S-4 1 tm2122352-1_s4.htm FORM S-4 tm2122352-1_s4 - none - 113.9225361s
AS FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 2021
Registration No: 333-      
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DFP Healthcare Acquisitions Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
6770
(Primary Standard Industrial
Classification Code Number)
84-3562323
(I.R.S. Employer
Identification Number)
345 Park Avenue South
New York, New York 10010
Tel: (212) 551-1600
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Steven Hochberg
Chief Executive Officer
345 Park Avenue South
New York, New York 10010
Tel: (212) 551-1600
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Joel Rubinstein
Bryan J. Luchs
Jason A. Rocha
White & Case LLP
1221 Avenue of the Americas
New York, New York 10020
Tel: (212) 819-8200
Steven B. Stokdyk
Brian Duff
Brent Epstein
Latham & Watkins LLP
10250 Constellation Blvd. Suite 1100
Los Angeles, CA 90067
Tel: (213) 485-1234
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective and all other conditions to the transactions contemplated by the Merger Agreement described in the included proxy statement/prospectus have been satisfied or waived.
If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
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 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i)        ☐
(Cross-Border Issuer Tender Offer)
Exchange Act Rule 14d-1(d)           ☐
(Cross-Border Third-Party Tender Offer)

CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered
Amount to be
Registered
Proposed
Maximum
Offering Price
Per Share
Proposed
Maximum
Aggregate
Offering Price
Amount of
Registration
Fee
Class A common stock, par value $0.0001 per share
83,590,052(1) $ 9.91 $ 828,377,415(2) $ 90,376(3)
Total
$ 828,377,415 $ 90,376
(1)
Based on the maximum number of shares of DFP Class A common stock, par value $0.0001 per share (“DFP Class A Common Stock”), of the registrant estimated to be issued in connection with the business combination described herein (the “Business Combination”). Such maximum number of shares of DFP Class A Common Stock is based on the sum of: (a) 71,090,052 shares of DFP Class A Common Stock to be issued to the holders of shares of common stock, par value $0.001 per share of TOI Parent, Inc. (assuming that all outstanding options to acquire such stock are exercised prior to the closing of the Business Combination and the vesting of outstanding TOI Parent, Inc. restricted stock units); and (b) 12,500,000 shares of DFP Class A Common Stock that may be issued pursuant to the earnout provisions of the Merger Agreement described herein.
(2)
Pursuant to Rules 457(c) and 457(f)(1) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is calculated as the product of (i) 72,867,016 shares of DFP Class A Common Stock and (ii) $9.91, the average of the high and low trading prices of DFP Class A Common Stock on July 20, 2021 (within five business days prior to the date of this Registration Statement).
(3)
Calculated pursuant to Rule 457 under the Securities Act by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001091.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

The information in this proxy statement/prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commissions is effective. This proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY — SUBJECT TO COMPLETION DATED JULY 23, 2021
PROXY STATEMENT OF DFP HEALTHCARE ACQUISITIONS CORP.
PROSPECTUS FOR
72,867,016 SHARES OF DFP CLASS A COMMON STOCK
On June 28, 2021, the board of directors of DFP Healthcare Acquisitions Corp., a Delaware corporation (“DFP,” “we,” “us” or “our”), unanimously approved an Agreement and Plan of Merger, dated June 28, 2021, by and among DFP, Orion Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of DFP (“First Merger Sub”), Orion Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of DFP (“Second Merger Sub”) and TOI Parent, Inc., a Delaware corporation (“TOI”) (as it may be amended and/or restated from time to time, the “Merger Agreement”). The transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination.”
If the Merger Agreement is adopted by DFP’s stockholders and the Business Combination is consummated, (i) the First Merger Sub will merge with and into TOI (the “First Merger”), with TOI being the surviving corporation and (ii) immediately following the First Merger, TOI will merge with and into the Second Merger Sub (the “Second Merger”), with the Second Merger Sub being the surviving entity and a wholly owned subsidiary of DFP. Upon the closing of the Business Combination, DFP will be renamed “The Oncology Institute, Inc.” and is referred to herein as “New TOI” as of the time following such change of name.
Immediately prior to the effective time of the First Merger (the “Effective Time”), TOI will cause each share of TOI preferred stock, par value $0.001 per share (“TOI Preferred Stock”) issued and outstanding as of such time to be automatically converted into 10 shares of common stock of TOI, par value $0.001 per share (“TOI Common Stock”, and such conversion, the “Conversion”). After giving effect to the Conversion, no shares of TOI Preferred Stock shall remain issued and outstanding.
At the Effective Time, by virtue of the First Merger and without any action on the part of DFP, First Merger Sub, TOI or the holders of any of TOI’s securities:

Each share of TOI Common Stock issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive (i) a number of shares of DFP Class A common stock, par value $0.0001 per share, of DFP (“DFP Class A Common Stock”) equal to the Closing Share Consideration (as defined below) divided by the Aggregate Fully Diluted Company Common Stock (as defined in the Merger Agreement), (ii) an amount in cash equal to the Closing Cash Consideration (as defined below) divided by the Aggregate Fully Diluted Company Common Stock (clause (i) and (ii) collectively, the “Per Share Merger Consideration”) and (iii) the contingent right to receive Earnout Shares (as defined and described below). “Closing Share Consideration” means a number of shares (rounded to the nearest whole share) of DFP Class A Common Stock determined by dividing (a) (i) the Closing Merger Consideration minus (ii) the Closing Cash Consideration by (b) 10. “Closing Cash Consideration” means an amount equal to the Available Closing Acquiror Cash (as defined below), multiplied by 0.5556; provided, that if the Closing Cash Consideration would result in Closing Share Consideration that is less than the Minimum Share Consideration (as defined below) multiplied by $10, the Closing Cash Consideration will be decreased by the minimum extent necessary such that the Closing Share Consideration equals an amount equal to the Minimum Share Consideration multiplied by $10. “Closing Merger Consideration” means an amount equal to $762,052,411. “Minimum Share Consideration” means, solely to the extent TOI elects application thereof, the number of shares (rounded up to the nearest whole share) of DFP Class A Common Stock that represents the minimum number of shares of DFP Class A Common Stock that is required to ensure that the Business Combination qualifies for the Intended Income Tax Treatment (as defined below) (with such number of shares to be reasonably determined by tax advisors to TOI in their reasonable discretion). “Intended Income Tax Treatment” means, for U.S. federal income tax purposes (and for purposes of any applicable state or local income tax that follows U.S. federal income tax treatment of the Business Combination), the intent of the parties to the Merger Agreement that (i) the First Merger and the Second Merger, taken together, constitute an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code and the regulations promulgated thereunder to which DFP and TOI are parties under Section 368(b) of the Code, and (ii) the Merger Agreement be, adopted as a “plan of reorganization” for purposes of Section 368 of the Code and Section 1.368-2(g) of the regulations promulgated thereunder. “Available Closing Acquiror Cash” means, without duplication, an amount equal to (i) all amounts in the Trust

Account (defined below) (after reduction for the aggregate amount of payments required to be made in connection with any DFP Stockholder redemptions), plus (ii) the aggregate amount of cash that has been funded to and remains with DFP pursuant to the Subscription Agreements (defined below) as of immediately prior to the Closing, minus (iii) expenses of DFP and its affiliates incurred prior to the Closing consistent with the disclosures set forth in all documents filed with the SEC since March 10, 2020, minus (iv) Acquiror Transaction Expenses (defined below), minus (v) Company Transaction Expenses (defined below). “Acquiror Transaction Expenses” means all unpaid fees, costs and expenses incurred by or on behalf of the DFP, First Merger Sub and Second Merger Sub prior to and through the Closing in connection with the negotiation, preparation and execution of the Merger Agreement, the other transaction agreements, the performance and compliance with all transaction agreements and conditions contained in the Merger Agreement to be performed or complied with by DFP at or before Closing, and the consummation of the Business Combination, including (i) the fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of DFP, (ii) any Antitrust Fees (defined below), (iii) the cost of the D&O tail policy to be obtained pursuant to Section 8.02(b) of the Merger Agreement and (iv) Transfer Taxes (defined below); provided that Acquiror Transaction Expenses shall not include any Company Transaction Expenses. “Company Transaction Expenses” means the aggregate amount of (i) all accrued and unpaid fees, costs and expenses incurred by or on behalf of the TOI, its subsidiaries and the Group Companies (defined below) prior to and through the Closing in connection with the negotiation, preparation and execution of the Merger Agreement, the other transaction agreements, the performance and compliance with all transaction agreements and conditions contained in the Merger Agreement to be performed or complied with at or before Closing, and the consummation of the Business Combination, including any and all professional or transaction related costs, fees and expenses of legal, accounting and financial advisors, consultants, auditors, accountants and brokers and (b) any Transaction Bonuses (defined below). “Antitrust Fees” means any and all filing fees payable to the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission under the HSR Act or the antitrust or competition Law authorities of any other jurisdiction in connection with the Business Combination. “Transfer Taxes” means all transfer, documentary, sales, use, stamp, registration, value-added or other similar Taxes incurred in connection with the Business Combination. “Transaction Bonuses” means payments to officers, employees, consultants, directors and managers of TOI, its subsidiaries and the Group Companies (defined below) as change of control payments, severance payments, special or retention bonuses, and similar payments, in each case, paid or payable as a result of the transactions contemplated by the Merger Agreement and the other transaction agreements (including the employer portion of any tax in connection with such).

Each of the options to purchase TOI Common Stock (each, a “Company Option”) will be entitled to receive (i) if vested and outstanding as of immediately prior to the Effective Time (after taking into consideration any accelerated vesting that may occur as a result of the Business Combination) (a “Vested Company Option”), (A) with respect to an Eligible Cash-Out Vested Company Option (as defined below), cash in an amount equal to (I) the Per Share Merger Consideration multiplied by (II) the number of shares of TOI Common Stock underlying the Eligible Cash-Out Vested Company Option, minus (III) the aggregate exercise price applicable to the shares of TOI Common Stock underlying such Eligible Cash-Out Vested Company Option and (B) with respect to the remaining shares of TOI Common Stock subject to such Vested Company Option, (I) an option to purchase a number of shares of DFP Class A Common Stock and (II) restricted Earnout Shares (as defined and described below); and (ii) if unvested and outstanding as of immediately prior to the Effective Time, (A) an option to purchase shares of DFP Class A Common Stock and (B)  restricted Earnout Shares (as described below). “Eligible Cash-Out Vested Company Option” means the number of Company Options multiplied by a fraction, the numerator of which is the Closing Cash Consideration and the denominator of which is the Closing Merger Consideration (rounded up to the nearest whole number).

Each share of TOI Common Stock outstanding immediately prior to the Effective Time that is subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code (such TOI Common Stock, “Restricted Stock”), will be, subject to the applicable holder of such Restricted Stock executing and delivering a Restricted Stock Agreement pursuant to which such individual agrees that any consideration paid in respect of the Restricted Stock shall be subject to the same vesting and forfeiture terms on which such Restricted Stock was issued, entitled to receive (i) the Per Share Merger Consideration and (ii) the contingent right to receive Earnout Shares (defined below).


Each restricted stock unit under TOI’s incentive stock plan or otherwise, whether or not vested (“Company RSU”), outstanding immediately prior to the Effective Time will be converted into (i) a restricted stock unit denominated in shares of DFP Class A Common Stock equal to the product of (A) the number of shares of TOI Common Stock subject to such Company RSU immediately prior to the Effective Time and (B) the Exchange Ratio (as defined below), and (ii) the contingent right to receive Earnout Shares. “Exchange Ratio” means the quotient obtained by dividing (a) 76,205,241.10 by (b) the Aggregate Fully Diluted Company Common Stock (as defined in the Merger Agreement).
Following the closing of the Business Combination (the “Closing”), New TOI will issue to eligible holders of securities of New TOI up to 12,500,000 additional shares of New TOI Common Stock, par value $0.0001 per share (“New TOI Common Stock”) in the aggregate (the “Earnout Shares”). The Earnout Shares will be earned in two tranches of 5,000,000 and 7,500,000 Earnout Shares, respectively, upon New TOI achieving a price per share of New TOI Common Stock of $12.50 during the two-year period following the Closing or a per share stock price of $15.00 during the three-year period following the Closing, in each case, as its last reported sales price per share for any 20 trading days within any 30 consecutive trading day period within the applicable earnout period; provided, that (i) if one or both of the share price triggers has not been achieved prior to the end of the three-year period following the Closing, (ii) New TOI enters into a definitive agreement that would result in a change of control and (iii) the price per share of New TOI Common Stock in such transaction is equal to or greater than one or both of the share price triggers that have not been satisfied during the applicable earnout period, then, the applicable share price trigger that has not been satisfied will be deemed to have been satisfied and earned at the Closing of such transaction as if such share price trigger had been achieved. Holders of Company Options will be issued their pro rata share of the Earnout Shares at Closing, in the form of restricted stock, subject to forfeiture if the Earnout Shares are not earned by the end of the applicable earnout periods. All other Earnout Shares will be issued only if and when the Earnout Shares are earned as described above.
Concurrently with the execution of the Merger Agreement, DFP entered into a Stockholder Support Agreement (the “Stockholder Support Agreement”) with TOI, the Sponsor and certain of DFP’s directors and officers (together with the Sponsor, the “Subject Stockholders”), pursuant to which, among other things described in the this proxy/prospectus, the Subject Stockholders agreed to subject 20% of the shares of DFP Class B common stock, par value $0.0001 per share (the “DFP Class B Common Stock”), held by the Subject Stockholders (the “Subject Shares”) and 20% of the Private Placement Warrants held by the Sponsor (the “Subject Warrants,” and, together with the Subject Shares, the “Subject Securities”) to forfeiture. The number of Subject Shares and Subject Warrants to be forfeited will be determined by multiplying the Subject Warrants and the Subject Warrants, as applicable, by a fraction, the numerator of which is (i) the total number of shares of DFP Class A Common Stock redeemed by DFP’s stockholders prior to the closing, and the denominator of which is (ii) the total number of shares of DFP Class A Common Stock issued and outstanding as of June 28, 2021 (excluding such shares of DFP Class A Common Stock beneficially owned by the Subject Stockholders).
Concurrently with the execution of the Merger Agreement, DFP also entered into certain subscription agreements with certain institutional and accredited investors (the “PIPE Investors”), including Deerfield Private Design Fund IV, L.P. (“Deerfield Fund IV”) and Deerfield Partners, L.P. (“Deerfield Partners,” and, together with Deerfield Fund IV, the “Deerfield Funds”), pursuant to which the PIPE Investors have agreed to purchase, immediately prior to the Closing, an aggregate of 27.5 million shares of Series A Common Equivalent Preferred at a purchase price of $10.00 per share, for aggregate proceeds of $275,000,000. However, for every 100 shares of DFP Class A Common Stock to be purchased by the Deerfield Funds, the Deerfield Funds will have the option to instead purchase one share of Series A Common Equivalent Preferred Stock (defined below) at a purchase price of $1,000 per share.
Immediately prior to the effective time of the Business Combination, each of the currently issued and outstanding shares of DFP Class B Common Stock, will automatically convert, on a one-for-one basis, into shares of DFP Class A Common Stock in accordance with the terms of the DFP’s amended and restated certificate of incorporation. Thereafter, in connection with the Closing, each of the then issued and outstanding shares of DFP Class A Common Stock will become shares of New TOI Common Stock.
Assuming there are no redemptions of DFP Class A Common Stock, the total maximum number of shares of DFP Class A Common Stock expected to be issued to the holders of TOI Common Stock and the PIPE Investors at the Closing of the Business Combination is approximately 77,853,167 shares. As described in this proxy statement/prospectus, prior to the Closing, the Sponsor, Deerfield Fund IV and Deerfield

Partners (the “Deerfield Holders”) will exchange a number of their DFP Class A Common Stock and DFP Class B Common Stock for a number of DFP preferred stock, par value $0.0001 per share, to be designated as Series A Common Equivalent Preferred Stock (the “Series A Common Equivalent Preferred Stock”), such that immediately thereafter they will hold an aggregate number of outstanding shares of DFP Class A Common Stock at Closing that will represent 4.5% of the New TOI Common Stock immediately following the Closing (the “Deerfield Exchange”). Assuming (i) there are no redemptions of DFP Class A Common Stock, (ii) all of the Earnout Shares have been released to the eligible securities holders of New TOI, and (iii) all of the Subject Shares have been released to the Subject Stockholders: (a) holders of shares of TOI Common Stock as of immediately prior to the Closing are expected to hold, in the aggregate, 62.9 million shares of New TOI Common Stock, or 60.9% of the issued and outstanding shares of New TOI Common Stock, (b) the holders of Public Shares, excluding the Deerfield Holders’ Public Shares (each, a “Public Stockholder”) are expected to hold 18.0 million shares of New TOI Common Stock, or 17.4% of the issued and outstanding shares of New TOI Common Stock, (c) holders of DFP Class B Common Stock, excluding the Deerfield Holders’ DFP Class B Common Stock, are expected to hold 0.3 million shares of New TOI Common Stock, or 0.3% of the issued and outstanding shares of New TOI Common Stock, (d) the Deerfield Holders are expected to hold 4.1 million shares of New TOI Common Stock, or 4.5% of the issued and outstanding shares of New TOI Common Stock and (e) the PIPE Investors, excluding the Deerfield Holders’, are expected to hold 17.5 million shares of New TOI Common Stock, or 16.9% of the issued and outstanding shares of New TOI Common Stock. See “The Business Combination Proposal — Consent and Waiver Letter” for further details on the terms of the Series A Common Equivalent Preferred Stock.
DFP will hold a special meeting of stockholders (the “Special Meeting”) to consider matters relating to the Business Combination. DFP cannot complete the Business Combination unless DFP’s stockholders consent to the approval of the Merger Agreement and the transactions contemplated thereby. DFP is sending you this proxy statement/prospectus to ask you to vote in favor of these and the other matters described in this proxy statement/prospectus.
Unless adjourned, the Special Meeting of the stockholders of DFP will be held at [•], New York City time, on [•], 2021 at [•]. In light of ongoing developments related to the novel coronavirus (COVID-19), after careful consideration, DFP has determined that the Special Meeting will be a virtual meeting conducted exclusively via live webcast in order to facilitate stockholder attendance and participation while safeguarding the health and safety of our stockholders, directors and management team. You or your proxyholder will be able to attend the virtual Special Meeting online, vote, view the list of stockholders entitled to vote at the Special Meeting and submit questions during the Special Meeting by visiting [•] and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement/prospectus.
This proxy statement/prospectus provides you with detailed information about the Business Combination. It also contains or references information about DFP, TOI and New TOI and certain related matters. You are encouraged to read this proxy statement/prospectus carefully. In particular, you should read the section titled “Risk Factors” on page 42 of this proxy statement/prospectus for a discussion of the risks you should consider in evaluating the Business Combination and how it will affect you.
If you have any questions or need assistance voting your common stock, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing DFPH.info@investor.morrowsodali.com. This notice of Special Meeting is and the proxy statement/prospectus relating to the Business Combination will be available at [•].
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the Business Combination or the other transactions contemplated thereby, as described in this proxy statement/prospectus, or passed upon the adequacy or accuracy of the disclosure in this proxy statement/prospectus. Any representation to the contrary is a criminal offense.
This proxy statement/prospectus is dated, [•], 2021, and is first being mailed to stockholders of DFP on or about, [•], 2021.

 
DFP HEALTHCARE ACQUISITIONS CORP.
345 Park South Avenue
New York, New York 10010
Tel: (212) 551-1600
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [•], 2021
TO THE STOCKHOLDERS OF DFP HEALTHCARE ACQUISITIONS CORP.:
NOTICE IS HEREBY GIVEN that a special meeting (the “Special Meeting”) of the stockholders of DFP Acquisitions Healthcare Corp., a Delaware corporation (“DFP,” “we,” “us” or “our”), will be held at [•], New York City time, on [•], 2021 at [•]. You are cordially invited to attend the Special Meeting, which will be held for the following purposes:
(a)
Proposal No. 1 — The Business Combination Proposal — to consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of June 28, 2021 (as it may be amended and/or restated from time to time, the “Merger Agreement”), by and among DFP, Orion Merger Sub I, Inc., a Delaware corporation and direct, wholly owned subsidiary of DFP (“First Merger Sub”), Orion Merger Sub II, LLC, a Delaware limited liability company and direct, wholly owned subsidiary of DFP (“Second Merger Sub”) and TOI Parent, Inc., a Delaware corporation (“TOI”), and the transactions contemplated thereby, pursuant to which (i) the First Merger Sub will merge with and into TOI (the “First Merger”), with TOI being the surviving corporation, (ii) immediately following the First Merger, TOI will merge with and into the Second Merger Sub, with the Second Merger Sub being the surviving entity and a wholly owned subsidiary of DFP, and (iii) DFP will change its name to “The Oncology Institute, Inc.” ​(referred to herein as “New TOI”) (the transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination,” and such proposal, the “Business Combination Proposal”);
(b)
Proposal No. 2 — Stock Issuance Proposal — to consider and vote upon a proposal to approve, assuming the Business Combination Proposal is approved and adopted, for purposes of complying with the applicable listing rules of Nasdaq (each, a “Nasdaq Listing Rule”), (i) the issuance of DFP Class A Common Stock, par value $0.0001 per share (the “DFP Class A Common Stock”) pursuant to the Merger Agreement and up to 12,500,000 additional Earnout Shares (as defined herein), as described in more detail in the accompanying proxy statement/prospectus under the heading titled “The Business Combination Proposal  —  Business Combination Consideration,” and (ii) the issuance and sale of up to 27,500,000 newly issued shares of DFP Class A Common Stock in a private placement with certain institutional and accredited investors (the “PIPE Investors”), including Deerfield Private Design Fund IV, L.P. (“Deerfield Fund IV”) and Deerfield Partners, L.P. (“Deerfield Partners,” and, together with Deerfield Fund IV, the “Deerfield Funds”), to the extent such issuances would require a stockholder vote under the applicable Nasdaq Listing Rules (the “Stock Issuance Proposal”);
(c)
Proposal No. 3 — The Charter Proposal — to consider and vote upon a proposal to approve, assuming the Business Combination Proposal and the Stock Issuance Proposal are approved and adopted, a proposed third amended and restated certificate of incorporation (the “Proposed Charter”) of DFP, to be renamed The Oncology Institute, Inc., a copy of which is attached to the accompanying proxy statement/prospectus as Annex B, which will amend and restate the second amended and restated certificate of incorporation of DFP, dated March 10, 2020, (the “Current Charter”), which Proposed Charter will be in effect upon the closing of the Business Combination (the “Closing”) (the “Charter Amendment Proposal”);
(d)
Proposal No. 4 — The Advisory Charter Proposals — to consider and vote upon separate proposals to approve, on a non-binding advisory basis, the following material differences between the Proposed Charter and the Current Charter, which are being presented in accordance with the requirements of the SEC as 8 separate sub-proposals (the “Advisory Charter Proposals”);
 

 

to change the number of shares of authorized capital stock to [•], consisting of [•] shares of New TOI Common Stock, par value $0.0001 per share (the “New TOI Common Stock”) and (ii) [•] shares of preferred stock, par value $0.0001 per share from 100,000,000 shares of DFP Class A Common Stock, 10,000,000 shares of DFP Class B common stock, par value $0.0001 per share (the “DFP Class B Common Stock”) and 1,000,000 shares of preferred stock, par value $0.0001 per share (“Advisory Charter Proposal A”);

to make each member of our board of directors (the “New TOI Board”) subject to election at each annual meeting of stockholders (or special meeting in lieu thereof), as opposed to DFP having three classes of directors, with only once class of directors being elected in each year and each class servicing a three-year term (“Advisory Charter Proposal B”);

to change the stockholder vote required to amend certain provisions of the Proposed Charter (“Advisory Charter Proposal C”)

to change the stockholder vote required to amend the amended and restated bylaws (the “Proposed Bylaws”) to be adopted by DFP immediately prior to the Closing (“Advisory Charter Proposal D”);

to prohibit stockholders form acting by written consent by specifying that any action required or permitted to be taken by stockholders must be effected by a duly called annual or special meeting and may not be effected by written consent (“Advisory Charter Proposal E”);

to renounce any interest or expectancy that New TOI has in, or right to be offered an opportunity to participate in, specified business opportunities that are from time to time presented to its non-employee directors (including any non-employee director who serves as one of New TOI’s officers in both his or her director and officer capacities) (“Advisory Charter Proposal F”)

to amend the exclusive forum provision of the Current Charter to provide that, among other administrative or clarifying revisions, unless New TOI consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for any action asserting a cause of action arising under the Securities Act or any rule or regulation promulgated thereunder (in each case, as amended) shall be the federal district courts of the United States of America (“Advisory Charter Proposal G”); and

to provide for certain additional changes, including, among others, (i) changing the post-business combination company’s corporate name from DFP Healthcare Acquisitions Corp.” to “The Oncology Institute, Inc.” and making the company’s corporate existence perpetual and (ii) removing certain provisions related to our status as a blank check company that will no longer apply upon consummation of the Business Combination, all of which our board of directors (the “DFP Board”) believes are necessary to adequately address the needs of the post-business combination company (“Advisory Charter Proposal H”).
(e)
Proposal No. 5 — The Incentive Plan Proposal — to consider and vote upon a proposal to approve, assuming the Business Combination Proposal, Stock Issuance Proposal and Charter Proposal are approved and adopted, The Oncology Institute, Inc. 2021 Incentive Award Plan (the “2021 Plan”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex F, including the authorization of the initial share reserve under the 2021 Plan (the “Incentive Plan Proposal”);
(f)
Proposal No. 6 — The ESPP Proposal — to consider and vote upon a proposal to approve, assuming the Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal and the Incentive Plan Proposal are approved and adopted, The Oncology Institute, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), a copy of which is attached to this proxy statement/prospectus as Annex G, including the authorization of the initial share reserve under the ESPP (the “ESPP Proposal”);
(g)
Proposal No. 7 — The Director Election Proposal — to consider and vote upon a proposal to elect, assuming the Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal, the Incentive plan Proposal and the ESPP Proposal are approved and adopted, [•] directors, in each
 

 
case to serve on New TOI’s Board comprised of [•] directors, in each case to serve on New TOI’s Board for a term expiring at the annual meeting of stockholders to be held in 2022 or until such director’s successor has been duly elected and qualified, or until such director’s earlier death, resignation, retirement or removal (the “Director Election Proposal,” and, together with Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal, the Incentive Plan Proposal and the ESPP Proposal, the “condition precedent proposals”); and
(h)
Proposal No. 8 — The Adjournment Proposal — to consider and vote upon a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote, or we determine that one or more of the closing conditions under the Business Combination is not satisfied or waived (the “Adjournment Proposal”).
Only DFP Stockholders of record at the close of business on [•], 2021 are entitled to notice of the Special Meeting and to vote at the Special Meeting and any adjournments or postponements of the Special Meeting. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.
We will provide you with the proxy statement/prospectus and a proxy card in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournment of the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read, when available, the proxy statement/prospectus (and any documents incorporated into the proxy statement/prospectus by reference) carefully. Please pay particular attention to the section entitled “Risk Factors.
After careful consideration, our board of directors has determined that each of the Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal, the Director Election Proposal and the Adjournment Proposal are in the best interests of DFP and our stockholders and unanimously recommend that you vote or give instructions to vote “FOR” each of those proposals.
The existence of financial and personal interests of our directors and officers may result in a conflict of interest on the part of one or more of the directors between what they may believe is in the best interests of DFP and its stockholders and what they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “The Business Combination Proposal — Interests of the Sponsor and DFP’s Directors and Officers in the Business Combination” in the proxy statement/prospectus for a further discussion.
Under the Merger Agreement, the approval of the condition precedent proposals presented at the Special Meeting is a condition to the consummation of the Business Combination. The adoption of each condition precedent proposal is conditioned on the approval of all of the condition precedent proposals. If our stockholders do not approve each of the condition precedent proposals, the Business Combination may not be consummated. The Adjournment Proposal and the Advisory Charter Proposals are not conditioned on the approval of any other proposal.
Concurrently with the execution of the Merger Agreement, DFP entered into a Stockholder Support Agreement (the “Stockholder Support Agreement”) with TOI, DFP Sponsor LLC (the “Sponsor”) and certain of DFP’s directors and officers (together with the Sponsor, the “Subject Stockholders”), pursuant to which, among other things described in the accompanying proxy statement/prospectus, the Subject Stockholders: (i) agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby, and (ii) agreed not to redeem any of their DFP securities in connection with the Business Combination. Furthermore, DFP also entered into a Company Support Agreement (the “Company Support Agreement”) with TOI and certain TOI stockholders (the “Supporting Stockholders”), pursuant to which the Supporting Stockholders have agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Business Combination. The Supporting Stockholders hold sufficient shares of TOI to cause the approval of the Business Combination on behalf of TOI.
 

 
Furthermore, also concurrently with the execution of the Merger Agreement, DFP entered into certain subscription agreements with certain institutional and accredited investors (the “PIPE Investors”), including Deerfield Private Design Fund IV, L.P. (“Deerfield Fund IV”) and Deerfield Partners, L.P. (“Deerfield Partners,” and, together with Deerfield Fund IV, the “Deerfield Funds”), pursuant to which the PIPE Investors have agreed to purchase, immediately prior to the Closing, an aggregate of 27.5 million shares of DFP Class A Common Stock at a purchase price of $10.00 per share, for aggregate proceeds of $275,000,000 (the “PIPE Investments”). Following the Deerfield Exchange described in the proxy statement/prospectus, for every 100 shares of DFP Class A Common Stock to be purchased by the Deerfield Funds, the Deerfield Funds will have the option to instead purchase one share of Series A Common Equivalent Preferred Stock (as defined in the proxy statement/prospectus) at a purchase price of $1,000 per share.
Pursuant to the Current Charter, a Public Stockholder may request that DFP redeem all or a portion of its Public Shares for cash if the Business Combination is consummated. As a Public Stockholder, and assuming the Business Combination is consummated, you will be entitled to receive cash for any Public Shares to be redeemed only if you:
(i)
(a) hold Public Shares or (b) hold Public Shares through Units and you elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and
(ii)
prior to [•], New York City time, on [•], 2021, (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to Continental Stock Transfer & Trust Company, DFP’s transfer agent (the “transfer agent”), that DFP redeem your Public Shares for cash and (b) deliver your Public Shares to the transfer agent, physically or electronically through Depository Trust Company (“DTC”).
Holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Shares and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact the transfer agent, directly and instruct it to do so. Public Stockholders may elect to redeem all or a portion of their Public Shares even if they vote for the Business Combination Proposal. If the Business Combination is not consummated, the Public Shares will not be redeemed for cash. If the Business Combination is consummated and a Public Stockholder properly exercises its right to redeem their Public Shares and timely delivers its shares to the transfer agent, we will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account (the “Trust Account”) established in connection with our initial public offering (the “IPO”), calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to us to fund our working capital requirements (subject to an annual limit of $500,000) and/or to pay our taxes, divided by the number of then issued and outstanding Public Shares. For illustrative purposes, as of June 30, 2021, this would have amounted to approximately $10.00 per public share. If a Public Stockholder exercises its redemption rights, then it will be exchanging its redeemed Public Shares for cash and will no longer own such shares. Any request to redeem Public Shares, once made, may be withdrawn at any time until the deadline for submitting redemption requests and thereafter, with our consent, until the consummation of the Business Combination. If a holder of a public share delivers its shares in connection with an election to redeem and subsequently decides prior to the deadline for submitting redemption requests not to elect to exercise such rights, it may simply request that DFP instruct the transfer agent to return the shares (physically or electronically). The holder can make such request by contacting the transfer agent, at the address or email address listed in this proxy statement/prospectus. See “The Special Meeting — Redemption Rights” in the proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.
Notwithstanding the foregoing, a holder of Public Shares, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares.
 

 
Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
In connection with the consummation of the Business Combination, all of the issued and outstanding shares of DFP Class A Common Stock, including the shares of DFP Class A Common stock issued in the PIPE Investments, will become shares of New TOI Common Stock.
All DFP Stockholders are cordially invited to attend the Special Meeting which will be held in virtual format. You will not be able to physically attend the Special Meeting. To ensure your representation at the Special Meeting, however, you are urged to complete, sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible. If you are a stockholder of record holding DFP Shares, you may also cast your vote at the Special Meeting electronically by visiting [•]. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the Special Meeting and vote electronically, obtain a proxy from your broker or bank. The Charter Proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of DFP common stock, voting as a single class. Accordingly, if you do not vote or do not instruct your broker or bank how to vote, it will have the same effect as a vote “AGAINST” the Charter Proposal. Because approval of the other proposals only require a majority of the votes cast, assuming a quorum is established at the Special Meeting, if you do not vote or do not instruct your broker or bank how to vote, it will have no effect on these other proposals because such action would not count as a vote cast at the Special Meeting.
Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting or not, please sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
If you have any questions or need assistance voting your common stock, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing DFPH.info@investor.morrowsodali.com. This notice of Special Meeting is and the proxy statement/prospectus relating to the Business Combination will be available at [•].
Thank you for your participation. We look forward to your continued support.
[•], 2021
By Order of the Board of Directors,
   
Richard Barasch
Executive Chairman
IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (I) IF YOU HOLD SHARES OF DFP CLASS A COMMON STOCK THROUGH UNITS, ELECT TO SEPARATE YOUR UNITS INTO THE UNDERLYING SHARES OF DFP CLASS A COMMON STOCK AND PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE PUBLIC SHARES, (II) SUBMIT A WRITTEN REQUEST, INCLUDING THE LEGAL NAME, PHONE NUMBER AND ADDRESS OF THE BENEFICIAL OWNER OF THE SHARES FOR WHICH REDEMPTION IS REQUESTED, TO THE TRANSFER AGENT THAT YOUR PUBLIC SHARES BE REDEEMED FOR CASH AND (III) DELIVER YOUR SHARES OF DFP CLASS A COMMON STOCK TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE, IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE PROXY STATEMENT/PROSPECTUS. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “THE SPECIAL MEETING — REDEMPTION RIGHTS” IN THIS PROXY STATEMENT/PROSPECTUS FOR MORE SPECIFIC INSTRUCTIONS.
 

 
ABOUT THIS DOCUMENT
This document, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission by DFP, constitutes a prospectus of DFP under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of DFP Class A Common Stock of DFP to be issued to TOI stockholders under the Merger Agreement. This document also constitutes a proxy statement of DFP under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
You should rely only on the information contained or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to DFP Stockholders nor the issuance by DFP of its Class A Common Stock in connection with the Business Combination will create any implication to the contrary.
Information contained in this proxy statement/prospectus regarding DFP has been provided by DFP and information contained in this proxy statement/prospectus regarding TOI has been provided by TOI.
This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
 

 
MARKET AND INDUSTRY DATA
This proxy statement/prospectus contains information concerning the market and industry in which TOI conducts its business. This proxy statement/prospectus includes market and industry data and forecasts that TOI has derived from publicly available information, various industry publications, other published industry sources and internal data and estimates. Industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable. Internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which TOI operates and TOI’s and our management’s understanding of industry conditions. Although we believe that such information is reliable, we have not had this information verified by any independent sources. Any estimates underlying such market-derived information and other factors could cause actual results to differ materially from those expressed in the independent parties’ estimates and in our estimates.
 

 
TABLE OF CONTENTS
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ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information about DFP from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available for you to review at the public reference room of the U.S. Securities and Exchange Commission, or SEC, located at 100 F Street, N.E., Washington, D.C. 20549, and through the SEC’s website at www.sec.gov. You can also obtain the documents incorporated by reference into this proxy statement/prospectus free of charge by requesting them in writing or by telephone from the appropriate company at the following address and telephone number:
DFP Healthcare Acquisitions Corp.
345 Park Avenue South
New York, New York 10010
Tel: (212) 551-1600
Attention: Chief Executive Officer
or
Morrow Sodali LLC
(800) 662-5200
(banks and brokers can call collect at (203) 658-9400)
Email: DFPH.info@investor.morrowsodali.com
To obtain timely delivery, DFP Stockholders must request the materials no later than five business days prior to the Special Meeting.
You also may obtain additional proxy cards and other information related to the proxy solicitation by contacting the appropriate contact listed above. You will not be charged for any of these documents that you request.
For a more detailed description of the information incorporated by reference in this proxy statement/prospectus and how you may obtain it, see the section entitled “Where You Can Find More Information.”
 
iii

 
CERTAIN DEFINED TERMS
Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our” and “DFP” refer to DFP Healthcare Acquisitions Corp., and the terms “New TOI,” “combined company” and “post-combination company” refer to The Oncology Institute, Inc. (f/k/a DFP Healthcare Acquisitions Corp. as of immediately following the consummation of the Business Combination) and its subsidiaries following the consummation of the Business Combination.
In this document:
2021 Plan” means The Oncology Institute, Inc. 2021 Incentive Award Plan, attached as Annex F.
Acquiror Transaction Expenses” means all unpaid fees, costs and expenses incurred by or on behalf of the DFP, First Merger Sub and Second Merger Sub prior to and through the Closing in connection with the negotiation, preparation and execution of the Merger Agreement, the other transaction agreements, the performance and compliance with all transaction agreements and conditions contained in the Merger Agreement to be performed or complied with by DFP at or before Closing, and the consummation of the Business Combination including all associated costs.
Adjournment Proposal” means the proposal to adjourn the Special Meeting to a later date or dates.
Advisers Act” means the Investment Advisers Act of 1940.
Advisory Charter Proposals” means the separate proposals to approve the differences between the Proposed Charter and the Current Charter.
Affected Periods” means the quarterly periods ended March 31, 2020, June 30, 2020 and September 30, 2020 and for the period from November 1, 2019 (inception) through December 31, 2020.
Antitrust Fees” means any and all filing fees payable to the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission under the HSR Act or the antitrust or competition Law authorities of any other jurisdiction in connection with the Business Combination.
ASC 815” means the Accounting Standards Codification 815, Derivatives and Hedging.
Available Closing Acquiror Cash” means an amount equal to (i) all amounts in the Trust Account (after reduction for the aggregate amount of payments required to be made in connection with any DFP Stockholder redemptions), plus (ii) the aggregate amount of cash that has been funded to and remains with DFP pursuant to the Subscription Agreements as of immediately prior to the Closing, minus (iii) expenses of DFP and its affiliates incurred prior to the Closing consistent with the disclosures set forth in all documents filed with the SEC since March 10, 2020, minus (iv) Acquiror Transaction Expenses, minus (v) Company Transaction Expenses.
Board” means the board of directors of DFP.
Business Combination” means the transactions contemplated by the Merger Agreement, including the merger of Merger Sub with and into TOI Parent, Inc., pursuant to which (i) the First Merger Sub will merge with and into TOI, with TOI being the surviving corporation and (ii) immediately following the First Merger, TOI will merge with and into the Second Merger Sub with Second Merger Sub being the surviving entity and a wholly owned subsidiary of DFP, which will be renamed “The Oncology Institute, Inc.”
Business Combination Agreement” means that certain Business Combination Agreement, dated as of June 28, 2021 by and among, DFP, First Merger Sub, Second Merger Sub, and TOI.
Closing” means the closing of the Business Combination.
Closing Cash Consideration” means an amount equal to the Available Closing Acquiror Cash, multiplied by 0.5556; provided, that if the Closing Cash Consideration would result in Closing Share Consideration that is less than the Minimum Share Consideration multiplied by $10, the Closing Cash Consideration will be decreased by the minimum extent necessary such that the Closing Share Consideration equals an amount equal to the Minimum Share Consideration multiplied by $10.
 
iv

 
Closing Date” means the closing date of the Business Combination.
Closing Merger Consideration” means an amount equal to $762,052,411.00.
Closing Share Consideration” means a number of shares (rounded to the nearest whole share) of DFP Class A Common Stock determined by dividing (a) (i) the Closing Merger Consideration minus (ii) the Closing Cash Consideration by (b) 10.
Code” means the Internal Revenue Code of 1986, as amended.
Company Option” means each of the options to purchase TOI Common Stock.
Company RSU” means each restricted stock unit under TOI’s incentive stock plan or otherwise, whether or not vested.
Company Support Agreement” means the agreement between DFP and the Supporting Stockholders.
Company Transaction Expenses” means the aggregate amount of (i) all accrued and unpaid fees, costs and expenses incurred by or on behalf of the TOI, its subsidiaries and the Group Companies prior to and through the Closing in connection with the negotiation, preparation and execution of the Merger Agreement, the other transaction agreements, the performance and compliance with all transaction agreements and conditions contained in the Merger Agreement to be performed or complied with at or before Closing, and the consummation of the Business Combination, including any and all professional or transaction related costs, fees and expenses of legal, accounting and financial advisors, consultants, auditors, accountants and brokers and (b) any Transaction Bonuses.
Comparable Companies” means collectively, One Medical, Oak Street Health, Progyny, Signify Health, Agilon Health and InnovAge.
Consent and Waiver Letter” means the Consent and Waiver Letter, dated as of June 28, 2021, by and among the DFP, Deerfield Fund IV and the DFP Sponsor, filed with the SEC on June 28, 2021.
Conversion” means the conversion of TOI preferred stock into TOI Common Stock.
Conversion Blockers” means the anticipated limit applicable to the Deerfield Holders on the conversion of Series A Common Equivalent Preferred Stock and/or the exercise of Private Placement Warrants and the Public Warrants into New TOI Common Stock such that, upon such conversion and/or exercise, the number of shares of New TOI Common Stock then beneficially owned by the Deerfield Holders and its affiliates and any other person or entity with whom the converting and/or exercising holder’s beneficial ownership would be aggregated for purposes of Section 13(d) under the Exchange Act, including any “group” members, cannot exceed 4.9% of the total number of shares of New TOI Common Stock then outstanding.
Current Charter” means DFP’s second amended and restated certificate of incorporation dated March 10, 2020.
Deerfield Funds” means Deerfield Partners and Deerfield Fund IV.
Deerfield Fund IV” means Deerfield Private Design Fund IV, L.P.
Deerfield Holders” means the Sponsor, Deerfield Fund IV and Deerfield Partners, L.P
Deerfield Management” means Deerfield Management Company, L.P., a Delaware series limited partnership (Series C).
Deerfield Partners” means Deerfield Partners, L.P.
Deerfield PIPE Investments” means the private placements with each of Deerfield Partners and Deerfield Fund IV, pursuant to which such investors have agreed to purchase 10 million shares of purchase Series A Common Equivalent Preferred for a purchase price of $10.00 per share pursuant to the Deerfield Subscription Agreements. Following the Deerfield Exchange, for every 100 shares of DFP Class A Common Stock to be purchased by the Deerfield Funds, the Deerfield Funds will have the option to instead purchase one share of Series A Common Equivalent Preferred Stock at a purchase price of $1,000 per share.
 
v

 
Deerfield Subscription” means the purchase of 10 million shares of DFP Class A Common Stock by Deerfield Partners and Deerfield Fund IV. However, for every 100 shares of DFP Class A Common Stock to be purchased by the Deerfield Funds, the Deerfield Funds will have the option to instead purchase one share of Series A Common Equivalent Preferred Stock at a purchase price of $1,000 per share.
Deerfield Subscription Agreements” means the subscription agreements, each dated as of June 28, 2021, between DFP and the Deerfield Funds pursuant to which the Deerfield Funds are making the Deerfield PIPE investments, the form of which is attached to this proxy statement/prospectus as Annex E.
Deferred Underwriting Fees” means the underwriting discount of 2.0% of the per unit offering price, or $3.6 million, at the closing of the IPO, with an additional fee.
DFB” means DFB Healthcare Acquisitions Corp.
DFHT” means Deerfield Healthcare Technology Acquisitions Corp.
DFP” means DFP Healthcare Acquisitions Corp., a Delaware corporation (which, after the Closing will be known as “The Oncology Institute, Inc.”).
DFP Board” means the board of directors of DFP.
DFP Class A Common Stock” means the shares of DFP Class A common stock, par value $0.0001 per share, of DFP.
DFP Class B Common Stock” means the shares of Class B common stock, par value $0.0001 per share, of DFP.
DFP Shares” means, collectively, the DFP Class A Common Stock and DFP Class B Common Stock.
DFP Stockholders” means the holders of DFP Shares.
DGCL” means the General Corporation Law of the State of Delaware.
DTC” means The Depository Trust Company.
Earnout Shares” means the issuance of New TOI Common Stock to eligible holders of securities.
Effective Time” means the time at which the Business Combination becomes effective.
Eligible Cash-Out Vested Company Option” means the number of Company Options multiplied by a fraction, the numerator of which is the Closing Cash Consideration and the denominator of which is the Closing Merger Consideration (rounded up to the nearest whole number).
ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
Escrow Agent” means the Continental Stock Transfer & Trust Company.
ESPP” means The Oncology Institute, Inc. 2021 Employee Stock Purchase Plan, attached as Annex G.
Exchange Act” means the Securities Exchange Act of 1934, as amended.
Exchange Ratio” means the quotient obtained by dividing (a) 76,205,241.10 by (b) the Aggregate Fully Diluted Company Common Stock (as defined in the Merger Agreement).
Fair Market Value” means the average reported last sale price of the New TOI Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
First Merger” means the transactions pursuant to which the First Merger Sub will merge with and into TOI.
First Merger Sub” means Orion Merger Sub I, Inc., a Delaware corporation.
 
vi

 
Founder Shares” means the aggregate of 5,750,000 shares of DFP Class B Common Stock held by the Sponsor.
GAAP” means United States generally accepted accounting principles.
Group Companies” means TOI and all of its direct and indirect Subsidiaries.
HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Initial Stockholders” means the Sponsor and DFP’s executive officers and directors who were the holders of the Founder Shares prior to the IPO.
Intended Income Tax Treatment” means, for U.S. federal income tax purposes, the intent of the parties to the Merger Agreement that (i) the First Merger and the Second Merger, taken together, constitute an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code and the regulations promulgated thereunder to which DFP and TOI are parties under Section 368(b) of the Code, and (ii) the Merger Agreement be, adopted as a “plan of reorganization” for purposes of Section 368 of the Code and Section 1.368-2(g) of the regulations promulgated thereunder.
Investment Company Act” means the Investment Company Act of 1940, as amended.
IPO” means DFP’s initial public offering, consummated on March 13, 2020, through the sale of 23,000,000 Units at $10.00 per unit.
IRS” means the U.S. Internal Revenue Service.
JOBS Act” means the Jumpstart Our Business Startups Act of 2012.
Lock-up Shares” means the shares of common stock of DFP issued (a) as consideration pursuant to the First Merger and Second Merger, (b) to directors, officers and employees of DFP upon the settlement or exercise of restricted stock units, stock options or other equity awards outstanding as of immediately following the closing of the Business Combination in respect of awards of TOI outstanding immediately prior to the closing of the Business Combination or (c) as Class B Common Stock of DFP prior to the Business Combination, as well as any shares of DFP into which the DFP Class B Common Stock may be converted in connection with the Business Combination.
Merger Agreement” means that Agreement and Plan of Merger, dated as of June 28, 2021, by and among DFP, First Merger Sub, Second Merger Sub and TOI, a copy of which is attached as Annex A.
Merger Subs” means First Merger Sub and Second Merger Sub.
Minimum Available Closing Cash Condition” means requirement under the Merger Agreement that we have freely usable cash contained in the Trust Account (after giving effect to DFP Stockholder redemptions and the payment of certain enumerated expenses), together with the aggregate amount of proceeds from the PIPE Investments funded and remaining with DFP equaling or exceeding $290,000,000, which includes a minimum of $50,000,000 in the Trust Account following all DFP Stockholder redemptions but prior to the PIPE Investments.
Minimum Share Consideration” means solely to the extent TOI elects application thereof, the number of shares (rounded up to the nearest whole share) of DFP Class A Common Stock that represents the minimum number of shares of DFP Class A Common Stock that is required to ensure that the Business Combination qualify for the Intended Income Tax Treatment.
Morrow” means Morrow Sodali LLC, proxy solicitor to DFP.
Management” or our “Management Team” are DFP’s executive officers and directors.
Nasdaq” means the Nasdaq Capital Market.
Nasdaq Listing Rule” means each of the applicable listing rules of Nasdaq.
New Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement to be entered into at Closing by the Sponsor, DFP, TOI and the other signatories thereto.
 
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New TOI” means the Delaware corporation which, prior to consummation of the Business Combination, was known as DFP Healthcare Acquisitions Corp. (“DFP” herein).
New TOI Board” means the board of directors of New TOI.
New TOI Common Stock” means the shares of Common Stock, par value $0.0001 per share, of New TOI.
New TOI Management” means the management of New TOI following the consummation of the Business Combination.
Order” means an order under Section 203(e) and 203(k) of the Advisers voluntarily agreed to as part of a settlement of an SEC administrative proceeding relating to alleged violations of Section 204A of the Investment Advisers Act of 1940 on August 21, 2017 by Deerfield Management.
Per Share Merger Consideration” means each share of TOI Common Stock issued and outstanding immediately prior to the Effective Time that will be canceled and converted into the right to receive (i) a number of shares of DFP Class A Common Stock equal to the Closing Share Consideration divided by the Aggregate Fully Diluted Company Common Stock and (ii) an amount in cash equal to the Closing Cash Consideration divided by the Aggregate Fully Diluted Company Common Stock.
PIPE Investors” means the investors who are party to the Subscription Agreements.
PIPE Investments” means the Deerfield PIPE Investments and the Third-Party PIPE Investments.
Private Placement” means the issuance of an aggregate of 27.5 million shares of DFP Class A Common Stock pursuant to the Subscription Agreements to the PIPE Investors immediately before the Closing, at a purchase price of $10.00 per share.
Private Placement Warrants” means the 3,733,334 warrants issued to our Sponsor concurrently with our IPO, each of which is exercisable for one share of DFP Class A Common Stock.
Projections” means the prospective financial information prepared by the management of TOI, provided to the DFP Board.
Proposed Bylaws” means the proposed amended and restated bylaws to be adopted by DFP immediately prior to the Closing, a copy of which is attached as Annex C to this proxy statement/prospectus.
Proposed Charter” means the proposed third amended and restated certificate of incorporation to be adopted by DFP pursuant to the Charter Proposal immediately prior to the Closing (and which at and after the Closing will operate as the third amended and restated certificate of incorporation of New TOI), a copy of which is attached as Annex B to this proxy statement/prospectus.
Public Shares” means shares of DFP Class A Common Stock included in the Units issued in the IPO.
Public Stockholders” means holders of Public Shares.
Public Warrants” means the warrants included in the Units issued in the IPO, each of which is exercisable for one share of DFP Class A Common Stock, in accordance with its terms.
PWAM” means Park West Asset Management LLC.
PW Funds” means, collectively, PWAM, PWIMF and PWPI.
PWIMF” means Park West Partners International, Limited.
PWPI” means Park West Partners International, Limited.
Registration Rights Agreement” means the Registration Rights Agreement, dated as of, by and between DFP and the parties thereto.
 
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Restricted Stock” means each share of TOI Common Stock outstanding immediately prior to the Effective Time that is subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code.
Rights Holders” means the Sponsor, the Deerfield Funds and the other parties to the New Registration Rights Agreement, collectively, at Closing.
Rule 144” means Rule 144 under the Securities Act.
SEC” means the United States Securities and Exchange Commission.
SEC Statement” means the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by SPACs.”
Second Merger” means the transactions pursuant to which the TOI will merge with and the Second Merger Sub.
Second Merger Sub” means Orion Merger Sub II, LLC, a Delaware limited liability company.
Securities Act” means the Securities Act of 1933, as amended.
Series A Common Equivalent Preferred Stock” means the DFP Class A Common Stock and DFP Class B Common Stock that will be exchanged for a DFP preferred stock, par value $0.0001 per share.
SPACs” means Special Purpose Acquisition Companies.
Special Meeting” means the special meeting of the stockholders of DFP that is the subject of this proxy statement/prospectus.
Sponsor” means DFP Sponsor LLC, a Delaware limited liability company.
Sponsor Earnout Securities” means the Sponsor Earnout Shares, the Sponsor Earnout Warrants, together with the Sponsor Earnout Shares.
Sponsor Earnout Shares” means the 575,000 shares of DFP Class A Common Stock deposited by Sponsors immediately following the Closing.
Sponsor Earnout Warrants” means the 373,333 Private Placement Warrants.
Stockholder Support Agreement” means the agreement with TOI, the Sponsor and certain of DFP’s directors and officers (together with the Sponsor, the “Subject Stockholders”).
Subject Shares” means the 20% of the shares of DFP Class B Common Stock held by the Sponsor.
Subject Warrants” means 20% of the Private Placement Warrants held by the Sponsor.
Subscriptions” means the subscription agreements, each dated June 28, 2021, with certain investors, pursuant to which such investors have agreed to purchase an aggregate of 17.5 million shares of DFP Class A Common Stock.
Subscription Agreements” means the Deerfield Subscription Agreements and the Third-Party Subscription Agreements.
Supporting Stockholders” means TOI and certain TOI stockholders under the Company Support Agreement.
Termination Date” means March 13, 2022.
Third-Party PIPE Investments” means the private placements with each of the Third-Party PIPE Investors pursuant to the Third-Party Subscription Agreements.
Third-Party PIPE Investors” means the investors who have agreed to purchase an aggregate of 17.5 million shares of DFP Class A Common Stock for a purchase price of $10.00 per share pursuant to the Third-Party Subscription Agreements.
 
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Third-Party Subscription Agreements” means the subscription agreements, each dated as of June 28, 2021, between DFP and the Third-Party PIPE Investors pursuant to which the Third-Party Investors are making the Third-Party PIPE Investments, the form of which is attached to this proxy statement/prospectus as Annex D.
TOI” means TOI Parent, Inc., a Delaware corporation.
TOI Common Stock” means the shares of common stock of TOI, par value $0.001 per share.
TOI PCs” means the Physician-owned professional entities with which TOI enters into management services agreements to act as manager and administrator of their non-medical functions and services related to healthcare services and items provided to patients by physicians and other licenses healthcare providers employed by or under contract with a TOI PC.
TOI Preferred Stock” means TOI preferred stock, par value $0.001 per share.
Transaction Bonuses” means payments to officers, employees, consultants, directors and managers of TOI, its subsidiaries and the Group Companies as change of control payments, severance payments, special or retention bonuses, and similar payments, in each case, paid or payable as a result of the transactions contemplated by the Merger Agreement and the other transaction agreements (including the employer portion of any tax in connection with such).
Transfer Agent” means Continental Stock Transfer & Trust Company.
Transfer Taxes” means all transfer, documentary, sales, use, stamp, registration, value-added or other similar Taxes incurred in connection with the Business Combination.
Trust Account” means the Trust Account of DFP that holds the proceeds from DFP’s IPO and the private placement of the Private Placement Warrants.
Trust Agreement” mean that certain Investment Management Trust Agreement, dated as of June 25, 2020, between DFP and the Trustee.
Trustee” means Continental Stock Transfer & Trust Company.
Units” means the units of DFP, each consisting of one share of DFP Class A Common Stock and one-fourth of one public warrant of DFP.
Vested Company Option” means each of the options to purchase TOI Common Stock if vested and outstanding as of immediately prior to the Effective Time.
Working Capital Loans” means loans our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors may but are no to obligated to provide us in order to finance transaction costs in connection with a Business Combination.
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus includes forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of DFP and TOI. These statements are based on the beliefs and assumptions of the management of DFP and TOI. Although DFP and TOI believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither DFP nor TOI can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” or “intends” or similar expressions. The forward-looking statements are based on projections prepared by, and are the responsibility of, TOI’s management. Forward-looking statements contained in this proxy statement/prospectus related to DFP, TOI and New TOI include, but are not limited to, statements about:

meeting the Closing conditions to the Business Combination, including approval by DFP Stockholders and the availability of at least $290,000,000 in cash in the Trust Account (after giving effect to DFP Stockholder redemptions but excluding the payment of certain enumerated expenses) together with the aggregate amount of proceeds from the PIPE Investments funded and remaining with DFP, which includes a minimum of $50,000,000 in the Trust Account following all DFP Stockholder redemptions but prior to PIPE Investments;

our ability to realize the benefits of the Business Combination;

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

the ability to obtain and/or maintain the listing of New TOI’s Common Stock on Nasdaq following the Combination;

litigation; and

the business, operations and financial performance of New TOI; and

other factors detailed under the section entitled “Risk Factors.”
These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflects events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
In addition, statements that DFP, TOI or New TOI “believes” and similar statements reflect such parties’ beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that DFP, TOI or New TOI has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination Agreement;
 
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the outcome of any legal proceedings that may be instituted against DFP, TOI or New TOI following the announcement of the proposed Business Combination and transactions contemplated thereby;

the inability to complete the transactions contemplated by the proposed Business Combination due to the failure to obtain approval of the stockholders of DFP or other conditions to Closing in the Business Combination Agreement;

the risk that the proposed Business Combination disrupts current plans and operations as a result of the announcement and consummation of the transactions described herein;

the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of New TOI to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees, and the ability to integrate DFP and TOI;

costs related to the proposed Business Combination;

the ability to obtain and/or maintain the listing of New TOI Common Stock on Nasdaq following the Business Combination;

the possibility that DFP, TOI or New TOI may be adversely impacted by other economic, business, and/or competitive factors;

factors relating to the business, operations and financial performance of New TOI, including:

its ability to build or acquire new clinics;

its history of losses and the risk it may not achieve profitability;

the impact of the COVID-19 pandemic on its business or on its ability to forecast its

business’s financial outlook;

its ability to attract new patients;

its relationships with payors;

future costs of oncology care;

the reduction in Medicare reimbursement rates;

potential changes in the payor mix of patients;

the reduction of reimbursement rates for care;

its compliance with regulations;

its ability to comply with federal and state privacy regulations and the significant liability that could result from a cybersecurity breach or its failure to comply with such regulations;

its ability to establish and maintain strategic relationship with third parties; and

other risks and uncertainties indicated in this proxy statement/prospectus, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC.
 
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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING
The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to DFP Stockholders. DFP urges stockholders to read carefully this entire proxy statement, including the annexes and the other documents referred to herein.
Q:
Why am I receiving this proxy statement/prospectus?
A:
DFP is proposing to consummate the Business Combination with TOI. DFP, First Merger Sub, Second Merger Sub and TOI have entered into the Merger Agreement, the terms of which are described in this proxy statement/prospectus. A copy of the Merger Agreement is attached hereto as Annex A. DFP urges its stockholders to read the Merger Agreement in its entirety.
The Merger Agreement must be adopted by DFP Stockholders in accordance with the DGCL and the Current Charter. DFP is holding a Special Meeting to obtain that approval. DFP Stockholders will also be asked to vote on certain other matters described in this proxy statement/prospectus at the Special Meeting and to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies in the even there are not sufficient votes at the time of the Special Meeting to adopt the Merger Agreement and thereby approve the Business Combination.
THE VOTE OF DFP STOCKHOLDERS IS IMPORTANT. DFP STOCKHOLDERS ARE URGED TO SUBMIT THEIR PROXIES AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS AND CAREFULLY CONSIDERING EACH OF THE PROPOSALS BEING PRESENTED AT THE MEETING.
Q:
Why is DFP proposing the Business Combination?
A:
DFP was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses.
Based on its due diligence investigations of TOI and the industries in which it operates, including the financial and other information provided by TOI in the course of DFP’s due diligence investigations, the DFP Board believes that the Business Combination with TOI is in the best interests of DFP and its stockholders and presents an opportunity to increase stockholder value. However, there can be no assurances of this.
Although the DFP Board believes that the Business Combination with TOI presents a unique business combination opportunity and is in the best interests of DFP and its stockholders, the DFP Board did consider certain potentially material negative factors in arriving at that conclusion. See “The Business Combination Proposal —  DFP’s Board of Directors’ Reasons for the Approval of the Business Combination” for a discussion of the factors considered by the DFP Board in making its decision.
Q:
What is TOI?
A:
TOI is a leading value-based oncology company that manages community-based oncology practices that serve patients at over 55 clinic locations across eight markets and four states throughout the United States, which are staffed with more than 80 oncologists and advanced practice providers. 41 of these clinics are staffed with 68 providers employed by TOI’s affiliated physician-owned professional entities, which are referred to as the “TOI PCs”; and 14 of the clinics are owned by independent oncology practices to whom TOI provides management services. The TOI PCs provided care for more than 46,000 patients in 2020, and managed a population of over 1.3 million patients under value-based agreements as of March 31, 2021. TOI’s mission is to heal and empower cancer patients through compassionate and state-of-the art medical care.
TOI’s managed clinics provide a range of medical oncology and hematology services, including physician services, in-house infusion and dispensary, innovative programs like outpatient stem cell transplants and transfusions, along with 24/7 patient support. Through the Innovative Clinical Research
 
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Institute (“ICRI”), the clinical research arm of the TOI PCs, TOI also provides and manages clinical trial services and research for the benefit of cancer patients. Many of the 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 and ICRI bring these services to patients in a community setting.
As a value-based oncology company, TOI seeks to deliver both better quality care and lower cost of care. TOI works to accomplish this goal by reducing wasteful, inefficient or counterproductive care that drives up costs but does not improve outcomes. TOI believes payors and employers are aligned with the value-based model due to its enhanced access, improved outcomes, and lower costs. Patients under our 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. TOI believes that its affiliated providers enjoy the stability and predictability of a large multi-state practice, are not incentivized or pressured to over-treat 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.
Q:
What are the conditions to the completion of the Business Combination?
A:
The Closing is subject to certain conditions, including, among other things: (i) the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, (ii) the absence of any provision of any applicable legal requirement and any temporary, preliminary or permanent restraining order prohibiting, enjoining or making illegal the consummation of the Business Combination, (iii) the approval of the Business Combination by the DFP Stockholders and the stockholders of TOI and (iv) the freely usable cash contained in the Trust Account (after giving effect to DFP Stockholder redemptions and the payment of certain enumerated expenses), together with the aggregate amount of proceeds from the PIPE Investments funded and remaining with DFP equaling or exceeding $290,000,000, which includes a minimum of $50,000,000 in the Trust Account following all DFP Stockholder redemptions but prior to the PIPE Investments (the “Minimum Available Closing Cash Condition”). See the section entitled “The Merger Agreement.”
Q:
When and where will the Special Meeting take place?
A:
The Special Meeting of DFP Stockholders will be held on [•], 2021, at [•] New York City time, at [•].
In light of ongoing developments related to COVID-19, and the related protocols that governments have implemented, the DFP Board determined that the Special Meeting will be a virtual meeting conducted exclusively via live webcast. The DFP Board believes that this is the right choice for DFP and its stockholders at this time, as it permits stockholders to attend and participate in the Special Meeting while safeguarding the health and safety of DFP’s stockholders, directors and management team. You will be able to attend the Special Meeting online, vote, view the list of stockholders entitled to vote at the Special Meeting and submit your questions during the Special Meeting by visiting [•]. To participate in the virtual meeting, you will need a 12-digit control number assigned by Continental Stock Transfer & Trust Company. The meeting webcast will begin promptly at [•], New York City time. We encourage you to access the meeting prior to the start time and you should allow ample time for the check-in procedures. Because the Special Meeting will be a completely virtual meeting, there will be no physical location for stockholders to attend.
Beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the Special Meeting. After contacting Continental Stock Transfer & Trust Company, a beneficial holder will receive an e-mail prior to the meeting with a link and instructions for entering the Special Meeting. Beneficial stockholders should contact Continental Stock Transfer & Trust Company at least five business days prior to the meeting date in order to ensure access.
 
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Q:
What is being voted on?
A:
Below are the proposals on which DFP Stockholders are being asked to vote:

a proposal to adopt the Merger Agreement and approve the Business Combination (the “Business Combination Proposal”);

a proposal to approve, assuming the Business Combination Proposal is approved and adopted, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of New TOI Common Stock pursuant to the terms Merger Agreement and the issuance of DFP Class A Common Stock pursuant to the terms of the Subscription Agreements (the “Stock Issuance Proposal”);

a proposal to approve, assuming the Business Combination Proposal and the Stock Issuance Proposal are approved and adopted, the Proposed Charter (the “Charter Amendment Proposal”);

a proposal to approve, on a non-binding advisory basis and as required by applicable SEC guidance, certain material differences between the Current Charter and the Proposed Charter (the “Advisory Charter Proposals”);

a proposal to approve, assuming the Business Combination Proposal, Stock Issuance Proposal and Charter Proposal are approved and adopted, the 2021 Plan, including the authorization of the initial share reserve under the 2021 Plan (the “Incentive Plan Proposal”);

a proposal to approve, assuming the Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal and the Incentive Plan Proposal are approved and adopted, the ESPP, including the authorization of the initial share reserve under the ESPP (the “ESPP Proposal”);

a proposal to consider and vote upon a proposal to elect, assuming the Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal, the Incentive plan Proposal and the ESPP Proposal are approved and adopted, [•] directors, in each case to serve on New TOI’s board of directors (the “New TOI Board”) for a term expiring at the annual meeting of stockholders to be held in 2022 or until such director’s earlier death, resignation, retirement or removal (the “Director Election Proposal,” and, together with Business Combination Proposal, the Stock Issuance Proposal, the Charter Proposal, the Incentive Plan Proposal and the ESPP Proposal, the “condition precedent proposals”); and

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote, or we determine that one or more of the closing conditions under the Business Combination is not satisfied or waived (the “Adjournment Proposal”).
Q:
Is my vote important?
A:
Yes. The Business Combination cannot be completed unless the Merger Agreement is adopted by the DFP Stockholders holding a majority of the votes cast on such proposal and the other condition precedent proposals achieve the necessary vote outlined below. Only DFP Stockholders as of the close of business on [•], 2021, the record date for the Special Meeting, are entitled to vote at the Special Meeting. The DFP Board unanimously recommends that such DFP Stockholders vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Charter Proposal, “FOR” the approval, on an advisory basis, of the Advisory Charter Proposals, “FOR” the approval of the Incentive Plan Proposal, “FOR” the approval of the ESPP Proposal, “FOR” the election of each of the director nominees to the New TOI Board and “FOR” the approval of the Adjournment Proposal.
 
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Q:
If my shares are held in “street name” by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee automatically vote those shares for me?
A:
No. A “broker non-vote” occurs when a broker submits a proxy that states that the broker does not vote for some or all of the proposals because the broker has not received instructions from the beneficial owners on how to vote on the proposals and does not have discretionary authority to vote in the absence of instructions. Under the relevant rules, brokers are not permitted to vote on any of the matters to be considered at the Special Meeting. As a result, your Public Shares will not be voted on any matter unless you affirmatively instruct your broker, bank or nominee how to vote your shares in one of the ways indicated by your broker, bank or other nominee. You should instruct your broker to vote your shares in accordance with directions you provide.
Q:
What DFP Stockholder vote is required for the approval of each proposal brought before the Special Meeting? What will happen if I fail to vote or abstain from voting on each proposal?
A:
The approval of each of the Business Combination Proposal, the Stock Issuance Proposal, the Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by DFP Stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class. Accordingly, a DFP Stockholder’s abstention, failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or the failure of a DFP Stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee (a “broker non-vote”) will, assuming a valid quorum is established, have no effect on the outcome of any vote on the Business Combination Proposal, the Stock Issuance Proposal, the Incentive Plan Proposal, the ESPP Proposal or the Adjournment Proposal.
The election of directors is decided by a plurality of the votes cast by DFP Stockholders present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class. Accordingly, a DFP Stockholder’s abstention, failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or a broker non-vote will, assuming a valid quorum is established, have no effect on the outcome of Director Election Proposal.
The approval of the Charter Amendment Proposal requires the affirmative vote of a majority of the issued and outstanding shares of DFP Shares voting together as a single class as of the Record Date. Accordingly, a DFP Stockholder’s abstention, failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or a broker non-vote will have the same effect as a vote “AGAINST” the Charter Amendment Proposal.
Q:
What will TOI equityholders receive in connection with the Business Combination?
A:
Immediately prior to the effective time of the First Merger (the “Effective Time”), TOI will cause each share of TOI preferred stock, par value $0.001 per share (“TOI Preferred Stock”) issued and outstanding as of such time to be automatically converted into 10 shares of common stock of TOI, par value $0.001 per share (“TOI Common Stock,” and such conversion, the “Conversion”). After giving effect to the Conversion, no shares of TOI Preferred Stock shall remain issued and outstanding.
At the Effective Time, by virtue of the First Merger and without any action on the part of DFP, First Merger Sub, TOI or the holders of any of TOI’s securities:

Each share of TOI Common Stock issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive (i) a number of shares of DFP Class A common stock, par value $0.0001 per share, of DFP (“DFP Class A Common Stock”) equal to the Closing Share Consideration (as defined below) divided by the Aggregate Fully Diluted Company Common Stock (as defined in the Merger Agreement), (ii) an amount in cash equal to the Closing Cash Consideration (as defined below) divided by the Aggregate Fully Diluted Company Common Stock (clause (i) and (ii) collectively, the “Per Share Merger Consideration”) and (iii) the contingent right to receive Earnout Shares (as defined and described below). “Closing Share Consideration” means a
 
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number of shares (rounded to the nearest whole share) of DFP Class A Common Stock determined by dividing (a) (i) the Closing Merger Consideration minus (ii) the Closing Cash Consideration by (b) 10. “Closing Cash Consideration” means an amount equal to the Available Closing Acquiror Cash (as defined below), multiplied by 0.5556; provided, that if the Closing Cash Consideration would result in Closing Share Consideration that is less than the Minimum Share Consideration (as defined below) multiplied by $10, the Closing Cash Consideration will be decreased by the minimum extent necessary such that the Closing Share Consideration equals an amount equal to the Minimum Share Consideration multiplied by $10. “Closing Merger Consideration” means an amount equal to $762,052,411.00. “Available Closing Acquiror Cash” means, without duplication, an amount equal to (i) all amounts in the Trust Account (defined below) (after reduction for the aggregate amount of payments required to be made in connection with any DFP Stockholder redemptions), plus (ii) the aggregate amount of cash that has been funded to and remains with DFP pursuant to the Subscription Agreements (defined below) as of immediately prior to the Closing, minus (iii) expenses of DFP and its affiliates incurred prior to the Closing consistent with the disclosures set forth in all documents filed with the SEC since March 10, 2020, minus (iv) Acquiror Transaction Expenses (defined below), minus (v) Company Transaction Expenses (defined below). “Acquiror Transaction Expenses” means all unpaid fees, costs and expenses incurred by or on behalf of the DFP, First Merger Sub and Second Merger Sub prior to and through the Closing in connection with the negotiation, preparation and execution of the Merger Agreement, the other transaction agreements, the performance and compliance with all transaction agreements and conditions contained in the Merger Agreement to be performed or complied with by DFP at or before Closing, and the consummation of the Business Combination, including (i) the fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of DFP, (ii) any Antitrust Fees (defined below), (iii) the cost of the D&O tail policy to be obtained pursuant to Section 8.02(b) of the Merger Agreement and (iv) Transfer Taxes (defined below); provided that Acquiror Transaction Expenses shall not include any Company Transaction Expenses. “Company Transaction Expenses” means the aggregate amount of (i) all accrued and unpaid fees, costs and expenses incurred by or on behalf of the TOI, its subsidiaries and the Group Companies (defined below) prior to and through the Closing in connection with the negotiation, preparation and execution of the Merger Agreement, the other transaction agreements, the performance and compliance with all transaction agreements and conditions contained in the Merger Agreement to be performed or complied with at or before Closing, and the consummation of the Business Combination, including any and all professional or transaction related costs, fees and expenses of legal, accounting and financial advisors, consultants, auditors, accountants and brokers and (b) any Transaction Bonuses (defined below). “Antitrust Fees” means any and all filing fees payable to the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission under the HSR Act or the antitrust or competition Law authorities of any other jurisdiction in connection with the Business Combination. “Transfer Taxes” means all transfer, documentary, sales, use, stamp, registration, value-added or other similar Taxes incurred in connection with the Business Combination. “Transaction Bonuses” means payments to officers, employees, consultants, directors and managers of TOI, its subsidiaries and the Group Companies (defined below) as change of control payments, severance payments, special or retention bonuses, and similar payments, in each case, paid or payable as a result of the transactions contemplated by the Merger Agreement and the other transaction agreements (including the employer portion of any tax in connection with such).

Each of the options to purchase TOI Common Stock (each, a “Company Option”), shall be entitled to receive (i) if vested and outstanding as of immediately prior to the Effective Time (after taking into consideration any accelerated vesting that may occur as a result of the Business Combination) (a “Vested Company Option”), (A) with respect to an Eligible Cash-Out Vested Company Option (as defined below), cash in an amount equal to (I) the Per Share Merger Consideration multiplied by (II) the number of shares of TOI Common Stock underlying the Eligible Cash-Out Vested Company Option, minus (III) the aggregate exercise price applicable to the shares of TOI Common Stock underlying such Eligible Cash-Out Vested Company Option and (B) with respect to the remaining shares of TOI Common Stock subject to such Vested Company Option, (I) an option to purchase a number of shares of DFP Class A Common Stock and (II) ) a number of shares of restricted stock equal to the option holder’s pro rata share of the Earnout Shares (as defined below) determined as
 
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if the number of shares subject to such option were outstanding shares; and (ii) if unvested and outstanding as of immediately prior to the Effective Time, (A) an option to purchase shares of DFP Class A Common Stock and (B) a number of shares of restricted stock equal to the option holder’s pro rata share of the Earnout Shares determined as if the number of shares subject to such option were outstanding shares . “Eligible Cash-Out Vested Company Option” means the number of Company Options multiplied by a fraction, the numerator of which is the Closing Cash Consideration and the denominator of which is the Closing Merger Consideration (rounded up to the nearest whole number).

Each share of TOI Common Stock outstanding immediately prior to the Effective Time that is subject to a substantial risk of forfeiture within the meaning of Section 83 of the of 1986, (such TOI Common Stock, “Restricted Stock”), will be, subject to the applicable holder of such Restricted Stock executing and delivering a Restricted Stock Agreement pursuant to which such individual agrees that any consideration paid in respect of the Restricted Stock shall be subject to the same vesting and forfeiture terms on which such Restricted Stock was issued, entitled to receive (i) the Per Share Merger Consideration and (ii) the contingent right to receive Earnout Shares (defined below).

Each restricted stock unit under TOI’s incentive stock plan or otherwise, whether or not vested (“Company RSU”), outstanding immediately prior to the Effective Time will be converted into (i) a restricted stock unit denominated in shares of DFP Class A Common Stock equal to the product of (A) the number of shares of TOI Common Stock subject to such Company RSU immediately prior to the Effective Time and (B) the Exchange Ratio (as defined below), and (ii) the contingent right to receive Earnout Shares. “Exchange Ratio” means the quotient obtained by dividing (a) 76,205,241.10 by (b) the Aggregate Fully Diluted Company Common Stock (as defined in the Merger Agreement.
Following the closing of the Business Combination, New TOI will issue to eligible holders of securities of New TOI up to 12,500,000 additional shares of New TOI Common Stock, par value $0.0001 per share in the aggregate. The Earnout Shares will be earned in two tranches of 5,000,000 and 7,500,000 Earnout Shares, respectively, upon New TOI achieving a price per share of New TOI Common Stock of $12.50 during the two-year period following the Closing or a per share stock price of $15.00 during the three-year period following the Closing, in each case, as its last reported sales price per share for any 20 trading days within any 30 consecutive trading day period within the applicable earnout period; provided, that (i) if one or both of the share price triggers has not been achieved prior to the end of the three-year period following the Closing, (ii) New TOI enters into a definitive agreement that would result in a change of control and (iii) the price per share of New TOI Common Stock in such transaction is equal to or greater than one or both of the share price triggers that have not been satisfied during the applicable earnout period, then, the applicable share price trigger that has not satisfied and earned at the Closing of such transaction as if such share price trigger had been achieved. Holders of Company Options will be issued their pro rata share of the Earnout Shares at Closing, in the form of restricted stock, subject to forfeiture if the Earnout Shares are not earned by the end of the applicable earnout periods. All other Earnout Shares will be issued only if and when the Earnout Shares are earned as described above.
Q:
What equity stake will current DFP Stockholders and former TOI equityholders hold in the Company after the closing of the Business Deal?
A:
Assuming there are no redemptions of DFP Class A Common Stock, the total maximum number of shares of DFP Class A Common Stock expected to be issued to the holders of TOI Common Stock and the PIPE Investors at the Closing of the Business Combination is approximately 77,853,167 shares. As described in this proxy statement/prospectus, prior to the Closing, the Deerfield Holders will exchange a number of their DFP Class A Common Stock and DFP Class B Common Stock for a number of DFP preferred stock, par value $0.0001 per share, to be designated as Series A Common Equivalent Preferred Stock, such that immediately thereafter they will hold an aggregate number of outstanding shares of DFP Class A Common Stock at Closing that will represent 4.5% of the New TOI Common Stock immediately following the Closing. Assuming (i) there are no redemptions of DFP Class A Common Stock, (ii) all of the Earnout Shares have been released to the eligible securities holders of New TOI, and (iii) all of the Subject Shares have been released to the Subject Stockholders: (a) holders
 
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of shares of TOI Common Stock as of immediately prior to the Closing are expected to hold, in the aggregate, 62.9 million shares of New TOI Common Stock, or 60.9% of the issued and outstanding shares of New TOI Common Stock, (b) the holders of Public Shares, excluding the Deerfield Holders’ Public Shares, are expected to hold 18.0 million shares of New TOI Common Stock, or 17.4% of the issued and outstanding shares of New TOI Common Stock, (c)  holders of DFP Class B Common Stock, excluding the Deerfield Holders’ DFP Class B Common Stock, are expected to hold 0.3 million shares of New TOI Common Stock, or 0.3% of the issued and outstanding shares of New TOI Common Stock, (d) the Deerfield Holders are expected to hold 4.6 million shares of New TOI Common Stock, or 4.5% of the issued and outstanding shares of New TOI Common Stock and (e) the PIPE Investors, excluding the Deerfield Holders’, are expected to hold 17.5 million shares of New TOI Common Stock, or 16.9% of the issued and outstanding shares of New TOI Common Stock. See “The Business Combination Proposal  —  Consent and Waiver Letter” for further details on the terms of the Series A Common Equivalent Preferred Stock.
See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Q:
Do TOI’s stockholders need to approve the Business Combination?
A:
Yes. Concurrently with the execution of the Merger Agreement, DFP entered into the Company Support Agreement, pursuant to which the Supporting Stockholders have agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Business Combination. The Supporting Stockholders hold sufficient shares of TOI to cause the approval of the Business Combination on behalf of TOI.
Q:
What happens to the funds deposited in the Trust Account after consummation of the Business Combination?
A:
A total of $230 million, including approximately $6,300,000 of underwriters’ deferred discount and approximately $3,600,000 of the proceeds of the sale of the Private Placement Warrants, was placed in a Trust Account maintained by Continental, acting as trustee. As of June 30, 2021, there were investments and cash held in the Trust Account of $ $230,006,825.45. These funds will not be released until the earlier of Closing or the redemption of our Public Shares if we are unable to complete an initial Business Combination by March 13, 2022, although we may withdraw the interest earned on the funds held in the Trust Account to fund our working capital requirements (subject to an annual limit of $500,000) and/or to pay taxes.
Q:
What happens if a substantial number of the Public Stockholders vote in favor of the Business Combination Proposal and exercise their redemption right?
A:
Public Stockholders who vote in favor of the Business Combination may also nevertheless exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are reduced as a result of redemptions by Public Stockholders. Nonetheless, the consummation of the Business Combination is conditioned upon, among other things, the satisfaction of the Minimum Available Closing Cash Condition (though this condition may be waived by TOI). DFP intends to notify DFP Stockholders by press release promptly after it becomes aware that TOI has waived this condition. In addition, with fewer Public Shares and Public Stockholders, the trading market for New TOI Common Stock may be less liquid than the market for DFP Class A Common Stock was prior to consummation of the Business Combination and New TOI may not be able to meet the listing standards for Nasdaq or another national securities exchange. In addition, with less funds available from the Trust Account, the working capital infusion from the Trust Account into New TOI’s business will be reduced. As a result, the proceeds will be greater in the event that no Public Stockholders exercise redemption rights with respect to their Public Shares for a pro rata portion of the Trust Account as opposed to the scenario in which DFP’s Public Stockholders exercise the maximum allowed redemption rights.
Furthermore, our Current Charter provides that we may not redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the
 
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SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the Merger Agreement. Other than this limitation, our Current Charter does not provide a specified maximum redemption threshold.
Q:
What amendments will be made to the Current Charter?
A:
The Proposed Charter provides for various changes that the DFP Board believes are necessary to address the needs of the post-Business Combination company, including, among other things: (i) an increase in the number of authorized shares, (ii) the elimination of the classified board; (iii) certain changes to the required vote to amend the charter and bylaws, (iv) the removal of the ability of stockholders to act by written consent, (v) the addition of supermajority voting provisions and (vi) the elimination of certain provisions specific to DFP’s status as a blank check company. For further information regarding these amendments to the Current Charter, see the section entitled “Comparisons of Stockholder Rights.”
Pursuant to Delaware law and the Current Charter, DFP is required to submit the Charter Proposal to DFP’s stockholders for approval. For additional information, see the section entitled “The Charter Proposal.
Q:
What material negative factors did the DFP Board consider in connection with the Business Combination?
A:
Although the DFP Board believes that the acquisition of TOI will provide DFP Stockholders with an opportunity to participate in a combined company with a proven model in an attractive market with a record of recurring revenue, and growth that is in a strong competitive position, the DFP Board did consider certain potentially material negative factors in arriving at that conclusion, such as the risk that DFP Stockholders would not approve the Business Combination and the risk that significant numbers of Public Stockholders would exercise their redemption rights. In addition, during the course of DFP management’s evaluation of TOI’s operating business and its public company potential, management conducted detailed due diligence on certain potential challenges. These factors are discussed in greater detail in the section entitled “The Business Combination Proposal — DFP’s Board of Directors’ Reasons for the Approval of the Business Combination” as well as in the section entitled “Risk Factors — Risks Relating to DFP and the Business Combination.
Q:
Do I have redemption rights?
A:
If you are a Public Stockholder, you have the right to request that DFP redeem all or a portion of your Public Shares for cash, provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus under the heading “The Special Meeting — Redemption Rights” Public Stockholders may elect to redeem all or a portion of their Public Shares even if they vote for the Business Combination Proposal. We sometimes refer to these rights to elect to redeem all or a portion of the Public Shares into a pro rata portion of the cash held in the Trust Account as “redemption rights.”
If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?
Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
Our Sponsor, directors and executive officers entered into the insider letter agreement, pursuant to which they agreed to waive their redemption rights with respect to their shares in connection with the completion of a business combination.
Q:
How do I exercise my redemption rights?
A:
If you are a Public Stockholder and wish to exercise your right to redeem your Public Shares, you must:
(i)
(a) hold Public Shares or (b) hold Public Shares through Units and elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and
 
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(ii)
prior to [•], New York City time, on [•], 2021, (a) submit a written request to Continental that DFP redeem your Public Shares for cash and (b) deliver your Public Shares to Continental, physically or electronically through the DTC.
The address of Continental is listed under the question “Whom do I call if I have questions about the Special Meeting or the Business Combination?” below.
Holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Shares and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact Continental directly and instruct them to do so.
Any Public Stockholder will be entitled to request that their Public Shares be redeemed for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to us to fund our working capital requirements (subject to an annual limit of $500,000) and/or to pay our taxes, divided by the number of then issued and outstanding Public Shares. For illustrative purposes, as of June 30, 2021, this would have amounted to approximately $10.00 per public share. However, the proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our Public Stockholders, regardless of whether such Public Stockholders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the Business Combination Proposal will have no impact on the amount you will receive upon exercise of your redemption rights. It is anticipated that the funds to be distributed to Public Stockholders electing to redeem their Public Shares will be distributed promptly after the consummation of the Business Combination.
If you are a holder of Public Shares, you may exercise your redemption rights by submitting your request in writing to Continental at the address listed under the question “Whom do I call if I have questions about the Special Meeting or the Business Combination?” below.
Any request for redemption, once made by a holder of Public Shares, may be withdrawn at any time up to the deadline for submitting redemption requests, which is [•], 2021 (two business days prior to the date of the Special Meeting), and thereafter, with our consent, until the Closing. If you deliver your shares for redemption to Continental and later decide prior to the deadline for submitting redemption requests not to elect redemption, you may request that DFP instruct Continental to return the shares to you (physically or electronically). You may make such request by contacting Continental at the phone number or address listed at the end of this section.
Any corrected or changed written exercise of redemption rights must be received by DFP’s secretary prior to the deadline for submitting redemption requests. No request for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to Continental prior to [•], New York City time, on [•], 2021.
If you are a holder of Public Shares and you exercise your redemption rights, it will not result in the loss of any DFP warrants that you may hold.
Q:
If I am a holder of Units, can I exercise redemption rights with respect to my Units?
A:
No. Holders of outstanding Units must elect to separate the Units into the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If you hold your Units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the Units into the underlying Public Shares and Public Warrants, or if you hold Units registered in your own name, you must contact Continental, DFP’s transfer agent, directly and instruct them to do so. If you fail to cause your Units to be separated and delivered to Continental, DFP’s transfer agent, prior to [•], New York City time, on [•], 2021, you will not be able to exercise your redemption rights with respect to your Public Shares.
 
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Q:
What are the U.S. federal income tax consequences of exercising my redemption rights?
A:
The U.S. federal income tax consequences of exercising your redemption rights depend on your particular facts and circumstances. It is possible that you may be treated as selling your Public Shares for cash and, as a result, recognize capital gain or capital loss. It is also possible that the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the number of Public Shares that you own or are deemed to own (including through the ownership of New TOI warrants). Any portion of such a distribution to you if you are a Non-U.S. holder (as defined below) that constitutes a dividend for U.S. federal income tax purposes will generally be subject to withholding tax at a rate of 30% of the gross amount of the dividend (unless you establish that you are eligible for a reduced rate of withholding tax under an applicable income tax treaty or certain other exceptions apply). Because the determination as to whether a redemption is treated as a sale or a distribution is dependent on matters of fact, withholding agents may presume, for withholding purposes, that all amounts paid to Non-U.S. holders in connection with a redemption are treated as distributions in respect of such Non-U.S. holder’s Public Shares. Accordingly, if you are a Non-U.S. holder, you should expect that a withholding agent will likely withhold U.S. federal income tax on the gross proceeds payable to you pursuant to a redemption at a rate of 30% unless you are eligible for a reduced rate of withholding tax under an applicable income tax treaty and provide proper certification of your eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, or other applicable IRS Form W-8). For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “Material U.S. Federal Income Tax Considerations.”
TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF EXERCISING YOUR REDEMPTION RIGHTS WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXERCISE OF REDEMPTION RIGHTS TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.
Q:
How does the DFP Board recommend that I vote?
A:
DFP Board recommends that the DFP Stockholders vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Charter Proposal, “FOR” the approval, on an advisory basis, of the Advisory Charter Proposals, “FOR” the approval of the Incentive Plan Proposal, “FOR” the approval of the ESPP Proposal, “FOR” the election of each of the director nominees to the New TOI Board and “FOR” the approval of the Adjournment Proposal. For more information regarding how the DFP Board recommends that DFP Stockholders vote, see the section entitled “The Business Combination Proposal — DFP Board’s Reasons for Approval of the Business Combination.
Q:
How do our Initial Stockholders intend to vote their shares?
A:
In connection with the IPO, the Initial Stockholders agreed to vote their Founder Shares and any Public Shares purchased during or after the IPO in favor of the Business Combination. It is expected that our Initial Stockholders will also vote in favor of the other proposals to be voted on by DFP Stockholders at the Special Meeting. Currently, our Initial Stockholders own approximately 20% of the total issued and outstanding shares of DFP Class A Common Stock. Accordingly, if all of our outstanding shares were to be voted, we would need the affirmative vote of approximately 37.5% of the remaining shares to approve the Business Combination.
Additionally, Deerfield Fund IV, an affiliate of our Sponsor, agreed to vote the Public Shares it purchased in the IPO in favor of the Business Combination, subject to its consent right (as described in the section entitled “Certain Relationships and Related Party Transactions — DFP — Deerfield Funds Agreements”).
Q:
May DFP, TOI, the Sponsor, DFP’s directors, officers, advisors or their respective affiliates purchase Public Shares or warrants prior to the Special Meeting?
A:
At any time prior to the Special Meeting, during a period when they are not then aware of any material nonpublic information regarding DFP or its securities, DFP, TOI, the Sponsor, DFP’s directors,
 
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officers, advisors or their respective affiliates purchase shares and/or warrants from investors, or they may enter into transactions with such investors and others to provide them with incentives to acquire Public Shares or vote their Public Shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood that (i) the proposals presented for approval at the Special Meeting are approved and/or (ii) DFP satisfies the Minimum Available Closing Cash Condition. Any such stock purchases and other transactions may thereby increase the likelihood of obtaining stockholder approval of the Business Combination Proposal. This may result in the completion of our Business Combination in a way that may not otherwise have been possible. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or rights owned by the Sponsor for nominal value.
Entering into any such arrangements may have a depressive effect on Public Shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares it owns, either prior to or immediately after the Special Meeting.
If such transactions are effected, the consequence could be to cause the Business Combination Proposal to be approved in circumstances where such approval could not otherwise be obtained. Purchases of Public Shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the Special Meeting and would likely increase the chances that such proposals would be approved. As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder.
Q:
What interests do our Sponsor and current directors and officers have in the Business Combination?
A:
When considering our Board’s recommendation that our stockholders vote in favor of the approval of the Business Combination Proposal, our stockholders should be aware that our Sponsor, directors and officers have interests in the Business Combination that may be different from, or in addition to, the interests of our stockholders. These interests include:

the fact that our Initial Stockholders have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and any Public Shares they hold in connection with the completion of our initial business combination;

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their Founder Shares if we fail to complete our initial business combination by March 13, 2022. If we do not complete our initial business combination by March 13, 2022, the Private Placement Warrants will expire worthless;

the fact that our Initial Stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of our initial business combination and (ii) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price New TOI Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the Founder Shares will be released from the lockup. Subject to certain limited exceptions, the Private Placement Warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own common stock or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination;
 
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the fact that our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination;

the fact that in no event will our Sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination;

the fact that our Initial Stockholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Company’s IPO in favor of our initial business combination, and Deerfield Fund IV agreed to vote the Public Shares it purchased in the Company’s IPO in favor of our initial business combination, subject to its consent right with respect to our initial business combination.

the fact that we have agreed not to complete a business combination without the consent of Deerfield Fund IV, which owns a significant interest in our Sponsor, which consent Deerfield Fund IV has indicated it would not provide if our proposed business combination were to be with a target that is not in the healthcare industry;

the fact that the sponsor paid $25,000 for the Founder Shares and these shares will have a significantly higher value at the time of the business combination, and that, since the Initial Stockholders have waived their redemption rights and their rights to liquidating distributions from the trust account, as noted above, a transaction resulting in an increase in value for the Initial Stockholders but a loss in value for Public Stockholders will result in a total loss of investment for the Initial Stockholders if the transaction is not approved and an alternative business combination is not consummated;

the fact that the Initial Stockholders (including entities controlled by DFP’s officers and directors) have made an aggregate average investment of less than $0.01 per DFP Share as of the consummation of the Company’s IPO, and as a result of the significantly lower investment per share of the Initial Stockholders as compared with the investment per share of DFP’s Public Stockholders, a transaction which results in an increase in the value of the investment of the Initial Stockholders may result in a decrease in the value of the investment of DFP’s Public Stockholders;

the fact that the sponsor paid $5,600,000 for its 3,733,334 Private Placement Warrants, and if a business combination is not consummated by March 13, 2022, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will be worthless;

the fact that if the Trust Account is liquidated, including if we are unable to complete an initial business combination within the required time period, the Sponsor has agreed that it will be jointly and severally liable to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have discussed entering into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if the target business or vendor has not executed a waiver of any and all rights to seek access to the Trust Account;

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

the fact that the Sponsor and our officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses or repaid the Working Capital Loans (as defined in the section entitled “Certain Relationships and Related Party Transactions — DFP — Related Party Loans,”) if any, if an initial business combination is not consummated by March 13, 2022;

the fact that at the signing of the Merger Agreement we entered into the Consent and Waiver Letter with pursuant to which, among other things, Deerfield Fund IV consented to the consummation of the Business Combination and the Sponsor waived any adjustment of the conversion provisions in Section 4.3(b)(ii) of the Current Charter that would, solely as a result of the consummation of the
 
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Business Combination, cause the DFP Class B Common Stock to convert to DFP Class A Common Stock at a ratio of greater than one-for-one upon consummation of the Business Combination; and

the fact that at the Closing we will enter into the New Registration Rights Agreement which will provide registration rights to the Rights Holders (including the Initial Stockholders, the Deerfield Funds and the other parties thereto) and their permitted transferees.
Q:
Will the management of New TOI change in connection with the Closing?
A:
We anticipate that all of the executive officers of TOI will continue to serve in such capacities for New TOI after the Closing. In addition, we expect that each of the current DFP directors, other than Richard Barasch and [•] will resign upon the Closing and each of [•] will be appointed to serve as directors of the post-combination company upon the Closing. For additional information, please see the section entitled “New TOI Management after the Business Combination.”
Q:
Who is entitled to vote at the Special Meeting?
A:
The DFP Board has fixed [•], 2021 as the record date for the Special Meeting. All holders of record of DFP Shares as of the close of business on the record date are entitled to receive notice of, and to vote at, the Special Meeting, provided that those shares remain outstanding on the date of the Special Meeting. Physical attendance at the Special Meeting is not required to vote. See the section entitled “How can I vote my shares without attending the Special Meeting?” for instructions on how to vote your DFP Shares without attending the Special Meeting.
Q:
How many votes do I have?
A:
Each DFP Stockholder of record is entitled to one vote for each DFP Share held by such holder as of the close of business on the record date. As of the close of business on the record date, there were [•] outstanding DFP Shares.
Q:
What constitutes a quorum for the Special Meeting?
A:
A quorum is the minimum number of stockholders necessary to hold a valid meeting.
A quorum will exist at the Special Meeting with respect to each matter to be considered at the Special Meeting if the holders of a majority of the outstanding DFP Shares as of the record date present in person (which would include presence at the virtual Special Meeting) or represented by proxy at the Special Meeting. All shares represented by proxy are counted as present for purposes of establishing a quorum.
Q:
What will happen to my DFP Shares as a result of the Business Combination?
A:
If the Business Combination is completed, each share of DFP Class B Common Stock will be converted into one share of DFP Class A Common Stock in accordance with the terms of the Current Charter and each then outstanding share of DFP Class A Common Stock will automatically become a share of New TOI Common Stock. See the section entitled “The Business Combination Proposal — Consideration to TOI Stockholders and DFP Stockholders” for more information.
Q:
Where will the New TOI Common Stock that DFP Stockholders receive in the Business Combination be publicly traded?
A:
Assuming the Business Combination is completed, the shares of New TOI Common Stock (including the New TOI Common Stock issued in connection with the Business Combination) will be listed and traded on Nasdaq under the ticker symbol “TOI” and the Public Warrants will be listed and traded on Nasdaq under the ticker symbol “TOIW.”
 
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Q:
What happens if the Business Combination is not completed?
A:
If we do not consummate an initial business combination by March 13, 2022, we will cease all operations except for the purpose of winding up and redeem our Public Shares and liquidate the Trust Account, in which case our Public Stockholders may only receive approximately $10.00 per share and our warrants will expire worthless.
Q:
How can I attend and vote my shares at the Special Meeting
A:
If you were the record holder of DFP Shares as of the record date, you may submit your proxy to vote such shares by mail or at the Special Meeting.
Voting by Mail

To submit your proxy by mail, simply mark your proxy card, date and sign it and return it in the postage-paid envelope. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted.

If you vote by mail, your proxy card must be received no later than the close of business, Eastern Time, on [•], 2021.
Please carefully consider the information contained in this proxy statement/prospectus and, whether or not you plan to attend the Special Meeting, please vote by mail so that your shares will be voted in accordance with your wishes even if you later decide not to attend the Special Meeting.
Voting at the Special Meeting

We encourage you to vote by mail. If you attend the Special Meeting, you may also submit your vote at the Special Meeting via the Special Meeting website at [•], in which case any votes that you previously submitted by mail will be superseded by the vote that you cast at the Special Meeting. If your proxy is properly completed and submitted, and if you do not revoke it prior to or at the Special Meeting, your shares will be voted at the Special Meeting in the manner set forth in this proxy statement/prospectus or as otherwise specified by you. Again, your paper proxy card must be received by mail no later than the close of business, Eastern Time, on [•], 2021.
Voting of Shares Held in Street Name

If your shares are held in an account at a broker, bank, or nominee (i.e., in “street name”), you must provide the record holder of your shares with instructions on how to vote the shares. Please follow the voting instructions provided by the broker, bank, or nominee. See the section entitled “The Special Meeting — Voting Your Shares — Beneficial Owners” for more information.
Q:
How can I vote my shares without attending the Special Meeting?
A:
If you are a stockholder of record of DFP Shares as of the close of business on [•], 2021, the record date, you can vote by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares, or otherwise follow the instructions provided by your bank, brokerage firm or other nominee.
Q:
What is a Proxy?
A:
A proxy is a legal designation of another person to vote the stock you own. If you are a stockholder of record of DFP Shares as of the close of business on the record date, and you vote by phone, by Internet or by signing, dating and returning your proxy card in the enclosed postage-paid envelope, you designate two of DFP’s officers as your proxies at the Special Meeting, each with full power to act without the other and with full power of substitution. These two officers are Steven Hochberg and Christopher Wolfe.
 
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Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:
If your DFP Shares are registered directly in your name with Continental you are considered the stockholder of record with respect to those shares, and access to proxy materials is being provided directly to you. If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in street name. Access to proxy materials is being provided to you by your broker, bank or other nominee who is considered the stockholder of record with respect to those shares.
Direct holders (stockholders of record).   For DFP Shares held directly by you, please complete, sign, date and return each proxy card (or cast your vote by telephone or Internet as provided on each proxy card) or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your DFP Shares are voted.
Shares in street name.   For DFP Shares held in “street name” through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee to vote your shares.
Q:
If a DFP Stockholder gives a proxy, how will the DFP Shares covered by the proxy be voted?
A:
If you provide a proxy by returning the applicable enclosed proxy card, the individuals named on the enclosed proxy card will vote your DFP Shares in the way that you indicate when providing your proxy in respect of the DFP Shares you hold. When completing the proxy card, you may specify whether your DFP Shares should be voted FOR or AGAINST, or should be abstained from voting on, all, some or none of the specific items of business to come before the Special Meeting.
Q:
How will my DFP Shares be voted if I return a blank proxy?
A:
If you sign, date and return your proxy and do not indicate how you want your DFP Shares to be voted, then your DFP Shares will be voted “FOR” the approval of the Business Combination Proposal, “FOR” Stock Issuance Proposal, “FOR” the approval of the Charter Proposal, “FOR” the approval, on an advisory basis, of the Advisory Charter Proposals, “FOR” the approval of the Incentive Plan Proposal, “FOR” the approval of the ESPP Proposal, “FOR” the election of each of the director nominees to the New TOI Board and “FOR” the approval of the Adjournment Proposal.
Q:
Can I change my vote after I have submitted my proxy?
A:
Yes. If you are a stockholder of record of DFP Shares as of the close of business on the record date, you can change or revoke your proxy before it is voted at the meeting in one of the following ways:

submit a new proxy card bearing a later date;

give written notice of your revocation to DFP’s Corporate Secretary, which notice must be received by DFP’s Corporate Secretary prior to the vote at the Special Meeting; or

attend and vote electronically at the Special Meeting by visiting [•] and entering the control number found on your proxy card, voting instruction form or notice you previously received. Please note that your attendance at the Special Meeting will not alone serve to revoke your proxy.
If your shares are held in “street name” by your broker, bank or another nominee as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.
Q:
Where can I find the voting results of the Special Meeting?
A:
The preliminary voting results are expected to be announced at the Special Meeting. In addition, within four business days following certification of the final voting results, DFP will file the final voting results of its Special Meeting.
 
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Q:
Are DFP Stockholders able to exercise dissenters’ rights or appraisal rights with respect to the matters being voted upon at the Special Meeting?
A:
No. DFP Stockholders are not entitled to exercise dissenters’ rights or appraisal rights under Delaware law in connection with the Business Combination. Dissenters’ rights or appraisal rights are unavailable under the DGCL in connection with the Business Combination to holders of DFP Class A Common Stock because it is currently listed on a national securities exchange and such holders are not required to receive any consideration (other than continuing to hold their shares of DFP Class A Common Stock, which will become an equal number of shares of New TOI Common Stock after giving effect to the Business Combination). Holders of DFP Class A Common Stock may vote against the Business Combination Proposal or redeem their DFP Shares if they are not in favor of the adoption of the Merger Agreement or the Business Combination. Dissenter’s rights or appraisal rights are unavailable under the DGCL in connection with the Business Combination to holders of DFP Class B Common Stock because they have agreed to vote in favor of the Business Combination.
Q:
Are there any risks that I should consider as a DFP Stockholder in deciding how to vote or whether to exercise my redemption rights?
A:
Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors.” You also should read and carefully consider the risk factors of DFP and TOI contained in the documents that are incorporated by reference herein.
Q:
What happens if I sell my DFP Shares before the Special Meeting?
A:
The record date for DFP Stockholders entitled to vote at the Special Meeting is earlier than the date of the Special Meeting. If you transfer your DFP Shares before the record date, you will not be entitled to vote at the Special Meeting. If you transfer your DFP Shares after the record date but before the Special Meeting, you will, unless special arrangements are made, retain your right to vote at the Special Meeting but will transfer the right to hold New TOI shares to the person to whom you transfer your shares.
Q:
When is the Business Combination expected to be completed?
A:
Subject to the satisfaction or waiver of the Closing conditions described in the section entitled “The Merger Agreement — Conditions to Closing,” including the adoption of the Merger Agreement by the DFP Stockholders at the Special Meeting, the Business Combination is expected to close in the third or fourth quarter of 2021. However, it is possible that factors outside the control of both DFP and TOI could result in the Business Combination being completed at a later time, or not being completed at all.
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
DFP has engaged a professional proxy solicitation firm, Morrow, to assist in soliciting proxies for the Special Meeting. DFP has agreed to pay Morrow a fee of $[•], plus disbursements. DFP will reimburse Morrow for reasonable out-of-pocket expenses and will indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. DFP will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of our common stock for their expenses in forwarding soliciting materials to beneficial owners of our common stock and in obtaining voting instructions from those owners. DFP’s management team may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
What should I do now?
A:
You should read this proxy statement/prospectus carefully in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or submit your voting instructions by telephone or via the Internet as soon as possible so that your DFP Shares will be voted in accordance with your instructions.
 
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Q:
What should I do if I receive more than one set of voting materials?
A:
Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your DFP Shares.
Q:
Whom do I call if I have questions about the Special Meeting or the Business Combination?
A:
If you have questions about the Special Meeting or the Business Combination, or desire additional copies of this proxy statement/prospectus or additional proxies, you may contact:
Morrow Sodali LLC
470 West Avenue, Suite 3000
Stamford, CT 06902
Tel: (800) 662-5200
Banks and brokers call collect: (203) 658-9400
E-mail: DFPH.info@investor.morrowsodali.com
You also may obtain additional information about DFP from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of Public Shares and you intend to seek redemption of your shares, you will need to deliver your Public Shares (either physically or electronically) to Continental Stock Transfer & Trust Company, DFP’s transfer agent, at the address below prior to [•], New York City time, on [•], 2021. If you have questions regarding the certification of your position or delivery of your stock, please contact:
Mark Zimkind
Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
E-mail: mzimkind@continentalstock.com
 
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information included in this proxy statement/prospectus and does not contain all of the information that may be important to you. You should read this entire document and the annexes and the other documents to which we refer before you decide how to vote with respect to the proposals to be considered and voted on at the Special Meeting.
Information About the Parties to the Business Combination
DFP Healthcare Acquisitions Corp.
345 Park Avenue South
New York, New York 10010
Tel: (212) 551-1600
DFP Healthcare Acquisitions Corp. is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
Orion Merger Sub I, Inc.
c/o DFP Healthcare Acquisitions Corp.
345 Park Avenue South
New York, New York 10010
Tel: (212) 551-1600
First Merger Sub is a Delaware corporation and wholly owned subsidiary of DFP, which was formed for the purpose of effecting a merger with TOI.
Orion Merger Sub II, LLC
c/o DFP Healthcare Acquisitions Corp.
345 Park Avenue South
New York, New York 10010
Tel: (212) 551-1600
Second Merger Sub is a Delaware limited liability company and wholly owned subsidiary of DFP, which was formed for the purpose of effecting a merger with TOI.
Sponsor, Deerfield Management and the Deerfield Funds
Our Sponsor is a Delaware limited liability company and an initial stockholder of DFP. Our Sponsor currently holds 5,360,000 shares of DFP Class B Common Stock that are convertible into shares of DFP Class A Common Stock and 3,733,334 Private Placement Warrants. Richard Barasch, through an investment vehicle, and Christopher Wolfe are among the members of our Sponsor and may be entitled to distributions of securities held by our Sponsor. Steven Hochberg is among the managers of the Sponsor. Each of Mr. Barasch, Mr. Wolf and Mr. Hochberg is an executive officer of DFP.
Deerfield Management is the investment manager of each of the Deerfield Funds. Deerfield Mgmt, L.P. (“Deerfield Mgmt”) is the general partner of Deerfield Partners. Deerfield Mgmt IV, L.P. (“Deerfield Mgmt IV”) is the general partner of Deerfield Fund IV. James E. Flynn is the sole member of the general partner of each of Deerfield Management, Deerfield Mgmt and Deerfield Mgmt IV. Each of the Deerfield Funds holds a membership interest in the Sponsor, each may be deemed to beneficially own the securities held by our Sponsor and each purchased 2,500,000 Units in the IPO. Mr. Hochberg and Laurence Atinsky, employees of Deerfield Management, are the managers of the Sponsor and may be deemed to beneficially own the securities held by our Sponsor. Deerfield Management and Mr. Flynn may be deemed to beneficially own the securities held by the Deerfield Funds, the Sponsor and Mr. Hochberg. Deerfield Mgmt may be deemed to beneficially own the securities held by Deerfield Partners and the Sponsor. Deerfield Mgmt. IV may be deemed to beneficially own the securities held by Deerfield Fund IV and the Sponsor.
 
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Finally, 100,000 shares of DFP Class B Common Stock are held by Mr. Hochberg for the benefit, and at the direction, of Deerfield Management.
Our Sponsor, Deerfield Management and the Deerfield Funds are not parties to the Merger Agreement.
TOI Parent, Inc.
18000 Studebaker Rd, Suite 800
Cerritos, CA 90703
Tel: 213-760-1328
TOI is a leading value-based oncology company that manages community-based oncology practices that serve patients at over 55 clinic locations across eight markets and four states throughout the United States, which are staffed with more than 80 oncologists and advanced practice providers. As a value based oncology company, TOI seeks to deliver both better quality care and lower cost of care.
The Business Combination and the Merger Agreement
The terms and conditions of the Business Combination are contained in the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus. We encourage you to read the Merger Agreement carefully and in its entirety, as it is the legal document that governs the Business Combination.
If the Merger Agreement is approved and adopted and the Business Combination is consummated, (i) the First Merger Sub will merge with and into TOI, with TOI being the surviving corporation and (ii) immediately following the First Merger, TOI will merge with and into the Second Merger Sub with the Second Merger Sub being the surviving entity and a wholly owned subsidiary of DFP, and DFP will change its name to “The Oncology Institute, Inc.”
Structure of the Business Combination
The following diagrams illustrate in simplified terms the current structure of DFP and TOI and the expected structure of New TOI (formerly DFP) upon the Closing.
Simplified Pre-Combination Structure
[MISSING IMAGE: tm2122352d1-fc_stockbw.jpg]
[MISSING IMAGE: tm2122352d1-fc_sponsrbw.jpg]
 
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Simplified Post-Combination Structure
[MISSING IMAGE: tm2122352d1-fc_publicbw.jpg]
Merger Consideration
At the Effective Time, by virtue of the First Merger and without any action on the part of DFP, First Merger Sub, TOI or the holders of any of TOI’s securities:

Each share of TOI Common Stock issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive (i) a number of shares of DFP Class A Common Stock equal to the Closing Share Consideration divided by the Aggregate Fully Diluted Company Common Stock, (ii) an amount in cash equal to the Closing Cash Consideration divided by the Aggregate Fully Diluted Company Common Stock and (iii) the contingent right to receive Earnout Shares.

Each of the Company Options, shall be entitled to receive (i) if a Vested Company Option, (A) with respect to an Eligible Cash-Out Vested Company Option, cash in an amount equal to (I) the Per Share Merger Consideration multiplied by (II) the number of shares of TOI Common Stock underlying the Eligible Cash-Out Vested Company Option, minus (III) the aggregate exercise price applicable to the shares of TOI Common Stock underlying such Eligible Cash-Out Vested Company Option and (B) with respect to the remaining shares of TOI Common Stock subject to such Vested Company Option, (I) an option to purchase a number of shares of DFP Class A Common Stock and (II) a number of shares of restricted stock equal to the option holder’s pro rata share of the Earnout Shares determined as if the number of shares subject to such option were outstanding shares; and (ii) if unvested and outstanding as of immediately prior to the Effective Time, (A) an option to purchase shares of DFP Class A Common Stock and (B) a number of shares of restricted stock equal to the option holder’s pro rata share of the Earnout Shares determined as if the number of shares subject to such option were outstanding shares.

The Restricted Stock will be, subject to the applicable holder of such Restricted Stock executing and delivering a Restricted Stock Agreement pursuant to which such individual agrees that any consideration paid in respect of the Restricted Stock shall be subject to the same vesting and forfeiture
 
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terms on which such Restricted Stock was issued, entitled to receive (i) the Per Share Merger Consideration and (ii) the contingent right to receive Earnout Shares.

Each Company RSU outstanding immediately prior to the Effective Time will be converted into (i) a restricted stock unit denominated in shares of DFP Class A Common Stock equal to the product of (A) the number of shares of TOI Common Stock subject to such Company RSU immediately prior to the Effective Time and (B) the Exchange Ratio, and (ii) the contingent right to receive Earnout Shares.
Earnout Consideration
Following the closing of the Business Combination, New TOI will issue to eligible holders of securities of New TOI up to 12,500,000 additional shares of New TOI Common Stock, in two tranches of 5,000,000 and 7,500,000 Earnout Shares, respectively, upon New TOI achieving a price per share of New TOI Common Stock $12.50 during the two-year period following the Closing or a price per share of $15.00 during the three-year period following the Closing, in each case, as its last reported sales price per share for any 20 trading days within any 30 consecutive trading day period within the applicable earnout period; provided, that (i) if one or both of the share price triggers has not been achieved prior to the end of the three-year period following the Closing, (ii) New TOI enters into a definitive agreement that would result in a change of control and (iii) the price per share of New TOI Common Stock in such transaction is equal to or greater than one or both of the share price triggers, that has not been satisfied during the applicable earnout period, then, the applicable share price trigger has not been satisfied will be deemed to have been satisfied, and, at the Closing of such transaction, New TOI shall issue the applicable portion of the Earnout Shares as if such share price trigger had been achieved.
New Registration Rights Agreement
At the Closing, DFP, Sponsor, the Deerfield Funds and the other parties thereto (collectively, the “Rights Holders”) will enter into an Amended and Restated Registration Rights Agreement (the “New Registration Rights Agreement”), which amends and restates in its entirety the existing Registration Rights Agreement, dated March 10, 2020, by and between DFP and the parties thereto (the “Registration Rights Agreement”). Pursuant to the terms of the New Registration Rights Agreement, New TOI will be obligated to file a registration statement to register the resale of all New TOI Common Stock held by the Rights Holders. In addition, pursuant to the terms of the New Registration Rights Agreement and subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, the Rights Holders may demand at any time or from time to time, that New TOI file a registration statement on Form S-1 or Form S-3 to register certain shares of New TOI Common Stock held by or otherwise issuable to such Rights Holders. The New Registration Rights Agreement will also provide the Rights Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions.
Subscription Agreements
In connection with the execution of the Merger Agreement, DFP entered into certain subscription agreements, each dated June 28, 2021 (the “Third-Party Subscription Agreements”), with certain investors, pursuant to which such investors have agreed to purchase an aggregate of 17.5 million shares of DFP Class A Common Stock (together, the “Subscriptions”), for a purchase price of $10.00 per share, for an aggregate purchase price of $175 million, to be issued immediately prior to and conditioned upon the effectiveness of the consummation of the Business Combination. The obligations of each party to consummate the Subscriptions are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Merger Agreement.
The shares of DFP Class A Common Stock to be issued in connection with the Subscription Agreements and the transactions contemplated thereby will not be registered under the Securities Act and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering. The Company has agreed to file with the SEC a registration statement registering the resale
 
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of such shares and will use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof.
Deerfield Subscription Agreements
In connection with the execution of the Merger Agreement, DFP entered into certain subscription agreements, each dated June 28, 2021 (the “Deerfield Subscription Agreements”, and, together with the Third Party Subscription Agreements, the “Subscription Agreements”), with each of Deerfield Partners and Deerfield Fund IV, pursuant to which such investors have agreed to purchase an aggregate of 10 million shares of DFP Class A Common Stock (the “Deerfield Subscription,” and together with the Subscriptions, the “PIPE Investments”), consisting of 5,000,000 shares of DFP Class A Common Stock to be purchased by Deerfield Partners and 5,000,000 shares of DFP Class A Common Stock to be purchased by Deerfield Fund IV for a purchase price of $10.00 per share and an aggregate purchase price of $100 million, to be issued immediately prior to and conditioned upon the effectiveness of the consummation of the Business Combination. However, for every 100 shares of DFP Class A Common Stock to be purchased by the Deerfield Funds, the Deerfield Funds will have the option to instead purchase one share of Series A Common Equivalent Preferred Stock at a purchase price of $1,000 per share. It is expected that each of Deerfield Partners and Deerfield Fund IV will exercise its option to purchase Series A Common Equivalent Preferred Stock instead of DFP Class A Common Stock.
The shares to be issued in connection with the Deerfield Subscription Agreements and the transactions contemplated thereby will not be registered under the Securities Act and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.
Stockholder Support Agreement
Concurrently with the execution of the Merger Agreement, DFP entered into the Stockholder Support Agreement with TOI and the Subject Stockholders, pursuant to which, among other things, the Subject Stockholders: (i) agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby, (ii) agreed not to redeem any of their DFP securities in connection with the Business Combination, (iii) agreed to subject 20% of the shares of DFP Class B Common Stock held by the Subject Stockholders (the “Subject Shares”) and 20% of the Private Placement Warrants held by the Sponsor (the “Subject Warrants”) to forfeiture. The number of Subject Shares and Subject Warrants to be forfeited will be determined by multiplying the Subject Warrants and the Subject Warrants by a fraction, the numerator of which is (i) the total number of shares of DFP Class A Common Stock redeemed by DFP’s Stockholders prior to the closing, and the denominator of which is (ii) the total number of shares of DFP Class A Common Stock issued and outstanding as of June 28, 2021 (excluding such shares of DFP Class A Common Stock beneficially owned by the Subject Stockholders).
The Stockholder Support Agreement also provides that immediately following the Closing, the Sponsor will deposit 575,000 shares of DFP Class A Common Stock (the “Sponsor Earnout Shares”) and 373,333 Private Placement Warrants (the “Sponsor Earnout Warrants,” and, together with the Sponsor Earnout Shares, the “Sponsor Earnout Securities”) into an escrow account with Continental Stock Transfer & Trust Company (the “Escrow Agent”). The Sponsor Earnout Securities will vest and be released to the Sponsor in two tranches of 50%, each, upon New TOI achieving a price per share of New TOI Common Stock of $12.50 during the two-year period following the Closing or a price per share of $15.00 during the three-year period following the Closing in each case, as its last reported sales price per share for any 20 trading days within any 30 consecutive trading day period within the applicable earnout period; provided, that (i) if one or both of the share price triggers has not been achieved prior to the end of the three-year period following the closing, (ii) New TOI enters into a definitive agreement that would result in a change of control and (iii) the price per share of New TOI Common Stock in such transaction is equal to or greater than one or both of the share price triggers, that has not been satisfied and earned at the Closing of such transaction as if such share price trigger had been achieved. Holders of Company Options will be issued their pro rata share of the Earnout Shares at Closing, in the form of restricted stock, subject to forfeiture if the Earnout Shares are not earned by the end of the applicable earnout periods. All other Earnout Shares will be issued only if and when the Earnout Shares are earned as described above. To the extent any Sponsor Earnout
 
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Securities remain unvested at the expiration of the three-year period following the Closing, such Sponsor Earnout Securities shall be forfeited and New TOI shall direct the Escrow Agent to transfer such forfeited Sponsor Earnout Securities to New TOI for cancellation without any consideration.
Company Support Agreement
Concurrently with the execution of the Merger Agreement, DFP entered into the Company Support Agreement with TOI and the Supporting Stockholders, pursuant to which the Supporting Stockholders have agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Business Combination. The Supporting Stockholders hold sufficient shares of TOI to cause the approval of the Business Combination on behalf of TOI.
Consent and Waiver Letter
Concurrently with the execution of the Merger Agreement, DFP entered into the Consent and Waiver Letter pursuant to which, among other things, (i) pursuant to the terms and conditions set forth therein, Deerfield Fund IV consented to the consummation of the Business Combination as required under that certain letter agreement, dated as of August 7, 2020, pursuant to which the consent of Deerfield Fund IV is required for DFP to consummate its initial Business Combination, (ii) the Sponsor also waived any adjustment to the conversion provisions in the Current Charter which would result in DFP Class B Common Stock converting to DFP Class A Common Stock at a ratio of greater than one-for-one upon consummation of the Business Combination, (iii) Deerfield Partners and Deerfield Fund IV agreed not to redeem any of the 2,500,000 shares of DFP Class A Common Stock included in the Units of DFP purchased by each of Deerfield Partners and Deerfield Fund IV at the IPO and (iv) DFP, the Deerfield Funds and the Sponsor (collectively, the “Deerfield Holders”) agreed to use reasonable best efforts to, within 30 days of the execution of the Merger Agreement, negotiate and establish definitive documentation pursuant to which the Deerfield Holders would exchange a number of their shares of DFP Class A Common Stock and DFP Class B Common Stock for and in consideration of a number of shares of DFP preferred stock, par value $0.0001 per share, to be designated as Series A Common Equivalent Preferred Stock (the “Series A Common Equivalent Preferred Stock”), such that immediately following the Closing, the Deerfield Holders collectively will hold an aggregate number of outstanding shares of New TOI Common Stock that represents 4.5% of the then outstanding shares of New TOI Common Stock. The terms of the Series A Common Equivalent Preferred Stock will provide that each share is convertible into 100 shares of New TOI Common Stock, at the option of the holder thereof, will be entitled to a de minimis liquidation preference of $0.0001 per share, will not have any voting rights (except in limited circumstances), will otherwise be substantially similar to the Class A Common Stock and will be subject to a Blocker/Beneficial Ownership Limitation such that the Series A Common Equivalent Preferred Stock will not be convertible into New TOI Common Stock to the extent that, upon such conversion, the number of shares of New TOI Common Stock then beneficially owned by the converting holder and its affiliates and any other person or entity with whom the converting holder’s beneficial ownership would be aggregated for purposes of Section 13(d) under the Exchange Act, including any “group” members, would exceed 4.9% of the total number of shares of New TOI Common Stock then outstanding. The Deerfield Holders expect to request Continental Stock Transfer & Trust Company, the warrant agent for DFP’s outstanding warrants, to apply the same limitation to the exercise of the Deerfield Holders’ Private Placement Warrants (such limitations, the “Conversion Blockers”).
Bylaws
In connection with the Business Combination, DFP will amend its Bylaws (the “Proposed Bylaws”) to, among other matters, provide that the holders (each, a “Lock-up Holder”) of common stock of DFP issued (a) as consideration pursuant to the First Merger and Second Merger, (b) to directors, officers and employees of DFP upon the settlement or exercise of restricted stock units, stock options or other equity awards outstanding as of immediately following the closing of the Business Combination in respect of awards of TOI outstanding immediately prior to the closing of the Business Combination or (c) as Class B Common Stock (as defined in the Merger Agreement) of DFP prior to the Business Combination, as well as any shares of DFP into which the DFP Class B Common Stock may be converted in connection with the Business Combination (such common stock of DFP referred to in clauses (a), (b) and (c), the “Lock-up
 
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Shares”), and each Permitted Transferee (as defined in the Proposed Bylaws), may not transfer, sell or assign any Lock-up Shares, except for certain specified transfers, during the period beginning on the closing date of the Business Combination and ending on the date that is 12 months thereafter; provided, that (i) 50% of the Lock-up Shares held by each Lock-up Holder (as defined in the Proposed Bylaws) will be released from lock-up six months after the closing date of the Business Combination and (ii) an additional 25% the Lock-up Shares held by each Lock-up Holder will be released from lock-up nine months after the closing date of the Business Combination.
Special Meeting of DFP Stockholders and the Proposals
The Special Meeting will convene on [•], 2021 at [•], New York City time, in virtual format. Stockholders may attend, vote and examine the list of DFP Stockholders entitled to vote at the Special Meeting by visiting [•] and entering the control number found on their proxy card, voting instruction form or notice they previously received. The purpose of the Special Meeting is to consider and vote on the Business Combination Proposal, Stock Issuance Proposal, the Charter Proposal, the Advisory Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal.
Approval of the condition precedent proposals is a condition to the obligation of DFP to complete the Business Combination.
Only holders of record of issued and outstanding DFP Shares as of the close of business on [•], 2021, the record date for the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting or any adjournment or postponement of the Special Meeting. You may cast one vote for each share of DFP Shares that you owned as of the close of business on that record date.
A quorum of stockholders is necessary to hold a valid meeting. A quorum will exist at the Special Meeting with respect to each matter to be considered at the Special Meeting if the holders of a majority of the outstanding DFP Shares as of the record date present in person (which would include presence at the virtual Special Meeting) or represented by proxy at the Special Meeting. All shares represented by proxy are counted as present for purposes of establishing a quorum. Abstentions will count as present for the purposes of establishing a quorum, but broker non-votes will not count as present for the purposes of establishing a quorum.
The approval of each of the Business Combination Proposal, the Stock Issuance Proposal, the Incentive Plan Proposal, the ESPP Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of DFP Shares present in person (which would include presence at a virtual meeting) or represented by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class. Accordingly, a DFP Stockholder’s abstention, failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or the failure of a DFP Stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee (a “broker non-vote”) will, assuming a valid quorum is established, have no effect on the outcome of any vote on the Business Combination Proposal, the Stock Issuance Proposal, the Incentive Plan Proposal, the ESPP Proposal or the Adjournment Proposal.
The approval of the Charter Amendment Proposal requires the affirmative vote of a majority of the issued and outstanding shares of DFP Shares voting together as a single class as of the Record Date. Accordingly, a DFP Stockholder’s abstention, failure to vote by proxy or to vote in person (which would include presence at a virtual meeting) at the Special Meeting or a broker non-vote will have the same effect as a vote “AGAINST” the Charter Amendment Proposal.
Recommendation of DFP Board
The DFP Board has unanimously determined that the Business Combination is in the best interests of, and advisable to, the DFP Stockholders and recommends that the DFP Stockholders adopt the Merger Agreement and approve the Business Combination. The DFP Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors.
The DFP Board recommends that you vote “FOR” the approval of the Business Combination Proposal, “FOR” the approval of the Stock Issuance Proposal, “FOR” the approval of the Charter Proposal,
 
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FOR” the approval, on an advisory basis, of each of the Advisory Charter Proposals, “FOR” the approval of the Incentive Plan Proposal, “FOR” the approval of the ESPP Proposal, “FOR” the election of each of the director nominees to the New TOI Board and “FOR” the approval of the Adjournment Proposal.
For more information about the DFP Board’s recommendation and the proposals, see the sections entitled “The Special Meeting — Vote Required and DFP Board Recommendation” and “The Business Combination Proposal — DFP’s Board of Directors’ Reasons for the Approval of the Business Combination.”
The DFP Board’s Reasons for Approval of the Business Combination
We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We sought to do this by utilizing the networks and industry experience of our management team and our sponsors to identify, acquire and operate one or more businesses in the gaming industry. Our Board considered and evaluated several factors in evaluating and negotiating the transaction and the transaction agreements. For additional information relating to the DFP Board’s evaluation of the transaction and the factors it considered in connection therewith, please see the section entitled “The Business Combination Proposal — DFP’s Board of Directors’ Reasons for the Approval of the Business Combination.”
Regulatory Approvals
The Business Combination is subject to the expiration or termination of the waiting period (or any extension thereof) applicable under the HSR Act. The waiting period expired on [•], 2021.
Conditions to the Completion of the Business Combination
The Closing is subject to certain conditions, including, among other things: (i) the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, (ii) the absence of any provision of any applicable legal requirement and any temporary, preliminary or permanent restraining order prohibiting, enjoining or making illegal the consummation of the Business Combination, (iii) the approval of the Business Combination by the DFP Stockholders and the stockholders of TOI and (iv) the satisfaction of the Minimum Available Closing Cash Condition. See the section entitled “The Merger Agreement.”
Termination
The Merger Agreement may be terminated prior to the closing as follows:

by the mutual written consent of DFP and TOI;

by DFP, if (i) TOI breaches any of its representations, warranties, covenants or agreements such that the conditions to closing would not be satisfied, except that, if such breach is curable by TOI through the exercise of its reasonable efforts, then, for a period of 30 days (or any shorter term that remains between the date of DFP providing written notice of such breach and the Termination Date (as defined below)) after receipt by TOI of notice from DFP of such breach, but only as long as TOI continues to use reasonable efforts to cure such breach, (ii) the Closing has not occurred on or before March 13, 2022 (the “Termination Date”), or (iii) the consummation of the transactions contemplated by the Merger Agreement are permanently enjoined, prohibited or prevented by the terms of a final, non-appealable governmental order;

by TOI, if (i) DFP breaches any of its representations, warranties, covenants or agreements such that the conditions to closing would not be satisfied, except that, if such breach is curable by DFP through the exercise of its reasonable efforts, then, for a period of 30 days (or any shorter term that remains between the date of TOI providing written notice of such breach and the Termination Date) after receipt by DFP of notice from TOI of such breach, but only as long as DFP continues to use reasonable efforts to cure such breach, (ii) the Closing has not occurred on or before the Termination Date or (iii) the consummation of the transactions contemplated by the Merger Agreement are permanently enjoined, prohibited or prevented by the terms of a final, non-appealable governmental order;
 
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by TOI or DFP, if the DFP Special Meeting has been held and DFP’s stockholders have voted against the transaction; or

by DFP, in the event TOI fails to deliver the approval of its stockholders with 72 hours after the effectiveness of the Registration Statement of which this prospectus/proxy statement forms a part.
Redemption Rights
Pursuant to the Current Charter, a Public Stockholder may request that DFP redeem all or a portion of its Public Shares for cash if the Business Combination is consummated. You will be entitled to receive cash for any Public Shares to be redeemed only if you:

(a) hold Public Shares or (b) hold Public Shares through Units and you elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and

prior to [•], New York City time, on [•], 2021, (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the transfer agent that DFP redeem your Public Shares for cash and (b) deliver your Public Shares to the transfer agent, physically or electronically through DTC.
As noted above, holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. Holders may instruct their broker to do so, or if a holder holds Units registered in its own name, the holder must contact the transfer agent directly and instruct them to do so. Public Stockholders may elect to redeem all or a portion of their Public Shares even if they vote for the Business Combination Proposal. If the Business Combination is not consummated, the Public Shares will not be redeemed for cash. If a Public Stockholder properly exercises its right to redeem their Public Shares and timely delivers its Public Shares to the transfer agent, DFP will redeem such Public Shares upon the Closing for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to DFP to fund DFP’s working capital requirements (subject to an annual limit of $500,000) and/or to pay our taxes, divided by the number of then outstanding public. If a Public Stockholder exercises its redemption rights, then it will be exchanging its redeemed Public Shares for cash and will no longer own such shares. See the section entitled “The Special Meeting — Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.
Notwithstanding the foregoing, a holder of Public Shares, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.
No Delaware Appraisal Rights
Appraisal rights are statutory rights under the DGCL that enable stockholders who object to certain extraordinary transactions to demand that the corporation pay such stockholders the fair value of their shares instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. However, appraisal rights are not available in all circumstances. Appraisal rights are not available to DFP Stockholders or warrant holders in connection with the Business Combination.
Proxy Solicitation
Proxies may be solicited by mail. DFP has engaged Morrow to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares in person (which would include presence at a virtual meeting) if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “The Special Meeting — Revoking Your Proxy.”
 
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Interests of the Sponsor and DFP’s Directors and Officers in the Business Combination
When you consider the recommendation of the DFP Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor and DFP’s directors and executive officers, have interests in such proposal that are different from, or in addition to those of DFP Stockholders and warrant holders generally. These interests include, among other things, the following:

the fact that our Initial Stockholders have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and any Public Shares they hold in connection with the completion of our initial business combination;

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their Founder Shares if we fail to complete our initial business combination by March 13, 2022. If we do not complete our initial business combination by March 13, 2022, the Private Placement Warrants will expire worthless;

the fact that our Initial Stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the completion of our initial business combination and (ii) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of our New TOI Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the Founder Shares will be released from the lockup. Subject to certain limited exceptions, the Private Placement Warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own common stock or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination;

the fact that our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination;

the fact that in no event will our Sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination;

the fact that our Initial Stockholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Company’s IPO in favor of our initial business combination, and Deerfield Fund IV agreed to vote the Public Shares it purchased in the Company’s IPO in favor of our initial business combination, subject to its consent right with respect to our initial business combination.

the fact that we have agreed not to complete a business combination without the consent of Deerfield Fund IV, which owns a significant interest in our Sponsor, which consent Deerfield Fund IV has indicated it would not provide if our proposed business combination were to be with a target that is not in the healthcare industry;

the fact that the sponsor paid $25,000 for the Founder Shares and these shares will have a significantly higher value at the time of the business combination, and that, since the Initial Stockholders have waived their redemption rights and their rights to liquidating distributions from the trust account, as noted above, a transaction resulting in an increase in value for the Initial Stockholders but a loss in value for Public Stockholders will result in a total loss of investment for the Initial Stockholders if the transaction is not approved and an alternative business combination is not consummated;

the fact that the Initial Stockholders (including entities controlled by DFP’s officers and directors) have made an aggregate average investment of less than $0.01 per DFP Share as of the consummation
 
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of the Company’s IPO, and as a result of the significantly lower investment per share of the Initial Stockholders as compared with the investment per share of DFP’s Public Stockholders, a transaction which results in an increase in the value of the investment of the Initial Stockholders may result in a decrease in the value of the investment of DFP’s Public Stockholders;

the fact that the sponsor paid $5,600,000 for its 3,733,334 Private Placement Warrants, and if a business combination is not consummated by March 13, 2022, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will be worthless;

the fact that if the Trust Account is liquidated, including if we are unable to complete an initial business combination within the required time period, the Sponsor has agreed that it will be jointly and severally liable to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have discussed entering into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if the target business or vendor has not executed a waiver of any and all rights to seek access to the Trust Account;

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

the fact that the Sponsor and our officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses or repaid the Working Capital Loans (as defined in the section entitled “Certain Relationships and Related Party Transactions — DFP — Related Party Loans,” if any, if an initial business combination is not consummated by March 13, 2022;

the fact that at the signing of the Merger Agreement we entered into the Consent and Waiver Letter, pursuant to which, among other things, Deerfield Fund IV consented to the consummation of the Business Combination and the Sponsor waived any adjustment of the conversion provisions in Section 4.3(b)(ii) of the Current Charter that would, solely as a result of the consummation of the Business Combination, cause the DFP Class B Common Stock to convert to DFP Class A Common Stock at a ratio of greater than one-for-one upon consummation of the Business Combination;

the fact that concurrently with the signing of the Merger Agreement we entered into the Stockholder Support Agreement with TOI and the Subject Stockholders, pursuant to which, among other things, the Subject Stockholders: (i) agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby, (ii) agreed not to redeem any of their DFP securities in connection with the Business Combination, (iii) agreed to subject 20% of the shares of DFP Class B Common Stock held by the Subject Stockholders and 20% of the Private Placement Warrants held by the Sponsor to forfeiture; and

the fact that at the Closing we will enter into the New Registration Rights Agreement which will provide registration rights to the Rights Holders (including the Initial Stockholders, the Deerfield Funds and the other parties thereto) and their permitted transferees.
At any time prior to the Special Meeting, during a period when they are not then aware of any material nonpublic information regarding DFP or its securities, DFP, TOI, the Sponsor, DFP’s directors, officers, advisors or their respective affiliates purchase shares and/or warrants from investors, or they may enter into transactions with such investors and others to provide them with incentives to acquire Public Shares or vote their Public Shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood that (i) the proposals presented for approval at the Special Meeting are approved and/or (ii) DFP satisfies the Minimum Available Closing Cash Condition. Any such stock purchases and other transactions may thereby increase the likelihood of obtaining stockholder approval of the Business Combination Proposal. This may result in the completion of our Business Combination in a way that may not otherwise have been possible. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or rights owned by the Sponsor for nominal value.
 
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Entering into any such arrangements may have a depressive effect on Public Shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares it owns, either prior to or immediately after the Special Meeting.
If such transactions are effected, the consequence could be to cause the Business Combination Proposal to be approved in circumstances where such approval could not otherwise be obtained. Purchases of Public Shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the Special Meeting and would likely increase the chances that such proposals would be approved. As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder.
The existence of financial and personal interests of DFP’s directors and officers may result in a conflict of interest on the part of one or more of them between what he may believe is best for DFP and what he may believe is best for him in determining whether or not to grant a waiver in a specific situation. See the sections entitled “Risk Factors” and “The Business Combination Proposal — Interests of the Sponsor and DFP’s Directors and Officers in the Business Combination” for a further discussion of this and other risks.
Stock Exchange Listing
DFP’s Units, DFP Class A Common Stock and Public Warrants are publicly traded on the Nasdaq Capital Market (“Nasdaq”) under the symbols “DFPHU,” “DFPH” and “DFPHW,” respectively. DFP intends to apply to list the New TOI Common Stock and Public Warrants on NASDAQ under the symbols “TOI” and “TOIW” respectively, upon the Closing. New TOI will not have units traded following the Closing.
Sources and Uses of Funds for the Business Combination
The following table summarizes the sources and uses for funding the transactions contemplated by the Merger Agreement.
(in millions)
Assuming No
Redemption
Assuming
Maximum
Redemption
Sources
Proceeds from Trust Account
$ 230 $ 50
PIPE Investments
275 275
Total Sources
$ 505 $ 325
Uses
Cash to TOI Stockholders
258 158
Cash to Balance Sheet
207 127
Transaction costs
40 40
Total Uses
$ 505 $ 325
Accounting Treatment
The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, DFP will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of TOI issuing stock for the net assets of DFP, accompanied by a recapitalization. The net assets of DFP will be stated at historical cost, with no goodwill or other intangible assets recorded.
Comparison of Stockholders’ Rights
Following the consummation of the Business Combination, the rights of DFP Stockholders who become New TOI stockholders in the Business Combination will no longer be governed by the Current
 
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Charter and DFP’s bylaws and instead will be governed by the Proposed Charter and the Proposed Bylaws. See the section entitled “Comparison of Stockholders’ Rights” for further information.
Summary of Risk Factors
In evaluating the proposals to be presented at the Special Meeting, a DFP Stockholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.
Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of New TOI’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the Closing of DFP’s initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
 
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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following summary unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) gives effect to the transactions contemplated by the Merger Agreement. The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, DFP will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be reflected as the equivalent of TOI issuing stock for the net assets of DFP, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of TOI. The summary unaudited pro forma condensed combined balance sheet data as of March 31, 2021 gives effect to the Business Combination as if it had occurred on March 31, 2021. The summary unaudited pro forma condensed combined statements of operations data for the three months ended March 31, 2021 and year ended December 31, 2020 give effect to the Business Combination as if it had occurred on January 1, 2020.
The Summary Pro Forma Information has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the post-combination company appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of DFP and TOI for the applicable periods included elsewhere in this proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information.” The Summary Pro Forma Information has been presented for informational purposes only and is not necessarily indicative of what the post-combination company’s financial position or results of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the Summary Pro Forma Information does not purport to project the future financial position or operating results of the post-combination company.
The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by Public Stockholders of shares of DFP Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit (as of two (2) business days prior to the closing of the Business Combination) in the Trust Account:

Assuming No Redemptions:   This presentation assumes that no Public Stockholders exercise redemption rights with respect to their shares of DFP Class A Common Stock for a pro rata share of the funds in the Trust Account.

Assuming Maximum Redemptions:   This presentation assumes that Public Stockholders holding 18.0 million shares of DFP Class A Common Stock will exercise their redemptions rights for their pro-rata share at approximately $10.01 per share (aggregate $180.2 million) to be redeemed out of the Trust Account. The maximum number of shares of DFP Class A Common Stock subject to redemption gives effect to the Deerfield Holders’ commitment not to redeem its 5.0 million shares of DFP Class A Common Stock and potential forfeiture of Subject Shares, while still providing New TOI with cash at closing of the Business Combination of no less than the minimum of $290.0 million required by the Merger Agreement.
 
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(in thousands, except share and per share data)
Pro Forma
Combined
(No Redemption
Scenario)
Pro Forma
Combined
(Maximum
Redemption
Scenario)
Summary Unaudited Pro Forma Condensed Combined
Statement of Operations Data
Three months ended March 31, 2021
Revenue
$ 48,580 $ 48,580
Net income
$ 2,325 $ 1,262
DFP Class A Common Stock
Weighted average shares outstanding of DFP Class A Common Stock, basic
90,666,539 82,256,547
Basic net income per share, DFP Class A Common Stock
$ 0.02 $ 0.01
Weighted average shares outstanding of DFP Class A Common Stock, diluted
91,924,672 83,920,434
Diluted net income per share, DFP Class A Common Stock
$ 0.02 $ 0.01
Summary Unaudited Pro Forma Condensed Combined
Statement of Operations Data
Year ended December 31, 2020
Revenue
$ 187,515 $ 187,515
Net loss
$ (73,903) $ (66,594)
DFP Class A Common Stock
Weighted average shares outstanding of DFP Class A Common Stock, basic and diluted
90,349,008 81,939,016
Basic and diluted net loss per share, DFP Class A Common Stock
$ (0.70) $ (0.68)
Summary Unaudited Pro Forma Condensed Combined
Balance Sheet Data as of March 31, 2021
Total assets
$ 297,606 $ 217,509
Total liabilities and commitments
$ 121,244 $ 119,195
Total stockholders’ equity
$ 176,362 $ 98,314
 
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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA COMBINED PER SHARE FINANCIAL INFORMATION
The following table sets forth selected historical comparative share information for DFP and TOI and unaudited pro forma condensed combined per share information of the combined company after giving effect to the Business Combination, assuming two redemption scenarios as follows:

Assuming No Redemptions:   This presentation assumes that no Public Stockholders exercise redemption rights with respect to their shares of DFP Class A Common Stock for a pro rata share of the funds in the Trust Account.

Assuming Maximum Redemptions:   This presentation assumes that Public Stockholders holding 18.0 million shares of DFP Class A Common Stock will exercise their redemptions rights for their pro-rata share at approximately $10.01 per share (aggregate $180.2 million) to be redeemed out of the Trust Account. The maximum number of shares of DFP Class A Common Stock subject to redemption gives effect to the Deerfield Holders’ commitment not to redeem its 5.0 million shares of DFP Class A Common Stock and potential forfeiture of Subject Shares, while still providing New TOI with cash at closing of the Business Combination of no less than the minimum of $290.0 million required by the Merger Agreement.
The pro forma book value information reflects the Business Combination as if it had occurred on March 31, 2021. The weighted average shares outstanding and net loss per share information give pro forma effect to the Business Combination as if it had occurred on January 1, 2020.
This information is only a summary and should be read together with the historical financial statements of DFP and TOI and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information of DFP and TOI is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information.
The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of DFP and TOI would have been had the companies been combined during the periods presented.
(in thousands, except share and per share data)
DFP Healthcare
Acquisitions
Corp.
(Historical)
TOI Parent, Inc.
(Historical)
Pro Forma Combined
Equivalent
pro forma
per share data(3)
No
Redemption
Scenario
Maximum
Redemption
Scenario
No
Redemption
Scenario
Maximum
Redemption
Scenario
As of and for the Three months ended March 31,
2021
Net income (loss)
$ 5,685 $ (995) $ 2,325 $ 1,262 N/A N/A
Total stockholders’ equity (deficit)
4,999 (52,965) 176,362 98,314 N/A N/A
Historical Stock
Weighted average shares outstanding of Class A common stock, basic and diluted
23,000,000 N/A N/A
Basic and diluted net income per share, Class A
$ N/A N/A
Weighted average shares outstanding of Class B common stock, basic and diluted
5,750,000 N/A N/A
Basic and diluted net income per share, Class B
$ 0.99 N/A N/A
Weighted average shares outstanding of TOI Parent, Inc., basic and diluted
107,643 N/A N/A
Net loss per share attributable to TOI Parent,
Inc. common stockholders, basic and diluted
$ (9.24) N/A N/A
Total Book Value per share(1)
$ 0.22 $ (492.04) N/A N/A
 
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(in thousands, except share and per share data)
DFP Healthcare
Acquisitions
Corp.
(Historical)
TOI Parent, Inc.
(Historical)
Pro Forma Combined
Equivalent
pro forma
per share data(3)
No
Redemption
Scenario
Maximum
Redemption
Scenario
No
Redemption
Scenario
Maximum
Redemption
Scenario
DFP Class A Common Stock
Weighted average shares outstanding of DFP Class A Common Stock, basic
90,666,539 82,256,547 N/A N/A
Basic net income per share, DFP Class A Common Stock
$ 0.02 $ 0.01 $ 12.95 $ 7.67
Weighted average shares outstanding of DFP Class A Common Stock, diluted
91,924,672 83,920,434 N/A N/A
Diluted net income per share, DFP Class A Common Stock
$ 0.02 $ 0.01 $ 12.80 $ 7.54
Total Book Value per share of DFP Class A Common Stock(1)
$ 1.95 $ 1.20 $ 1,153.47 $ 708.75
As of and for the Year ended December 31, 2020
Net loss
$ (8,340) $ (14,321) $ (73,903) $ (66,594) N/A N/A
Historical Stock
Weighted average shares outstanding of Class A common stock, basic and diluted
23,000,000 N/A N/A
Basic and diluted net loss per share, Class A
$ N/A N/A
Weighted average shares outstanding of Class B common stock, basic and diluted
5,602,459 N/A N/A
Basic and diluted net loss per share, Class B
$ (1.49) N/A N/A
Weighted average shares outstanding of TOI Parent, Inc., basic and diluted
23,786 N/A N/A
Net loss per share attributable to TOI Parent, Inc. common stockholders, basic and
diluted
$ (602.09) N/A N/A
Total Book Value per share(2)
N/A N/A
N/A (2) N/A (2)
DFP Class A Common Stock
Weighted average shares outstanding of DFP Class A Common Stock, basic and
diluted
90,349,008 81,939,016 N/A N/A
Basic and diluted net loss per share, DFP Class A Common Stock
$ (0.70) $ (0.68) $ (412.75) $ (405.90)
Total Book Value per share(2)
N/A (2) N/A (2) N/A N/A
(1)
Book value per share = (Total equity excluding preferred shares)/shares outstanding.
(2)
A pro forma balance sheet for the year ended December 31, 2020 is not required to be included herein and as such, no such calculation is included in this table.
(3)
The equivalent per share data is calculated by multiplying the combined pro forma per share data by the Exchange Ratio.
 
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MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION
DFP
Market Price and Ticker Symbol
DFP’s Units, DFP Class A Common Stock and Public Warrants are currently listed on Nasdaq under the symbols “DFPHU,” “DFPH,” and “DFPHW,” respectively.
The closing price of DFP’s Units, DFP Class A Common Stock and Public Warrants on June 25, 2021, the last trading day before announcement of the execution of the Merger Agreement, was $10.21, $9.97 and $1.36, respectively. As of [•], 2021, the record date for the Special Meeting, the closing price for each unit, share of DFP Class A Common Stock and public warrant was $[•], $[•] and $[•], respectively.
Holders
As of [•], 2021, there was [•] holder[s] of record of our Units, [•] holder[s] of record of DFP Class A Common Stock, [•] holder[s] of record of DFP Class B Common Stock and [•] holder[s] of record of our Public Warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Units, DFP Class A Common Stock and warrants are held of record by banks, brokers and other financial institutions.
Dividend Policy
DFP has not paid any cash dividends on DFP Class A Common Stock to date and does not intend to pay any cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon New TOI’s revenue and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of New TOI’s Board.
TOI
There is no public market for shares of TOI’s Common Stock.
 
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We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations or reputation. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently believe are not material may also significantly affect our business, financial condition, results of operations or reputation. Our business could be harmed by any of these risks. In assessing these risks, you should also refer to the other information contained in this proxy statement/prospectus, including our consolidated financial statements and related notes.
Unless the context otherwise requires, references in the subsection “— Risks Related to TOI’s Business” to “we,” “us,” “our,” and “the Company” generally refer to TOI in the present tense or New TOI from and after the Business Combination.
SUMMARY RISK FACTORS
The following is a summary of select risks and uncertainties that could materially adversely affect the Business Combination, TOI and its business, financial condition and results of operations. You should read this summary together with the full and complete discussion of risk factors contained below:
Risks Related to TOI’s Business

Our growth strategy depends on our ability to build or acquire new TOI PC clinics to service our contracts and treat our patients.

We have experienced, and may continue to experience, rapid growth and organizational change, which has placed, and may continue to place, significant demands on our management and our operational and financial resources.

We have identified material weaknesses in our internal control over financial reporting that, if not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements.

We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability.

A pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide, including the outbreak of the novel strain of coronavirus disease, COVID-19, could adversely affect our business.

Our services are concentrated in certain geographic areas and populations exposing us to unfavorable changes in local benefit costs, reimbursement rates, competition and economic conditions.

If we are unable to attract new patients, our revenue growth will be adversely affected.

We primarily depend on reimbursement from third-party payors, as well as payments by individuals, which could lead to delays, denials, or uncertainties in the reimbursement process.

With many of our value-based agreements, the TOI PCs assume the risk that the cost of providing services will exceed our compensation. As oncology costs rise, if we do not accurately predict the cost to deliver care, some of the TOI PCs’ value-based agreements could become less profitable, or unprofitable.

There are significant risks associated with estimating the amount of revenue that is recognize under TOI PCs’ risk agreements with health plans, and if our estimates of revenue are materially inaccurate, it could impact the timing and the amount of our revenue recognition or have a material adverse effect on our business, results of operations, financial condition and cash flows.

A significant portion of our consolidated Patient Services revenue is derived from a limited number of health insurance, Independent Practice Associations, or IPAs and medical group companies. Those payors could take action to remove, exclude, delay, or otherwise prevent the inclusion of the TOI PCs in their provider networks.

A significant portion of sales are from prescription drug sales reimbursed by a limited number of pharmacy benefit management companies with which TOI PCs contract. Those pharmacy benefit
 
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management companies could take action to remove, exclude, delay or otherwise prevent the inclusion of the TOI PCs in their provider networks.

Reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program could have a material adverse effect on our financial condition and results of operations

We cannot predict the effect that health care reform and other changes in government programs may have on our business, financial condition or results of operations.

The transition from volume to value-based reimbursement models may have a material adverse effect on our operations.

Changes in the payor mix of patients and potential decreases in reimbursement rates as a result of consolidation among plans could adversely affect our revenues and results of operation.

We face significant competition from other healthcare services providers. Our failure to adequately compete could adversely affect our business.

Competition for physicians and clinical personnel, including nurses, shortages of qualified personnel or other factors could increase our labor costs and adversely affect our revenue, growth rate, profitability and cash flows.

Because competition for qualified personnel is intense, we may not be able to attract and retain the highly skilled employees we need to execute our business strategies and growth plans.

If we are unable to provide consistently high quality of care, our business will be adversely impacted.

If certain of our suppliers do not meet our needs, if there are material price increases on supplies, if we are not reimbursed or adequately reimbursed for drugs we purchase or if we are unable to effectively access new technology or superior products, it could negatively impact our ability to effectively provide the services we offer and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We depend on our information technology systems, and those of our third-party vendors, contractors and consultants, and any failure or significant disruptions of these systems, security breaches or loss of data could materially adversely affect our business, financial condition and results of operations.

We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and results of operations.

Some jurisdictions preclude the TOI PCs from entering into non-compete agreements with our physicians, and other non-compete agreements and restrictive covenants applicable to certain physicians and other clinical employees may not be enforceable.

Current and future acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities.

If we are unable to protect the confidentiality of our trade secrets, know-how and other proprietary and internally developed information, the value of our technology could be adversely affected.

We conduct some clinical trials in contract with the ICRI. If we fail to perform our clinical trial services in accordance with contractual requirements, government regulations and ethical considerations, we could be subject to significant costs or liability and our reputation could be adversely affected.

Negative publicity regarding the managed healthcare industry generally could adversely affect our results of operations or business.

Our managed clinics may be negatively impacted by weather and other factors beyond our control.

We are dependent on our relationships with the TOI PCs, which are affiliated professional entities that we do not own, to provide healthcare services, and our business would be harmed if those relationships were disrupted or if our arrangements with the TOI PCs become subject to legal challenges.
 
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Our managed clinics and the TOI PCs providing professional services at such clinics may become subject to medical liability claims, which could have a material adverse impact on our business.

If there is a change in accounting standards by the Financial Accounting Standards Board or the interpretation thereof affecting consolidation of entities, it could have a material adverse effect on our consolidation of total revenues derived from the TOI PCs.

Our managed clinics and the TOI PCs may be subject to third-party payor audits, which, if adversely determined against us or the TOI PCs, may have a material effect on our results of operations and financial condition.

We are subject to extensive fraud, waste, and abuse laws that may give rise to federal and state audits, investigations, lawsuits and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.

If any of our managed clinics or TOI PCs lose their regulatory licenses, permits and/or accreditation status, or become ineligible to receive reimbursement under Medicare or Medicaid or other third-party payors, there may be a material adverse effect on our business, financial conditions, cash flows or results of operations.

If we or the TOI PCs fail to comply with applicable data interoperability and information blocking rules, our consolidated results of operations could be adversely affected.

Actual or perceived failures to comply with applicable data protection, privacy and security, advertising and consumer protection laws, regulations, standards and other requirements could adversely affect our business, financial condition and results of operations.

We and our TOI PCs are subject to federal, state and local laws and regulations that govern our business. These include regulations of our employment practices, including minimum wage, living wage, and paid time-off requirements, permitting and licensing, employee health and safety and the storage, treatment and disposal of waste. Failure to comply with these laws and regulations, or changes to these laws and regulations that increase our expenses, could adversely impact our operations.

We may not be able to utilize a portion of our net operating loss carry forwards (“NOLs”) to offset future taxable income for U.S. federal income tax purposes, which could adversely affect our net income and cash flows.

Future changes to applicable tax laws and regulations and/or their interpretations may have an adverse effect on our business, financial condition and results of operations. Tax rules and regulations are subject to interpretation and require judgment by us that may be successfully challenged by the applicable taxation authorities upon audit, which could result in additional tax liabilities.
Risks Related to DFP and the Business Combination

Directors and officers of DFP have potential conflicts of interest in recommending that stockholders vote in favor of the approval of the Business Combination and the approval of the other proposals described in this proxy statement/prospectus.

Deerfield Fund IV and the Initial Stockholders have agreed to vote in favor of the Business Combination, regardless of how our Public Stockholders vote.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

Even if we consummate the Business Combination, there can be no assurance that the warrants will be in the money at the time they become exercisable, and they may expire worthless.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities may decline.

Our actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus.

Financial projections with respect to New TOI may not prove to be reflective of actual future results.

The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.
 
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We have identified a material weakness in our internal control over financial reporting that, if not properly corrected, could materially adversely affect our ability to report our operations and result in material misstatements in our financial statements.

We will incur significant costs and obligations as a result of being a public company.
 
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RISK FACTORS
We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations or reputation. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently believe are not material may also significantly affect our business, financial condition, results of operations or reputation. Our business could be harmed by any of these risks. In assessing these risks, you should also refer to the other information contained in this proxy statement/prospectus, including our consolidated financial statements and related notes.
The risks described below are not the only risks DFP and TOI face. Additional risks not presently known to DFP or TOI or that DFP or TOI currently believe are not material may also significantly affect New TOI’s business, financial condition, results of operations or reputation. New TOI’s business could be harmed by any of these risks. In that event, the trading price of DFP’s securities and securities of New TOI could decline and you could lose all or part of your investment.
Unless the context otherwise requires, references in the subsections “— Risks Related to TOI’s Business” and “— Risks Related to TOI’s Regulatory Environment” to “we,” “us,” “our,” and “the Company” generally refer to TOI in the present tense or New TOI from and after the Business Combination.
Risks Related to TOI’s Business
Our growth strategy depends on our ability to build or acquire new TOI PC clinics to service our contracts and treat our patients.
Our business strategy is to grow rapidly by expanding our network of oncology care clinics and is significantly dependent our ability to open new TOI PC clinics in our existing markets, expand into new geographical locations through existing TOI PCs or affiliating with new professional entities that would become a TOI PC, recruit new patients and partner or contract with payors, existing medical practices or other healthcare providers to provide oncology care services. We seek growth opportunities both organically and through TOI PCs’ agreements with payors or other oncology care providers. Our ability to grow organically depends upon a number of factors, including our affiliated providers obtaining referrals for cancer patient care services, the TOI PCs entering into contracts with additional payors, identifying appropriate facilities, obtaining leases, completing internal build-outs of new facilities within proposed timelines and budgets and hiring care teams and other employees. We cannot guarantee that we will be successful in pursuing our growth strategy. If we fail to evaluate and execute new business opportunities properly, we may not achieve anticipated benefits and may incur increased costs.
Our growth strategy involves a number of risks and uncertainties, including that:

the TOI PCs may not be able to successfully enter into contracts with local payors on terms favorable to us or at all. In addition, the TOI PCs compete for payor relationships with other potential players, some of whom may have greater resources than we do. This competition may intensify due to the ongoing consolidation in the healthcare industry, which may increase our costs to pursue such opportunities;

through the TOI PCs, we may not be able to recruit or retain a sufficient number of new patients to execute our growth strategy, and we may incur substantial costs to recruit new patients and we may be unable to recruit a sufficient number of new patients to offset those costs;

the TOI PCs may not be able to hire sufficient numbers of physicians and other staff and may fail to integrate our employees, particularly our medical personnel, into our care model;

future value-based contracts may not be as favorable as current capitation contracts;

when expanding our business into new states, we may be required to comply with laws and regulations that may differ from states in which we currently operate; and

depending upon the nature of the local market, we may not be able to implement our business model in every local market that we enter, which could negatively impact our revenues and financial condition.
 
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There can be no assurance that we will be able to successfully capitalize on growth opportunities, which may negatively impact our business model, revenues, results of operations and financial condition.
We have experienced, and may continue to experience, rapid growth and organizational change, which has placed, and may continue to place, significant demands on our management and our operational and financial resources.
Our organizational structure may become more complex as we improve our operational, financial and management controls, as well as our reporting systems and procedures. We may require significant capital expenditures and the allocation of valuable management resources to grow and change in these areas. We must effectively increase our headcount and continue to effectively train and manage our employees. We will be unable to manage our business effectively if we are unable to alleviate the strain on resources caused by growth in a timely and successful manner. If we fail to effectively manage our anticipated growth and change, the quality of our services may suffer, which could negatively affect our brand and reputation and harm our ability to attract and retain patients and employees.
In addition, as we expand our business, it is important that we continue to maintain a high level of patient service and satisfaction. As our patient base continues to grow, through the TOI PCs, we will need to expand our medical, patient services and other personnel, and our network of partners, to provide personalized patient service. If we are not able to continue to provide high quality medical care with high levels of patient satisfaction, our reputation, as well as our business, results of operations and financial condition could be adversely affected.
We have identified material weaknesses in our internal control over financial reporting that, if not properly corrected, could materially adversely affect our operations and result in material misstatements in our financial statements.
Currently, our accounting and IT controls have numerous deficiencies which we need to address with additional investments in personnel, processes and technology. These deficiencies include material weaknesses surrounding segregation of duties in the financial closing and reporting process, inappropriate application of GAAP, material weaknesses in revenue, lack of reviews and effective off boarding and on boarding procedures, weak password controls, lack of change management procedures or documentation, errors in the reporting of the payroll cycle, and the lack of a formal process for tracking fixed asset disposal and equity grants. If we are unable to remediate our material weaknesses in a timely manner, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information. Either of these events could have a material adverse effect on our operations, investor, supplier and customer confidence in our reported financial information.
We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability.
We have incurred net losses on an annual basis since our inception. We incurred net losses of $14.3 million and $4.0 million in 2020 in 2019. We expect our aggregate costs will increase substantially in the foreseeable future and our losses will continue as we expect to invest heavily in increasing our patient base, expanding our operations, hiring additional employees and operating as a public company. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale of our equity, revenue from our patient services and the incurrence of indebtedness. We may not generate positive cash flow from operations or profitability in any given period, and our limited operating history may make it difficult for you to evaluate our current business and our future prospects.
We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including increasing expenses as we continue to grow our business. We expect our operating expenses to increase significantly over the next several years as we continue to hire additional personnel, expand our operations and infrastructure, and continue to expand to reach more patients. In addition to the expected costs to grow our business, we also expect to incur additional legal, accounting and other expenses as a newly public company. These investments may be more costly than we expect, and if we do not achieve the benefits anticipated from these investments, or if the
 
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realization of these benefits is delayed, they may not result in increased revenue or growth in our business. If our growth rate were to decline significantly or become negative, it could adversely affect our financial condition and results of operations. If we are not able to achieve or maintain positive cash flow in the long term, we may require additional financing, which may not be available on favorable terms or at all and/or which would be dilutive to our shareholders. If we are unable to successfully address these risks and challenges as we encounter them, our business, results of operations and financial condition would be adversely affected. Our failure to achieve or maintain profitability could negatively impact the value of New TOI Common Stock.
A pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide, including the outbreak of the novel strain of coronavirus disease, COVID-19, could adversely affect our business.
If a pandemic, epidemic or outbreak of an infectious disease occurs in the United States or worldwide, our business may be adversely affected. The severity, magnitude and duration of the current COVID-19 pandemic is uncertain and rapidly changing. As of the date of this proxy statement/prospectus, the extent to which the COVID-19 pandemic may impact our business, results of operations and financial condition remains uncertain. Furthermore, because of our business model, the full impact of the COVID-19 pandemic may not be fully reflected in our results of operations and overall financial condition until future periods.
Adverse market conditions resulting from the spread of COVID-19 could materially adversely affect our business and the value of New TOI Common Stock. Numerous state and local jurisdictions, including all markets where we operate, have imposed, and others in the future may impose, “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. Such orders or restrictions resulted in largely remote operations at our headquarters, work stoppages among some vendors and suppliers, slowdowns and delays, travel restrictions and cancellation of events, among other effects, thereby significantly and negatively impacting our operations. Other disruptions or potential disruptions include restrictions on the ability of our personnel to travel; restrictions on our business development activities due to potential payors or other entities we and the TOI PCs engage with limiting their corresponding business development efforts; inability of our suppliers to manufacture goods and to deliver these to us on a timely basis, or at all; inventory shortages or obsolescence; delays in actions of regulatory bodies; diversion of or limitations on employee resources that would otherwise be focused on the operations of our business, including because of sickness of employees or their families or the desire of employees to avoid contact with groups of people; business adjustments or disruptions of certain third parties; and additional government requirements or other incremental mitigation efforts. The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity and spread of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. In addition, the COVID-19 virus disproportionately impacts older adults, especially those with chronic illnesses, which describes many of our patients.
It is not currently possible to reliably project the direct impact of COVID-19 on our operating revenues and expenses. Key factors include the duration and extent of the outbreak in our service areas as well as societal and governmental responses. Patients may continue to be reluctant to seek necessary care given the risks of the COVID-19 pandemic. This could have the effect of deterring healthcare costs that we will need to incur to later periods and may also affect the health of patients who defer treatment, which may cause our costs to increase in the future. Further, as a result of the COVID-19 pandemic, we may experience slowed growth or a decline in new patient demand. We also may experience increased internal and third-party medical costs as the TOI PCs and our affiliated providers provide care for patients suffering from COVID-19. This increase in costs may be particularly significant given the number of patients who are under capitation agreements. Further, we may face increased competition due to changes to our competitors’ products and services, including modifications to their terms, conditions, and pricing that could materially adversely impact our business, results of operations, and overall financial condition in future periods.
While we resumed opening new clinics and continued normal clinic activity at existing managed clinics as of the third quarter of 2020, in the first nine months of 2020, in response to the COVID-19 pandemic, we temporarily moved the majority of our corporate teammates to work remotely at home. During the second quarter of 2020, we made operational changes and implemented safety policies at all of our managed
 
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clinics and corporate locations to minimize potential exposure to COVID-19. We have also implemented travel restrictions for non-essential business. If the COVID-19 pandemic worsens, especially in regions where we have offices or clinics, our business activities originating from affected areas could be adversely affected. Disruptive activities could include business closures in impacted areas, further restrictions on our employees’ and service providers’ ability to travel, impacts to productivity if our employees or their family members experience health issues, and potential delays in hiring and onboarding of new employees. We may take further actions that alter our business operations as may be required by local, state, or federal authorities or that we determine are in the best interests of our employees’ health and safety. Such measures could negatively affect our sales and marketing efforts, sales cycle, employee productivity, or customer retention, any of which could harm our financial condition and business operations.
As part of the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, the U.S. Department of Health and Human Services, or HHS, distributed funding to healthcare providers to offset the impacts of the COVID-19 pandemic related expenses and lost revenues, also known as the Provider Relief Funds. Sources of relief include the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act, or the PPPHCE Act, and the Consolidated Appropriations Act, 2021, or the CAA. In addition, the CARES Act provides for an expansion of the Medicare Accelerated and Advance Payment Program whereby inpatient acute care hospitals and other eligible providers were able to request accelerated payment of up to 100% of their Medicare payment amount for a six-month period to be repaid through withholding of future Medicare fee-for-service payments. Various other state and local programs also exist to provide relief, either independently or through distribution of monies received via the CARES Act. In 2020, together with the TOI PCs, we obtained loans and stimulus funds of $6.0 million and Medicare advances of $2.7 million pursuant to these stimulus measures.
Grants received are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to the COVID-19 pandemic and will only reimburse health care related expenses or lost revenues that are attributable to the COVID-19 pandemic. Recipients are not required to repay these funds, provided that they attest to and comply with certain terms and conditions, including not using the funds to reimburse expenses or losses that other sources are obligated to reimburse and fulfill audit and reporting requirements. There can be no assurance as to the total amount of financial and other types of assistance we will receive under the CARES Act, other enacted stimulus legislation, or future measures, if any, and it is difficult to predict the impact of such measures on our operations or how they will affect operations of our competitors. Further, there can be no assurance that the terms of provider relief funding or other programs will not change or be interpreted in ways that affect the TOI PCs’ funding or eligibility to participate or the TOI PCs’ ability to comply with applicable requirements and retain amounts received. HHS’ interpretation of the underlying terms and conditions of such Provider Relief Funds, including auditing and reporting requirements, continues to evolve. Additional guidance or new and amended interpretations of existing guidance on the terms and conditions of Provider Relief Funds may result in changes in our estimate of amounts for which the terms and conditions are reasonably assured of being met, and any such changes may be material. We will continue to monitor compliance by us and the TOI PCs with the terms and conditions of the Provider Relief Funds, including demonstrating that the distributions received have been used for healthcare-related expenses or lost revenue attributable to the COVID-19 pandemic. If we and the TOI PCs are unable to attest to or comply with current or future terms and conditions our ability to retain some or all of the distributions received may be impacted.
The COVID-19 pandemic could also cause our third-party data center hosting facilities and cloud computing platform providers, which are critical to our infrastructure, to shut down their business, experience security incidents that impact our business, delay or disrupt performance or delivery of services, or experience interference with the supply chain of hardware required by their systems and services, any of which could materially adversely affect our business. Further, the COVID-19 pandemic has resulted in our employees and those of many of our vendors working from home and conducting work via the internet, and if the network and infrastructure of internet providers becomes overburdened by increased usage or is otherwise unreliable or unavailable, our employees’, and our customers’ and vendors’ employees’, access to the internet to conduct business could be negatively impacted. Limitations on access or disruptions to services or goods provided by or to some of our suppliers and vendors upon which our platform and business operations relies, could interrupt our ability to provide our platform, decrease the productivity of our workforce, and significantly harm our business operations, financial condition, and results of operations.
 
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Our platform and the other systems or networks used in our business may experience an increase in attempted cyberattacks, targeted intrusion, ransomware, and phishing campaigns seeking to take advantage of shifts to employees working remotely using their household or personal internet networks and to leverage fears promulgated by the COVID-19 pandemic. The success of any of these unauthorized attempts could substantially impact our platform, the proprietary and other confidential data contained therein or otherwise stored or processed in our operations, and ultimately our business. Any actual or perceived security incident also may cause us to incur increased expenses to improve our security controls and to remediate security vulnerabilities.
The extent and continued impact of the COVID-19 pandemic on our business will depend on certain developments, including: the duration and spread of the outbreak; government responses to the pandemic; the impact on our customers and our sales cycles; the impact on customer, industry, or employee events; and the effect on our partners and supply chains, all of which are uncertain and cannot be predicted. Because of our business model, the full impact of the COVID-19 pandemic may not be fully reflected in our results of operations and overall financial condition until future periods.
To the extent the COVID-19 pandemic, or another pandemic, epidemic or outbreak of an infectious disease occurs in the United States or worldwide, adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to those relating to cyberattacks and security vulnerabilities, interruptions or delays due to third-parties, or our ability to raise additional capital or generate sufficient cash flows necessary to fulfill our obligations under our existing indebtedness or to expand our operations.
Our services are concentrated in certain geographic areas and populations exposing us to unfavorable changes in local benefit costs, reimbursement rates, competition and economic conditions.
The TOI PCs’ membership remains concentrated in certain geographic areas in the United States. We have clinic locations in four states. As of March 31, 2021, the vast majority of the TOI PC members under capitation agreements were residents of California. In addition, during 2020, greater than 90% of our revenues were generated in California. Unfavorable changes in health care or other benefit costs or reimbursement rates or increased competition in the states in which we operate or any other geographic area where the TOI PCs’ membership becomes concentrated in the future could therefore have a disproportionately adverse effect on our operating results. Additionally, the geographic concentration of a significant portion of the TOI PCs’ membership may make them more vulnerable to events such as the COVID-19 pandemic.
If we are unable to attract new patients, our revenue growth will be adversely affected.
To increase our revenue, our business strategy is to expand the number of payor contracts entered into by the TOI PCs and clinic locations in our network. In order to support such growth, the TOI PCs must continue to win new contracts and retain or grow existing contracts with payors. We face competition from other oncology providers in the recruitment of potential patients. If the TOI PCs are unable to convince potential payors and patients of the benefits of our value-based system, or if potential or existing payors and patients prefer the care provider model of one of our competitors, we may not be able to effectively implement our growth strategy, which depends on our ability to grow organically and attract new patient referrals and payors for the TOI PCs. In addition, our growth strategy is dependent on payors electing to enter into capitation or other value-based arrangements and selecting the TOI PCs as their oncology provider. The TOI PCs’ inability to obtain new payor agreements and patient referrals and retain existing payors and patients, particularly those under capitation arrangements, would harm our ability to execute our growth strategy and may have a material adverse effect on our business operations and financial position.
We primarily depend on reimbursement by third-party payors, as well as payments by individuals, which could lead to delays and uncertainties in the reimbursement process.
The reimbursement process is complex and can involve lengthy delays. Although we recognize revenue when the TOI PCs and our affiliated providers provide services to patients, we may from time to time experience delays in receiving the associated capitation payments or, for patients on fee-for-service arrangements, the reimbursement for the service provided. In addition, third-party payors may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for
 
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coverage, certain amounts are not reimbursable under plan coverage or the services provided that were not medically necessary or additional supporting documentation is necessary. Retroactive adjustments may change amounts realized from third-party payors. As described below, the TOI PCs are subject to audits by such payors, including governmental audits of our Medicare claims, and may be required to repay these payors if a finding is made that we were incorrectly reimbursed. Delays and uncertainties in the reimbursement process may adversely affect accounts receivable, increase the overall costs of collection and cause us to incur additional costs associated with raising capital. Third-party payors are also increasingly focused on controlling healthcare costs, and such efforts, including any revisions to reimbursement policies, may further complicate and delay the TOI PCs’ reimbursement claims.
In addition, certain of our patients are covered under health plans that require the patient to cover a portion of their own healthcare expenses through the payment of copayments or deductibles. The TOI PCs may not be able to collect the full amounts due with respect to these payments that are the patient’s financial responsibility, or in those instances where physicians provide services to uninsured individuals. To the extent permitted by law, amounts not covered by third-party payors are the obligations of individual patients for which the TOI PCs may not receive whole or partial payment. Any increase in cost shifting from third-party payors to individual patients, including as a result of high deductible plans for patients, increases our collection costs and reduces overall collections, which we may not be able to offset such additional costs with sufficient revenue.
In response to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services, or CMS, the federal agency responsible for administering the Medicare program, made several changes in the manner in which Medicare will pay for telehealth visits, many of which relax previous requirements, including site requirements for both the providers and patients, telehealth modality requirements and others. State law applicable to telehealth, particularly licensure requirements, has also been relaxed in many jurisdictions as a result of the COVID-19 pandemic. It is unclear which, if any, of these changes will remain in place permanently and which will be rolled-back following the COVID-19 pandemic. If regulations change to restrict the TOI PCs’ ability to or prohibit our affiliated providers from delivering care through telehealth modalities, our financial condition and results of operations may be adversely affected.
With many of our value-based agreements, the TOI PCs assume some or all of the risk that the cost of providing services will exceed compensation. As oncology costs rise, if we do not accurately predict the cost to deliver care, some of the TOI PCs’ value-based agreements could become less profitable, or unprofitable.
Approximately 20% of our revenue for 2020, was derived from fixed fees paid by payors under capitation agreements with the TOI PCs. While there are variations specific to each agreement, the TOI PCs generally contract with payors to receive a fixed fee per month for professional services and assume the financial responsibility for the specified medical oncology and related expenses of our patients. This type of contract is referred to as a “capitation” contract. To the extent that patients require more care than is anticipated and/or the cost of care increases, aggregate fixed compensation amounts, or capitation payments, may be insufficient to cover the costs associated with treatment. If medical costs and expenses exceed estimates, except in very limited circumstances, the TOI PCs will not be able to increase the fee received under these risk agreements during their then-current terms and we could suffer losses with respect to such agreements.
Changes in our anticipated ratio of medical expense to revenue can significantly impact our financial results. Accordingly, the failure to adequately predict and control medical costs and expenses could have a material adverse effect on our business, results of operations, financial condition and cash flows. Additionally, the Medicare expenses of our patients may be outside of the TOI PCs control in the event that patients take certain actions that increase such expenses, such as unnecessary hospital visits.
Historically, the TOI PCs’ medical costs and expenses as a percentage of revenue have fluctuated. Factors that may cause medical expenses to exceed estimates include:

the health status of patients;

changes to oncology treatment guidelines which our affiliated providers follow;

higher than expected utilization of new or existing healthcare services, drugs or technologies;
 
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an increase in the cost of healthcare services and supplies, whether as a result of inflation or otherwise;

changes to mandated benefits or other changes in healthcare laws, regulations and practices;

increased costs attributable to provider and support staff compensation or providers with which the TOI PCs contract to provide care to patients;

changes in the demographics of our patients and medical trends;

contractual or claims disputes with providers, hospitals or other service providers within and outside a health plan’s network; and

the occurrence of catastrophes, major epidemics or acts of terrorism.

an increase in the cost of healthcare services and supplies, whether as a result of inflation or otherwise;

changes to mandated benefits or other changes in healthcare laws, regulations and practices;

increased costs attributable to provider and support staff compensation or providers with which the TOI PCs contract to provide care to patients;

changes in the demographics of our patients and medical trends;

contractual or claims disputes with providers, hospitals or other service providers within and outside a health plan’s network; and

the occurrence of catastrophes, major epidemics or acts of terrorism.
If we underestimate or do not correctly predict the cost of the oncology care the TOI PCs provide to patients, the TOI PCs might be underpaid for the care that must be provided to our patients, which could have a negative impact on our results of operations and financial condition.
There are significant risks associated with estimating the amount of revenue that is recognize under TOI PCs’ risk agreements with health plans, and if our estimates of revenue are materially inaccurate, it could impact the timing and the amount of our revenue recognition or have a material adverse effect on our business, results of operations, financial condition and cash flows.
There are significant risks associated with estimating the amount of revenues that is recognize under the TOI PCs’ risk agreements with health plans in a reporting period. The billing and collection process is complex due to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payor issues, such as ensuring appropriate documentation. Determining applicable primary and secondary coverage for our patients, together with the changes in patient coverage that occur each month, requires complex, resource-intensive processes. Errors in determining the correct coordination of benefits may result in refunds to payors. Revenues associated with Medicare and Medicaid programs are also subject to estimating risk related to the amounts not paid by the primary government payor that will ultimately be collectible from other government programs paying secondary coverage, the patient’s commercial health plan secondary coverage or the patient. Collections, refunds and payor recoupments typically continue to occur for up to three years and longer after services are provided. If our estimates of revenues are materially inaccurate, it could impact the timing and the amount of our revenues recognition and have a material adverse impact on our business, results of operations, financial condition and cash flows.
A significant portion of our consolidated Patient Services revenue is derived from a limited number of health insurance, Independent Practice Associations, or IPAs and medical group companies. Those payors could take action to remove, exclude, delay, or otherwise prevent the inclusion of the TOI PCs in their provider networks.
Our operations are dependent on a concentrated number of payors with whom the TOI PCs contract to provide services to patients. We generally manage the TOI PCs’ payor contracts on a state by state basis, entering into a separate contract in each state with the local affiliate of the relevant payor such that no one local payor contract accounts for a majority of our collective revenue. Regal Medical Group accounted for
 
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a total of approximately 15% of the Patient Services revenue for the year ended December 31, 2020 and entities under Optum and United Healthcare accounted for a total of approximately 16% of the total Patient Services revenue for the year ended December 31, 2020. No other non-government payor accounted for more than 10% of the Patient Services revenue in 2020. We believe that a majority of the TOI PCs’ revenues will continue to be derived from a limited number of key payors, which may terminate their contracts with the TOI PC or the individual TOI PC physicians credentialed by them upon the occurrence of certain events. The sudden loss of any of the TOI PCs’ payor partners, or the renegotiation of any of the TOI PCs’ payor contracts, could adversely affect our operating results. In the ordinary course of business we engage in active discussions and renegotiations with payors in respect of the services the TOI PCs provide and the terms of the TOI PCs’ payor agreements. As the payors’ businesses respond to market dynamics and financial pressures, and as payors make strategic business decisions in respect of the lines of business they pursue and programs in which they participate, certain of the payors may seek to renegotiate or terminate their agreements with the TOI PCs. These discussions could result in reductions to the fees and changes to the scope of services contemplated by the original payor contracts and consequently could negatively impact our revenues, business and prospects.
Because we rely on a limited number of payors for a significant portion of the TOI PCs’ revenues, we depend on the creditworthiness of these payors. The payors are subject to a number of risks including reductions in payment rates from governmental programs, higher than expected health care costs and lack of predictability of financial results when entering new lines of business, particularly with high-risk populations. If the financial condition of the TOI PCs’ payor partners declines, our financial results could be impacted. Should one or more of the TOI PCs’ significant payor partners declare bankruptcy, be declared insolvent or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, this could adversely affect our ongoing revenues, the collectability of our accounts receivable, our bad debt reserves and our net income.
Although the TOI PCs have long-term contracts with many payors, these contracts may be terminated before their term expires for various reasons, such as changes in the regulatory landscape and poor performance by the TOI PCs and our affiliated providers, subject to certain conditions. Certain of the payor contracts are terminable immediately upon the occurrence of certain events. Certain of the payor contracts may be terminated immediately by the partner if the TOI PCs lose applicable licenses, go bankrupt, lose its liability insurance or receive an exclusion, suspension or debarment from state or federal government authorities. Additionally, if a payor were to lose applicable licenses, go bankrupt, lose liability insurance, become insolvent, file for bankruptcy or become subject to exclusion, suspension or debarment from state or federal government authorities, the TOI PC’s contract with such payor could in effect be terminated. In addition, certain of the payor contracts may be terminated immediately if a TOI PC becomes insolvent or file for bankruptcy. If any of the contracts with the TOI PCs’ payors is terminated, the TOI PCs may not be able to recover all fees due under the terminated contract, which may adversely affect our operating results.
A significant portion of sales are from prescription drug sales reimbursed by a limited number of pharmacy benefit management companies with which TOI PCs contract. Those pharmacy benefit management companies could take action to remove, exclude, delay or otherwise prevent the inclusion of the TOI PCs in their provider networks.
There is currently significant concentration in the U.S. healthcare industry, and in particular there are a limited number of pharmacy benefit managers, or PBMs, and a limited number of national pharmacy chains. CVS Caremark, OptumRx and Express Scripts together accounted for approximately 64% of our dispensary revenue in 2020. If the TOI PCs are unable to retain favorable contractual arrangements with PBMs, including any successor PBMs should there be further consolidation of PBMs, the negotiated rates provided by such PBMs may become less competitive, which could have an adverse impact on the TOI PCs’ ability to provide prescription drugs at the capitated rates negotiated with the payors with whom the TOI PCs contract to provide such drugs to patients. This could be exacerbated by further consolidation of PBMs or pharmacy chains. Specifically, PBMs have instituted Direct and Indirect Remuneration , or DIR, fees, which reduce the reimbursement for drugs dispensed by the TOI PCs. The impact of these fees in future is uncertain, and our ability to negotiate with PBMs on DIR fees is limited. If such changes, individually or in the aggregate, are material, they would have an adverse effect on our business, results of operations and financial condition.
 
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Reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program could have a material adverse effect on our financial condition and results of operations.
The TOI PCs receive a significant portion of revenue directly from Medicare, which accounted for approximately 15% of our Patient Services revenue in 2020. In addition, many private payors base their reimbursement rates on the published Medicare rates or, in the case of Medicare Advantage, are themselves reimbursed by Medicare for the services the TOI PCs provide. As a result, our results of operations are, in part, dependent on government funding levels for Medicare programs, particularly Medicare Advantage programs. Any changes that limit or reduce Medicare Advantage or general Medicare reimbursement levels, such as reductions in or limitations of reimbursement amounts or rates under programs, reductions in funding of programs, expansion of benefits without adequate funding, elimination of coverage for certain benefits, or elimination of coverage for certain individuals or treatments under programs, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The Medicare program and its reimbursement rates and rules are subject to frequent change. These include statutory and regulatory changes, rate adjustments (including retroactive adjustments), administrative or executive orders and government funding restrictions, all of which may materially adversely affect the rates at which Medicare reimburses the TOI PCs for patient care services. Budget pressures often lead the federal government to reduce or place limits on reimbursement rates under Medicare. Implementation of these and other types of measures has in the past and could in the future result in substantial reductions in our revenue and operating margins.
In addition, CMS often changes the rules governing the Medicare program, including those governing reimbursement. Changes that could adversely affect our business include:

administrative or legislative changes to rates or the bases of payment;

limits on the services or types of providers for which Medicare will provide reimbursement;

changes in methodology for patient assessment and/or determination of payment levels;

the reduction or elimination of annual rate increases; or

an increase in co-payments or deductibles payable by beneficiaries.
There is also uncertainty regarding both Medicare Advantage payment rates and beneficiary enrollment, which, if reduced, would reduce our overall revenues and net income, as well as future growth opportunities. For example, although the Congressional Budget Office (“CBO”) predicted in 2010 that Medicare Advantage participation would drop substantially by 2020, the CBO has more recently predicted, without taking into account potential future reforms, that enrollment in Medicare Advantage (and other contracts covering Medicare Parts A and B) could reach 36 million by 2027. Although Medicare Advantage enrollment has increased significantly over the past decade, there can be no assurance that this trend will continue. Further, fluctuation in Medicare Advantage payment rates are evidenced by CMS’s annual announcement of the expected average change in revenue from the prior year: for 2020, CMS announced an average increase of 2.53%; and for 2021, 1.66%. Uncertainty over Medicare Advantage enrolment and payment rates present a continuing risk to our business.
According to the Kaiser Family Foundation , or KFF, Medicare Advantage enrolment continues to be highly concentrated among a few payors, both nationally and in local regions. In 2021, the KFF reported that three payors together accounted for more than half of Medicare Advantage enrollment and six firms accounted for nearly 70% of covered lives. Consolidation among Medicare Advantage plans in certain regions, or the Medicare program’s failure to attract additional plans to participate in the Medicare Advantage program, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Reductions in reimbursement rates or the scope of services rendered by the TOI PCs being reimbursed could have a material, adverse effect on our financial condition and results of operations or even result in reimbursement rates that are insufficient to cover our operating expenses. Additionally, any delay or default by the government in making Medicare reimbursement payments to the TOI PCs could materially and adversely affect our business, financial condition and results of operations.
 
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We cannot predict the effect that health care reform and other changes in government programs may have on our business, financial condition or results of operations.
The impact of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, but may adversely affect our business, financial condition and results of operations. Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy. The healthcare industry is subject to changing political, regulatory and other influences. By way of example, the ACA, which was enacted in 2010, made major changes in how healthcare is delivered and reimbursed, and it increased access to health insurance benefits to the uninsured and underinsured populations of the United States.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Prior to the Supreme Court’s decision, President Biden issued an executive order initiating a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare. It is unclear how healthcare reform measures enacted by Congress or implemented by the Biden administration or other challenges to the ACA, if any, will impact the ACA or our business.
Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year, which began in 2013 and will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect consumer demand and affordability for our products and services and, accordingly, the results of our financial operations. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement.
Such changes in the regulatory environment may also result in changes to our payer mix that may affect our operations and revenue. In addition, certain provisions of the ACA authorize voluntary demonstration projects, which include the development of bundling payments for acute, inpatient hospital services, physician services and post-acute services for episodes of hospital care. Further, the ACA may adversely affect payers by increasing medical costs generally, which could have an effect on the industry and potentially impact our business and revenue as payers seek to offset these increases by reducing costs in other areas.
Uncertainty regarding future amendments to the ACA as well as new legislative proposals to reform healthcare and government insurance programs, along with the trend toward managed healthcare in the United States, could result in reduced demand and prices for our services. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments and other third party payers will pay for healthcare products and services, which could adversely affect our business, financial condition and results of operations.
The transition from volume to value-based reimbursement models may have a material adverse effect on our operations.
Healthcare reform is causing some payors to transition from volume to value-based reimbursement models, which can include risk-sharing, bundled payment and other innovative approaches. While these models may provide us with opportunities to provide new or additional services and to participate in incentive-based payment arrangements, there can be no assurance that such new models and approaches will be
 
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profitable to us or the TOI PCs. Further, new models and approaches may require investment by us to develop technology or expertise to offer necessary and appropriate solutions or support to the TOI PCs, and we do not fully know the amount and timing for return of such investment at this time. In addition, some of these new models are being offered as pilot programs and there is no assurance that they will continue or be renewed. Many states in which these new value-based structures are being developed also lack regulatory guidance or a well-developed body of law for these new models and approaches, or may not have updated their laws or enacted legislation yet to reflect the new healthcare reform models. As a result, new and existing laws, regulations or guidance could have a material adverse effect on our operations and could subject us to the risk of restructuring or terminating our arrangements with the TOI PCs, as well as the risk of regulatory enforcement, penalties and sanctions, if state and federal enforcement agencies disagree with our interpretation of these laws.
CMS, through the Centers for Medicare and Medicaid Innovation, or the CMMI, has implemented or has announced plans to implement numerous demonstration models designed to test value-based reimbursement models, some of which are specifically focused on oncology services. For example, in 2016, CMS initiated the Oncology Care Model, or OCM demonstration, which continues into 2022 and provides participating physician practices with performance-based financial incentives that aim to manage or reduce Medicare costs without negatively affecting the efficacy of care. We currently participate in the OCM program. In late 2019, CMS issued a request for information on the Oncology Care First model, a new voluntary model that, if implemented, would build on the Oncology Care Model. While the extent to which these models may impact our business is uncertain and will depend on future developments, such models may materially reduce Medicare reimbursement levels for our services or TOI PCs’ services and could have a material adverse effect on our results of operations and financial condition.
Changes in the payor mix of patients and potential decreases in reimbursement rates as a result of consolidation among plans could adversely affect our revenues and results of operation.
The amounts the TOI PCs receive for services provided to patients are determined by a number of factors, including the payor mix of patients and the reimbursement methodologies and rates utilized by our patients’ plans. Our Patient Services revenue consists of both capitation and fee-for-service agreements held by the TOI PCs. Reimbursement rates are generally higher for capitation agreements than they are under fee-for-service arrangements, and capitation agreements provide the TOI PCs with an opportunity to capture any additional surplus created by applying our care model. Under a capitation plan, the TOI PCs receive a fixed fee PMPM for services. Under a fee-for-service payor arrangement, the TOI PCs collect fees directly from the payor as services are provided. Our Patient Services revenue accounted for approximately 62% of total revenue for the year ended December 31, 2020. A significant decrease in the number of capitation or FFS arrangements held by the TOI PCs could adversely affect our revenues and results of operation.
The healthcare industry has also experienced a trend of consolidation, resulting in fewer but larger payors that have significant bargaining power, given their market share. Payments from payors are the result of negotiated rates. These rates may decline based on renegotiations and larger payors have significant bargaining power to negotiate higher discounted fee arrangements with healthcare providers. As a result, payors increasingly are demanding discounted fee structures or the assumption by healthcare providers of all or a portion of the financial risk related to paying for care provided through capitation agreements.
We face significant competition from other healthcare services providers. Our failure to adequately compete could adversely affect our business.
We and the TOI PCs compete directly with national, regional and local providers of healthcare for patients and physicians. There are many other companies and individuals currently providing healthcare services, many of which have been in business longer and/or have substantially more resources. Other companies could enter the healthcare industry in the future and divert some or all of our business. If we expand to other geographies, we expect competition may change based on a number of factors, including the number of competing oncology care facilities in the local market and the types of services available at those facilities, our local and the TOI PCs reputation for quality care of patients, the commitment and expertise of the TOI PCs medical staff, our local service offerings and community programs, the cost of care in each
 
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locality, and the physical appearance, location, age and condition of our facilities. If we are unable to attract patients to our managed clinics, our revenue and profitability will be adversely affected. Some of our competitors may have greater recognition and be more established in their respective communities than we are, and may have greater financial and other resources than we have. Competing oncology care providers may also offer larger facilities or different programs or services than we do, which, combined with the foregoing factors, may result in our competitors being more attractive to our current patients, potential patients and referral sources. Furthermore, while we budget for routine capital expenditures at our managed clinics to keep them competitive in their respective markets, to the extent that competitive forces cause those expenditures to increase in the future, our financial condition may be negatively affected. In addition, our relationships with governmental and private third-party payors are not exclusive and our competitors have established or could seek to establish relationships with such payors to serve their covered patients. Additionally, as we expand into new geographies, we may encounter competitors with stronger relationships or recognition in the community in such new geography, which could give those competitors an advantage in obtaining new patients. Individual physicians, physician groups and companies in other healthcare industry segments, including those with which the TOI PCs have contracts, and some of which have greater financial, marketing and staffing resources, may become competitors in providing health care services, and this competition may have a material adverse effect on our business operations and financial position.
Competition for physicians and nurses, shortages of qualified personnel or other factors could increase our labor costs and adversely affect our revenue, profitability and cash flows.
Our operations are dependent on the efforts, abilities and experience of the TOI PCs’ physicians and clinical personnel. We compete with other healthcare providers, primarily hospitals and other oncology practices, in attracting physicians, nurses and medical staff to support our managed clinics, recruiting and retaining qualified management and support personnel responsible for the daily operations of each of our managed clinics and in the TOI PCs contracting with payors in each of our markets. In some markets, the lack of availability of clinical personnel has become a significant operating issue facing all healthcare providers. This shortage may require us and the TOI PCs to continue to enhance wages and benefits to recruit and retain qualified personnel or to contract for more expensive temporary personnel. We also depend on the available labor pool of semi-skilled and unskilled workers in each of the markets in which we operate.
If our labor costs increase, we may not be able to raise rates to offset these increased costs. Because a significant percentage of our revenue consists of fixed, prospective payments, our ability to pass along increased labor costs is limited. In particular, if labor costs rise at an annual rate greater than our net annual consumer price index basket update from Medicare, our results of operations and cash flows will likely be adversely affected. Any union activity at our managed clinics that may occur in the future could contribute to increased labor costs. Certain proposed changes in federal labor laws and the National Labor Relations Board’s modification of its election procedures could increase the likelihood of employee unionization attempts. Although none of our employees or the employees of the TOI PCs are currently represented by a collective bargaining agreement, to the extent a significant portion of our employee base unionizes, it is possible our labor costs could increase materially. Our failure to recruit and retain qualified management and medical personnel for the TOI PCs, or to control our collective labor costs, could have a material adverse effect on our business, prospects, results of operations and financial condition.
Because competition for qualified personnel is intense, we may not be able to attract and retain the highly skilled employees we need to execute our business strategies and growth plans.
To execute on our growth plan, we and the TOI PCs must attract and retain highly qualified personnel. Competition for highly qualified personnel is intense, especially for physicians and other medical professionals who are experienced in providing oncology care services. We and the TOI PCs have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies and healthcare providers with which we compete for experienced personnel have greater resources than we have. If we and the TOI PCs hire employees from competitors or other companies or healthcare providers, their former employees may attempt to assert that these employees or we have breached certain legal obligations, resulting in a diversion of our time and resources.
 
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As we become a more mature company, we may find our recruiting efforts more challenging. The incentives to attract, retain, and motivate employees provided by our stock options and other equity awards, or by other compensation arrangements, may not be as effective as in the past. As such, we may not be successful in continuing to attract and retain qualified personnel. Our recruiting efforts may also be limited by laws and regulations, such as restrictive immigration laws, and restrictions on travel or availability of visas (including during the ongoing COVID-19 pandemic). If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.
If we are unable to provide consistently high quality of care, our business will be adversely impacted.
Our business is dependent upon the TOI PCs and our affiliated providers providing high-quality care to our patients. In particular, our ability to attract and retain patients and patient referrals dependent upon providing cost effective, quality patient care that meets or exceeds our patients’ and payors’ expectations. We depend on third parties for certain of our patient care needs. If we or the TOI PCs fail to provide service that meets our patients’ and payors’ expectations, we may have difficulty retaining or growing our patient base, which could adversely affect our business, financial condition and results of operations.
We expect the importance of high-quality patient experience to increase as we, through the TOI PCs, expand our business and pursue new lives served. Any failure to maintain high-quality patient experience, or a market perception that we do not maintain high-quality care, could harm the reputation of us and our affiliated providers and our ability to grow the number of lives served, and our business, results of operations, and financial condition. Additionally, as the number of lives served by the TOI PCs in our managed clinics grows, we will need to hire additional personnel to provide quality care at scale. If we and the TOI PCs are unable to provide such care, our business, results of operations, financial condition, and reputation could be harmed.
If certain of our suppliers do not meet our needs, if there are material price increases on supplies, if we are not reimbursed or adequately reimbursed for drugs purchased or if we are unable to effectively access new technology or superior products, it could negatively impact the ability of the TOI PCs to effectively provide the services we offer and could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The TOI PCs have significant drug suppliers that may be the sole or primary source of products critical to the services the TOI PCs provide, or to which we have committed obligations to make purchases, sometimes at particular prices. Approximately 60% of the TOI PCs’ total costs are related to drug purchases, including both oral and chemotherapy drugs, for the year ended December 31, 2020. If any of these suppliers do not meet the TOI PCs’ needs for the products they supply, including in the event of a product recall, shortage or dispute, and we are not able to find adequate alternative sources, if we experience material price increases from these suppliers that we are unable to mitigate, or if some of the drugs that the TOI PCs purchase are not reimbursed or not adequately reimbursed by commercial or government payors, it could have a material adverse impact on our business, results of operations, financial condition and cash flows. In addition, the technology related to the products critical to the services we provide is subject to new developments which may result in superior products. If we are not able to access superior products on a cost-effective basis or if suppliers are not able to fulfill our requirements for such products, we and the TOI PCs could face patient attrition and other negative consequences which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We depend on our information technology systems, and those of our third-party vendors, contractors and consultants, and any failure or significant disruptions of these systems, security breaches or loss of data could materially adversely affect our business, financial condition and results of operations.
Our business is highly dependent on maintaining effective information systems as well as the integrity and timeliness of the data we use to serve our patients, support our care teams and operate our business. Because of the large amount of data that we collect and manage, it is possible that hardware failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or contain inaccuracies that our partners regard as significant. If our data were found to be inaccurate or unreliable due to fraud or other error, or if we, or any of the third-party service providers we
 
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engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our patients and care teams and hinder our ability to provide services, establish appropriate pricing for services, retain and attract patients, manage our patient risk profiles, establish reserves, report financial results timely and accurately and maintain regulatory compliance, among other things.
Our information technology strategy and execution are critical to our continued success. We must continue to invest in long-term solutions that will enable us to anticipate patient needs and expectations, enhance the patient experience, act as a differentiator in the market and protect against cybersecurity risks and threats. We believe our success is dependent, in large part, on maintaining the effectiveness of existing technology systems and continuing to deliver and enhance technology systems that support our business processes in a cost-efficient and resource-efficient manner. Increasing regulatory and legislative changes will place additional demands on our information technology infrastructure that could have a direct impact on resources available for other projects tied to our strategic initiatives. In addition, recent trends toward greater patient engagement in health care require new and enhanced technologies, including more sophisticated applications for mobile devices. Connectivity among technologies is becoming increasingly important. We must also develop new systems to meet current market standards and keep pace with continuing changes in information processing technology, evolving industry and regulatory standards and patient needs. Failure to do so may present compliance challenges and impede our ability to deliver services in a competitive manner. Further, because system development projects are long-term in nature, they may be more costly than expected to complete and may not deliver the expected benefits upon completion.
Security incidents compromising the confidentiality, integrity, and availability of our confidential or personal information and our and our third-party service providers’ information technology systems could result from cyber-attacks, computer malware, viruses, social engineering (including spear phishing and ransomware attacks), credential stuffing, supply chain attacks, efforts by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations, errors or malfeasance of our personnel, and security vulnerabilities in the software or systems on which we and our third party service providers rely. As techniques used by cyber criminals change frequently, a disruption, cyberattack or other security breach of our information technology systems or infrastructure, or those of our third-party service providers, may go undetected for an extended period and could result in the theft, transfer, unauthorized access to, disclosure, modification, misuse, loss or destruction of our employee, representative, customer, vendor, consumer and/or other third-party data, including sensitive or confidential data, personal information and/or intellectual property. We cannot guarantee that our security efforts will prevent breaches or breakdowns of our or our third-party service providers’ information technology systems. If we suffer a material loss or disclosure of health-related or other personal or confidential information as a result of a breach of our information technology systems, including those of our third-party service providers, we may suffer reputational, competitive and/or business harm, incur significant costs and be subject to government investigations, litigation, fines and/or damages, which could have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows. Moreover, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot assure you that our insurance will be adequate to cover costs and liabilities related to these incidents. Further, our failure to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems could adversely affect our results of operations, financial position and cash flow.
We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and results of operations.
We and the TOI PCs may be party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We may face allegations, lawsuits and regulatory inquiries, audits and investigations regarding data privacy, security, labor and employment, consumer protection and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights and other rights. We may also face allegations or litigation related to our acquisitions, securities issuances or business practices, including public disclosures about our business. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict. Certain of these matters may include speculative claims for substantial or indeterminate
 
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amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our services or require us to stop serving certain patients or geographies, all of which could negatively impact our geographical expansion and revenue growth. The TOI PCs may also become subject to periodic audits, which would likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts the attention of management and our affiliated providers from our business.
The results of regulatory proceedings, litigation, claims, and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our reputation, business, financial condition, results of operations and the market price of our common stock.
Furthermore, our business exposes the TOI PCs and our affiliated providers to potential medical malpractice, professional negligence or other related actions or claims that are inherent in the provision of healthcare services. These claims, with or without merit, could cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management and our affiliated providers from our core business, harm our reputation and adversely affect the TOI PCs’ ability to attract and retain patients, any of which could have a material adverse effect on our business, financial condition and results of operations.
Although the TOI PCs and our affiliated providers maintain third-party professional liability insurance coverage, it is possible that claims against them may exceed the coverage limits of their insurance policies. Even if any professional liability loss is covered by an insurance policy, these policies typically have substantial deductibles for which the TOI PCs and our affiliated providers are responsible. Professional liability claims in excess of applicable insurance coverage could have a material adverse effect on our collective business, financial condition and results of operations. In addition, any professional liability claim brought against the TOI PCs or our affiliated providers, with or without merit, could result in an increase of their professional liability insurance premiums. Insurance coverage varies in cost and can be difficult to obtain, and we cannot guarantee that we will be able to obtain insurance coverage on behalf of the TOI PCs and our affiliated providers in the future on terms acceptable to us or at all. If costs of insurance and claims increase, then our collective earnings could decline.
Some jurisdictions preclude the TOI PCs from entering into non-compete agreements with physicians, and other non-compete agreements and restrictive covenants applicable to certain physicians and other clinical employees may not be enforceable.
The TOI PCs have employment contracts with physicians and other health professionals in many states. Some of these contracts include provisions preventing these physicians and other health professionals from competing with us both during and after the term of our contract with them. The law governing non-compete agreements and other forms of restrictive covenants varies from state to state. Some jurisdictions prohibit the TOI PCs from using non-competition covenants with our professional staff. Other states are reluctant to strictly enforce non-compete agreements and restrictive covenants applicable to physicians and other healthcare professionals. There can be no assurance that the TOI PCs’ non-compete agreements related to physicians and other health professionals will be found enforceable if challenged in certain states. In such event, the TOI PCs would be unable to prevent physicians and other health professionals formerly employed by the TOI PCs from competing with us, potentially resulting in the loss of some of our patients.
Current and future acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities.
As part of our growth strategy, we may pursue acquisitions of oncology and other physician practices and services. These acquisitions may involve significant cash expenditures, debt incurrence, additional operational losses and expenses, and compliance risks that could have a material adverse effect on our
 
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financial condition and results of operation. We may not be able to successfully integrate the acquired businesses into ours and the TOI PCs, and therefore, we may not be able to realize the intended benefits from an acquisition. These acquisitions could result in difficulties integrating acquired operations, technologies, and personnel into our business. Such difficulties may divert significant financial, operational, and managerial resources from our existing operations and make it more difficult to achieve our operating and strategic objectives. We and the TOI PCs may fail to retain employees or patients acquired through these acquisitions, which may negatively impact the integration efforts. These acquisitions could also have a negative impact on our results of operations if it is subsequently determined that goodwill or other acquired intangible assets are impaired, thus resulting in an impairment charge in a future period.
In addition, these acquisitions involve risks that the acquired businesses will not perform in accordance with expectations; that we may become liable for unforeseen financial or business liabilities of the acquires businesses, including liabilities for failure to comply with applicable healthcare regulations; that the expected synergies associated with acquisitions will not be achieved; and that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove incorrect, which could have a material adverse effect on our financial condition and results of operations.
If we are unable to protect the confidentiality of our trade secrets, know-how and other proprietary and internally developed information, the value of our technology could be adversely affected.
We may not be able to protect our trade secrets, know-how and other internally developed information adequately. Although we use reasonable efforts to protect this internally developed information and technology, our employees, consultants and other parties (including independent contractors and companies with which we conduct business) may unintentionally or willfully disclose our information or technology to competitors. Enforcing a claim that a third party illegally disclosed or obtained and is using any of our internally developed information or technology is difficult, expensive and time-consuming, and the outcome is unpredictable. We rely, in part, on non-disclosure, confidentiality and assignment-of-invention agreements with our employees, independent contractors, consultants and companies with which we conduct business to protect our internally developed information. These agreements may not be self-executing, or they may be breached and we may not have adequate remedies for such breach. Moreover, third parties may independently develop similar or equivalent proprietary information or otherwise gain access to our trade secrets, know-how and other internally developed information.
We conduct some clinical trials in contract with the ICRI. If we fail to perform our clinical trial services in accordance with contractual requirements, government regulations and ethical considerations, we could be subject to significant costs or liability and our reputation could be adversely affected.
The ICRI, contracts with biotechnology and pharmaceutical companies to perform services to assist them in bringing new drugs and biologics to market. ICRI’s services include monitoring clinical trials, laboratory analysis, electronic data capture, patient recruitment, data analytics, technology solutions, and other related services. Such services are complex and subject to contractual requirements, government regulations, and ethical considerations. ICRI’s services are subject to various regulatory requirements designed to ensure the quality and integrity of the clinical trial process. In the United States, clinical development services must be performed in compliance with applicable laws, rules and regulations enforced by the United States Food and Drug Administration, or FDA, including Good Clinical Practice, or GCP, requirements, which govern, among other things, the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials.
If ICRI fails to perform services in accordance with these requirements, regulatory authorities may take action against ICRI. Such actions may include injunctions or failure to grant marketing approval of products, imposition of clinical holds or delays, suspension or withdrawal of approvals, rejection of data collected in ICRI’s studies, license revocation, product seizures or recalls, operational restrictions, civil or criminal penalties or prosecutions, damages, or fines. Additionally, there is a risk that actions by regulatory authorities, if they result in significant inspectional observations or other measures, could harm ICRI’s reputation and cause customers not to award ICRI future contracts or to cancel existing contracts. Clients may also bring claims against ICRI for breach of ICRI’s contractual obligations and patients in the clinical
 
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trials and patients taking drugs approved on the basis of those trials may bring personal injury claims against ICRI. Any such action could have a material adverse effect on our results of operations, financial condition, and reputation.
Negative publicity regarding the managed healthcare industry generally could adversely affect our results of operations or business.
Negative publicity regarding the managed healthcare industry generally, or the MA program in particular, may result in increased regulation and legislative review of industry practices that further increase our costs of doing business and adversely affect our results of operations or business by:

requiring us to change our products and services;

increasing the regulatory, including compliance, burdens under which we operate, which, in turn, may negatively impact the manner in which the TOI PCs provide services and increase our costs of providing services;

adversely affecting our ability to market the TOI PCs products or services through the imposition of further regulatory restrictions regarding the manner in which plans and providers market to MA enrollees; or

adversely affecting our ability to attract and retain patients.
Our managed clinics may be negatively impacted by weather and other factors beyond our control.
Our results of operations may be adversely impacted by adverse conditions affecting our managed clinics, including severe weather events such as hurricanes and flooding, natural disasters such as earthquakes and forest fires, public health concerns such as contagious disease outbreaks, violence or threats of violence or other factors beyond our control that cause disruption of patient scheduling, displacement of our patients, employees and care teams, or force certain of our managed clinics to close temporarily. Our future operating results may be adversely affected by these and other factors that disrupt the operation of our managed clinics.
Risks Related to TOI’s Regulatory Environment
We are dependent on our relationships with the TOI PCs, which are affiliated professional entities that we do not own, to provide healthcare services, and our business would be harmed if those relationships were disrupted or if our arrangements with the TOI PCs become subject to legal challenges.
Our contractual relationships with the TOI PCs may implicate certain state laws that generally prohibit non-professional entities from providing licensed medical services or exercising control over licensed physicians or other healthcare professionals (such activities generally referred to as the “corporate practice of medicine”) or engaging in certain practices such as fee-splitting with such licensed professionals. The interpretation and enforcement of these laws vary significantly from state to state. There can be no assurance that these laws will be interpreted in a manner consistent with our practices or that other laws or regulations will not be enacted in the future that could have a material and adverse effect on our business, financial condition and results of operations. Regulatory authorities, state boards of medicine, state attorneys general and other parties may assert that, despite the agreements through which we operate, we are engaged in the provision of medical services and/or that our arrangements with the TOI PCs constitute unlawful fee-splitting. If a jurisdiction’s prohibition on the corporate practice of medicine or fee-splitting is interpreted in a manner that is inconsistent with our practices, we would be required to restructure or terminate our arrangements with the TOI PCs to bring our activities into compliance with such laws. A determination of non-compliance, or the termination of or failure to successfully restructure these relationships could result in disciplinary action, penalties, damages, fines, and/or a loss of revenue, any of which could have a material and adverse effect on our business, financial condition and results of operations. State corporate practice and fee-splitting prohibitions also often impose penalties on healthcare professionals for aiding in the improper rendering of professional services, which could discourage physicians and other healthcare professionals from providing clinical services to members of the health plans with whom we contract.
 
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Our managed clinics and the TOI PCs providing professional services at such clinics may become subject to medical liability claims, which could have a material adverse impact on our business.
Our business entails the risk of medical liability claims against us, the TOI PCs and their clinicians. Although we, the TOI PCs and their clinicians carry insurance covering medical malpractice claims in amounts that we believe are appropriate in light of the risks attendant to our business, successful medical liability claims could result in substantial damage awards that exceed the limits of our and our clinicians’ insurance coverage. In addition, professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services. As a result, adequate professional liability insurance may not be available to our clinicians, our affiliated practices or to us in the future at acceptable costs or at all.
Any claims made against us or the TOI PCs that are not fully covered by insurance could be costly to defend, result in substantial damage awards against us and divert the attention of our management and the TOI PCs from our operations, which could have a material adverse effect on our business, financial condition and results of operations. In addition, any claims may adversely affect our business or reputation.
If there is a change in accounting standards by the Financial Accounting Standards Board or the interpretation thereof affecting consolidation of entities, it could have a material adverse effect on our consolidation of total revenues derived from the TOI PCs.
Our financial statements are consolidated in accordance with applicable accounting standards and include the accounts of our subsidiaries and the TOI PCs, which we manage under long-term management services agreements but are not owned by us. Such consolidation for accounting and/or tax purposes does not, is not intended to, and should not be deemed to, imply or provide us any control over the medical or clinical affairs of the TOI PCs. In the event a change in accounting standards promulgated by FASB or in interpretation of its standards, or if there is an adverse determination by a regulatory agency or a court, or a change in state or federal law relating to the ability to maintain present agreements or arrangements with the TOI PCs, we may not be permitted to continue to consolidate the total revenues of such practices.
Our managed clinics and the TOI PCs may be subject to third-party payor audits, which, if adversely determined against us or the TOI PCs, may have a material effect on our results of operations and financial condition.
As a result of the TOI PCs participation in the Medicare and Medicaid programs, our managed clinics and the TOI PCs are subject to various governmental inspections, reviews, audits and investigations to verify our compliance with these programs and applicable laws and regulations. Payors may also reserve the right to conduct audits. We also periodically conduct internal audits and reviews of our regulatory compliance. An adverse inspection, review, audit or investigation could result in:

refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from payors;

state or federal agencies imposing fines, penalties and other sanctions on us;

temporary suspension of payment for new patients to the facility or agency;

decertification or exclusion from participation in the Medicare or Medicaid programs or one or more payor networks;

self-disclosure of violations to applicable regulatory authorities;

damage to our reputation;

the revocation of a facility’s or agency’s license; and

loss of certain rights under, or termination of, our contracts with payors.
We have in the past and will likely in the future be required to refund amounts we have been paid and/or pay fines and penalties as a result of these inspections, reviews, audits and investigations. If adverse inspections, reviews, audits or investigations occur and any of the results noted above occur, it could have a
 
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material adverse effect on our business and operating results. Furthermore, the legal, document production and other costs associated with complying with these inspections, reviews, audits or investigations could be significant.
We are subject to extensive fraud, waste, and abuse laws that may give rise to federal and state audits, investigations, lawsuits and claims against us, the outcome of which may have a material adverse effect on our business, financial condition, cash flows, or results of operations.
The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payors, our contractual relationships and arrangements with healthcare providers and vendors, our marketing activities and other aspects of our operations. Of particular importance are:

the federal Anti-Kickback Statute, or AKS, which prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

the federal physician self-referral law, the Stark Law, which, subject to limited exceptions, prohibits physicians from referring Medicare or Medicaid patients to an entity for the provision of certain designated health services, or DHS if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare or Medicaid for such DHS;

the FCA, which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits. There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud such as coding errors, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality. In addition, the government may assert that a claim including items or services resulting from a violation of the AKS or Stark Law constitutes a false or fraudulent claim for purposes of the FCA;

the Civil Monetary Penalties Law, which prohibits, among other things, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider. We may also be subject to civil monetary penalties and other sanctions under the statute if we or the TOI PCs hire or contract with any individuals or entities that are or become excluded from government healthcare programs, for the provision of items or services for which payment may be made under such programs;

the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs;

similar state law provisions pertaining to anti-kickback, self-referral and false claims issues, some of which may apply to items or services reimbursed by any payor, including patients and commercial insurers;
 
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laws that regulate debt collection practices;

a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose, or refund known overpayments;

federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered;

federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs and, in some cases, to re-enroll in these programs when changes in direct or indirect ownership occur; and

federal and state laws pertaining to the provision of services by nurse practitioners and physician assistants in certain settings, physician supervision of those services, and reimbursement requirements that depend on the types of services provided and documented and relationships between physician supervisors and nurse practitioners and physician assistants; and

Medicare and Medicaid regulations, manual provisions, local coverage determinations, national coverage determinations and