Variable Interest Entities

3 Months Ended

Mar. 31, 2023

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, 2023		December 31, 2022
Assets
Current assets:
Cash and restricted cash	$	1,659	$	1,070
Accounts receivable, net	45,956		39,817
Other receivables	123		220
Inventories, net	10,254		9,262
Prepaid expenses	1,406		841
Total current assets	59,398		51,210
Property and equipment, net	153		168
Other assets	491		441
Intangible assets, net	3,227		3,343
Goodwill	—		15,832
Total assets	$	63,269	$	70,994
Liabilities
Current liabilities:
Accounts payable	$	10,370	$	8,296
Income taxes payable	—		132
Accrued expenses and other current liabilities	6,291		5,129
Current portion of long-term debt	—		—
Amounts due to affiliates	153,410		140,218
Total current liabilities	170,071		153,775
Other non-current liabilities	645		739
Deferred income taxes liability	43		58
Total liabilities	$	170,759	$	154,572

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, TOI FL or TOI TX, however.