algorithm driven action plan 24/7 Health Care Coach Patient education and engagement Providers trained in advanced care planning Close coordination between network providers 10 Where We Focus Savings
Proven Portability with Rapidly Expanding Footprint 11 California (Lancaster) (Rancho Mirage) Nevada FloridaArizona 41 Clinics & 75+ Hospital Affiliations 6 Clinics & 9 Hospital Affiliations3 Clinics & 12 Hospital Affiliations4 Clinics & 6 Hospital Affiliations Note: Map does not include recently announced Fresno acquisition Texas . 1 Clinic & 1 Hospital Affiliations
Our Care Model is Hard to Replicate 12 TOI has Developed Many Highly Specific and Difficult to Replicate Capabilities that Collectively Comprise our Competitive Moat Physician Recruiting Tech-enabled Care Pathways Delivered in Community Setting Clinical Trials Clinical Culture Care Management Integration of Palliative Care and Hospice Coding Accuracy
Our Technology Platform is Purpose Built for Oncology Care 13 1. Collect Work with health plans and primary care doctors on front- end collection of extensive patient data sets 3. Apply Use results from our data analysis to dictate appropriate care pathways 2. Analyze Leverage proprietary algorithms and data science to refine relevant clinical care pathways Key attributes Actionable Efficient Scalable Flexible • Heavily customized where unique to TOI model; leverage vendor-partner solutions where needs are common • Integrations across systems enable workflows, ensure seamless experience and consistent tracking and reporting • Proprietary custom-built regimens and pathways embedded into EHR • Full availability of practice data enables analytic insights and data-sharing collaborations • Cloud-based application set deployed readily and managed centrally, supporting rapid expansion • No limitation on number of sites or clinicians; supports roles in clinic, regionalized/centralized, or nearshore/offshore • Supports different contract structures and lines of business, regional flexibility as needed • Workflow and analytics tools built to be quickly iterated, vendor-partnerships include custom feature development
Strong Unit Economics Drives Increasing Profitability 14 Embedded Gross Margin Expansion Potential as TOI Scales Margin Expansion Drivers TOI Pod(2) Gross Margin vs. % Value-Based Visits Value-Based Volume Mix: As our mix of value-based revenue increases our margins are expected to improve; pods today with highest mix of value-based contract achieve 30%+ margins Provider Utilization: Margins expected to improve as 1) Provider productivity increases in maturing clinics 2) The ratio of APPs(1) to MDs increases Market Dynamics: Certain expansion markets have higher- cost fee-for-service oncology, therefore we believe TOI can deliver better value and savings to our customers and capture higher margins 1 2 3 Note: (1) Advanced Practice Providers (APPs) include Physician Assistants and Nurse Practitioners; (2) Each pod is an operational unit consisting of 2-5 clinics, grouped together based on geographic proximity and visit volume. This analysis was performed in 2020. 10% 15% 20% 25% 30% 35% 40% 20% 30% 40% 50% 60% 70% 80% 90% Po d Gr os s M ar gi n Pod % Value-Based Visits
Strong Unit Economics Provide the Foundation of Future Growth 15 -10% -5% 0% 5% 10% 15% 20% 25% 30% (1,000) (500) - 500 1,000 1,500 2,000 2,500 3,000 Year 1 Year 2 Year 3 Year 4 Year 5 G ro ss M ar gi n EB IT DA ($ 00 0s ) Denovo EBITDA Acquisition EBITDA Denovo Gross Margin Acquisition Gross Margin Illustrative New Market Ramp Acquisition CAGR (Top-line): 18% DeNovo CAGR (Top-line): 53% Acquisition EBITDA accretive: Year 1 Conversion to Capitated Contracts by year 4: enabling Gross Margins >25% New Markets launch with FFS + Gainshare Note: Actual results may vary materially
16 We Are Shifting the Market to Value-Based Oncology Care We Are Shifting the Market to Value-Based Oncology Care Oncology Spend is a Major Pain Point for Value-Based Primary Care Illustrative Value Based Primary Care Group Funds Flow PMPM from CMS to MA Plans % Retained by MA Plans % Paid to Primary Care Group TOI Reduces Oncology Care Spend Primary Care Group Profit Oncology Expense TOI is a Market Leader in Value-Based Oncology Care • Growth in value-based primary care propels TOI’s growth • Value-based payments comprised of 36% of healthcare spending in 2018 vs. 20% in 2014 • Since 2013, Humana has increased PCPs within value-based arrangements by 145% • Primary / preventative care only encompasses less than 3% of Medicare spend; vast majority of spend occurs outside of primary care clinics Sources: American Society of Clinical Oncology; Cancer Epidemiology, Biomarkers & Prevention – American Association For Cancer Research, July 2020; Global Market Insights; IQVIA Institute; Wall Street research. Note: MA = Medicare Advantage.
Multiple Levers to Sustain Long Term Growth Trajectory Service Expansion Expand Scope and Diversify Service Offering Build comprehensive portfolio of ancillary services Radiation Oncology Pharmacy Clinical trials MSO services Data monetization Existing Markets Continue Driving Growth in Lives and Partnership Expansion New contracts Expand covered lives New clinics & providers Improve unit economics Medicare direct contracting New Markets Well-Honed TOI Model Enables Quick Scaling in New Markets Establish presence in new markets Highly attractive market dynamics Value-based care transition for physicians M&A Opportunities Leverage Pipeline and M&A Expertise to Drive Accretive Growth Successful acquisition track record Scalable platform Highly effective M&A playbook 17 TOI represents 0.01% of the U.S. Oncology Market providing substantial growth opportunity
Financial Overview 18
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018(2) 2019 2020 2021 2022(3) $1 $10 $17 $26 $29 $38 $41 $42 $48 $64 $74 $113 $155 $188 $203 $270 19 TOI Founded 1st Value- Based Contract Clinical Trials Established AZ TXNV FLCA Downey & Whittier, CA NVAZ FL,CA Dispensary Opening Patients Served 42.7% Revenue CAGR CA New State Entry Private Equity Investment 1st Gainshare Contract Revenue(1) and Milestone Timeline 1st Outpatient Stem Cell 50th Clinic D-SPAC Notes: (1)2007-2017 revenue is cash basis, unaudited and pertains to the Predecessor entity only (2)Predecessor revenue of $76M; Successor revenue of $37M (3 )$270M is low-end 2022 guidance; guidance herein is as of August 9, 2022, only TOI welcomed as first cohort of OCM participants Over 10K patients cared for
Diversified Business Model with Multiple Drivers of Revenue Growth and Margin Expansion 20 Diverse Line of Business Management ServicesClinical Trials Data Monetization Patient Care (Medical and Radiation Oncology) Drug Dispensing Products Covered Medicaid Medicare Commercial Currently in five states Varying degree of managed care adoption Oncology provider landscape driving significant cost variation Geographic DiversityRevenue Model Capitation Gainshare Fee-for-Service VBC Multiple Levers to Drive Top Line Growth and Margin Expansion Clinics Legacy / Same Store Acquisition De Novo New VBC Contracts Capitation Contracts Gainshare Contracts MD Productivity MD / APP Pairing Technology and Process Excellence Productivity
Value Driven Highly Attractive Economic Model 21 TOI saves payors 25%+ of medical oncology costs TOI captures a 20% – 40% margin on contracts Pa yo r C on tr ac ts Pr ov id er C on tr ac ts Pool of lives managed by TOI FFS Driven; High Cost for Payors and Risk-Taking Providers TOI Preferred / Exclusive Provider with Lower Cost Capitated Contracts TOI Delivers High Quality / Low-Cost Care Margin Full Risk Contract: TOI takes full upside and downside risk Gainshare: TOI receives portion of savings from payor / at risk provider partners Illustrative Economic Model Payor Costs without TOI Payor Costs with TOI TOI Cost to deliver care Unmanaged or Under- managed Oncology Market 1 2 3 Note: Actual results may vary materially
Gain Share Contracts 22 • Gain share contracts offer payors an alternative to full capitation, with incentives for TOI to drive reductions in cost of care and improvements in quality of care • Typically structured with an upside-only share of savings generated on patients seen by TOI relative to a benchmark • Creative solution for risk-bearing primary care groups that aren’t delegated for contracting • Can include quality incentives for TOI to further improve patient care and lower overall cost • Acts as a steppingstone to a broader capitation relationship as TOI demonstrates the value of its model of care TOI Earns % of Savings x Eligible Members TOI Can Earn Additional Incentives by Achieving Quality Measures Gain Share Contracts Offer TOI an Entry Point with Payors in New Markets Illustrative Gain Share Contract Structure Benchmark Spend Savings Relative to Benchmark Spend on TOI Eligible Members
Proven economic model shows 30+% Gross Margins in Mature, Value-Based driven markets 23 Same Store Markets Established Value-Based Partnerships Continued Strategic Growth Same-Store Gross Margin 30+% Overall Gross Margin 20+% Growth Markets Recently opened markets Launched in partnership with national value-based primary care groups Ramping Gross Margins
Historic growth supports continued scale to drive increased revenue…. 24 1.1 1.3 1.6 2019 2020 2021 19.3% 19.7% 20.1% 2019 2020 2021 $155 $188 $203 2019 2020 2021 New Value-Based Contracts – +9 contracts, +545k lives New Markets – 4 (in 2 states) New Clinics – 6 Acquisitions, 8 DeNovo 2019-2021 GrowthRevenue ($ in millions) Gross Margin % Capitated Lives (in millions)
….Benefits of scale go beyond top line 25 Corporate G&A Efficiencies Provider Productivity Reduced Drug costs % Margins TOI’s growth allows us to scale our infrastructure, driving better margins due to lower drug costs, and more efficient providers – all leading to more savings for our payor partners and patients
Capital Deployment Strategy fueled by recent $110 million strategic investment by Deerfield Management 26 Acquisitions De Novo Growth Working Capital (predominantly funding A/R) Operating Losses Adjusted EBITDA and Net Income Profitability projected in 2024
2022 Guidance 27 Updated Guidance Drivers • Strong year-over-year revenue and lives growth expected • Continued focus on pipeline execution and network expansion to deliver care under value-based contracts • Growth in California and new market penetration in Florida and Texas • Gain sharing contracts and higher mix of FFS-reimbursement is expected to produce lower revenue and gross profit • TOI’s public company costs are higher than initially projected, mainly due to D&O insurance cost 2022 Guidance Revenue $270 to 310 million, representing approximately 33% to 53% growth over 2021 revenue Gross Profit $50 to 60 million Adjusted EBITDA $(20) to (25) million Lives at Year End 1.75 million to 2.0 million lives, representing approximately 9% to 25% growth over year-end 2021 lives Note: Our achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in our filings with the SEC. The outlook does not take into account the impact of any unanticipated developments in the business or changes in the operating environment, nor does it take into account the impact of our acquisitions, dispositions or financings during 2022. Our outlook assumes a largely reopened global market, which would be negatively impacted if closures or other restrictive measures persist or are reimplemented. Guidance herein is as of August 9, 2022, only.
Key Takeaways 28 Key Takeaways Early Market Leader in Large and Growing Market Proven Economic Model with Imbedded Scalability Well Capitalized, with Disciplined Deployment Strategy Our growth enables high-quality, affordable care for more patients
Historical Financials 29
Historical Financials 30 ($ in thousands) Note: (1) Adjusted EBITDA is a non-GAAP measure. For a discussion and reconciliation to the nearest GAAP measure please see Slide 31 of this presentation. For Three Months Ended For Three Months Ended For Year Ended Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Dec 31, 2020 Dec 31, 2021 Patient services Capitated revenue $ 12,330 $ 12,897 $ 14,124 $ 14,934 $ 14,516 $ 13,944 $ 37,381 $ 54,285 FFS revenue 17,292 16,889 18,843 16,765 20,541 25,165 79,436 69,789 Subtotal 29,622 29,786 32,967 31,699 35,057 39,109 116,817 124,074 Dispensary 17,618 17,782 17,918 19,232 18,679 20,218 63,890 72,550 Clinical trials & other 1,340 2,276 1,390 1,373 1,425 1,594 6,808 6,379 Total operating revenue 48,580 49,844 52,275 52,304 55,161 60,921 187,515 203,003 Operating expenses Direct costs – patient services 23,086 23,574 25,391 27,350 27,378 32,875 95,747 99,401 Direct costs – dispensary 15,123 15,237 15,279 16,463 15,324 16,754 53,907 62,102 Direct costs – clinical trials & other 169 143 182 158 137 150 982 652 Selling, general and administrative expense 11,178 11,212 12,729 48,246 29,806 28,348 41,898 83,365 Depreciation and amortization 777 794 850 920 987 1,098 3,178 3,341 Total operating expenses 50,333 50,960 54,432 93,136 73,632 79,225 195,712 248,861 Loss from operations (1,753) (1,116) (2,157) (40,832) (18,471) (18,304) (8,197) (45,858) Other non-operating expense (income) Interest expense 101 81 78 60 74 61 347 320 Change in fair value of derivative warrant - - - (3,686) 1,461 (2,065) - (3,686) Change in fair value of earnout liabilities - - - (24,891) (39,440) (10,800) - (24,891) Gain on debt extinguishment - (5,186) - 229 (183) - - (4,957) Other, net (1,076) 4 (54) 80 151 (15) 6,271 (1,046) Total other non-operating income (975) (5,101) 24 (28,208) (37,937) (12,819) 6,618 (34,260) Income (loss) before provision for income taxes (778) 3,985 (2,181) (12,624) 19,466 (5,485) (14,815) (11,598) Income tax (expense) benefit (218) (780) (799) 2,468 (180) 32 493 671 Net (loss) income (996) 3,205 (2,980) (10,156) 19,286 (5,453) (14,322) (10,927) Adjusted EBITDA(1) 69 343 110 (5,346) (5,184) (6,867) 5,773 (4,824) Revenue Expenses Income (Loss)
31 Adjusted EBITDA Reconciliation The Company includes adjusted EBITDA because it is an important measure upon which our management uses to assess the results of operations, to evaluate factors and trends affecting the business, and to plan and forecast future periods. Adjusted EBITDA is “non-GAAP” financial measure within the meaning of Item 10 of Regulation S-K promulgated by the SEC. Management believes that this measure provides an additional way of viewing aspects of the Company's operations that, when viewed with the GAAP results, provides a more complete understanding of the Company's results of operations and the factors and trends affecting the business. However, non-GAAP financial measures should be considered a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with U.S. GAAP. Non-GAAP financial measures used by management may differ from the non-GAAP measures used by other companies, including the Company's competitors. Management encourages investors and others to review the Company's financial information in its entirety, not to rely on any single financial measure. The following table provides a reconciliation of net income (loss), the most closely comparable GAAP financial measure, to Adjusted EBITDA: Three Months Ended March 31, Three Months Ended June 30, Three Months Ended Sept 30, Three Months Ended Dec 31, Three Months Ended March 31, Three Months Ended June 30, Year Ended December 31, Year Ended December 31, 2021 2021 2021 2021 2022 2022 2020 2021 (in thousands) Net (loss) income $ (996) $ 3,205 $ (2,980) $ (10,156) $ 19,286 $ (5,453) $ (14,322) $ (10,927) Depreciation and amortization 777 794 850 920 987 1,098 3,178 3,341 Interest expense 101 81 78 60 74 61 347 320 Income tax expense 218 780 799 (2,468) 180 (32) (493) (671) Board and management fees 106 102 106 239 45 62 620 553 Non-cash addbacks (13) (5,728) 99 527 197 108 11,972 (5,115) Share-based compensation 42 51 59 24,383 8,552 6,515 151 24,535 Change in fair value of liabilities - - - (28,577) (37,979) (12,865) - (28,577) Practice acquisition-related costs 90 107 71 208 422 111 374 476 Consulting and legal fees 387 543 221 675 655 1,144 1,495 1,826 Other, net (643) 408 807 1,120 953 1,634 2,451 1,692 Public company transaction costs - - - 7,723 1,444 750 - 7,723 Adjusted EBITDA $ 69 $ 343 $ 110 $ (5,346) $ (5,184) $ (6,867) $ 5,773 $ (4,824)