Variable Interest Entities

6 Months Ended

12 Months Ended

Jun. 30, 2022

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

Variable Interest Entities

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)	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and restricted cash	$	1,351	$	1,618
Accounts receivable	28,947		20,007
Other receivables	212		935
Inventories, net	8,580		6,438
Prepaid expenses	935		781
Total current assets	40,025		29,779
Property and equipment, net	26		—
Other assets	347		276

(in thousands)	June 30, 2022		December 31, 2021
Intangible assets, net	3,543		1,181
Goodwill	18,946		11,096
Total assets	$	62,887	$	42,332
Liabilities
Current liabilities:
Accounts payable	$	12,028	$	14,204
Income taxes payable	132		132
Accrued expenses and other current liabilities	7,643		5,539
Current portion of long-term debt	—		183
Amounts due to affiliates	99,583		56,312
Total current liabilities	119,386		76,370
Other non-current liabilities	2,565		3,203
Deferred income taxes liability	32		6
Total liabilities	$	121,983	$	79,579

Single physician holders, who are officers of the Company, retain equity ownership in TOI CA, TOI FL and TOI TX, 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 June 30, 2022, net loss of $(5,453) and $0 were attributable to TOI and to the noncontrolling interest, respectively. For the three months ended June 30, 2021, net income of $3,205 and $0 were attributable to TOI and to the noncontrolling interest, respectively.

For the six months ended June 30, 2022, net income of $13,833 and $0 were attributable to TOI and to the noncontrolling interest, respectively. For the six months ended June 30, 2021, net income of $2,209 and $0 were attributable to TOI and to the noncontrolling interest, respectively.

Variable Interest Entities

The Company prepares its 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 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)	December 31, 2021		December 31, 2020
Assets
Current assets:
Cash and restricted cash	$	1,618	$	20
Accounts receivable	20,007		17,146
Other receivables	935		49
Inventories, net	6,438		4,354
Prepaid expenses	781		719
Total current assets	29,779		22,288
Other assets	276		201
Intangible assets, net	1,181		—
Goodwill	11,096		150
Total assets	$	42,332	$	22,639
Liabilities
Current liabilities:
Accounts payable	$	14,204	$	11,953
Income taxes payable	132		—
Accrued expenses and other current liabilities	5,539		6,039
Current portion of long-term debt	183		2,000
Amounts due to affiliates	56,312		19,883
Total current liabilities	76,370		39,875
Other non-current liabilities	3,203		551
Deferred income taxes liability	6		—
Total liabilities	$	79,579	$	40,426

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, in 2021, net loss of $10,927 and $0 was attributable to TOI and to the noncontrolling interest, respectively. In 2020, net loss of $14,322 and $0 was attributable to TOI and to the noncontrolling interest, respectively.