The Oncology Institute Inc.

03/12/2026 | Press release | Distributed by Public on 03/12/2026 14:57

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of The Oncology Institute, Inc. ("TOI") along with its consolidating subsidiaries (the "Company"). The discussion should be read together with the historical audited annual financial statements for the years ended December 31, 2025 and 2024, and the related notes that are included elsewhere in this Annual Report. The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (as amended, "Securities Act"), as amended, and Section 21E of the Securities Exchange Act of 1934 (as amended, the "Exchange Act"). Such statements are based upon current expectations, as well as management's beliefs and assumptions and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to such differences include those described under the heading "Risk Factors" section in this Annual Report on Form 10-K, and in subsequent filings we make with the Securities and Exchange Commission, where we may discuss new risks that have not yet arisen at the time of this Annual Report. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the filing date of this Annual Report on Form 10-K and we assume no obligation to update any forward-looking statements or the reasons why our actual results may differ. All dollar values are expressed in thousands, unless otherwise noted.
Unless the context dictates otherwise, references in this Annual Report on Form 10-K to the "Company," "we," "us," "our," and similar words are references to The Oncology Institute, Inc., a Delaware corporation ("TOI"), and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities ("VIEs").
Overview
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 across 17 markets and fivestates throughout the United States. As of December 31, 2025, we operate 65community-based oncology practices, staffed with 116oncologists and advanced practice providers employed by our affiliated physician-owned professional corporations, referred to as the "TOI PCs." In addition to our TOI-affiliated providers, we also manage a network of 207 providers in Florida under the Florida Oncology Network brand. Collectively across the provider base, we manage a population of approximately 2.0 million patients under value-based agreements as of December 31, 2025. The Company's mission is to heal and empower cancer patients through compassion, innovation, and state-of-the-art medical care.
Operationally, the Company's medical centers provide a complete suite of medical oncology services including: physician services, in-house infusion, in-house specialty pharmacy, clinical trials, radiation therapy, educational seminars, support groups, counseling, and 24/7 patient assistance.Many of our services, such as managing clinical trials and palliative care programs, 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.
As a value-based oncology company, the Company seeks to deliver both better quality care and lower cost of care for payors and patients. 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.
Additionally, we allow our independent network participating providers to access the ability to treat patient populations that are managed under value-based care contracts without the need to incur costs required to build clinical or operational infrastructure typical for risk-bearing entities, or to adopt new operational frameworks which may be disruptive to their existing practices.
Components of Results of Operations
Revenue
The Company receives payments from the following sources for services rendered: (i) commercial insurers; (ii) pharmacy benefit managers ("PBMs"), (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services ("CMS"); (iv) state governments under Medicaid and other programs; (v) other third-party payors and managed care organizations (e.g., risk bearing organizations and independent practice associations ("IPAs"); and (vi) individual patients and clients.
Revenue primarily consists of capitation revenue, fee-for-service ("FFS") revenue, specialty pharmacy revenue, and clinical trials revenue. Capitation and FFS revenue comprise the revenues within the Company's patient services segment and are presented together in the results of operations. The following paragraphs provide a summary of the principal forms of our billing arrangements and how revenue is recognized for each type of revenue.
Capitation
Capitation revenues consist primarily of fees for medical services provided by the TOI PCs or network providers to the Company's patients under a capitated arrangement with various risk-bearing medical groups or managed care organizations. Capitation revenue is paid monthly based on the number of enrollees by the contracted payor (per member per month or "PMPM"). Capitation contracts generally have a legal term of one year or longer. Payments in capitation contracts are variable since they primarily include PMPM fees associated with unspecified membership that fluctuates throughout the term of the contract; however, based on our experience, our total underlying membership generally increases over time as penetration of Medicare Advantage products grows and our payor partners, who tend to be the larger and more sophisticated operators within the industry, consolidate. Certain contracts include terms for a capitation deduction where the cost of out-of-network referrals of members are deducted from the future payment. Revenue is recognized in the month services are rendered on the basis of the transaction price established at that time.
Fee-for-service revenue
FFS revenue represents revenue earned under contracts in which we bill and collect for specific medical services rendered by the TOI PCs' employed physicians. The terms for FFS contracts are short in duration and only last for the period over which services are rendered (typically, one day). FFS revenue consists of fees for medical services provided to patients. As specialist providers, our FFS revenue is dependent on referrals from other physicians, such as primary care physicians. The Company's affiliated providers build trusted, professional relationships with these physicians and their associated medical groups, which can lead to recurring FFS volume; however, this volume is subject to numerous factors the Company cannot control and can fluctuate over time. The Company also receives FFS revenue for capitated patients that receive medical services which are excluded from the Company's capitation contracts. Under the FFS arrangements, third-party payors and patients are billed for patient care services provided by the TOI PCs. Payments for services provided are generally less than billed charges. The Company records revenue net of an allowance for contractual adjustments, which represents the net revenue expected to be collected from third-party payors (including managed care, commercial, and governmental payors such as Medicare and Medicaid), and patients. These expected collections are based on fees and negotiated payment rates in the case of third-party payors, the specific benefits provided for under each patient's healthcare plan, mandated payment rates in the case of Medicare and Medicaid programs, and historical gross charges and cash collections (net of recoveries). The recognition of net revenue (gross charges less contractual allowances) from such services is dependent on certain factors, such as the proper completion of medical charts following a patient visit, the forwarding of such charts to our billing center for medical coding and entering into the Company's billing system, and the verification of each patient's submission or representation at the time services are rendered as to the payor(s) responsible for payment of such services. Revenue is recorded on the date the services are rendered based on the information known at the time of entering of such information into the Company's billing systems as well as an estimate of the revenue associated with medical services.
Specialty Pharmacy
Oral prescription drugs prescribed by doctors to their patients are sold directly through the TOI PCs' dispensaries and our retail pharmacies. Revenue for the prescriptions is based on fee schedules set by various PBMs and other third-party payors.
Clinical trials & other revenue
The TOI PCs also enter into contracts to perform clinical research trials. The terms for clinical trial contracts last many months as the clinical research is performed. Each contract represents a single, integrated set of research activities that are
satisfied over time as the output of results from the trial is captured for the trial sponsor to review. Under the clinical trial contracts, the TOI PCs receive a fixed payment for administrative, set-up, and close-down fees; a fixed amount for each patient site visit; and certain expense reimbursements. The Company recognizes revenue for these arrangements on the fees earned to date based on the state of the trial, as established under contract with the customer. On March 31, 2025, the Company entered into a Research Services Agreement ("RSA") with Helios CR, Inc. ("Helios"), effective May 5, 2025, pursuant to which the Clinical Trials segment is operated by Helios in its entirety under a profit sharing arrangement with the Company. As part of the RSA, there is a Transition Services Agreement, in which certain administrative and professional services are provided by Helios for a certain period of time. Additionally, the Company pays a management fee to Helios on a periodic basis for certain shared services.
Operating Expenses
Direct costs - patient services
Direct costs - patient services primarily includes chemotherapy drug costs, clinician salaries and benefits, and medical supplies. Clinicians include oncologists, advanced practice providers such as physician assistants and nurse practitioners, and registered nurses employed by the TOI PCs.
Direct costs - specialty pharmacy
Direct costs - specialty pharmacy primarily includes the cost of medications dispensed in the TOI PCs' clinic locations.
Direct costs - clinical trials & other
Direct costs - clinical trials & other primarily includes costs related to clinical trial contracts and medical supplies.
Network medical expense
Network medical expense is the cost of care delivered by our independent network providers and paid by TOI under our fully delegated contracts. For presentation purposes, we eliminate the portion of network medical expense that is paid to TOI PCs who participate in these fully delegated networks.
Selling, general and administrative expense
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.
Results of Operations
The following table sets forth our Consolidated Statements of Operations data expressed as a percentage of total revenues for the periods indicated. The Company's management is not aware of material events or uncertainties that would cause the financial information below to not be indicative of future operating results or results of future financial condition, although past results should not be relied upon as an indication of future performance or future financial condition.
Year Ended December 31,
2025 2024
Revenue
Patient services 45.6 % 52.1 %
Specialty pharmacy 53.5 % 45.7 %
Clinical trials & other 0.9 % 2.2 %
Total operating revenue 100.0 % 100.0 %
Operating expenses
Direct costs - patient services 40.9 % 47.5 %
Direct costs - specialty pharmacy 43.9 % 38.4 %
Direct costs - clinical trials & other - % 0.3 %
Selling, general and administrative expense 21.0 % 27.4 %
Depreciation and amortization 1.4 % 1.6 %
Total operating expenses 107.2 % 115.2 %
Loss from operations (7.2) % (15.2) %
Other non-operating expense (income)
Interest expense, net 2.2 % 1.9 %
Change in fair value of derivative warrant liabilities - % (0.2) %
Change in fair value of conversion option derivative liabilities 2.4 % (0.7) %
Other, net 0.3 % 0.2 %
Total other non-operating expense 4.9 % 1.2 %
Loss before provision for income taxes (12.1) % (16.4) %
Income tax benefit - % - %
Net loss (12.1) % (16.4) %
Comparison of the Years Ended December 31, 2025 and 2024
Revenue
Year Ended December 31, Change
(dollars in thousands) 2025 2024 $ %
Patient services $ 228,991 $ 204,883 $ 24,108 11.8 %
Specialty pharmacy 269,176 179,916 89,260 49.6 %
Clinical trials & other 4,562 8,613 (4,051) (47.0) %
Total operating revenue $ 502,729 $ 393,412 $ 109,317 27.8 %
Patient services
The increase in patient services revenue for the year ended December 31, 2025 compared to the prior year was primarily due to a 9.0% and 17.2% increase in FFS revenue and capitated revenue, respectively. This was driven by steady patient volumes in more mature markets, momentum in new markets in addition to the impact of our investments in referral relationship management, new contract development, and call center expansion.
Specialty Pharmacy
The increase in specialty pharmacy revenue was primarily due to a 66.6% increase in the number of fills offset by 10.2% decrease in the average revenue per fill. This is driven by increases in pharmacy services provided to both our capitated and fee-for-service populations, due to higher underlying patient volumes as well as a higher rate of prescriptions written by TOI's
affiliated physicians directed towards TOI's own internal pharmacy, as a result of active efforts to drive awareness and reduce 'leakage' to outside pharmacies.
Clinical trials & other
For the year ended December 31, 2025, the decrease in clinical trials and other revenue was due to the profit sharing agreement as described in Note 1 of the consolidated financial statements.
Operating Expenses
Year Ended December 31, Change
(dollars in thousands) 2025 2024 $ %
Direct costs - patient services $205,502 $ 186,880 $ 18,622 10.0 %
Direct costs - specialty pharmacy 220,558 151,231 69,327 45.8 %
Direct costs - clinical trials & other 234 1,304 (1,070) (82.1) %
Selling, general and administrative expense 105,574 107,828 (2,254) (2.1) %
Depreciation and amortization 6,944 6,287 657 10.5 %
Total operating expenses $538,812 $ 453,530 $ 85,282 18.8 %
Patient services cost
The increase in patient services cost during the year as compared to the prior year was primarily due to a 13.1% increase in intravenous drug costs, driven by the Company's patient mix and increased volume, offset by a 4.1% decrease in clinical payroll costs as the Company adjusts physician compensation to better match performance, as well as increased use of advanced practice providers which results in a more efficient labor mix.
Specialty Pharmacy cost
The increase in specialty pharmacy cost was primarily due to a 66.6% increase in the number of prescriptions filled offset by a 12.5% decrease in the average cost of the prescriptions filled, reflecting both changing drug mix as well as improvement in drug procurement performance resulting from TOI's increasing purchasing scale in addition to the deployment of enhanced analytics and coordination within TOI's medical economics and procurement functions used to optimize drug formulary and rebate attainment.
Selling, general and administrative expense
The decrease in selling, general and administrative expense was primarily driven by a 59.2% decrease in share-based compensation expense, a 9.4% decrease in non-clinical payroll, partially offset by a 22.5% increase in professional fees and a 27.5% increase in support services and office expenses.
Other Non-Operating Expenses (Income)
Year Ended December 31, Change
(dollars in thousands) 2025 2024 $ %
Interest expense, net $ 11,276 $ 7,496 $ 3,780 50.4 %
Change in fair value of derivative warrant liabilities 247 (619) 866 (139.9) %
Change in fair value of conversion option derivative liabilities 12,206 (2,697) 14,903 (552.6) %
Other, net 925 365 560 153.4 %
Total other non-operating expense $ 24,654 $ 4,545 $ 20,109 442.4 %
Interest expense
The increase in interest expense compared to the prior year was primarily the result of a prepayment related to the Senior Secured Convertible Note in which the Company recognized a one-time loss of extinguishment of debt of $2,900 during the first quarter of 2025.
Change in fair value of liabilities
The increase in the fair value of liabilities was primarily due to an unfavorable increase in the fair value of conversion option derivative liabilities due to the stock price increasing year over year with the increased likelihood of redemption. The increase in the derivative warrant liability is due to the increase in the publicly traded warrant price. These measures are related to the derivative warrant liabilities and conversion option derivative liabilities, which were created as part of the Business Combination and the issuance of the Senior Secured Convertible Note, respectively.
Key Business Metrics
In addition to our financial information, the Company's management reviews a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
Year Ended December 31,
2025 2024
Affiliated and Network Clinics (1)
146 86
Markets 17 16
Lives under value-based contracts (millions) 2.0 1.9
Net loss (in thousands) $ (60,606) $ (64,663)
Adjusted EBITDA (in thousands) (2)
$ (12,409) $ (35,688)
(1) Clinics operated under the TOI PCs, whereby we receive a percentage of revenue under our management services agreements, or MSAs, and are consolidated. Additionally, includes independent oncology practices to which we provide limited management services and have network provider agreements, but do not bear the operating costs.
(2) Adjusted EBITDA is a "non-GAAP" financial measure within the meaning of Item 10 of Regulation S-K promulgated by the SEC. The Company defines Adjusted EBITDA as net income (loss) adjusting for:
•Depreciation and amortization,
•Interest expense, net,
•Tax payments and penalties,
•Non-cash addbacks,
•Share-based compensation,
•Changes in fair value of liabilities,
•Unrealized (gains) losses on investments
•Post combination compensation expense,
•Consulting and legal fees,
•Infrastructure and workforce costs, and
•Transaction costs.
The Company includes Adjusted EBITDA because it is an important measure 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.
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 tables provide a reconciliation of net loss, the most closely comparable GAAP financial measure, to Adjusted EBITDA:
Year Ended December 31, Change
(dollars in thousands) 2025 2024 $ %
Net loss $ (60,606) $ (64,663) $ 4,057 (6.3) %
Depreciation and amortization 6,944 6,287 657 10.5 %
Interest expense, net 11,276 7,497 3,779 50.4 %
Tax payments and penalties 12 (32) 44 (137.5) %
Non-cash addbacks(1)
4,642 (139) 4,781 (3,439.6) %
Share-based compensation 4,551 11,151 (6,600) (59.2) %
Change in fair value of liabilities 12,453 (3,316) 15,769 (475.5) %
Unrealized (gains) losses on investments 6 (133) 139 (104.5) %
Post-combination compensation expense(2)
46 374 (328) (87.7) %
Consulting and legal fees(3)
2,030 841 1,189 141.4 %
Infrastructure and workforce costs(4)
6,236 6,427 (191) (3.0) %
Transaction costs(5)
1 18 (17) (94.4) %
Adjusted EBITDA $ (12,409) $ (35,688) $ 23,279 (65.2) %
(1) During the year ended December 31, 2025, non-cash addbacks was comprised of the write-off of the net assets of the Clinical Trials segment and certain expenses incurred through our shared services agreement with Helios of $2,398 and a bad debt write off of $2,594, offset by non-cash rent expense of $665. During the year ended December 31, 2024, non-cash addbacks were primarily comprised of non-cash rent of $411 and $259 loss on disposal of fixed assets.
(2) Deferred consideration payments for practice acquisitions that are contingent upon the seller's future employment at the Company.
(3) Consulting fees were comprised of a subset of the Company's total consulting fees, and related to certain non-recurring advisory projects during the year ended December 31, 2025and 2024.
(4)Infrastructure and workforce costs were primarily comprised of non-recurring legal fees related to infrastructure build out and settlements of $2,256 and $3,656, recruiting expenses to build out corporate infrastructure of $1,338 and $1,294, severance expenses resulting from cost rationalization programs of $257 and $343, stop-loss contract timing of approximately $1,248 and $0, and temporary labor of $217 and $748 during the year ended December 31, 2025 and 2024, respectively.
(5) Transaction costs incurred during the year ended December 31, 2025 and 2024 were comprised of consulting, legal, administrative and regulatory fees associated with non-recurring due diligence projects.
Liquidity and Capital Resources
General
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. Below information reflects dollars in thousands.
In connection with the preparation of the consolidated financial statements for the year ended December 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 $33,565 and an accumulated deficit of $271,419 at December 31, 2025, and a net loss of $60,606 and net cash used in operating activities of $24,587 for the year ended December 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 million 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 million of cash and cash equivalents. Additionally, in March 2025, the Company entered into a securities purchase agreement for a private placement that resulted in gross proceeds of approximately $16.5 million, before deducting placement agent fees and offering expenses. Also, the Company's lender and existing investor, entered into an exchange agreement, in which approximately $4.1 million aggregate principal amount of the Company's senior secured convertible notes would be exchanged for common-equivalent preferred stock and warrants for common stock. Additionally, from August 2025 through October 2025, the Company raised approximately $13.8 million in net proceeds from a at-the-market offering. The Company does not intend to further use the at-the-market sales agreement related to this offering program.
The Company has also taken a number of other actions to increase cash flow. As one of our strategic priorities in 2025 and beyond, the Company implemented an initiative to eliminate cash burn. Due to efforts towards working capital management, the Company was able to generate a positive cash flow from operations in Q4 2025 of $3,233. Additionally, we generated a 2.1% reduction in SG&A expenses compared to the prior year directly as a result of our ongoing efforts to streamline operations, improve efficiency, and optimize our overhead resourcing.
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.
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.
Cash Flows
The following table presents a summary of the Company's consolidated cash flows from operating, investing, and financing activities for the periods indicated.
Year Ended December 31, Change
(dollars in thousands) 2025 2024 $ %
Net cash and cash equivalents used in operating activities $ (24,587) $ (26,538) $ 1,951 (7.4) %
Net cash and cash equivalents provided by (used in) investing activities (3,074) 46,211 (49,285) (106.7) %
Net cash and cash equivalents provided by (used in) financing activities 11,557 (3,492) 15,049 (431.0) %
Net (decrease) increase in cash and cash equivalents $ (16,104) $ 16,181 $ (32,285) (199.5) %
Cash and cash equivalents at beginning of period 49,669 33,488 16,181 48.3 %
Cash and cash equivalents at end of period $ 33,565 $ 49,669 $ (16,104) (32.4) %
Operating Activities
Significant changes impacting net cash and cash equivalents used in operating activities for the year ended December 31, 2025 as compared to the year ended December 31, 2024 were as follows:
•Increase in amortization of debt issuance cost and debt discount of $2,075 due to the decrease of the senior secured convertible note principal in connection with the debt amendment and exchange agreement;
•Write-off of net assets related to the clinical trials segment of $2,398;
•Increase in loss of $14,903 related to the change in the fair value of liabilities due to the increase in stock price over the prior year;
•Increase in bad debt expense of $0 related to the write off of accounts receivable related to co-pays;
•Share based compensation decreased by $6,601 compared to the prior year due to the cancellation of earnout shares in November 2024 and the full vesting of RSUs and options from previous grants;
•Cash impacted by accounts receivable decreased $6,333 for the year ended December 31, 2025 as compared to the year ended December 31, 2024 due to new contract wins and therefore more services being provided and billed;
•Cash impacted by accounts payable and accrued expenses increased $504 for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to an increase in vendor payables resulting from the growth in the Company's business and strategic cash management;
•Cash used by purchasing inventory increased $10,475 for the year ended December 31, 2025 as compared to the year ended December 31, 2024 due to the year-end buy-in with our primary drug supplier to take advantage of rebates related to purchases
Investing Activities
Net cash provided by investing activities decreased $49,285 for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to the sales of marketable securities of $50,000 during the same period in the prior year, which did not occur in the current period.
Financing Activities
Net cash used by financing activities increased $15,049 for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to the net proceeds from the private placement offering of $15,359, net proceeds from at-the-market offering of $13,841, and an increase in proceeds from options and warrants exercised of $3,285, partially offset by principal payments on the senior secured convertible note of $20,000.
Material Cash Requirements
The Company's material cash requirements for the following five years consist of principal and interest due on the convertible note, operating leases and other miscellaneous items. 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 December 31, 2025.
Material Cash Requirements Due by the Year Ended December 31,
(dollars in thousands) 2026 2027 2028-2029 Thereafter Total
Convertible note1
$ - $ 92,349 $ - $ - $ 92,349
Operating leases
8,633 13,400 6,562 1,733 30,328
Deferred acquisition and contingent consideration 125 - - - 125
Other2
858 29 - - 887
Total material cash requirements $ 9,616 $ 105,778 $ 6,562 $ 1,733 $ 123,689
(1)Includes principal and interest payments due.
(2)Other is comprised of finance leases and D&O financing
Critical Accounting Policies and Estimates
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.
Our significant accounting policies are more fully described in the notes to our audited consolidated financial statements elsewhere in this Annual Report on Form 10-K. We believe that the following accounting policies and estimates reflects the most critical judgments and estimation uncertainty used in the preparation of our Consolidated Financial Results.
Variable Interest Entities
The Company consolidates entities for which it has a variable interest and is determined to be the primary beneficiary. The Company holds variable interests in the TOI PCs, comprised of The Oncology Institute CA, a Professional Corporation ("TOI CA") and The Oncology Institute FL, LLC ("TOI FL") and The Oncology Institute TX, a Professional Association ("TOI TX"), all of which the Company cannot legally own due to jurisdictional laws governing the corporate practice of medicine. The TOI PCs employ physicians and other clinicians in order to provide professional services to patients of our managed clinics, and under substantially similar management services agreements, or MSAs, we serve as the exclusive manager and administrator of the TOI PCs' non-medical functions and services. The TOI PCs are considered variable interest entities ("VIEs") as they do not have sufficient equity to finance their activities without additional financial support from the Company. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits - that is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE's economic performance (power), and (2) the obligation to absorb the losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power to control all financial activities of the TOI PCs, the rights to receive substantially all benefits from the VIEs, and consequently consolidates the TOI PCs. Revenues, expenses, and income from the TOI PCs are included in the consolidated amounts as presented on the Consolidated Statements of Operations.
Segment Reporting
The Company presents the financial statements by segment in accordance with the relevant accounting literature to provide investors with transparency into how the chief operating decision maker ("CODM") manages the business. The Company's CODM is our Chief Executive Officer. The CODM reviews financial information and allocates resources across three operating segments: specialty pharmacy, patient services, and clinical trials & other.
Revenue Recognition
The Company recognizes consolidated revenue based upon the principle of the transfer of control of our goods and services to customers in an amount that reflects the consideration it expects to be entitled. This principle is achieved through applying the following five-step approach:
1.Identification of the contract, or contracts, with a customer.
2.Identification of the performance obligations in the contract.
3.Determination of the transaction price.
4.Allocation of the transaction price to the performance obligations in the contract.
5.Recognition of revenue when, or as, the entity satisfies a performance obligation.
Consolidated revenue primarily consists of capitation revenue, fee-for-service (FFS) revenue, specialty pharmacy revenue, and clinical trials revenue. Revenue is recognized in the period in which services are rendered or the period in which the TOI PCs are obligated to provide services. The form of billing and related risk of collection for such services may vary by type of revenue and the payor. The following paragraphs provide a summary of the principal forms of billing arrangements and how revenue is recognized for each.
Capitation
Capitation contracts have a single performance obligation that is a stand ready obligation to perform specified healthcare services to the population of enrolled members and constitutes a series for the provision of managed healthcare services for the term of the contract, which is deemed to be one month since the mix of patient-customers can and do change month over month. The transaction price for capitation contracts is variable as it primarily includes PMPM fees associated with unspecified membership that fluctuates throughout the term of the contract. Further, we adjust the transaction price for capitation deductions based on historical experience. Revenue is recognized in the month services are rendered on the basis of the transaction price established at that time. If subsequent information resolves uncertainties related to the transaction price, adjustments will be
recognized in the period they are resolved. When payment has been received but services have not yet been rendered, the payment is recognized as a contract liability.
Fee For Service
FFS revenue consists of fees for medical services actually provided to patients. These medical services are distinct since the patient can benefit from the medical services on their own. Each service constitutes a single performance obligation for which the patient accepts and receives the benefit of the medical services as they are performed.
The transaction price from FFS arrangements is variable in nature because fees are based on patient encounters, credits due to patients, and reimbursement of provider costs, all of which can vary from period to period. The Company estimates the transaction price using the most likely methodology and amounts are only included in the net transaction price to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. As a practical expedient, the Company adopted a portfolio approach to determine the transaction price for the medical services provided under FFS arrangements. Under this approach, the Company bifurcated the types of services provided and grouped health plans with similar fees and negotiated payment rates.
At these levels, portfolios share the characteristics conducive to ensuring that the results do not materially differ from the standard applied to individual patient contracts related to each medical service provided.
Revenue is recorded on the date the services are rendered based on the information known at the time of entering of such information into our billing systems as well as an estimate of the revenue associated with medical services. When the performance obligation is not satisfied, the billing is recognized as a contract liability.
Specialty Pharmacy
Dispensed prescriptions that are filled and delivered to the patient are considered a distinct performance obligation. The transaction price for the prescriptions is based on fee schedules set by PBMs and other third-party payors. The fee schedule is often subject to DIR fees, which are based primarily on pre-established metrics. DIR fees may be assessed in periods after payments are received against future payments. The Company estimates DIR fees to arrive at the transaction price for prescriptions. Revenue is recognized based on the transaction at the time the patient takes possession of the oral drug.
Clinical Research & Other
Clinical research contracts represent a single, integrated set of research activities and thus are a single performance obligation. The performance obligation is satisfied over time as the output is captured in data and documentation that is available for the customer to consume over the course of arrangement and furthers progress of the clinical trial. The Company has elected to recognize revenue for clinical trials using the 'as-invoiced' practical expedient. The customer is invoiced periodically based on the progress of the trial such that each invoice captures the revenue earned to date based on the state of the trial as established under contract with the customer.
Income Taxes
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.
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:
•future reversals of existing taxable temporary differences;
•future taxable income or loss, exclusive of reversing temporary differences and carryforwards;
•tax-planning strategies; and
•taxable income in prior carryback years.
We will continue to reevaluate the continued need for a valuation allowance. Relevant factors include:
•current financial performance;
•our ability to meet short-term and long-term financial and taxable income projections;
•the overall market environment; and
•the volatility and trends in the industry in which we operate.
Goodwill and Intangible Assets
The Company accounts for goodwill and intangible assets under Accounting Standards Codification Topic No. 350, Goodwill and Other ("ASC 350"). Goodwill represents the excess of the fair value of the consideration conveyed in acquisition over the fair value of net assets acquired.
Goodwill is not amortized but is required to be evaluated for impairment at the same time every year. The Company performs annual testing of impairment for goodwill in the fourth quarter of each year or earlier if potential impairment indicators exist. When impairment indicators are identified, the Company compares the reporting unit's fair value to its carrying amount, including goodwill. An impairment loss is recognized as the difference, if any, between the reporting unit's carrying amount and its fair value to the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit.
Under ASC 350, finite-lived intangible assets are stated at acquisition-date fair value. Intangible assets are amortized using the straight-line method.
Finite-lived intangible assets are stated at acquisition-date fair value. Intangible assets are amortized using the straight-line method. Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When circumstances indicate that recoverability may be impaired, the Company assesses its ability to recover the carrying value of the asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Fair value is determined based on appropriate valuation techniques.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, refer to Note 2 of our consolidated financial statements included in this Annual Report on Form 10-K.
The Oncology Institute Inc. published this content on March 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 12, 2026 at 20:57 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]