Variable Interest Entities

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company prepares its condensed consolidated financial statements in accordance with Accounting Standards Codification Topic No. 810, Consolidations (“ASC 810”), which provides for the consolidation of VIEs of which an entity is the primary beneficiary.

Pursuant to the MSAs established with the TOI PCs, TOI Management is entitled to receive a management fee, which represents a variable interest in and the right to receive the benefits of the TOI PCs. Through the terms of the MSAs, TOI Management receives the right to direct the most significant activities of the TOI PCs. Therefore, the TOI PCs are variable interest entities and TOI Management is the primary beneficiary that consolidates the TOI PCs, and their subsidiaries.

The condensed consolidated financial statements include the accounts of TOI and its subsidiaries and VIEs. All inter-company profits, transactions, and balances have been eliminated upon consolidation.


(in thousands)	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and restricted cash	$	2,248	$	1,618
Accounts receivable	24,513		20,007
Other receivables	1,028		935
Inventories, net	7,770		6,438
Prepaid expenses	1,146		781
Total current assets	36,705		29,779
Property and equipment, net	44		—
Other assets	273		276
Intangible assets, net	1,120		1,181
Goodwill	11,096		11,096
Total assets	$	49,238	$	42,332
Liabilities
Current liabilities:
Accounts payable	$	11,876	$	14,204
Income taxes payable	132		132
Accrued expenses and other current liabilities	5,228		5,539
Current portion of long-term debt	—		183
Amounts due to affiliates	76,960		56,312
Total current liabilities	94,196		76,370
Other non-current liabilities	1,917		3,203
Deferred income taxes liability	16		6
Total liabilities	$	96,129	$	79,579

Single physician holders, who are officers of the Company, retain equity ownership in TOI CA and TOI FL, which represents nominal noncontrolling interests. The noncontrolling interests do not participate in the profit or loss of TOI CA or TOI FL, however. As such, for the three months ended March 31, 2022, net income of $19,286 and $0 were attributable to TOI and to the noncontrolling interest, respectively. For the three months ended March 31, 2021, net loss of $996 and $0 were attributable to TOI and to the noncontrolling interest, respectively.