|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Assets
|
| |
|
| |
|
Current assets
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$
|
| |
$
|
Short-term marketable securities
|
| |
|
| |
|
Restricted cash
|
| |
|
| |
|
Patient accounts receivable, net
|
| |
|
| |
|
Inventories
|
| |
|
| |
|
Other receivables
|
| |
|
| |
|
Prepaids expenses and other current assets
|
| |
|
| |
|
|
| |
|
| |
|
Total current assets
|
| |
|
| |
|
Property and equipment, net
|
| |
|
| |
|
Operating right of use assets, net(1)
|
| |
|
| |
|
|
| |
|
| |
|
Other assets
|
| |
|
| |
|
Goodwill and intangibles, net
|
| |
|
| |
|
Total assets
|
| |
$
|
| |
$
|
Liabilities and Members’ Equity
|
| |
|
| |
|
Current liabilities
|
| |
|
| |
|
Accounts payable(2)
|
| |
$
|
| |
$
|
Accrued compensation related costs
|
| |
|
| |
|
Accrued other
|
| |
|
| |
|
Medicare advance payment
|
| |
|
| |
|
Current portion operating lease liability(3)
|
| |
|
| |
|
Total current liabilities
|
| |
|
| |
|
Commitments and contingencies (Note 16)
|
| |
|
| |
|
Long-term portion operating lease liability(4)
|
| |
|
| |
|
Long-term debt, net
|
| |
|
| |
|
Other long-term liabilities
|
| |
|
| |
|
Total liabilities
|
| |
|
| |
|
Stockholders’ equity
|
| |
|
| |
|
Class A units;
|
| |
|
| |
|
Class A-1 units;
|
| |
|
| |
|
Class B units;
|
| |
|
| |
|
Accumulated other comprehensive loss
|
| |
(
|
| |
|
Retained earnings
|
| |
|
| |
|
Total members’ equity
|
| |
|
| |
|
Total liabilities and members’ equity
|
| |
$
|
| |
$
|
(1)
|
—
|
(2)
|
—
|
(3)
|
—
|
(4)
|
—
|
|
| |
Year Ended December 31,
|
||||||
|
| |
2022
|
| |
2021
|
| |
2020
|
Revenue
|
| |
|
| |
|
| |
|
Patient service revenue, net
|
| |
$
|
| |
$
|
| |
$
|
HHS grant income
|
| |
|
| |
|
| |
|
Other revenue
|
| |
|
| |
|
| |
|
Total revenue
|
| |
|
| |
|
| |
|
Costs and expenses
|
| |
|
| |
|
| |
|
Cost of revenue(1)(2)
|
| |
|
| |
|
| |
|
General and administrative expenses
|
| |
|
| |
|
| |
|
Total costs and expenses
|
| |
|
| |
|
| |
|
Income from operations
|
| |
|
| |
|
| |
|
Other income (expense)
|
| |
|
| |
|
| |
|
Interest expense
|
| |
(
|
| |
(
|
| |
(
|
Interest income
|
| |
|
| |
|
| |
|
Other income, net
|
| |
|
| |
|
| |
|
Income before income taxes
|
| |
|
| |
|
| |
|
Income tax expense (benefit)
|
| |
|
| |
|
| |
(
|
Net income (loss) before noncontrolling interest
|
| |
$
|
| |
$(
|
| |
$
|
Net income (loss) attributable to Legacy AON Shareholders
prior to the reverse recapitalization
|
| |
$
|
| |
$(
|
| |
$
|
Net loss attributable to Class A Common Stockholders
|
| |
$
|
| |
$
|
| |
$
|
Earnings (loss) per Class A Common Stock:
|
| |
|
| |
|
| |
|
basic and diluted
|
| |
$
|
| |
$
|
| |
$
|
Weighted average Class A Common Stock outstanding:
|
| |
|
| |
|
| |
|
basic and diluted
|
| |
|
| |
|
| |
|
Other comprehensive loss:
|
| |
|
| |
|
| |
|
Unrealized losses on marketable securities
|
| |
(
|
| |
|
| |
|
Other comprehensive loss
|
| |
(
|
| |
|
| |
|
Comprehensive income (loss)
|
| |
$
|
| |
$(
|
| |
$
|
(1)
|
|
(2)
|
|
|
| |
Class A
|
| |
Class A-1
|
| |
Class B
Units
|
| |
Class B
$
|
| |
Accumulated
Other
Comprehensive
Loss
|
| |
Retained
Earnings
|
| |
Total
Members’
Equity
|
||||||
|
| |
Units
|
| |
$
|
| |
Units
|
| |
$
|
| ||||||||||||||
Balances at December 31, 2019
|
| |
|
| |
$
|
| |
|
| |
$
|
| |
|
| |
$
|
| |
$
|
| |
$
|
| |
$
|
Issuance of Class A-1 units, net of issuance costs
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
Equity-based compensation
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
Balances at December 31, 2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
|
| |
(
|
| |
(
|
Equity-based compensation
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Balances at December 31, 2021
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
Other comprehensive loss
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
—
|
| |
|
| |
(
|
| |
|
| |
(
|
Balances at December 31, 2022
|
| |
|
| |
$
|
| |
|
| |
$
|
| |
|
| |
$
|
| |
$(
|
| |
$
|
| |
$
|
|
| |
Year Ended December 31,
|
||||||
|
| |
2022
|
| |
2021
|
| |
2020
|
Cash flows from operating activities
|
| |
|
| |
|
| |
|
Net income (loss)
|
| |
$
|
| |
$(
|
| |
$
|
Adjustments to reconcile net income (loss) to net cash (used
in) provided by operating activities
|
| |
|
| |
|
| |
|
Depreciation and amortization
|
| |
|
| |
|
| |
|
Amortization of debt issuance costs
|
| |
|
| |
|
| |
|
Amortization of right-of-use assets(1)
|
| |
|
| |
|
| |
|
Loss on extinguishment of debt financing costs
|
| |
|
| |
|
| |
|
Equity-based compensation
|
| |
|
| |
|
| |
|
Deferred income taxes
|
| |
|
| |
|
| |
(
|
Gain on sale of equipment
|
| |
(
|
| |
(
|
| |
|
Deferred rent
|
| |
|
| |
|
| |
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
| |
|
Patient accounts receivable, net
|
| |
(
|
| |
(
|
| |
(
|
Inventories(2)
|
| |
(
|
| |
(
|
| |
(
|
Prepaid expenses and other current assets
|
| |
|
| |
(
|
| |
(
|
Other receivables
|
| |
(
|
| |
(
|
| |
(
|
Other assets
|
| |
(
|
| |
(
|
| |
(
|
Accounts payable(3)
|
| |
|
| |
|
| |
|
Accrued compensation related costs
|
| |
(
|
| |
|
| |
|
Accrued other
|
| |
|
| |
|
| |
|
Operating lease liability(4)
|
| |
(
|
| |
|
| |
|
Medicare advance payment
|
| |
(
|
| |
(
|
| |
|
Other long-term liabilities
|
| |
|
| |
|
| |
|
Net cash (used in) provided by operating activities
|
| |
(
|
| |
(
|
| |
|
Cash flows from investing activities
|
| |
|
| |
|
| |
|
Purchases of property and equipment
|
| |
(
|
| |
(
|
| |
(
|
Disposals of property and equipment
|
| |
|
| |
|
| |
|
Purchase of marketable securities
|
| |
(
|
| |
|
| |
|
Proceeds from sales of marketable securities
|
| |
|
| |
|
| |
|
Acquisition of physician practices
|
| |
(
|
| |
(
|
| |
(
|
Issuance of notes receivable — related parties
|
| |
(
|
| |
(
|
| |
(
|
Collections on notes receivable — related parties
|
| |
|
| |
|
| |
|
Net cash used in investing activities
|
| |
(
|
| |
(
|
| |
(
|
Cash flows from financing activities
|
| |
|
| |
|
| |
|
Repayments of revolving line of credit
|
| |
|
| |
(
|
| |
(
|
Borrowings on long-term debt
|
| |
|
| |
|
| |
|
Repayments of long-term debt
|
| |
|
| |
(
|
| |
(
|
Issuance of class A-1 units, net of issuance costs
|
| |
|
| |
|
| |
|
Cash paid for deferred offering costs
|
| |
(
|
| |
|
| |
|
Repayments on finance and capital leases
|
| |
(
|
| |
(
|
| |
|
Cash paid for debt financing costs
|
| |
(
|
| |
(
|
| |
(
|
Net cash provided by financing activities
|
| |
|
| |
|
| |
|
Net (decrease) increase in cash and cash equivalents and
restricted cash
|
| |
(
|
| |
(
|
| |
|
|
| |
Year Ended December 31,
|
||||||
|
| |
2022
|
| |
2021
|
| |
2020
|
Cash, cash equivalents and restricted cash
|
| |
|
| |
|
| |
|
Beginning of year
|
| |
|
| |
|
| |
|
End of year
|
| |
$
|
| |
$
|
| |
$
|
Supplemental consolidated cash flow information
|
| |
|
| |
|
| |
|
Cash paid for interest
|
| |
$
|
| |
$
|
| |
$
|
Cash paid for income taxes
|
| |
|
| |
|
| |
|
Supplemental noncash investing and financing activities
|
| |
|
| |
|
| |
|
Changes in accounts payable for capital additions to
property and equipment
|
| |
|
| |
|
| |
|
Assumed capital lease liabilities in acquisition of physician practice
|
| |
|
| |
|
| |
|
Reduction of notes receivable as consideration for purchase
of physician practice assets
|
| |
|
| |
|
| |
|
Note payable for acquisition of physician practice
|
| |
|
| |
|
| |
|
Payables for deferred offering costs
|
| |
|
| |
|
| |
|
Disposal of property and equipment in exchange for reduction
in finance lease liability
|
| |
|
| |
|
| |
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
2020
|
| |
2021
|
| |
2022
|
||||||||||||||||||
|
| |
State
|
| |
Effective
Date
|
| |
|
| |
State
|
| |
Effective
Date
|
| |
|
| |
State
|
| |
Effective
Date
|
Location 12
|
| |
North
Carolina
|
| |
|
| |
Location 18
|
| |
Maryland
|
| |
|
| |
Location 23
|
| |
Arizona
|
| |
|
Location 13
|
| |
Maryland
|
| |
|
| |
Location 19
|
| |
Arizona
|
| |
|
| |
Location 24
|
| |
Georgia(a)
|
| |
|
Location 14
|
| |
Virginia
|
| |
|
| |
Location 20
|
| |
Washington
|
| |
|
| |
Location 25
|
| |
Louisiana(a)
|
| |
|
Location 15
|
| |
Michigan
|
| |
|
| |
Location 21
|
| |
Georgia(a)
|
| |
|
| |
Location 26
|
| |
Georgia(a)
|
| |
|
Location 16
|
| |
Washington
|
| |
|
| |
Location 22
|
| |
Arizona
|
| |
|
| |
Location 27
|
| |
Georgia(a)
|
| |
|
Location 17
|
| |
Georgia and
South
Carolina
|
| |
|
| |
|
| |
|
| |
|
| |
Location 28
|
| |
Georgia(a)
|
| |
|
(a)
|
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Cash and cash equivalents
|
| |
$
|
| |
$
|
Restricted cash
|
| |
|
| |
|
Total cash, cash equivalents and restricted cash shown in the statements of cash
flow
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Medicare
|
| |
|
| |
|
Managed Medicare
|
| |
|
| |
|
Other Commercial
|
| |
|
| |
|
BCBS
|
| |
|
| |
|
Managed Medicaid
|
| |
|
| |
|
Other
|
| |
|
| |
|
|
| |
|
| |
|
Leasehold improvements
|
| |
|
Furniture, fixtures and equipment
|
| |
|
Medical equipment
|
| |
|
Computer equipment
|
| |
|
Signs
|
| |
|
Automobiles
|
| |
|
Software
|
| |
|
Level 1
|
Inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.
|
Level 2
|
Inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived
valuations in which all significant inputs are observable for substantially the full term of the asset or liability.
|
Level 3
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.
|
|
| |
As of December 31,
|
|||
Assets
|
| |
2022
|
| |
2021
|
Cash and cash equivalents
|
| |
$
|
| |
$
|
Accounts receivable
|
| |
|
| |
|
Inventories
|
| |
|
| |
|
Property and equipment, net
|
| |
|
| |
|
Prepaid expenses and other current assets
|
| |
|
| |
|
Goodwill and intangibles, net
|
| |
|
| |
|
Other receivables
|
| |
|
| |
|
Other assets
|
| |
|
| |
|
Total assets
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
Liabilities
|
| |
2022
|
| |
2021
|
Accounts payable
|
| |
$
|
| |
$
|
Accrued compensation and benefits
|
| |
|
| |
|
Accrued other
|
| |
|
| |
|
Medicare advance payment
|
| |
|
| |
|
Other long-term liabilities
|
| |
|
| |
|
Due to AON and subsidiaries, net
|
| |
|
| |
|
Total liabilities
|
| |
$
|
| |
$
|
|
| |
2021
Acquired
Locations
|
Purchase consideration
|
| |
|
Cash transferred upon closing
|
| |
$
|
Assumed capital lease liabilities
|
| |
|
Total consideration transferred
|
| |
|
Net assets acquired
|
| |
|
Inventories
|
| |
|
Other assets
|
| |
|
Property and equipment
|
| |
|
Total net assets acquired
|
| |
|
Amount assigned to goodwill
|
| |
$
|
|
| |
2020
Acquired
Locations
|
Purchase consideration
|
| |
|
Cash transferred upon closing
|
| |
$
|
Issuance of note payable
|
| |
|
Non-cash settlement
|
| |
|
Total consideration transferred
|
| |
|
Net assets acquired
|
| |
|
Inventories
|
| |
|
Property and equipment
|
| |
|
Prepaids
|
| |
|
Total net assets acquired
|
| |
|
Amount assigned to goodwill
|
| |
$
|
|
| |
Pro Forma
|
||||||
|
| |
Year Ended December 31,
|
||||||
|
| |
2022
|
| |
2021
|
| |
2020
|
Revenue
|
| |
$
|
| |
$
|
| |
$
|
Net income
|
| |
$
|
| |
$
|
| |
$
|
|
| |
As of December 31, 2022
|
|||||||||
|
| |
Amortized Cost
|
| |
Gross
Unrealized
Gains
|
| |
Gross
Unrealized
Losses
|
| |
Estimated
Fair
Value
|
Cash equivalents(1)
|
| |
|
| |
|
| |
|
| |
|
Level 1:
|
| |
|
| |
|
| |
|
| |
|
Money market funds
|
| |
$
|
| |
$
|
| |
$
|
| |
$
|
Marketable securities
|
| |
|
| |
|
| |
|
| |
|
Level 2:
|
| |
|
| |
|
| |
|
| |
|
Corporate bonds
|
| |
|
| |
|
| |
(
|
| |
|
U.S. Treasury securities
|
| |
|
| |
|
| |
(
|
| |
|
Level 2 total
|
| |
|
| |
|
| |
(
|
| |
|
Total
|
| |
$
|
| |
$
|
| |
$(
|
| |
$
|
(1)
|
|
|
| |
As of December 31, 2022
|
||||||
|
| |
Corporate
Bonds
|
| |
U.S. Treasury
Securities
|
| |
Total
|
Due within one year
|
| |
$
|
| |
$
|
| |
$
|
Due within one to five years
|
| |
|
| |
|
| |
|
Total
|
| |
$
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Intravenous drugs
|
| |
$
|
| |
$
|
Oral pharmaceuticals
|
| |
|
| |
|
Total inventories
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Rebates receivable
|
| |
$
|
| |
$
|
Other
|
| |
|
| |
|
Total other receivables
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Leasehold improvements
|
| |
$
|
| |
$
|
Furniture, fixtures and equipment
|
| |
|
| |
|
Medical equipment
|
| |
|
| |
|
Computer equipment
|
| |
|
| |
|
Signs
|
| |
|
| |
|
Automobiles
|
| |
|
| |
|
Software
|
| |
|
| |
|
Construction-in-progress
|
| |
|
| |
|
|
| |
|
| |
|
Accumulated depreciation and amortization
|
| |
(
|
| |
(
|
Property and equipment, net
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Refund liability
|
| |
$
|
| |
$
|
Deferred social security taxes – COVID
|
| |
|
| |
|
Current portion of finance lease liability
|
| |
|
| |
|
Other
|
| |
|
| |
|
Total accrued other
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
PNC Facility
|
| |
$
|
| |
$
|
Total
|
| |
|
| |
|
Unamortized debt issuance costs
|
| |
(
|
| |
(
|
Total debt
|
| |
$
|
| |
$
|
|
| |
Year Ended December 31,
|
||||||
|
| |
2022
|
| |
2021
|
| |
2020
|
Current
|
| |
|
| |
|
| |
|
Federal
|
| |
$
|
| |
$(
|
| |
$
|
State
|
| |
|
| |
(
|
| |
|
|
| |
|
| |
(
|
| |
|
Deferred
|
| |
|
| |
|
| |
|
Federal
|
| |
|
| |
|
| |
(
|
State
|
| |
|
| |
|
| |
(
|
|
| |
|
| |
|
| |
(
|
Total income tax expense (benefit)
|
| |
$
|
| |
$
|
| |
$(
|
|
| |
Year Ended December 31,
|
||||||
|
| |
2022
|
| |
2021
|
| |
2020
|
Federal statutory income tax rate
|
| |
|
| |
|
| |
|
State taxes, net of federal benefit
|
| |
(
|
| |
(
|
| |
(
|
State rate change
|
| |
(
|
| |
(
|
| |
|
Other
|
| |
(
|
| |
|
| |
|
Nontaxable passthrough LLC income
|
| |
(
|
| |
(
|
| |
(
|
Increase in valuation allowance
|
| |
|
| |
|
| |
|
Effective tax rate
|
| |
|
| |
|
| |
(
|
|
| |
As of December 31,
|
|||
|
| |
2022
|
| |
2021
|
Deferred tax assets
|
| |
|
| |
|
Net operating loss carryforwards
|
| |
$
|
| |
$
|
Accrued expenses
|
| |
|
| |
|
Deferred tax assets
|
| |
|
| |
|
Valuation allowance
|
| |
(
|
| |
(
|
Net deferred tax asset
|
| |
|
| |
|
Deferred tax liabilities
|
| |
|
| |
|
Prepaid expenses
|
| |
|
| |
|
Accounting method change
|
| |
|
| |
|
Fixed assets
|
| |
|
| |
|
Deferred tax liabilities
|
| |
|
| |
|
Net deferred tax asset
|
| |
$
|
| |
$
|
|
| |
As of December 31,
|
| |
Original
Principal
|
| |
Issue
Date
|
| |
Maturity
Date
|
|||
|
| |
2022
|
| |
2021
|
| ||||||||
Notes receivable
|
| |
|
| |
|
| |
|
| |
|
| |
|
Note 2
|
| |
$
|
| |
$
|
| |
$
|
| |
|
| |
|
Note 3
|
| |
|
| |
|
| |
|
| |
|
| |
|
Note 4
|
| |
|
| |
|
| |
|
| |
|
| |
|
Note 6
|
| |
|
| |
|
| |
|
| |
|
| |
|
Note 8
|
| |
|
| |
|
| |
|
| |
|
| |
|
Note 9
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total notes receivables
|
| |
|
| |
|
| |
|
| |
|
| |
|
Less: Current portion of notes receivable
|
| |
(
|
| |
(
|
| |
|
| |
|
| |
|
Notes receivable, less current portion
|
| |
$
|
| |
$
|
| |
|
| |
|
| |
|
Assets
|
| |
|
|
| |
$
|
Finance lease right-of-use assets, net (included in
) |
| |
|
Total right-of-use assets
|
| |
$
|
Liabilities
|
| |
|
Current
|
| |
|
Current portion of
|
| |
$
|
Current portion of finance lease liabilities (included in
) |
| |
|
Long-term
|
| |
|
Long-term
|
| |
|
Long-term finance lease liabilities (included in
) |
| |
|
Total lease liabilities
|
| |
$
|
Operating lease costs
|
| |
$
|
Finance lease costs
|
| |
|
Amortization of finance lease right-of-use assets
|
| |
|
Interest on finance lease liabilities (included in interest expense)
|
| |
|
Variable lease costs
|
| |
|
Total lease costs
|
| |
$
|
|
| |
Operating Leases
|
| |
Finance Leases
|
2023
|
| |
$
|
| |
$
|
2024
|
| |
|
| |
|
2025
|
| |
|
| |
|
2026
|
| |
|
| |
|
2027
|
| |
|
| |
|
Thereafter
|
| |
|
| |
|
Total lease payments
|
| |
|
| |
|
Less: amount representing interest
|
| |
(
|
| |
(
|
Present value of lease liabilities
|
| |
|
| |
|
Less: current portion of lease liabilities
|
| |
(
|
| |
(
|
Long-term lease liabilities, net of current portion
|
| |
$
|
| |
$
|
Cash paid for amounts included in the measurement of lease liabilities:
|
| |
|
Operating cash flows from operating leases
|
| |
$
|
Operating cash flows from finance leases
|
| |
|
Financing cash flows from finance leases
|
| |
|
ROU assets obtained in exchange for new operating lease liabilities
|
| |
|