QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Large accelerated filer | o | Accelerated filer | o | ||||||||
x | Smaller reporting company | ||||||||||
Emerging growth company |
PAGE | |||||
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term marketable securities | |||||||||||
Patient accounts receivable, net | |||||||||||
Inventories | |||||||||||
Other receivables | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Current portion of notes receivable - related parties | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets, net (1) | |||||||||||
Notes receivable - related parties | |||||||||||
Other assets | |||||||||||
Goodwill and intangibles, net | |||||||||||
Deferred tax asset, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities, Mezzanine Equity, and Stockholders' Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable (2) | $ | $ | |||||||||
Accrued compensation related costs | |||||||||||
Accrued other | |||||||||||
Income tax payable | |||||||||||
Current portion of operating lease liabilities (3) | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net | |||||||||||
Long-term operating lease liabilities (4) | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Mezzanine equity | |||||||||||
Series A convertible preferred stock; $ | |||||||||||
Redeemable noncontrolling interest | |||||||||||
Stockholders' equity | |||||||||||
Class A Common Stock; $ | |||||||||||
Class B Common Stock; $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock, at cost, | ( | ||||||||||
Accumulated other comprehensive income | |||||||||||
Retained deficit | ( | ( | |||||||||
Total AON stockholders' deficit | ( | ( | |||||||||
Noncontrolling interest | |||||||||||
Total deficit | $ | ( | $ | ( | |||||||
Total liabilities, mezzanine equity, noncontrolling interest, and stockholders' equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenue | |||||||||||
Patient service revenue, net | $ | $ | |||||||||
Other revenue | |||||||||||
Total revenue | |||||||||||
Costs and expenses | |||||||||||
Cost of revenue (1) | |||||||||||
General and administrative expenses (2) | |||||||||||
Transaction expenses | |||||||||||
Total costs and expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Other income (expense) | |||||||||||
Interest expense | ( | ( | |||||||||
Interest income | |||||||||||
Other (expense) income, net | ( | ||||||||||
Loss before income taxes, equity loss in affiliate, and noncontrolling interest | ( | ( | |||||||||
Income tax expense | |||||||||||
Loss before equity loss in affiliate and noncontrolling interest | ( | ( | |||||||||
Equity in loss of affiliate | ( | ||||||||||
Net loss before noncontrolling interest | ( | ( | |||||||||
Net income attributable to noncontrolling interest | |||||||||||
Net loss before redeemable noncontrolling interest | ( | ( | |||||||||
Net loss and noncontrolling interest attributable to Legacy AON Stockholders prior to the reverse recapitalization | ( | ||||||||||
Net loss attributable to redeemable noncontrolling interest | ( | ||||||||||
Net loss attributable to Class A Common Stockholders | $ | ( | $ | ||||||||
Loss per share of Class A Common Stock: | |||||||||||
Basic | $ | ( | $ | ||||||||
Diluted | $ | ( | $ | ||||||||
Weighted average shares of Class A Common Stock Outstanding: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
Other comprehensive income (loss): | |||||||||||
Unrealized gain (loss) on marketable securities | ( | ||||||||||
Other comprehensive gain (loss) | ( | ||||||||||
Comprehensive loss | $ | ( | $ | ( | |||||||
Other comprehensive loss attributable to Legacy AON Shareholders | ( | ||||||||||
Other comprehensive loss attributable to noncontrolling interests | ( | ||||||||||
Total comprehensive loss attributable to Class A Common Stockholders | $ | ( | $ |
Mezzanine Equity - Series A Preferred Stock | NCI(1) | Class A Common Stock | Class B Common Stock | ||||||||||||||||||||||||||||||||||||||
In thousands (including share and per share data) | Stock | $ | $ | Stock | $ | Stock | $ | APIC(1) | Treasury Stock | AOCI(1) | Noncontrolling Interest | Retained Deficit | Total Equity (Deficit) | ||||||||||||||||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
Other comprehensive loss | - | - | ( | - | - | - | - | - | - | ( | - | - | $ | ( | |||||||||||||||||||||||||||
Equity-based compensation and NCI rebalancing | - | - | - | - | - | - | - | - | - | $ | |||||||||||||||||||||||||||||||
Repurchases of Class A Common Stock | - | - | - | ( | - | - | - | - | ( | - | - | - | $ | ( | |||||||||||||||||||||||||||
Capital contributions from noncontrolling interest member | - | - | - | - | - | - | - | - | - | - | - | $ | |||||||||||||||||||||||||||||
Net income (loss) | - | - | ( | - | - | - | - | - | - | - | ( | $ | ( | ||||||||||||||||||||||||||||
Fair value adjustment to redeemable noncontrolling interest | - | - | - | - | - | - | ( | - | - | - | ( | $ | ( | ||||||||||||||||||||||||||||
Redemption of Class B Common Stock to Class A Common Stock | - | - | ( | - | ( | - | - | - | - | $ | |||||||||||||||||||||||||||||||
Balances at March 31, 2024 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Class A | Class A-1 | Class B | |||||||||||||||||||||||||||||||||||||||||||||
In thousands (including share and unit data) | Units | $ | Units | $ | $ | AOCI(1) | Retained Earnings (Deficit) | Total Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2022 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net loss attributable to Legacy AON Shareholders | - | - | - | - | - | - | ( | ( | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income attributable to Legacy AON Shareholders | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2023 | $ | $ | $ | $ | ( | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of debt issuance costs | |||||||||||
Provision for income taxes | |||||||||||
Amortization of operating right-of-use assets (1) | |||||||||||
Changes in fair value adjustments of warrants and derivative liabilities | ( | ||||||||||
Equity-based compensation | |||||||||||
Equity in loss of affiliate | ( | ||||||||||
Gain on sale of property and equipment | |||||||||||
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 liabilities (4) | ( | ( | |||||||||
Other long-term liabilities | ( | ||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Purchases of marketable securities | ( | ( | |||||||||
Proceeds from sales of marketable securities | |||||||||||
Collections on notes receivable - related parties | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities | |||||||||||
Repayments on finance lease liabilities | ( | ( | |||||||||
Repurchases of Class A Common Stock | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ | |||||||||
Supplemental noncash investing and financing activities | |||||||||||
Promissory note issued in connection with acquisition | $ | $ | |||||||||
Contribution from noncontrolling interest | ( | ||||||||||
Right-of-use assets and lease liabilities removed in termination of lease | $ | $ | |||||||||
Changes in accounts payable for capital additions to property and equipment | $ | ( | $ |
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||||
State | State | |||||||
Maryland (a) | ||||||||
Texas (a) |
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. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
As of September 20, 2023 | |||||
Cash and Cash Equivalents | $ | ||||
Current Liabilities | ( | ||||
Long Term Liabilities | ( | ||||
Total Net Liabilities | $ | ( |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Goodwill and intangibles, net | |||||||||||
Other receivables | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation and benefits | |||||||||||
Accrued other | |||||||||||
Other long-term liabilities | |||||||||||
Due to AON LLC and subsidiaries, net | |||||||||||
Total liabilities | $ | $ |
As of March 31, 2024 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Cash equivalents (1) | |||||||||||||||||||||||
Level 1: | |||||||||||||||||||||||
Overnight repurchase agreements (2) | $ | $ | - | $ | - | $ | |||||||||||||||||
Money market funds | - | - | |||||||||||||||||||||
U.S. Treasury Bills | - | - | |||||||||||||||||||||
Level 1 total | $ | $ | — | $ | — | $ | |||||||||||||||||
Marketable securities | |||||||||||||||||||||||
Level 2: | |||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||
U.S. Treasury securities | ( | ||||||||||||||||||||||
Level 2 total | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
As of December 31, 2023 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Cash equivalents (1) | |||||||||||||||||||||||
Level 1: | |||||||||||||||||||||||
Overnight repurchase agreements (2) | $ | $ | - | $ | - | $ | |||||||||||||||||
Money market funds | $ | $ | - | $ | - | $ | |||||||||||||||||
Level 1 total | — | — | |||||||||||||||||||||
Marketable securities | |||||||||||||||||||||||
Level 2: | |||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Level 2 total | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Corporate Bonds | U.S. Treasuries | Total | |||||||||||||||
Due in one year or less | $ | $ | $ | ||||||||||||||
Due in one to five years | |||||||||||||||||
Total | $ | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Rebates receivable | $ | $ | |||||||||
Other | |||||||||||
Total other receivables | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Intravenous drugs | $ | $ | |||||||||
Oral pharmaceuticals | |||||||||||
Total inventories | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Leasehold improvements | $ | $ | |||||||||
Furniture, fixtures and equipment | |||||||||||
Medical equipment | |||||||||||
Computer equipment | |||||||||||
Signs | |||||||||||
Automobiles | |||||||||||
Software | |||||||||||
Construction-in-progress | |||||||||||
Property and equipment, gross | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Refund liability | $ | $ | |||||||||
Warrant liability | |||||||||||
Excise taxes payable | |||||||||||
Other | |||||||||||
Total accrued other | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
PNC Facility | $ | $ | |||||||||
Total | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Total debt | $ | $ |
As of March 31, 2024 | As of December 31, 2023 | ||||||||||
Assets | |||||||||||
Operating lease right-of-use assets, net | $ | $ | |||||||||
Finance lease right-of-use assets, net (included in property and equipment, net) | |||||||||||
Total right-of-use assets | $ | $ | |||||||||
Liabilities | |||||||||||
Current | |||||||||||
Current portion of operating lease liabilities | $ | $ | |||||||||
Current portion of finance lease liabilities (included in accrued other) | |||||||||||
Long-term | |||||||||||
Long-term operating lease liabilities | |||||||||||
Long-term finance lease liabilities (included in other long-term liabilities) | |||||||||||
Total lease liabilities | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
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 | ||||||||||
2024 (remainder of year after March 31, 2024) | $ | $ | |||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 | |||||||||||
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 | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
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 |
As of March 31, 2024 | As of December 31, 2023 | Original Principal | Issue Date | Maturity Date | |||||||||||||||||||||||||
Notes receivable | |||||||||||||||||||||||||||||
Note 2 | $ | $ | $ | 5/1/2019 | 4/30/2024 | ||||||||||||||||||||||||
Note 3 | 6/1/2019 | 5/31/2024 | |||||||||||||||||||||||||||
Note 8 | 5/1/2020 | 5/1/2025 | |||||||||||||||||||||||||||
Total notes receivables | |||||||||||||||||||||||||||||
Less: Current portion of notes receivable | $ | ( | ( | ||||||||||||||||||||||||||
Notes receivable, less current portion | $ | $ |
Restricted Stock Units | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding as of December 31, 2023 | $ | |||||||||||||
Granted | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | $ | |||||||||||||
Outstanding as of March 31, 2024 | $ |
in thousands, except for share and per share amounts | Three Months Ended March 31, 2023 | |||||||
Class A Units, value | ||||||||
Beginning of Period | $ | |||||||
Issuance of Units | ||||||||
Impact of the Reverse Recapitalization | ||||||||
End of Period | $ | |||||||
Class A Units, units | ||||||||
Beginning of Period | ||||||||
Issuance of Units | ||||||||
Impact of the Reverse Recapitalization | ||||||||
End of Period | ||||||||
Class A-1 Units, value | ||||||||
Beginning of Period | $ | |||||||
Issuance of Units | ||||||||
Impact of the Reverse Recapitalization | ||||||||
End of Period | $ | |||||||
Class A-1 Units, units | ||||||||
Beginning of Period | ||||||||
Issuance of Units | ||||||||
Impact of the Reverse Recapitalization | ||||||||
End of Period | ||||||||
Class B Units, value | ||||||||
Beginning of Period | $ | |||||||
Equity based compensation | ||||||||
Impact of the Reverse Recapitalization | ||||||||
End of Period | $ | |||||||
Class B Units, units | ||||||||
Beginning of Period | ||||||||
Units Vested | ||||||||
Impact of the Reverse Recapitalization | ||||||||
End of Period |
Net loss attributable to Class A Common Stockholders for basic and diluted earnings per share | $ | ( | |||
Series A Preferred Cumulative Dividends | ( | ||||
Undistributed loss for basic earnings per share | $ | ( | |||
Weighted-average shares for basic earnings per share | |||||
Basic and Diluted loss per share of Class A Common Stock | $ | ( |
Series A Preferred Stock | |||||
Class B Common Stock | |||||
Class B Prefunded Warrants | |||||
Public and Private Warrants | |||||
Restricted Stock Units |
Period beginning December 31, 2023 and ending March 31, 2024 | |||||||||||
AON LLC Units | |||||||||||
AON Inc. | Legacy AON Shareholders | Total | |||||||||
Beginning of Period | |||||||||||
Issuances | |||||||||||
Repurchases | ( | ( | |||||||||
Redemptions | ( | ||||||||||
Total Units Issued | |||||||||||
End of Period | |||||||||||
Allocation of income to controlling and noncontrolling interests | % | % | % | ||||||||
Allocation of losses to controlling and noncontrolling interests (1) | % | % | % |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ | % | ||||||||||||||||||||||
Patient service revenue, net | $ | 361,508 | $ | 301,773 | $ | 59,735 | 19.8 | % | ||||||||||||||||||
Other revenue | 2,831 | 1,958 | 873 | 44.6 | % | |||||||||||||||||||||
Total revenue | $ | 364,339 | $ | 303,731 | $ | 60,608 | 20.0 | % |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ | % | ||||||||||||||||||||||
Cost of revenue | $ | 354,948 | $ | 278,534 | $ | 76,414 | 27.4 | % | ||||||||||||||||||
General and administrative expenses | 28,277 | 23,717 | 4,560 | 19.2 | % | |||||||||||||||||||||
Transaction expenses | 352 | 1,971 | (1,619) | * | ||||||||||||||||||||||
Total costs and expenses | $ | 383,577 | $ | 304,222 | $ | 79,355 | 26.1 | % |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ | % | ||||||||||||||||||||||
Interest expense | $ | (1,763) | $ | (1,417) | $ | (346) | 24.4 | % | ||||||||||||||||||
Interest income | 793 | 57 | 736 | * | ||||||||||||||||||||||
Other (expense) income, net | (1,908) | 466 | (2,374) | * | ||||||||||||||||||||||
Total other expense | $ | (2,878) | $ | (894) | $ | (1,984) | * |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ | % | ||||||||||||||||||||||
Provision for income taxes | $ | 2,894 | $ | — | $ | 2,894 | * | |||||||||||||||||||
Effective tax rate | (13.1) | % | — | % | * |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ | % | ||||||||||||||||||||||
Net loss | $ | (24,961) | $ | (1,486) | $ | (23,475) | * | |||||||||||||||||||
Interest expense, net | 970 | 1,360 | (390) | (28.7 | %) | |||||||||||||||||||||
Depreciation and amortization | 2,506 | 2,207 | 299 | 13.5 | % | |||||||||||||||||||||
Income tax expense | 2,894 | — | 2,894 | * | ||||||||||||||||||||||
Equity-based compensation | 13,353 | — | 13,353 | * | ||||||||||||||||||||||
Revenue cycle transformation (a) | 4,736 | — | 4,736 | * | ||||||||||||||||||||||
Gain/loss on derivative liabilities | 1,590 | — | 1,590 | * | ||||||||||||||||||||||
Transaction expenses (b) | 352 | 1,971 | (1,619) | (82.1 | %) | |||||||||||||||||||||
Acquisition related costs (c) | 522 | — | 522 | * | ||||||||||||||||||||||
Adjusted EBITDA | $ | 1,962 | $ | 4,052 | $ | (2,090) | (51.6 | %) |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||
(dollars in thousands) | 2024 | 2023 | $ | % | ||||||||||||||||||||||
Net cash (used in) provided by operations | $ | 45,137 | $ | (329) | $ | 45,466 | * | |||||||||||||||||||
Net cash (used in) provided by investing activities | 1,522 | (2,643) | 4,165 | * | ||||||||||||||||||||||
Net cash used in financing activities | (254) | (105) | (149) | * |
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101.INS | Inline XBRL Instance Document.* | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | ||||
104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
AMERICAN ONCOLOGY NETWORK, INC. | ||||||||
By: | /s/ Todd Schonherz | |||||||
Name: | Todd Schonherz | |||||||
Title: | Chief Executive Officer | |||||||
Dated: | May 15, 2024 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Redeemable convertible preferred stock, shares outstanding (in shares) | 6,652,000 | 6,652,000 | ||||||||
Treasury stock, common, shares (in shares) | 31,170 | 14,729 | ||||||||
Operating lease right-of-use assets | [1] | $ 43,358,000 | $ 43,349,000 | |||||||
Accounts payable | [2] | 188,329,000 | 127,645,000 | |||||||
Current portion of operating lease liabilities | [3] | 6,715,000 | 6,692,000 | |||||||
Long-term operating lease liabilities | [4] | 39,786,000 | 39,803,000 | |||||||
Related Party | ||||||||||
Operating lease right-of-use assets | 11,293,000 | 10,931,000 | ||||||||
Accounts payable | 182,697,000 | 120,857,000 | ||||||||
Current portion of operating lease liabilities | 1,971,000 | 1,888,000 | ||||||||
Long-term operating lease liabilities | $ 9,772,000 | 9,472,000 | ||||||||
Series A Preferred Stock | ||||||||||
Par value (dollars per share) | $ 0.0001 | |||||||||
Shares authorized (shares) | 7,500,000 | |||||||||
Shares issued (in shares) | 6,651,610 | |||||||||
Redeemable convertible preferred stock, shares outstanding (in shares) | 6,651,610 | |||||||||
Liquidation preference | $ 69,369,195 | $ 68,009,015 | ||||||||
Common Class A | ||||||||||
Common stock, par value (in usd per share) | $ 0.0001 | |||||||||
Common stock, shares authorized (in shares) | 200,000,000 | |||||||||
Common stock, shares issued (in shares) | 10,334,734 | 9,517,816 | ||||||||
Common stock, shares outstanding (in shares) | 10,334,734 | 9,517,816 | ||||||||
Class B Common Stock | ||||||||||
Common stock, par value (in usd per share) | $ 0.0001 | |||||||||
Common stock, shares authorized (in shares) | 100,000,000 | |||||||||
Common stock, shares issued (in shares) | 23,725,998 | 25,109,551 | ||||||||
Common stock, shares outstanding (in shares) | 23,725,998 | 25,109,551 | ||||||||
|
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Revenue | ||
Total revenue | $ 364,339,000 | $ 303,731,000 |
Costs and expenses | ||
Cost of revenue | 354,948,000 | 278,534,000 |
General and administrative expenses | 28,277,000 | 23,717,000 |
Transaction expenses | 352,000 | 1,971,000 |
Total costs and expenses | 383,577,000 | 304,222,000 |
Loss from operations | (19,238,000) | (491,000) |
Other income (expense) | ||
Interest expense | (1,763,000) | (1,417,000) |
Interest income | 793,000 | 57,000 |
Other (expense) income, net | (1,908,000) | 466,000 |
Loss before income taxes, equity loss in affiliate, and noncontrolling interest | (22,116,000) | (1,385,000) |
Income tax expense | 2,894,000 | 0 |
Loss before equity loss in affiliate and noncontrolling interest | (25,010,000) | (1,385,000) |
Equity in loss of affiliate | 49,000 | (101,000) |
Net loss before noncontrolling interest | (24,961,000) | (1,486,000) |
Net income attributable to noncontrolling interest | 43,000 | 0 |
Net loss before redeemable noncontrolling interest | (25,004,000) | (1,486,000) |
Net loss and noncontrolling interest attributable to Legacy AON Stockholders prior to the reverse recapitalization | 0 | (1,486,000) |
Net loss attributable to redeemable noncontrolling interest | (17,163,000) | 0 |
Net loss attributable to Class A Common Stockholders, Basic | (7,841,000) | 0 |
Net loss attributable to Class A Common Stockholders, Diluted | $ (7,841,000) | $ 0 |
Loss per share of Class A Common Stock: | ||
Earnings (loss) per unit, basic (in usd per share) | $ (1.22) | $ 0 |
Earnings (loss) per unit, diluted (in usd per share) | $ (1.22) | $ 0 |
Weighted average shares of Class A Common Stock Outstanding: | ||
Weighted average shares for basic loss per share (in shares) | 7,527,882 | 0 |
Weighted average shares for diluted loss per share (in shares) | 7,527,882 | 0 |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on marketable securities | $ (22,000) | $ 64,000 |
Other comprehensive gain (loss) | (22,000) | 64,000 |
Comprehensive loss | (25,026,000) | (1,422,000) |
Other comprehensive loss attributable to Legacy AON Shareholders | 0 | (1,422,000) |
Other comprehensive loss attributable to noncontrolling interests | (17,180,000) | 0 |
Total comprehensive loss attributable to Class A Common Stockholders | (7,846,000) | 0 |
Patient service revenue, net | ||
Revenue | ||
Total revenue | 361,508,000 | 301,773,000 |
Other revenue | ||
Revenue | ||
Total revenue | $ 2,831,000 | $ 1,958,000 |
Condensed Consolidated Statements of Mezzanine and Stockholders’ Deficit - USD ($) $ in Thousands |
Total |
Common Class A |
Class B Common Stock |
Common Stock
Common Class A
|
Common Stock
Class B Common Stock
|
Common Units
Capital Unit, Class A
|
Common Units
Capital Unit, Class A-1
|
Common Units
Capital Unit, Class B
|
AOCI |
Additional Paid in Capital |
Treasury Stock |
AOCI |
Noncontrolling Interest |
Retained
Earnings (Deficit) |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in units) at Dec. 31, 2022 | 19,495,000 | 1,843,000 | ||||||||||||
Beginning balance at Dec. 31, 2022 | $ 62,016 | $ 7,725 | $ 28,500 | $ 80 | $ (117) | $ 25,828 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss attributable to Legacy AON Shareholders | (1,486) | (1,486) | ||||||||||||
Other comprehensive income attributable to Legacy AON Shareholders | 64 | 64 | ||||||||||||
Ending balance (in units) at Mar. 31, 2023 | 19,495,000 | 1,843,000 | ||||||||||||
Ending balance at Mar. 31, 2023 | $ 60,594 | $ 7,725 | $ 28,500 | $ 80 | $ (53) | 24,342 | ||||||||
Beginning Balance (in shares) at Dec. 31, 2023 | 6,652,000 | |||||||||||||
Beginning Balance at Dec. 31, 2023 | $ 64,986 | |||||||||||||
Ending Balance (in shares) at Mar. 31, 2024 | 6,652,000 | |||||||||||||
Ending Balance at Mar. 31, 2024 | $ 64,986 | |||||||||||||
Beginning Balance at Dec. 31, 2023 | 167,025 | |||||||||||||
Increase (Decrease) In Noncontrolling Interest [Roll Forward] | ||||||||||||||
Other comprehensive loss attributable to noncontrolling interests | (17) | |||||||||||||
Equity-based compensation and NCI rebalancing | 399 | |||||||||||||
Net income (loss) | (17,163) | |||||||||||||
Fair value adjustment to redeemable noncontrolling interest | 15,636 | |||||||||||||
Redemption of Class B Common Stock to Class A Common Stock | (8,164) | |||||||||||||
Ending Balance at Mar. 31, 2024 | 157,716 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 9,517,816 | 25,109,551 | 6,678,441,000 | 25,109,551,000 | ||||||||||
Beginning balance at Dec. 31, 2023 | (161,298) | $ 1 | $ 3 | $ 0 | $ 0 | $ 81 | $ 429 | (161,812) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Other comprehensive income (loss) | (4) | (4) | ||||||||||||
Equity-based compensation and NCI rebalancing (in shares) | 2,289,181,000 | |||||||||||||
Equity-based compensation and NCI rebalancing | 9,696 | 9,696 | ||||||||||||
Repurchases of Class A Common Stock (in shares) | (16,441,000) | |||||||||||||
Repurchases of Class A Common Stock | (97) | (97) | ||||||||||||
Capital contributions from noncontrolling interest member | 380 | 380 | ||||||||||||
Net income (loss) | (7,799) | 43 | (7,842) | |||||||||||
Fair value adjustment to redeemable noncontrolling interest | (15,636) | (9,696) | (5,940) | |||||||||||
Redemption of Class B Common Stock to Class A Common Stock (in shares) | (1,383,553,000) | (1,383,553,000) | ||||||||||||
Redemption of Class B Common Stock to Class A Common Stock | 8,164 | 8,164 | ||||||||||||
Net loss attributable to Legacy AON Shareholders | 0 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 10,334,734 | 23,725,998 | 10,334,734,000 | 23,725,998,000 | ||||||||||
Ending balance at Mar. 31, 2024 | $ (166,594) | $ 1 | $ 3 | $ 8,164 | $ (97) | $ 77 | $ 852 | $ (175,594) |
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|||||||||
Cash flows from operating activities | ||||||||||
Net loss before noncontrolling interest | $ (24,961) | $ (1,486) | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||||
Depreciation and amortization | 2,506 | 2,207 | ||||||||
Amortization of debt issuance costs | 215 | 176 | ||||||||
Provision for income taxes | 2,894 | 0 | ||||||||
Amortization of operating right-of-use assets | [1] | 2,040 | 2,224 | |||||||
Changes in fair value adjustments of warrants and derivative liabilities | (1,611) | 0 | ||||||||
Equity-based compensation | 10,094 | 0 | ||||||||
Equity in loss of affiliate | (49) | 101 | ||||||||
Gain on sale of property and equipment | 393 | 0 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Patient accounts receivable, net | (3,149) | (16,711) | ||||||||
Inventories | [2] | 281 | 4,854 | |||||||
Prepaid expenses and other current assets | (752) | (342) | ||||||||
Other receivables | (525) | 3,442 | ||||||||
Other assets | (4,579) | (2,826) | ||||||||
Accounts payable | [3] | 61,675 | 5,316 | |||||||
Accrued compensation related costs | 1,218 | 2,757 | ||||||||
Accrued other | 4,241 | (296) | ||||||||
Operating lease liabilities | [4] | (2,042) | (1,777) | |||||||
Other long-term liabilities | (2,752) | 2,032 | ||||||||
Net cash provided by (used in) operating activities | 45,137 | (329) | ||||||||
Cash flows from investing activities | ||||||||||
Purchases of property and equipment | (4,132) | (2,777) | ||||||||
Purchases of marketable securities | (7,069) | (1,442) | ||||||||
Proceeds from sales of marketable securities | 12,624 | 1,423 | ||||||||
Collections on notes receivable - related parties | 99 | 153 | ||||||||
Net cash provided by (used in) investing activities | 1,522 | (2,643) | ||||||||
Cash flows from financing activities | ||||||||||
Repayments on finance lease liabilities | (157) | (105) | ||||||||
Repurchases of Class A Common Stock | (97) | 0 | ||||||||
Net cash used in financing activities | (254) | (105) | ||||||||
Net increase (decrease) in cash and cash equivalents | 46,405 | (3,077) | ||||||||
Beginning of period | 28,539 | 26,926 | ||||||||
End of period | 74,944 | 23,849 | ||||||||
Supplemental noncash investing and financing activities | ||||||||||
Promissory note issued in connection with acquisition | 1,420 | 0 | ||||||||
Contribution from noncontrolling interest | (380) | 0 | ||||||||
Right-of-use assets and lease liabilities removed in termination of lease | 0 | 1,023 | ||||||||
Changes in accounts payable for capital additions to property and equipment | $ (1,055) | $ 0 | ||||||||
|
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Cost of revenue | $ 354,948 | $ 278,534 |
General and administrative expenses | 28,277 | 23,717 |
Related Party | ||
Cost of revenue | 310,877 | 178,166 |
General and administrative expenses | $ 706 | $ 679 |
Condensed Consolidated Statements of Cash Flows - Parenthetical - USD ($) $ in Thousands |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|||||||||
Amortization of operating right-of-use assets | [1] | $ 2,040 | $ 2,224 | |||||||
Inventories | [2] | 281 | 4,854 | |||||||
Accounts payable | [3] | 61,675 | 5,316 | |||||||
Operating lease liabilities | [4] | (2,042) | (1,777) | |||||||
Related Party | ||||||||||
Amortization of operating right-of-use assets | 2,146 | 528 | ||||||||
Inventories | (7,688) | 4,610 | ||||||||
Accounts payable | 80,584 | 3,669 | ||||||||
Operating lease liabilities | $ (2,381) | $ (797) | ||||||||
|
Business |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Business | Business American Oncology Network, Inc. (“AON”, “New AON”, “AON Inc.”, or the “Company”), through its subsidiary companies and variable interest entities (together, “its subsidiaries”), is an alliance of physicians and seasoned healthcare leaders who provide comprehensive oncology services across 32 oncology practices located in nineteen states (Arizona, Arkansas, Florida, Georgia, Iowa, Idaho, Indiana, Louisiana, Maryland, Missouri, Michigan, North Carolina, Nevada, Nebraska, Ohio, South Carolina, Texas, Virginia, Washington, and the District of Columbia). The Company also provides expertise in drug procurement and payor contracting, along with practice diversification through centralized laboratory and pathology services, as well as specialty pharmacy services, clinical research, radiation oncology, and imaging. During the three months ended March 31, 2024 and 2023, the Company entered into affiliation agreements with or acquired the following oncology practices.
(a)The Company entered into affiliation agreements with the physicians for these respective practices. The Company evaluated each of the affiliation agreements and determined that the transactions did not represent a business combination. The operations of the practices above have been included in the Company’s condensed consolidated financial statements. Business Combination Agreements Digital Transformation Opportunities Corp. (“DTOC”), American Oncology Network, LLC (“AON LLC”), GEF AON Holdings Corp. (“AON Class C Preferred Investor”), and DTOC Merger Sub, Inc., a direct, wholly owned subsidiary of DTOC (“Merger Sub”) entered into a Business Combination Agreement (the “Business Combination Agreement”), dated as of June 14, 2023 (which further amended and restated the Business Combination Agreement entered into by DTOC and AON as of October 5, 2022, and amended and restated on January 6, 2023, and April 27, 2023), pursuant to which, among other transactions, on September 20, 2023 (the “Closing Date”), DTOC and AON undertook a series of transactions (the “Business Combination” or “Reverse Recapitalization”) resulting in the organization of the combined post-business combination company as an umbrella partnership C corporation, in which substantially all of the assets and the business of the combined company are held by AON LLC, and DTOC became a member of AON LLC. In connection with the closing of the Business Combination (“the Closing”), DTOC changed its name to “American Oncology Network, Inc.”. The Business Combination was completed on September 20, 2023. As a result of, and in connection with, the Closing, among other things, (i) AON LLC amended and restated its operating agreement (the “Amended and Restated AON LLC Agreement”) to reclassify its existing Class A units, Class A-1 units and Class B units into a single class of AON LLC common units (“AON LLC Common Units”) that can be exchanged on a one-to-one basis for shares of New AON Class A common stock (“New AON Class A Common Stock”) and its existing AON LLC Class C units into AON LLC Series A preferred units (AON LLC Series A Preferred Units”); (ii) AON LLC converted profit pool units of certain of AON LLC’s subsidiaries into an equal number of AON LLC Common Units and shares of New AON Class B common stock (“New AON Class B Common Stock”), which together are exchangeable into shares of New AON Class A Common Stock (together with the New AON Class B Common Stock, the “New AON Common Stock”); (iii) New AON amended and restated its charter (the “Charter”) to provide for (a) the conversion of all existing shares of DTOC Class B common stock into shares of New AON Class A Common Stock on a one-to-one basis, (b) amendment of the terms of New AON Class B Common Stock to provide holders voting rights but no economic rights and (c) designation of a new series of New AON preferred stock as Series A convertible preferred stock (the “New AON Series A Preferred Stock” or “Series A Preferred Stock") with such rights and preferences as provided for in the certificate of designation of the New Aon Series A Preferred Stock (the “New AON Series A Certificate of Designation”); and (iv) among other things, (a) AON LLC issued common units to New AON in exchange for a combination of cash and shares of New AON Class B Common Stock and warrants to acquire shares of New AON Class B Common Stock (the “Class B Prefunded Warrants”), (b) New AON was admitted as a member of AON LLC, (c) AON LLC distributed shares of New AON Class B common stock or Class B Prefunded Warrants, as applicable, to AON LLC equity holders, (d) New AON reserved a specified number of additional shares of New AON Class A Common Stock after the Closing for issuance to eligible participants, (e) Merger Sub merged with and into the AON Class C Preferred Investor whereby the separate existence of Merger Sub ceased and New AON issued a number of shares of New AON Series A Preferred Stock equal to the number of AON LLC Series A preferred units held by the AON Class C Preferred Investor to AEA Growth Management LP, the parent of AON Class C Preferred Investor (“AEA Growth”) in exchange for all the shares of common stock held by AEA Growth in the AON Class C Preferred Investor (the “First Step”), (f) promptly after the First Step, the AON Class C Preferred Investor merged with and into New AON whereby the separate existence of the AON Class C Preferred Investor ceased and New AON held all the AON LLC Series A preferred units and (g) from and after the Closing (but subject to lock-up restrictions), the AON LLC common equity holders (other than New AON), referred to herein as “Legacy AON Shareholders” (former AON LLC Class A, Class A-1, and Class B unit holders), will have the right (but not the obligation) to exchange AON LLC Common Units together with an equal number of shares of New AON Class B Common Stock (whether held directly or indirectly through Class B Prefunded Warrants) for shares of New AON Class A Common Stock. In addition, in connection with the Closing, DTOC completed the offer to the holders of AON LLC Class B-1 units to exchange their AON LLC Class B-1 units for such number of newly issued shares of New AON Class A Common Stock equal to the ratio set forth in the Business Combination Agreement (such offer, the “Exchange Offer”). DTOC and AON LLC solicited consents from the holders of AON LLC Class B-1 units to make certain amendments to the terms of the awards and the unit grant agreements pursuant to which the AON LLC Class B-1 units were granted, which provided for the automatic exchange, as of immediately prior to the adoption of the Amended and Restated AON LLC Agreement, of all outstanding AON LLC Class B-1 units into shares of New AON Class A Common Stock (collectively, the “Proposed Amendments”). The requisite number of holders of Class B-1 units provided their consent to the Proposed Amendments, and as a result, in connection with the Closing, all AON LLC Class B-1 units were exchanged for an aggregate of 1,047,343 shares of New AON Class A Common Stock. Upon the consummation of the Business Combination, the outstanding membership units in AON LLC and the outstanding shares in AON Inc. (New AON) are as follows: •AON LLC Common Units held by the Legacy AON Shareholders - 28,109,796 •AON LLC Common Units held by New AON - 9,532,354 •AON LLC Series A Preferred Units held by New AON - 6,651,610 •Class A Common Stock held by the former AON LLC Class B-1 unit holders - 1,047,343 •Class A Common Stock held by the DTOC unredeemed shareholders - 147,511 •Class A Common Stock held by the DTOC Sponsor and their permitted transferees - 5,498,125(a) •Class B Common Stock held by Legacy AON Shareholders - 25,109,551(b) •New AON Series A Preferred Stock held by AEA Growth Management LP - 6,651,610 (a) Sponsor Earnout Shares of 2,839,375 are subject to vesting and forfeiture provisions and are not outstanding for GAAP purposes as of the Closing Date. (b) Certain Legacy AON Shareholders hold 3,000,245 Class B Prefunded Warrants, which underlying shares of Class B common stock are not outstanding as of the Closing Date. Warrants As of the Closing Date, New AON assumed the outstanding warrants (Public Warrants and Private Placement Warrants) that were issued by DTOC as part of DTOC’s IPO. Further, New AON issued the Class B Prefunded Warrants to former Class A-1 unit holders, in lieu of New AON Class B Common Stock. The accounting treatment for the Public Warrants, the Private Placement Warrants, and the Class B Prefunded Warrants, collectively referred to as “the Warrants”, is disclosed in Note 2. Public Warrants As of the Closing Date, New AON assumed 8,337,500 public warrants (the “Public Warrants”) issued by DTOC in its IPO. Each whole warrant entitles the holder to purchase one share of New AON Class A Common Stock at a price of $11.50 per share, subject to adjustment. The warrants will become exercisable on the later of 12 months from the closing of the DTOC Initial Public Offering or 30 days after the completion of its initial business combination and will expire five years after the Closing of the Business Combination, or earlier upon redemption or liquidation. Private Warrants As of the Closing Date, New AON assumed 6,113,333 Private Placement Warrants held by the DTOC Sponsor (the “Private Placement Warrants” or “Private Warrants”). The Private Placement Warrants will be non-redeemable in certain circumstances so long as they are held by the Sponsor or its permitted transferees. The Private Placement Warrants may also be exercised by the Sponsor and its permitted transferees for cash or on a cashless basis. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants, including as to exercise price, exercisability, and exercise period. Class B Prefunded Warrants As of the Closing Date, New AON issued 3,000,245 of Class B Prefunded Warrants to former AON Class A-1 unitholders. Because the Class B Warrants are prefunded, there was not any cash consideration exchanged as part of the Class B Warrant issuance. Each Class B Prefunded Warrant entitles the holder to purchase one share of New AON Class B common stock at a price of $0.01 per share. The exercise term of the Class B Warrant shall continue indefinitely so long as the holder of the Class B Warrant is also the holder of an AON LLC Common Unit, provided that the number of shares of Common Stock that this Warrant is exercisable for shall not exceed the number of AON LLC Common Units held by holder. Transaction Expenses In connection with the Reverse Recapitalization, AON LLC and New AON incurred costs of $0.4 million and $1.9 million during the three months ended March 31, 2024 and 2023, respectively, which were reported as transaction expenses in the condensed consolidated statements of operations and comprehensive loss.
|
Basis of Presentation and Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. Management believes the unaudited condensed consolidated financial statements for the interim periods presented contain all necessary adjustments, of a normal recurring nature, to state fairly, in all material respects, the Company’s financial position, results of operations and cash flows for the interim periods presented. These unaudited condensed consolidated financial statements were prepared on the same basis as and should be read in conjunction with such audited consolidated financial statements and related notes thereto of AON Inc. and its wholly-owned subsidiaries, included in the Annual Report on Form 10-K, dated and filed on March 28, 2024 with the SEC (the “Annual Report 2023"). Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results the Company expects for the entire year. For the three months ended March 31, 2024, these unaudited condensed consolidated financial statements reflect the consolidated results of operations, comprehensive loss, cash flows and changes in equity of AON Inc. and its wholly-owned subsidiaries. The condensed consolidated balance sheet at March 31, 2024 presents the financial condition of AON Inc. and its consolidated subsidiaries. For the three months ended March 31, 2023, these unaudited condensed consolidated financial statements present the consolidated results of operations, comprehensive loss, cash flows and changes in equity of AON LLC. The condensed consolidated balance sheet as of December 31, 2023 presents the financial condition of AON Inc. and its consolidated subsidiaries after the Reverse Recapitalization. All intercompany balances and transactions of AON LLC have been eliminated. In accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, the historical equity of AON LLC has been recasted in all periods up to the Closing Date, to reflect the number of shares of New AON’s Class A Common Stock and Class B Common Stock issued to Legacy AON Shareholders in connection with the Reverse Recapitalization. The Company recasted the units outstanding related to the historical AON LLC Class A, Class A-1, and Class B units prior to the Reverse Recapitalization (“Historical AON LLC Equity”) as common equity of New AON, equal to the Per Company Class Unit Exchange Ratio, pursuant to the Business Combination Agreement. The Per Company Unit Exchange Ratio at which AON LLC Class A units and Class A-1 units were reclassified is equal to 2,524 AON Common Units. The Per Company Unit Exchange Ratio at which AON LLC Class B units were reclassified varied depending on participation threshold, and is equal to 2,524, 2,453, or 1,976, AON Common Units. The Per Company Unit Exchange Ratio at which Class C units were reclassified is equal to 2,705 AON LLC Series A Preferred Units. The condensed consolidated financial statements and related notes thereto give effect to the conversion for all periods presented, without any change to par value or per unit amounts. The condensed consolidated financial statements do not necessarily represent the capital structure of New AON had the Reverse Recapitalization occurred in prior periods. The Company has not made retroactive adjustments related to the historical book values of Historical AON LLC Equity as the adjustments were considered immaterial. For the three months ended March 31, 2024, $7.8 million of the consolidated net loss of AON LLC were attributable to the Class A Common Stockholders, and reflects the Class A Common Stockholders’ absorption of 23.0% of the consolidated net loss of AON LLC. For the three months ended March 31, 2024, $17.2 million of the consolidated net losses of AON LLC were attributable to noncontrolling interest, and reflects the Legacy AON Stockholders’ absorption of 77.0% of the consolidated net losses of AON LLC. For the three months ended March 31, 2023, $1.5 million of the consolidated net losses of AON LLC were attributable to the Legacy AON Stockholders, to reflect their absorption of 100% of the consolidated net losses of AON LLC pertaining to the days prior to the Reverse Recapitalization. Principles of Consolidation For the period of January 1, 2024 through March 31, 2024, the condensed consolidated financial statements include the accounts of the Company, American Oncology Network, LLC (“AON LLC”), and its wholly owned subsidiary American Oncology Management Company, LLC (“AOMC”), and its consolidated variable interest entities (“VIEs”) American Oncology Partners, P.A. (“AON Partners”), American Oncology Partners of Maryland, P.A. (“Partners of Maryland”), AON Central Services, LLC (“AON Central Services”), and Meaningful Insights Biotech Analytics, LLC (“MIBA”). All intercompany accounts and transactions between the entities have been eliminated in consolidation. The accounting treatment of the Business Combination was a Reverse Recapitalization. For the periods prior to the Reverse Recapitalization, the consolidated financial statements of the Company comprise the accounts of AON LLC and its wholly-owned subsidiaries. All intercompany accounts and transactions among AON LLC and its consolidated subsidiaries were eliminated. The Company accounts for American Oncology Network, LLC, AON Partners, Partners of Maryland, AON Central Services, and MIBA in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidations. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a VIE. A VIE is broadly defined as an entity that has any of the following three characteristics: (i) the equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (ii) substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights; or (iii) the equity investors as a group lack any of the following, the power through voting or similar rights to direct the activities of the entity that most significantly impact the entity’s economic performance, the obligation to absorb the expected losses of the entity, or the right to receive the expected residual returns of the entity. The Company consolidates a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively, if any. AON LLC has contractual relationships with AON Partners, Partners of Maryland and AON Central Services and the physician owners through management service agreements (“MSAs”) and other contractual agreements to provide all practice management services outside of medical services provided by the physicians. In addition, despite not being required by the contractual relationships, AON LLC regularly provides funding to support AON Partners and Partners of Maryland’s operations and acquisitions of physician practices. AON Central Services was formed July 15, 2022 and, effective January 1, 2023, entered into an agreement with AOMC to provide qualified non-clinical and non-medical employees to AOMC to support the operation of the physician practices. MIBA was established during the first quarter of 2023 for the purpose of developing intellectual property to synergize the collection, de-identification, and dissemination of the Company’s patient data for sale to external parties for research, development, and clinical decisions. In May 2023, the Company contributed $0.2 million for a 56% interest in the equity of MIBA. As of March 31, 2024, MIBA had no significant operating activity. The Company concluded that AON LLC had a controlling financial interest in MIBA and has consolidated the entity at March 31, 2024 and recorded the noncontrolling interest in equity. The Company has concluded that AON Partners, Partners of Maryland, AON Central Services, and MIBA are all VIEs in which AON LLC has the characteristics of a controlling financial interest and is deemed to be the primary beneficiary. The variable interest subjects AON LLC to all potential losses in the entities and, therefore, requires AON LLC, and in turn AON Inc., to consolidate the results of AON Partners, Partners of Maryland, AON Central Services, and MIBA in its condensed consolidated financial statements. Refer to Note 4 for further information on the VIEs. Significant Accounting Policies The accounting policies included below should be read in conjunction with the annual consolidated financial statements. Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (the “CODM”). The Company’s CODM is its chief executive officer who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. The Company has one operating segment and one reportable segment that are structured around the organizational management of oncology practice operations. All revenue and assets are in the United States. Revenue Recognition Revenue is recognized under Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (“Topic 606”). The Company determines the transaction price based upon standard charges for goods and services with anticipated consideration due from patients, third-party payors (including health insurers and government agencies) and others. The Company’s revenue is primarily derived from patient service revenues, which encompass oncology services provided during patient visits and shipments of pharmacy prescriptions. Performance obligations for the Company’s services provided to patients and most procedures, are satisfied over the time of visit which is the same day services are performed. Performance obligations relating to pharmacy revenue are considered fully satisfied at a point in time upon the customer receiving delivery of the prescription. Accordingly, the Company does not anticipate a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and any such revenue recognized during the three month periods ended March 31, 2024 and 2023 was immaterial. Additionally, the Company does not expect to recognize material revenue in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2024 and December 31, 2023. Approximately $246.1 million and $214.3 million and of the Company’s revenues are generated from services performed during patient visits with the remainder primarily generated from shipments of pharmacy prescriptions for the three month periods ended March 31, 2024 and 2023, respectively. As services are performed and prescriptions are shipped, timely billing occurs for services rendered and prescriptions shipped less discounts provided to uninsured patients and contractual adjustments to third-party payors based upon prospectively determined rates and discounted charges. Payment is requested at the time of service for self-paying patients and for patients covered by third-party payors that are responsible for paying deductibles and coinsurance. The Company monitors revenue and receivables to prepare estimated contractual allowances for the anticipated differences between billed and reimbursed amounts. Payments from third-party payors and Government programs including Medicare and Medicaid may be subject to audit and other retrospective adjustments. Such amounts are considered on an estimated basis when net patient revenue is recorded and are adjusted as final adjustments are determined. For the three month periods ended March 31, 2024 and 2023, such resulting historic adjustments have been immaterial to the condensed consolidated financial statements. In assessing who is the principal in providing patient services and pharmacy prescriptions, the Company considered who controls the provision of services and prescriptions. The Company has determined they are acting as a principal in these relationships. In April 2022, the Company entered into a long-term arrangement to sponsor and manage a clinical trial. The Company subsequently contracted with a third-party to provide the clinical research services and is the principal in this arrangement. The performance of clinical research services are considered a single performance obligation because the Company provides a highly-integrated service. Revenue is recognized for the single performance obligation over time due to the Company’s right to payment for work performed to date. The contract provides for invoices based on predetermined milestones. The Company uses the cost-to-cost measure of progress for the Company’s contract because it best depicts the transfer of control to the customer as the performance obligation is fulfilled. For this method, the Company compares the contract costs incurred to date to the estimated total contract costs through completion. As part of the client proposal and contract negotiation process, the Company develops a detailed project budget for the direct costs and reimbursable costs based on the scope of the work, the complexity of the study, the geographical location involved and the Company’s historical experience. The estimated total contract costs at the project level are reviewed and revised periodically throughout the life of the contract, with adjustments to revenue resulting from such revisions being recorded on a cumulative basis in the period in which the revisions are identified. Contract costs consist primarily of direct labor and other reimbursable project-related costs such as travel, third-party vendor costs and investigator fees. The Company establishes pricing based on the Company’s internal pricing guidelines, discount agreements, if any, and negotiations with the client. The transaction price is the contractually defined amount. Revenue related to the clinical trial, which is included within other revenue, was $0.5 million and $0 million for the three months ended March 31, 2024 and 2023, respectively. The Company has a system and estimation process for recording Medicare net patient service revenue and estimated recoupments as it relates to value-based care (“VBC”) revenue included in patient service revenue in the condensed consolidated statements of operations and comprehensive loss. The Company’s VBC revenue is primarily generated through its participation in the CMS Oncology Care Model (“OCM”) which is an episode-based payment model to promote high-quality cancer care. Participants enter six-month episode periods, and the Company bills a monthly fee during the six-month period based on a fixed rate per participant per month and the total number of participants. Certain quality and compliance metrics are tracked as part of the program and submitted to CMS at the end of the episode period which may result in recoupment of funds. The Company estimates the recoupment amount by developing a recoupment percentage for each period based on historical known recoupment from CMS and applies the recoupment percentage against total fees for the period. Based on the estimate, the Company accrues a liability representing the expected final recoupments based on historical settlement trends. Short-term Marketable Securities Investments in marketable securities consist of corporate bonds and U.S. Treasury securities. Management determines the appropriate classification of investments at the time of purchase and reevaluates such determination at each balance sheet date. Marketable securities are classified as available-for-sale and are carried at fair value in the consolidated balance sheets. The marketable securities are classified as short-term based on management’s intent to convert such securities within one year and the ability to convert them within two to three days. Certain of our available-for-sale securities are debt securities. For an available-for-sale debt security with an amortized cost that exceeds its fair value, the Company first determines if it intends to sell or will more-likely-than-not be required to sell the security before the expected recovery of its amortized cost. If it intends to sell or will more-likely-than-not be required to sell the security, then the Company recognizes the impairment as a credit loss in the condensed consolidated statements of operations and comprehensive loss by writing down the security’s amortized cost to its fair value. If it does not intend to sell or it is not more-likely-than-not that it will be required to sell the security before the expected recovery of its amortized cost, the Company recognizes the portion of the impairment that is due to a credit loss, if any, in the condensed consolidated statements of operations and comprehensive loss through an allowance. The portion of the impairment that is due to factors other than a credit loss is recognized in other comprehensive income (loss) in the condensed consolidated statements of operations and comprehensive loss as an unrealized loss. Equity Investment in Affiliate In January 2023, the Company contributed noncash consideration, with a fair value of approximately $2.3 million, in return for a 49% equity interest in OCP Management Arizona, LLP. Investments in entities over which the Company has the ability to exercise significant influence but does not control the entity are accounted for using the equity method. Equity method investments are included with other assets in the condensed consolidated balance sheets. The carrying amount of the investment is adjusted to reflect the Company’s proportionate share of the net earnings or losses and reduced by any dividends received. The Company’s share of income or loss related to this investment is reported as an equity in loss of affiliate in the condensed consolidated statements of operations and comprehensive loss. Noncontrolling Interests The Company consolidates the results of entities in which it has a controlling financial interest. Refer to Note 15 for additional considerations and presentation for noncontrolling interest. Mezzanine Equity New AON Series A Preferred Stock is redeemable for cash or the value of the property, rights or securities to be paid or distributed in the event of a Deemed Liquidation Event (which is outside of the Company’s control). As a result, Management has determined that the New AON Series A Preferred Stock should be classified as mezzanine equity. As of March 31, 2024, the Preferred Stock are recorded at their initial carrying value, net of offering costs of $0.8 million. The Series A Preferred Stock are not being accreted to redemption value, as the redemption is not probable. The Series A Preferred Stock are classified outside of members’ equity on the consolidated balance sheets. Refer to Note 14 for mezzanine equity presentation considerations for redeemable noncontrolling interest. Treasury Stock We account for treasury stock purchased under the cost method and include treasury stock as a component of accumulated paid in capital. Treasury stock purchased with intent to retire (whether or not the retirement is actually accomplished) is charged to common stock. The company repurchased 14,729 shares of class A common stock at the spot rate as of each transaction date for a total cost of less than $0.1 million for the year ended December 31, 2023. For the three months ended March 31, 2024 the Company repurchased an additional 16,441 shares of class A common stock at the spot rate as of each transaction date for a total cost of less than $0.1 million. To date, the Company has repurchased a total of 31,170 shares. Equity-Based Compensation The Company issues stock-based awards to employees and directors in the form of stock options and restricted stock units. The Company measures and recognizes compensation expense for its stock-based awards granted to its employees and directors based on the estimated grant date fair value in accordance with ASC 718, Compensation-Stock Compensation, and determines the fair value of restricted stock units based on the fair value of its common stock. The Company measures all share-based options granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. The Company records the expense for awards with service-based conditions using the straight-line method over the requisite service period, net of any actual forfeitures. The Company classifies share-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Business Combinations The Company evaluates acquired practices in accordance with ASU 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business. This standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Because substantially all of the value of each acquired practice did not relate to a similar group of assets and as each acquired practice contained both inputs and processes necessary to provide economic benefits to the Company, it was determined that each acquisition represents a business combination. Therefore, the transactions have been accounted for using the acquisition method of accounting, which requires, with limited exceptions, that assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Any excess of the consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. Transaction costs related to business combinations are expensed in the period in which they are incurred. Offering Costs The Company defers specific incremental costs directly attributable to proposed offerings of securities. These costs consist of legal, accounting, and other similar expenses incurred through the balance sheet date that are directly related to a potential offering. If the offering is completed, these costs will be charged against the gross proceeds of the offering. These offering costs will be allocated to the separable financial instruments issued in the transaction on a relative fair value basis of the securities issued, compared to total proceeds received. Offering costs associated with any instruments classified as liabilities will be expensed as incurred, presented as non-operating expenses in the condensed consolidated statement of operations and comprehensive loss. Professional Liability The Company maintains insurance policies for exposure to professional malpractice insurance risk. The limits of malpractice insurance provide each physician/advanced practice provider with a dedicated $1.0 million limit per claim and a $3.0 million limit in the aggregate per policy period – on a first dollar basis, as no deductible applies. The policy further then extends coverage to the Company, by providing a $2.0 million limit per claim and a $4.0 million limit in the aggregate per policy period - on a first dollar basis, additionally, as no deductible applies. Reserves are established for estimates of the loss that will ultimately be incurred on claims that have been reported but not paid and claims that have been incurred but not reported. These reserves are established based on consultation with a third-party actuary. The actuarial valuations consider a number of factors, including historical claims payment patterns, changes in case reserves and the assumed rate of increase in healthcare costs. Management believes the use of actuarial methods to account for these reserves provides a consistent and effective way to measure these subjective accruals. However, due to the sensitive nature of this estimation technique, recorded reserves could differ from ultimate costs related to these claims due to changes in claims reporting, claims payment and settlement practices and differences in assumed future cost increases. Accrued unpaid claims and expenses that are expected to be paid within the next twelve months are classified as current liabilities and included in accrued other. All other accrued unpaid claims and expenses are classified as long-term liabilities and included in other long-term liabilities. Insurance recoveries associated with the unpaid claims are classified as long-term assets included in other assets. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities being measured within the fair value hierarchy. Our financial instruments include cash, short-term marketable securities, accounts receivable, notes receivable, accounts payable, accrued expenses, long-term debt and contractual agreements that resulted in derivative liabilities. Our nonfinancial assets such as property and equipment are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that impairment may exist. The carrying amounts of cash, accounts receivable, accounts payable, notes receivable, and accrued expenses approximate their fair value because of the short-term maturity and highly liquid nature of these instruments. We determine the fair value of long-term debt and marketable securities based on various factors including maturity schedules and current market rates. See Note 6 for a discussion of the Company’s Level 1 and Level 2 Marketable Securities as of March 31, 2024. See below for a discussion of the Company’s Level 1 and Level 3 warrant liabilities as of March 31, 2024. As of March 31, 2024 and December 31, 2023, there were no Level 3 financial instruments. There were no transfers between any levels of the hierarchy during any periods presented. Warrant Liabilities Upon Closing of the Business Combination, on September 20, 2023, the Company evaluated the Public Warrants and Private Placement Warrants and the Class B Prefunded Warrants, collectively referred to herein as “Warrants”, in accordance with ASC 815-40, “Derivatives and Hedging —- Contracts in Entity’s Own Equity”, and concluded that a provision in the warrant agreements related to potential net cash settlement of the warrants upon an exchange or tender offer that may not result in a change in control of the entity precludes the warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants are recorded as current liabilities within accrued other on the condensed consolidated balance sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement”, with changes in fair value recognized in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss in the period of change. As of March 31, 2024, the Public Warrants were trading separately from the Class A Common Stock and the quoted market price was used to establish fair value. As such, the Public Warrants fair value was determined using a Level 1 input. The fair value of the Public Warrants as of March 31, 2024 is $2.8 million and recorded in other long-term liabilities on the condensed consolidated balance sheets. Management has utilized the public warrant price to value the private warrants and believes the public and private warrants have materially consistent fair values given the existence of the make-whole redemption feature. As of March 31, 2024, a valuation of the private warrants was performed which confirmed the private warrant value was materially consistent with the public warrants. The details of this valuation are included in the paragraph below. The fair value of the Private Placement warrants was determined using Level 3 inputs. As of March 31, 2024, the fair value of the Private Placement Warrants was estimated to be $2.1 million and recorded in other long-term liabilities on the condensed consolidated balance sheets. The fair value was estimated at March 31, 2024, using the Black-Scholes Option Pricing model using the following assumptions: Expected annual dividend yield – 0.0% Expected volatility – 26.40% Risk-free rate of return – 4.31% Expected Option Term – 5.0 years The AON Class B Prefunded Warrants are exercisable into one share of New AON Class B Common Stock. A share of New AON Class B Common Stock, together with an AON LLC Common Unit, may be exchanged for one share of New AON Class A Common Stock. Considering New AON Class B Common Stock has no economic rights and limited liquidity or value if the holder does not also possess an AON LLC Common Unit, and because the AON Class B Prefunded Warrants are exercisable into New AON Class B Common Stock, the Company has estimated fair value of the Class B Prefunded Warrants to be immaterial. Earnings Per Share The Company recast Historical AON LLC Equity as AON Inc. common equity for all periods prior to the Reverse Recapitalization, refer to Note 2. However, as 100% of the net losses of AON LLC prior to the Reverse Recapitalization were absorbed by the Legacy AON Shareholders, basic and diluted earnings (loss) per share is zero for the three months ended March 31, 2023. Basic and diluted earnings (loss) per share for the three months ended March 31, 2024 represents the period where the Company had earnings (loss) attributable to Class A Common Stockholders. Class B Common Stock does not have economic rights in AON Inc., including rights to dividends or distributions upon liquidation, and as a result, is not considered a participating security for basic and diluted earnings (loss) per share. As such, basic and diluted earnings (loss) per share of Class B Common Stock has not been presented. The Company has issued and outstanding Sponsor Earnouts, which are subject to forfeiture if the achievement of certain stock price thresholds are not met. In accordance with ASC Topic 260, “Earnings Per Share,” the Sponsor Earnouts are excluded from weighted-average shares outstanding to calculate basic earnings (loss) per share as they are considered contingently issuable shares due to their potential forfeiture. Sponsor Earnouts will be included in weighted-average shares outstanding to calculate basic earnings (loss) per share as of the date of their stock price thresholds are met and they are no longer subject to forfeiture. Basic and diluted earnings (loss) per share is computed by use of the two-class method as a result of outstanding Series A Preferred Stock, which accrue dividends at the annual rate of 8% of the original price per share, participate with common stock on all other dividends, and accordingly have participation rights in undistributed earnings as if all such earnings had been distributed during the period (see Note 12). Under such method income available to common shareholders is computed by deducting both dividends declared or, if not declared, accumulated on Series A Preferred Stock from net income. Loss attributable to common shareholders is computed by increasing net loss by such dividends. Since the participating Series A Preferred Stock has no contractual obligation to share in the losses of the Company, there is no loss allocation between Class A Common Stock and Series A Preferred Stock. Basic earnings (loss) per share is based on the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings (loss) per share is based on the weighted-average number of shares of Class A Common Stock used for the basic earnings (loss) per share calculation, adjusted for the dilutive effect of the Public and Private Warrants and Sponsor Earnout, if any, using the “treasury stock” method and the convertible Series A Preferred Stock and, exchangeable Class B Common Stock and Class B Prefunded Warrants, if any, using the “if-converted” method. Net earnings (loss) for diluted loss per share is adjusted for the Company’s share of AON LLC’s consolidated net earnings (loss), net of AON Inc. taxes, after giving effect to the Class B Common Stock and Class B Prefunded Warrants that are exchanged into potential shares of Class A Common Stock, Public and Private Warrants that are liability classified, and Series A Preferred Stock, to the extent it is dilutive. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, ‘‘Financial instruments-Credit Losses’’ (“ASU 2016- 13”). ASU 2016-13 requires entities to report ‘‘expected’’ credit losses on financial instruments and other commitments to extend credit rather than the current ‘‘incurred loss’’ model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. ASU 2016-13 is effective for the Company for annual reporting periods beginning after December 15, 2022. ASU 2016-13 was adopted by the Company effective January 1, 2023, with no material impact on the Company’s consolidated financial statements and related disclosures. In October 2021, the FASB issued ASU 2021-08, “Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which provides that an acquirer must recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. The guidance is effective for the Company for annual reporting periods beginning after December 15, 2023, with early adoption permitted. The adoption of this standard as of January 1, 2024, did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker, a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the chief operating decision maker when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280, “Segment Reporting,” to be included in interim periods. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and retrospective application is required for all periods presented. The Company is evaluating the impact this will have on the Company's consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this upgrade enhance the transparency and decision usefulness of income tax disclosures. This ASU requires disclosures of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the effect that ASU 2023-09 will have on its disclosures.
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Reverse Recapitalization |
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Reverse Recapitalization [Abstract] | |||||||||||||||||||||||||||||||||||||
Reverse Recapitalization | Reverse Recapitalization As discussed in Note 1, AON LLC merged with DTOC, with AON LLC surviving the Merger. AON LLC is governed by a board of managers composed of three (3) persons that were designated by New AON and two (2) persons that were designated by holders of a majority of the AON LLC Common Units, held by members of AON LLC other than New AON. Management determined AON LLC was not a variable interest entity (Refer to Note 2), and as result, identified AON LLC as the accounting acquirer of the Merger in accordance ASC Topic 805. Management concluded that AON LLC was the accounting acquirer due to (i) the Legacy AON Shareholders, defined as the former AON Class A, Class A-1, and Class B unit holders, receiving the largest portion of the voting rights in the combined company, New AON, (ii) significantly all of the Legacy AON Shareholders retained their equity interest as stockholders in New AON, (iii) AON LLC’s operations prior to the Reverse Recapitalization comprising the only ongoing operations of New AON, (iv) the Legacy AON Shareholders have the right to appoint a majority of the directors of New AON, (v) the executive management of AON LLC will become the executive management of New AON and (vi) AON LLC is significantly larger than New AON in terms of revenue, total assets, and employees. Therefore, the Merger was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with ASC Topic 805. New AON was treated as the “acquired” company for financial reporting purposes, and for accounting purposes, the Reverse Recapitalization was treated as the equivalent of AON LLC issuing stock for the net assets of New AON, accompanied by a recapitalization. The net assets of New AON were recorded at historical cost on the condensed consolidated balance sheet as of September 20, 2023, the Closing Date of the Reverse Recapitalization, with no goodwill or other intangible assets recorded. For additional information on the capitalization of New AON and AON LLC immediately following the Closing of the Reverse Recapitalization, see Note 1. The following table provides the historical cost of assets and liabilities of AON Inc. as of September 20, 2023.
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Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities AOMC is a wholly owned subsidiary of AON LLC and neither AOMC nor AON LLC has ownership interest in AON Partners and Partners of Maryland. Both AON Partners and Partners of Maryland are fully owned by physicians. AON LLC operates its physician practices through the MSAs and other contractual agreements between AOMC, AON Partners, and Partners of Maryland. The responsibilities of AOMC include, but are not limited to, negotiating provider and payor contracts, employment and compensation decisions, billing and collections, furnishing all supplies and equipment necessary for the respective practice’s operations as well as, necessary real estate, contracting on behalf of AON Partners and Partners of Maryland, entering into leases, holding a power of attorney to perform the above activities, preparing, maintaining and administering all accounting records (including financial reporting), expense payment, and maintenance of all information systems/software. AON LLC is paid a management fee to compensate AOMC for the services provided. AON Central Services is 80% physician owned and 20% owned by AON LLC. AOMC entered into an agreement with AON Central Services, effective January 1, 2023, to provide qualified non-clinical and non-medical employees to AOMC to support the operation of the physician practices. AOMC pays a monthly management fee to AON Central Services equal to the aggregate cost of compensation, benefits and all other costs related to these employees. AON LLC invested $0.2 million in MIBA, a newly formed LLC, during the second quarter of 2023 in exchange for 56% equity ownership. The Company evaluated AON LLC’s relationship with MIBA under the VIE model and determined it was a VIE and the Company is the primary beneficiary based on its financial controlling interest. Based on various quantitative and qualitative factors, including assessment of certain services performed and relationships held above, management has determined that AON Partners, Partners of Maryland, AON Central Services, and MIBA are all variable interest entities and AOMC is the primary beneficiary who holds the decision-making rights over the activities that most significantly impact the economic performance of AON Partners, Partners of Maryland, AON Central Services, and MIBA through the MSAs and other contractual agreements. Accordingly, the results of AON Partners, Partners of Maryland, AON Central Services, and MIBA have been consolidated with the Company for the three month period ended March 31, 2024. The results of AON Partners, Partners of Maryland, and AON Central Services have been consolidated with the Company for the three month period ended March 31, 2023. The assets of AON Partners, Partners of Maryland, AON Central Services, and MIBA as of March 31, 2024 and December 31, 2023, are as follows:
The liabilities of AON Partners, Partners of Maryland, AON Central Services, and MIBA as of March 31, 2024 and December 31, 2023, are as follows:
All intercompany transactions and balances with the VIEs are eliminated in consolidation.
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Business Combinations |
3 Months Ended |
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Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations 2024 Acquisitions The Company did not have any ASC 805 acquisitions during the three months ended March 31, 2024. 2023 Acquisitions The Company did not have any ASC 805 acquisitions during the three months ended March 31, 2023.
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Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities The following table summarizes the Company’s marketable securities financial assets that are measured at fair value on a recurring basis:
(1)Included in cash and cash equivalents in the consolidated balance sheets at March 31, 2024 and December 31, 2023. (2)Cash equivalents as of March 31, 2024 included U.S. Treasury Bills with an initial maturity of 3 months or less and overnight repurchase agreements in which cash from the Company's main operating checking account is invested overnight in highly liquid, short-term investments sponsored by a large financial institution. The company had overnight repurchase agreements as of March 31, 2024 and December 31, 2023. The Company uses quoted prices in active markets for identical assets to determine the fair value of its Level 1 investments. The fair value of the Company’s Level 2 investments is determined using pricing based on quoted market prices or alternative market observable inputs. The fair value of the Company’s marketable securities as of March 31, 2024, by remaining contractual maturities, were as follows:
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Supplemental Condensed Balance Sheet Information |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Condensed Balance Sheet Information | Supplemental Condensed Balance Sheet Information Other receivables Other receivables consisted of the following at March 31, 2024 and December 31, 2023:
Inventory Inventory consisted of the following at March 31, 2024 and December 31, 2023:
Property and Equipment, net Property and equipment, net consisted of the following at March 31, 2024 and December 31, 2023:
Accrued Other Accrued other consisted of the following at March 31, 2024 and December 31, 2023:
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Long-term Debt |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Debt consisted of the following at March 31, 2024 and December 31, 2023:
Credit Facilities On April 30, 2021, the Company entered into a Loan Facility with PNC (“PNC Loan Facility”) collateralized by the Company’s assets and outstanding patient accounts receivable. The PNC Loan Facility is guaranteed on a limited basis by the Company and shareholder of AON Partners and Partners of Maryland. $34.6 million of proceeds from the PNC Loan Facility was used to pay off the Company’s previous term loans and revolver with Truist Bank. The remaining funds were made available for working capital and acquisition of additional physician practices. The PNC Loan Facility is interest-only with total principal due at an initial maturity on April 30, 2024. Interest originally accrued at one-month LIBOR or an alternate base rate plus 1.45%. The maximum balance of the PNC Loan Facility (“Borrowing Base”) is limited to the lesser of the Facility Limit ($65.0 million) or the fair value of the Company’s patient accounts receivable. The Company must maintain a balance of the lesser of the Borrowing Base or 65% of the Facility Limit in the first year and 75% of the Facility Limit in subsequent years (“minimum funding threshold”). The Company can repay the PNC Loan Facility up to the minimum funding threshold at any time without penalty. In accordance with the PNC Loan Facility, the Company pledged $10.0 million of collateral as restricted cash to be released quarterly in increments of $2.5 million. The restricted cash was fully released as of March 31, 2024 and December 31, 2023. On April 30, 2021, the Company entered into a $5.0 million revolving line of credit agreement (“PNC Line of Credit”). The PNC Line of Credit has an expiration date of April 30, 2024 and originally bore interest at a rate per annum equal to the sum of the daily LIBOR rate plus 1.65% or an alternate base rate plus 0.65% and is due on the first day of each month beginning June 1, 2021. Any outstanding principal and accrued interest will be due on the expiration date. Beginning July 1, 2021, quarterly bank fees equal to 1.65% per day per annum are due in arrears and will continue on the first day of each quarter thereafter. All debt related to the PNC Line of Credit is collateralized by the Company’s assets. As of March 31, 2024 and December 31 2023, no draws had been made on the PNC Line of Credit. The Company is also subject to a 0.20% unused line fee calculated per annum on the unused balance of the PNC Line of Credit. On July 29, 2021, the Company amended the PNC Loan Facility increasing the Facility Limit to $75.0 million. On February 14, 2022, the Company further amended the PNC Loan Facility and Line of Credit agreements. The primary changes included an increase of the Facility limit from $75.0 million to $125.0 million, an increase of the PNC Line of Credit availability from $5.0 million to $10.0 million, interest charges to be calculated based on the Bloomberg Short-Term Bank Yield Index plus 1.65% and certain financial covenants. As part of the amendment, the Company drew an additional $16.3 million in proceeds under the Loan Facility. On August 15, 2022, the PNC Loan Facility and Line of Credit agreements were amended again to reduce the availability under the PNC Line of Credit from $10.0 million to $1.0 million. Effective November 23, 2022, the Company entered into Waiver and Amendment No. 6 (“Waiver and Amendment”) under its PNC Loan Facility as the Company was not in compliance with the Delinquency Ratio financial covenant for the period ending October 31, 2022 and the requirement to provide certain annual financial statements. The Waiver and Amendment waives each event of default and also revised future delinquency percentages and financial statement requirements. On June 30, 2023, the Company entered into Amendment No. 7 (“Amendment 7”) to its PNC Loan Facility which extended the maturity date from April 30, 2024 to June 30, 2026. In connection with Amendment 7, the Company paid additional debt issuance costs of $0.4 million which will be amortized over the revised remaining life of the Loan Facility. In addition, Amendment 7 revised the definition of the minimum funding threshold to limit the threshold multiplier to 65% of the Facility Limit. On January 1, 2024, the Company entered into Amendment No. 8 (“Amendment 8”) to its PNC Loan Facility to modify certain definitions such as “change in control”. In addition, the Amendment 8 also amended the delinquency ratio threshold used to calculate certain debt covenants. The effective date of Amendment 8 was January 16, 2024. On January 16, 2024, the Company also entered into Amendment No. 3 (“Amendment 3”) to its PNC Line of Credit to modify certain definitions such as “change in control”. In addition, the Amendment 3 also amended certain debt covenants, such as EBITDA thresholds. The effective date of Amendment 3 was December 31, 2023. The PNC Loan Facility and PNC Line of Credit nonfinancial covenants include restrictions related to unpermitted property liens and the requirement of audited financial statements. Both agreements also contain several financial covenants, including the following ratios: accounts receivable default, delinquency, dilution, days sales outstanding, leverage, and fixed charge coverage. As of March 31, 2024, the Company was in compliance with all financial and nonfinancial debt covenants as required by both loan agreements.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is a member of American Oncology Network, LLC, which is treated as a partnership for U.S. federal and certain state and local income taxes. As a partnership, American Oncology Network, LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by American Oncology Network, LLC is passed through to and included in the taxable income or loss of its members, including the Company. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to the allocable share of any taxable income of American Oncology Network, LLC. Additionally, other corporate entities within the Company's structure are subject to income taxes. These corporate entities continue to generate losses and continue to maintain a valuation allowance against their net deferred tax assets. The Company’s effective income tax rate was (13.1)% and —% for the three months ended March 31, 2024 and 2023, respectively. The provision for income taxes was $2.9 million and $0 for the three months ended March 31, 2024 and 2023, respectively. The change to the income tax provision for the three months ended March 31, 2024 compared to the income tax provision for the three months ended March 31, 2023 was primarily a result of the transaction closing on September 20, 2023, resulting in a portion of the Company's consolidated pre-tax earnings, which were previously not subject to income taxes, flowing into a taxable corporation included in the Company's post transaction structure. As of December 31, 2023, the Company recognized a deferred tax asset related to its investment in the American Oncology Network, LLC partnership. As of March 31, 2024, the Company updated its valuation allowance assessment based on new factors including its year-to-date loss and forecasted loss at the American Oncology Network, LLC partnership legal entity. Based on its updated valuation allowance assessment, the Company recorded a discrete valuation allowance against its investment in partnership deferred tax asset during the three months ending March 31, 2024. The effective income tax rate for the three months ended March 31, 2024 and 2023 differed from the federal statutory rate primarily due to certain legal entities in the Company's structure being treated as partnerships for income tax purposes and, therefore, a significant portion of its income not being subject to income tax. Additionally, certain corporate entities within the Company's structure continue to maintain a full valuation allowance against their net deferred tax assets.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company currently leases office facilities and equipment for its practices under noncancelable operating and finance lease agreements expiring on various dates through 2038. Certain of the leases contain renewal options which are exercisable at the Company’s discretion. These renewal options are considered in determining the lease term if it is reasonably certain that the Company will exercise such options. Additionally, the Company leases certain other office and medical equipment under month-to-month lease agreements. Right-of-use assets and lease liabilities consist of the following at March 31, 2024 and December 31, 2023:
The components of lease costs recognized in the condensed consolidated statements of operations and comprehensive loss consist of the following for the three month periods ended March 31, 2024 and 2023 and are included in selling, general, and administrative expenses unless otherwise noted:
The following table reconciles the undiscounted cash flows expected to be paid in each of the next five years and thereafter recorded in the condensed consolidated balance sheets for operating and finance leases as of March 31, 2024:
The weighted-average remaining lease term as of March 31, 2024 and December 31, 2023 was 4.54 years and 6.93 years for operating leases and 6.84 years and 4.76 years for finance leases, respectively. The weighted-average discount rate as of March 31, 2024 and December 31, 2023 was 6.33% and 6.64% for operating leases and 6.71% and 6.30% for finance leases, respectively. The cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2024 and 2023 is as follows:
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Leases | Leases The Company currently leases office facilities and equipment for its practices under noncancelable operating and finance lease agreements expiring on various dates through 2038. Certain of the leases contain renewal options which are exercisable at the Company’s discretion. These renewal options are considered in determining the lease term if it is reasonably certain that the Company will exercise such options. Additionally, the Company leases certain other office and medical equipment under month-to-month lease agreements. Right-of-use assets and lease liabilities consist of the following at March 31, 2024 and December 31, 2023:
The components of lease costs recognized in the condensed consolidated statements of operations and comprehensive loss consist of the following for the three month periods ended March 31, 2024 and 2023 and are included in selling, general, and administrative expenses unless otherwise noted:
The following table reconciles the undiscounted cash flows expected to be paid in each of the next five years and thereafter recorded in the condensed consolidated balance sheets for operating and finance leases as of March 31, 2024:
The weighted-average remaining lease term as of March 31, 2024 and December 31, 2023 was 4.54 years and 6.93 years for operating leases and 6.84 years and 4.76 years for finance leases, respectively. The weighted-average discount rate as of March 31, 2024 and December 31, 2023 was 6.33% and 6.64% for operating leases and 6.71% and 6.30% for finance leases, respectively. The cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2024 and 2023 is as follows:
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Related Parties |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Parties | Related Parties Transactions Notes Receivable The Company enters into promissory notes with physicians of the Company. The notes receivable balances are satisfied through cash payments or settlements through the physicians’ compensation as part of their employee agreement. The notes receivable are amortized over a 60-month period as a reduction of compensation. The notes bear interest at the Company’s incremental borrowing rate (7.09% at March 31, 2024 and 7.18% at December 31, 2023, respectively).
Leases The Company has operating leases for thirteen of the office facilities owned by employees of the Company. Total cash was approximately $0.7 million and $0.7 million paid for leases to related parties for the three months ended March 31, 2024 and 2023, respectively. Inventory Purchases/Concentration Risk The Company purchases the majority of pharmaceuticals inventory from a subsidiary under common control of a Legacy AON Shareholder. During the three months ended March 31, 2024 and 2023, the Company purchased from the related party approximately $311.0 million and $243.0 million, respectively. These purchases were approximately 88% and 87% as a percentage of cost of revenue for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024 and December 31, 2023, the Company had $183.0 million and $102.1 million, respectively, included in accounts payable for invoices from the related party, representing 97% of accounts payable at each period-end.
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Equity-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Compensation | quity-Based Compensation The Company maintains a single equity incentive plan, the “2023 Incentive Equity Plan”, which was adopted by the Board of Directors and approved by stockholders in connection with the Business Combination. A total of 5,300,000 shares were authorized under the 2023 Incentive Equity Plan. The number of shares of common stock available for issuance under the 2023 Incentive Equity Plan will be increased annually on the first day of each fiscal year during the term of the 2023 Incentive Equity Plan by an amount equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s board of directors. At March 31, 2024, 2,044,394 shares were available for grant under the 2023 Incentive Equity Plan. The purpose of the 2023 Incentive Equity Plan is to attract and retain personnel for positions with the Company, to provide additional incentive to employees, directors, and consultants, and to promote the success of the Company’s business. The Plan permits the grant of Incentive Stock Options (“ISO”) to any ISO Employee and the grant of Non statutory stock options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Performance Awards to any Service Provider. Restricted Stock Units The Company granted 3,759,459 Restricted Stock Units (“RSUs”) to employees during the three months ended March 31, 2024. A summary of the RSU activity during the three month period ending March 31, 2024 is as follows:
The Company recognized $13.3 million in stock-based compensation expense related to outstanding RSUs during the three months ended March 31, 2024. As of March 31, 2024, there was approximately $8.2 million of total unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted-average period of approximately 1.7 years. The fair value of the RSUs is determined on the date of the grant based on the market price of the Company’s common stock on that date. Each RSU represents the right to receive one share of the Company’s common stock, upon vesting. Portions of the RSUs granted vest immediately with others vesting over to two years following the grant date, subject to the individual’s continued service to the Company through the applicable vesting date, and are subject to the terms and conditions on the Company’s form of RSU agreement under the 2023 Incentive Equity Plan.
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Equity |
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Equity | Equity Prior Period Presentation For periods prior to the Reverse Recapitalization, AON LLC had equity and stock-based compensation described below authorized, issued and outstanding. As discussed in Note 1, upon the Closing of the Business Combination, Legacy AON Shareholders received Class A Common Stock, Class B Common Stock, or Class B Prefunded Warrants and AON LLC reclassified their existing Class A, Class A-1, and Class B Units into AON LLC Common Units, pursuant to the terms of the Business Combination Agreement. The Company recasted Historical AON LLC Equity outstanding for the periods prior to the Reverse Recapitalization, equal to the Per Company Unit Exchange Ratio, pursuant to the Business Combination, that was applied to the Class A, Class A-1, and Class B Units. The historical AON LLC units disclosed in this note give effect to the conversion for all periods presented, as follows. Class A Units AON LLC had authorized 19,495,376 units of Class A Units, of which 19,495,376 units were issued and were outstanding as of December 31, 2022. Class A-1 Units AON LLC had authorized 3,000,245 units of Class A-1 Units, of which 1,842,520 units were issued and were outstanding as of December 31, 2022. Class B Units (Profit Interest) The Class B units were issued through the 2017 Profits Interest Plan adopted by the Company in October 2017. The Class B Units represented a non-voting equity interest in AON LLC that entitled the holder to appreciation in the equity value of AON LLC arising after the date of grant and after such time as an applicable hurdle amount is met. AON LLC recognized the cost of services received in exchange for Class B Units based on the grant-date fair value. That cost was recognized over the period during which the service provider is required to provide service in exchange for the award over the requisite service period or based on performance. AON LLC used the Black-Scholes-Merton pricing model to estimate the fair value of profits interest unit awards. On an as converted basis, as of December 31, 2022, AON LLC issued 5,614,176 Class B Units, of which 4,703,628 were vested and outstanding; the remaining 910,548 of Class B units vested upon consummation of the Business Combination. The following table summarizes the changes to AON LLC’s Class A, Class A-1, and Class B Units for the three months ended March 31, 2023.
Class B-1 Units In June and July of 2023, the Company granted a total of 415 AON LLC Class B-1 Units to certain employees under the 2017 Profits Interest Plan (the “Plan”). Upon the closing of the Business Combination, the vested Class B-1 Units were reclassified to AON LLC Common Units and exchanged for newly issued shares of Class A Common Stock equal to the Per Company Unit Exchange Ratio, pursuant to the Business Combination Agreement, which resulted in the issuance of 1,047,343 shares of New AON Class A Common Stock. Mezzanine Equity Class C Units As described in Note 1, the AON LLC Class C Units were converted into AON LLC Series A Preferred Units as of the Closing Date. Concurrently, New AON issued a number of shares of New AON Series A Preferred Stock equal to the number of AON LLC Series A Preferred Units held by the AON Class C Preferred Investor to AEA Growth Management LP, the parent of AON Class C Preferred Investor (“AEA Growth”) in exchange for all the shares of common stock held by AEA Growth in the AON Class C Preferred Investor. Promptly after the First Step, the AON Class C Preferred Investor merged with and into New AON whereby the separate existence of the AON Class C Preferred Investor ceased and New AON held all the AON LLC Series A Preferred Units. On an as converted basis, as of September 20, 2023, 6,651,610 Series A Preferred Stock were issued to AEA Growth Management LP. The AON LLC Class C Units were contingently redeemable convertible preferred units and classified as mezzanine equity on the condensed consolidated balance sheet as of June 30, 2023 because the units were redeemable five years from the issuance date, at the option of the holder. As of June 30, 2023, the AON LLC Class C Units were recorded at their initial carrying value, net of offering costs. The Class C Units were not being accreted to redemption value, as the redemption was not probable due to the removal of the redemption right pursuant to the Business Combination. See discussion below. The Class C Units had materially the same rights as the Series A Preferred Stock issued by the Company to AEA Growth Management LP, the parent of the AON Class C Preferred Investor, with the exception of the “AON LLC Class C Unit Redemption Right” and the “Class C Option to Purchase Additional Shares”, discussed below. Further, the Class C Units did not contain a mandatory conversion feature that allowed AON LLC to force the Class C Investor to convert the Class C Units into another equity unit in AON LLC and the Class C Units did not have a one time conversion price adjustment. Class C Unit Redemption Right After the fifth anniversary of the Effective Date (June 7, 2028), the holders of a majority of the Class C Units had the right to cause the Company to redeem all of the Class C Units. The redemption price per Class C Unit was equal to the greater of (i) the Class C Liquidation Preference and (ii) the Fair Market Value of a Class C Unit (the “Class C Redemption Price”). The Class C Liquidation Preference is defined as an amount equal to the sum of (a) the Class C Preferred Return of such Class C Member and (b) the amount of such Class C Member’s Net Invested Capital Contributions of $65.0 million. The Class C Unit Preferred Return is defined as the cumulative, semiannually-compounded return of 8% per annum based on the original Net Invested Capital Contributions of $65.0 million. The Class C Unit Redemption Right was removed as of the Closing of the Business Combination. Series A Preferred Stock (Mezzanine Equity) New AON Series A Preferred Stock is redeemable for cash or the value of the property, rights or securities to be paid or distributed in the event of a Deemed Liquidation Event (which outside of the Company’s control). As a result, the Company has determined that the New AON Series A Preferred Stock should be classified as mezzanine equity. At the closing of the Business Combination, the Company exchanged existing AON LLC Class C Units for Series A Preferred Stock in the Company. Based on the qualitative changes to the instrument, this exchange is considered an extinguishment for accounting purposes, with the Company recording a deemed dividend of $2.1 million to account for the difference between the carrying value of the Class C Units and the fair value of the Series A Preferred Stock at the transaction date. This amount is reflected in the December 31, 2023 condensed consolidated statements of mezzanine and stockholders’ equity as part of the reverse recapitalization, net. See further discussion on the PIK Dividend discussed below. The Series A Preferred Stock are not being accreted to redemption value, as the Series A Preferred Stock are not redeemable, nor are they probable of becoming redeemable. Dividends The Series A Preferred Stock accrue dividends at a cumulative, semiannually-compounded return of 8% per annum based on the original Net Invested Capital Contributions from the Class C Units of $65.0 million. These dividends may be paid in cash or accumulate into the Accrued Value at the option of New AON. The accrual shall be calculated on June 30 and December 31 and with respect to the semiannually-compounded return, no interest is required to be paid on any present or future Series A Preferred Stock accrued dividends. The Series A Preferred Stock also participate in distributions with the Class A Common stockholders. On September 20, 2023, the Company issued 6,651,610 Series A Preferred Stock to AEA Growth Management LP. The number of Series A Preferred Stock shares issued at the Closing of the Business Combination was equal to the aggregate Class C Liquidation Preference pursuant to the Business Combination Agreement. As a result, the issuance of the Series A Preferred Stock effectively included an in-kind payout (“PIK”) of the accrued dividend since the calculation of the amount issued was based on the Class C Liquidation Preference. As of the Closing, the Company recorded a dividend of 151,610 Series A Preferred Stock PIK shares with respect to the accrued dividends on the Series A Preferred Stock (the "PIK Dividend") in the December 31, 2023 condensed consolidated statements of mezzanine and stockholders’ equity. Voting The holders of the Preferred Stock are entitled to elect and appoint one of the directors (“Series A Director”) to the Board of Directors. All other directors are appointed by the Class A and Class B Common stockholders. There are no restrictions on which matters the Series A Preferred stockholders are entitled to vote. The Series A Preferred stockholders are entitled to the number of votes equal to the number of shares of Common Stock into which the Series A Preferred Stock would be convertible on the record date of the vote. Conversion Rights The Series A Preferred Stock is convertible, at the option of the holder, at any time, and without the payment of additional consideration by the holder, into such number of fully-paid Class A Common Stock as is determined by dividing the Accrued Value by the Conversion Price in effect at the time of conversion (“Conversion Ratio”). The Accrued Value is the Original Issue Price (which is $10.00 per share of Preferred Stock, as adjusted for any stock split, stock dividend, combination, or other recapitalization) plus any unpaid dividends, compounded semi-annually. The Conversion Price is initially $10.00 per Preferred Share subject to adjustment for dilutive issuances of additional shares, dividends to common stockholders, stock splits, mergers, and a five-year anniversary special adjustment based on the volume weighted average price of the common stock. These dividends may be paid in cash or accumulate into the Accrued Value, at the option of New AON, on June 30 and December 31 of each year. The Conversion Rights shall terminate at the close of business on the day prior to the date of a Change of Control. If at any time on or after the 30th day after the five-year anniversary of the issue date, any of the Series A Preferred Stock remain outstanding and the 30-Day VWAP of the Common Stock is less than $10.00 (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification), then the Conversion Price shall be adjusted to the greater of (x) the 30-Day VWAP on such date of determination and (y) $5.00 (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification). New AON also has the right on or after the third-year anniversary of the date of issuance to cause all (but not less than all) of the outstanding shares of Series A Preferred Stock to be converted into shares of Class A Common Stock for each share of Series A Preferred Stock at the Conversion Ratio detailed above. The Company may only convert shares of Series A Preferred Stock into shares of Common Stock if the 30-Day VWAP of the Common Stock immediately prior to the Company Conversion Date is greater than $16.00 (as adjusted for any stock split, stock dividend, combination, or other recapitalization). Liquidation Preferences In the event of voluntary or involuntary liquidation, dissolution or winding up of the Company or an Initial Public Offering (IPO) or Exit Event, the Series A Preferred Stock have preferential liquidation rights. If a Deemed Liquidation Event were to occur, each Series A Preferred stockholder is entitled to be paid out of the assets of the Company available for distribution, equal to the greater of the following: (i) The Original Issue Price of $10 per Series A Preferred Stock multiplied by the Applicable Percentage plus any Accrued Dividends on such share of Series A Preferred Stock; or (ii) Such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock immediately prior to such Deemed Liquidation Event. The Series A Preferred Stock Applicable Percentage is defined as a percentage equal to (a) one hundred twenty-five percent (125%) if an Exit Event, dissolution, liquidation, or winding-up occurs prior to June 7, 2024, (b) one hundred twenty percent (120%) if an Exit Event, dissolution, liquidation, or winding up occurs after June 7, 2024, but prior to June 7, 2025, (c) one hundred fifteen percent (115%) if an Exit Event, dissolution, liquidation, or winding-up occurs after June 7, 2025, but prior to June 7, 2026, (d) one hundred ten percent (110%) if an Exit Event, dissolution, liquidation, or winding up occurs after June 7, 2026, but prior to June 7, 2027, (e) one hundred five percent (105%) if an Exit Event, dissolution, liquidation, or winding-up occurs after June 7, 2027, but prior to June 7, 2028, (f) one hundred percent (100%) if an Exit Event, dissolution, liquidation, or winding-up occurs after June 7, 2028. Distributions to Class A and Class A-1 Members On March 4, 2020, the AON LLC entered into the Second Amended and Restated Limited Liability Agreement (“Second Operating Agreement”) which established another class of equity, Class A-1 Units. The Second Operating Agreement provided, among other things, that the Class A and A-1 Units would receive a cumulative, annually-compounded, preferred return of 8.0% and 4.0%, respectively, on capital contributions when and if distributions are declared by the Board of the Company. Prior to the issuance of the Class C Units on June 7, 2023 as discussed above, the Class A and A-1 unitholders were paid a cash distribution of $4.0 million and $4.1 million, respectively, representing the cumulative accrued preferred return to June 7, 2023. On June 7, 2023, in connection with the issuance of the Class C Units, AON LLC entered into the Third Amended and Restated Limited Liability Agreement (“Third Operating Agreement”) which, among other things, eliminated any provisions for future preferred returns on Class A and A-1 units.
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Net Loss Per Share |
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Net Loss Per Share | Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share of Class A Common Stock and represents the period from January 1, 2024 to March 31, 2024, the period where the Company had Class A and Class B common stock outstanding. Class B Common Stock does not have economic rights in AON Inc., including rights to dividends or distributions upon liquidation, and as a result, is not considered a participating security for basic and diluted loss per share. As such, basic and diluted loss per share of Class B Common Stock has not been presented. Series A Preferred Stock are considered participating securities for basic and diluted loss per share, but do not participate in losses. As such, basic and diluted loss per share is computed using the two-class method. For additional information, see Notes 1 and 2. Basic loss per share is based on the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted loss per share is based on the weighted-average number of shares of Class A Common Stock used for the basic loss per share calculation, adjusted for the dilutive effect of Public and Private Warrants, Restricted Stock Units, and Sponsor Earnouts, if any, using the “treasury stock” method and the convertible Series A Preferred Stock, Class B Common Stock, and Class B Prefunded Warrants, if any, using the “if-converted” method. Net loss for diluted loss per share is adjusted for the Company’s share of AON LLC’s consolidated net loss, net of AON Inc. taxes, after giving effect to Class B Common Stock and Class B Prefunded Warrants that are exchanged into potential shares of Class A Common Stock, Public and Private Warrants that are liability classified, and Series A Preferred Stock that accrue dividends, to the extent it is dilutive.
The following table details the securities that have been excluded from the calculation of weighted-average shares for diluted loss per share for the period presented as they were anti-dilutive. Note that the Sponsor Earnouts are excluded from the calculation of weighted-average shares for diluted loss per share as the contingency had not been met as of the period end.
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Redeemable Noncontrolling Interest |
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Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest Legacy AON Shareholders own 26,726,243 AON LLC Common Units, equal to a 61.1% of the economic interest in AON LLC. Legacy AON Shareholders also own 23,725,998 shares of Class B Common Stock and 3,000,245 Class B Prefunded Warrants, which, together with the AON LLC Common Units, may be redeemed at the option of the Legacy AON Shareholder on a one-for-one basis for shares of Class A Common Stock or the cash equivalent thereof (based on the market price of the shares of Class A Common Stock at the time of redemption) as determined by New AON. If New AON elects the redemption to be settled in cash, the cash used to settle the redemption must be funded through a private or public offering of Class A Common Stock no later than (10) business days after the redemption notice date. Upon the redemption of the AON LLC Common Units and Class B Common Stock for shares of Class A Common Stock or the equivalent thereof, all redeemed shares of Class B Common Stock will be cancelled. The redemption value is determined based on a five-day volume weighted average price (”VWAP”) of the Class A common shares, subject to customary conversion rate adjustments for share splits, share dividends, and similar events affecting Class A Common Stock. When applying SEC guidance concerning mezzanine classification, the Company understands that due to the NCI holders having control of the Board, if there is a sequence of remotely possible events that could trigger a redemption, this requires the instrument to be classified as temporary equity, without any regard to probability. Accordingly, though the redemption would require such a remotely possible sequence of events, and such remote sequence of events would also require, in management’s view, the Company to take extraordinary actions in order to allow such sequence of events to be remotely possible, the noncontrolling interest is currently classified as temporary equity. In the event that the Legacy AON Shareholders own less than 50% of the outstanding economic interest in AON LLC Common Units due to future redemptions, the noncontrolling interest will be presented as permanent equity. The redeemable noncontrolling interest is recognized at the greater of (1) its initial fair value plus accumulated earnings/(losses) associated with the noncontrolling interest or (2) the redemption value as of the balance sheet date. At March 31, 2024, the redeemable noncontrolling interest was recorded based on its redemption value of $157.7 million which exceeded its carrying value by $15.6 million. This measurement adjustment decreased additional paid in capital by $9.7 million and retained deficit by $5.9 million. At the end of each reporting period, AON LLC equity attributable to AON Inc. and the Legacy AON Shareholders is rebalanced to reflect AON Inc.’s and the Legacy AON Shareholder’s ownership in AON LLC. The following table summarizes the economic ownership of AON LLC, for the period beginning December 31, 2023 and ending March 31, 2024.
(1) As discussed in Note 13, Series A Preferred Stock are considered participating securities for basic and diluted loss per share, but do not participate in losses. As a result, the consolidated net loss of AON LLC, during the period of January 1, 2024 through March 31, 2024, were allocated to the NCI to reflect the absorption of the Legacy AON Shareholders to a portion of the consolidated net loss of AON LLC. Net losses were not attributed to Series A Preferred Stock.
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Basis of Presentation and Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. Management believes the unaudited condensed consolidated financial statements for the interim periods presented contain all necessary adjustments, of a normal recurring nature, to state fairly, in all material respects, the Company’s financial position, results of operations and cash flows for the interim periods presented. These unaudited condensed consolidated financial statements were prepared on the same basis as and should be read in conjunction with such audited consolidated financial statements and related notes thereto of AON Inc. and its wholly-owned subsidiaries, included in the Annual Report on Form 10-K, dated and filed on March 28, 2024 with the SEC (the “Annual Report 2023"). Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results the Company expects for the entire year. For the three months ended March 31, 2024, these unaudited condensed consolidated financial statements reflect the consolidated results of operations, comprehensive loss, cash flows and changes in equity of AON Inc. and its wholly-owned subsidiaries. The condensed consolidated balance sheet at March 31, 2024 presents the financial condition of AON Inc. and its consolidated subsidiaries. For the three months ended March 31, 2023, these unaudited condensed consolidated financial statements present the consolidated results of operations, comprehensive loss, cash flows and changes in equity of AON LLC. The condensed consolidated balance sheet as of December 31, 2023 presents the financial condition of AON Inc. and its consolidated subsidiaries after the Reverse Recapitalization. All intercompany balances and transactions of AON LLC have been eliminated. In accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, the historical equity of AON LLC has been recasted in all periods up to the Closing Date, to reflect the number of shares of New AON’s Class A Common Stock and Class B Common Stock issued to Legacy AON Shareholders in connection with the Reverse Recapitalization. The Company recasted the units outstanding related to the historical AON LLC Class A, Class A-1, and Class B units prior to the Reverse Recapitalization (“Historical AON LLC Equity”) as common equity of New AON, equal to the Per Company Class Unit Exchange Ratio, pursuant to the Business Combination Agreement. The Per Company Unit Exchange Ratio at which AON LLC Class A units and Class A-1 units were reclassified is equal to 2,524 AON Common Units. The Per Company Unit Exchange Ratio at which AON LLC Class B units were reclassified varied depending on participation threshold, and is equal to 2,524, 2,453, or 1,976, AON Common Units. The Per Company Unit Exchange Ratio at which Class C units were reclassified is equal to 2,705 AON LLC Series A Preferred Units. The condensed consolidated financial statements and related notes thereto give effect to the conversion for all periods presented, without any change to par value or per unit amounts. The condensed consolidated financial statements do not necessarily represent the capital structure of New AON had the Reverse Recapitalization occurred in prior periods. The Company has not made retroactive adjustments related to the historical book values of Historical AON LLC Equity as the adjustments were considered immaterial. For the three months ended March 31, 2024, $7.8 million of the consolidated net loss of AON LLC were attributable to the Class A Common Stockholders, and reflects the Class A Common Stockholders’ absorption of 23.0% of the consolidated net loss of AON LLC. For the three months ended March 31, 2024, $17.2 million of the consolidated net losses of AON LLC were attributable to noncontrolling interest, and reflects the Legacy AON Stockholders’ absorption of 77.0% of the consolidated net losses of AON LLC. For the three months ended March 31, 2023, $1.5 million of the consolidated net losses of AON LLC were attributable to the Legacy AON Stockholders, to reflect their absorption of 100% of the consolidated net losses of AON LLC pertaining to the days prior to the Reverse Recapitalization.
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Principles of Consolidation | Principles of Consolidation For the period of January 1, 2024 through March 31, 2024, the condensed consolidated financial statements include the accounts of the Company, American Oncology Network, LLC (“AON LLC”), and its wholly owned subsidiary American Oncology Management Company, LLC (“AOMC”), and its consolidated variable interest entities (“VIEs”) American Oncology Partners, P.A. (“AON Partners”), American Oncology Partners of Maryland, P.A. (“Partners of Maryland”), AON Central Services, LLC (“AON Central Services”), and Meaningful Insights Biotech Analytics, LLC (“MIBA”). All intercompany accounts and transactions between the entities have been eliminated in consolidation. The accounting treatment of the Business Combination was a Reverse Recapitalization. For the periods prior to the Reverse Recapitalization, the consolidated financial statements of the Company comprise the accounts of AON LLC and its wholly-owned subsidiaries. All intercompany accounts and transactions among AON LLC and its consolidated subsidiaries were eliminated. The Company accounts for American Oncology Network, LLC, AON Partners, Partners of Maryland, AON Central Services, and MIBA in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidations. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a VIE. A VIE is broadly defined as an entity that has any of the following three characteristics: (i) the equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (ii) substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights; or (iii) the equity investors as a group lack any of the following, the power through voting or similar rights to direct the activities of the entity that most significantly impact the entity’s economic performance, the obligation to absorb the expected losses of the entity, or the right to receive the expected residual returns of the entity. The Company consolidates a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively, if any. AON LLC has contractual relationships with AON Partners, Partners of Maryland and AON Central Services and the physician owners through management service agreements (“MSAs”) and other contractual agreements to provide all practice management services outside of medical services provided by the physicians. In addition, despite not being required by the contractual relationships, AON LLC regularly provides funding to support AON Partners and Partners of Maryland’s operations and acquisitions of physician practices. AON Central Services was formed July 15, 2022 and, effective January 1, 2023, entered into an agreement with AOMC to provide qualified non-clinical and non-medical employees to AOMC to support the operation of the physician practices. MIBA was established during the first quarter of 2023 for the purpose of developing intellectual property to synergize the collection, de-identification, and dissemination of the Company’s patient data for sale to external parties for research, development, and clinical decisions. In May 2023, the Company contributed $0.2 million for a 56% interest in the equity of MIBA. As of March 31, 2024, MIBA had no significant operating activity. The Company concluded that AON LLC had a controlling financial interest in MIBA and has consolidated the entity at March 31, 2024 and recorded the noncontrolling interest in equity. The Company has concluded that AON Partners, Partners of Maryland, AON Central Services, and MIBA are all VIEs in which AON LLC has the characteristics of a controlling financial interest and is deemed to be the primary beneficiary. The variable interest subjects AON LLC to all potential losses in the entities and, therefore, requires AON LLC, and in turn AON Inc., to consolidate the results of AON Partners, Partners of Maryland, AON Central Services, and MIBA in its condensed consolidated financial statements.
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Accounting Estimates and Assumptions | Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
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Segments | Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (the “CODM”). The Company’s CODM is its chief executive officer who reviews financial information together with certain operating metrics principally to make decisions about how to allocate resources and to measure the Company’s performance. The Company has one operating segment and one reportable segment that are structured around the organizational management of oncology practice operations. All revenue and assets are in the United States.
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Revenue Recognition | Revenue Recognition Revenue is recognized under Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (“Topic 606”). The Company determines the transaction price based upon standard charges for goods and services with anticipated consideration due from patients, third-party payors (including health insurers and government agencies) and others. The Company’s revenue is primarily derived from patient service revenues, which encompass oncology services provided during patient visits and shipments of pharmacy prescriptions. Performance obligations for the Company’s services provided to patients and most procedures, are satisfied over the time of visit which is the same day services are performed. Performance obligations relating to pharmacy revenue are considered fully satisfied at a point in time upon the customer receiving delivery of the prescription. Accordingly, the Company does not anticipate a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and any such revenue recognized during the three month periods ended March 31, 2024 and 2023 was immaterial. Additionally, the Company does not expect to recognize material revenue in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2024 and December 31, 2023. Approximately $246.1 million and $214.3 million and of the Company’s revenues are generated from services performed during patient visits with the remainder primarily generated from shipments of pharmacy prescriptions for the three month periods ended March 31, 2024 and 2023, respectively. As services are performed and prescriptions are shipped, timely billing occurs for services rendered and prescriptions shipped less discounts provided to uninsured patients and contractual adjustments to third-party payors based upon prospectively determined rates and discounted charges. Payment is requested at the time of service for self-paying patients and for patients covered by third-party payors that are responsible for paying deductibles and coinsurance. The Company monitors revenue and receivables to prepare estimated contractual allowances for the anticipated differences between billed and reimbursed amounts. Payments from third-party payors and Government programs including Medicare and Medicaid may be subject to audit and other retrospective adjustments. Such amounts are considered on an estimated basis when net patient revenue is recorded and are adjusted as final adjustments are determined. For the three month periods ended March 31, 2024 and 2023, such resulting historic adjustments have been immaterial to the condensed consolidated financial statements. In assessing who is the principal in providing patient services and pharmacy prescriptions, the Company considered who controls the provision of services and prescriptions. The Company has determined they are acting as a principal in these relationships. In April 2022, the Company entered into a long-term arrangement to sponsor and manage a clinical trial. The Company subsequently contracted with a third-party to provide the clinical research services and is the principal in this arrangement. The performance of clinical research services are considered a single performance obligation because the Company provides a highly-integrated service. Revenue is recognized for the single performance obligation over time due to the Company’s right to payment for work performed to date. The contract provides for invoices based on predetermined milestones. The Company uses the cost-to-cost measure of progress for the Company’s contract because it best depicts the transfer of control to the customer as the performance obligation is fulfilled. For this method, the Company compares the contract costs incurred to date to the estimated total contract costs through completion. As part of the client proposal and contract negotiation process, the Company develops a detailed project budget for the direct costs and reimbursable costs based on the scope of the work, the complexity of the study, the geographical location involved and the Company’s historical experience. The estimated total contract costs at the project level are reviewed and revised periodically throughout the life of the contract, with adjustments to revenue resulting from such revisions being recorded on a cumulative basis in the period in which the revisions are identified. Contract costs consist primarily of direct labor and other reimbursable project-related costs such as travel, third-party vendor costs and investigator fees. The Company establishes pricing based on the Company’s internal pricing guidelines, discount agreements, if any, and negotiations with the client. The transaction price is the contractually defined amount. Revenue related to the clinical trial, which is included within other revenue, was $0.5 million and $0 million for the three months ended March 31, 2024 and 2023, respectively. The Company has a system and estimation process for recording Medicare net patient service revenue and estimated recoupments as it relates to value-based care (“VBC”) revenue included in patient service revenue in the condensed consolidated statements of operations and comprehensive loss. The Company’s VBC revenue is primarily generated through its participation in the CMS Oncology Care Model (“OCM”) which is an episode-based payment model to promote high-quality cancer care. Participants enter six-month episode periods, and the Company bills a monthly fee during the six-month period based on a fixed rate per participant per month and the total number of participants. Certain quality and compliance metrics are tracked as part of the program and submitted to CMS at the end of the episode period which may result in recoupment of funds. The Company estimates the recoupment amount by developing a recoupment percentage for each period based on historical known recoupment from CMS and applies the recoupment percentage against total fees for the period. Based on the estimate, the Company accrues a liability representing the expected final recoupments based on historical settlement trends.
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Short-term Marketable Securities | Short-term Marketable Securities Investments in marketable securities consist of corporate bonds and U.S. Treasury securities. Management determines the appropriate classification of investments at the time of purchase and reevaluates such determination at each balance sheet date. Marketable securities are classified as available-for-sale and are carried at fair value in the consolidated balance sheets. The marketable securities are classified as short-term based on management’s intent to convert such securities within one year and the ability to convert them within two to three days. Certain of our available-for-sale securities are debt securities. For an available-for-sale debt security with an amortized cost that exceeds its fair value, the Company first determines if it intends to sell or will more-likely-than-not be required to sell the security before the expected recovery of its amortized cost. If it intends to sell or will more-likely-than-not be required to sell the security, then the Company recognizes the impairment as a credit loss in the condensed consolidated statements of operations and comprehensive loss by writing down the security’s amortized cost to its fair value. If it does not intend to sell or it is not more-likely-than-not that it will be required to sell the security before the expected recovery of its amortized cost, the Company recognizes the portion of the impairment that is due to a credit loss, if any, in the condensed consolidated statements of operations and comprehensive loss through an allowance. The portion of the impairment that is due to factors other than a credit loss is recognized in other comprehensive income (loss) in the condensed consolidated statements of operations and comprehensive loss as an unrealized loss.
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Equity Investment in Affiliate | Equity Investment in Affiliate In January 2023, the Company contributed noncash consideration, with a fair value of approximately $2.3 million, in return for a 49% equity interest in OCP Management Arizona, LLP. Investments in entities over which the Company has the ability to exercise significant influence but does not control the entity are accounted for using the equity method. Equity method investments are included with other assets in the condensed consolidated balance sheets. The carrying amount of the investment is adjusted to reflect the Company’s proportionate share of the net earnings or losses and reduced by any dividends received. The Company’s share of income or loss related to this investment is reported as an equity in loss of affiliate in the condensed consolidated statements of operations and comprehensive loss.
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Noncontrolling Interests | Noncontrolling Interests The Company consolidates the results of entities in which it has a controlling financial interest. Refer to Note 15 for additional considerations and presentation for noncontrolling interest.
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Mezzanine Equity and Treasury Stock | Mezzanine Equity New AON Series A Preferred Stock is redeemable for cash or the value of the property, rights or securities to be paid or distributed in the event of a Deemed Liquidation Event (which is outside of the Company’s control). As a result, Management has determined that the New AON Series A Preferred Stock should be classified as mezzanine equity. As of March 31, 2024, the Preferred Stock are recorded at their initial carrying value, net of offering costs of $0.8 million. The Series A Preferred Stock are not being accreted to redemption value, as the redemption is not probable. The Series A Preferred Stock are classified outside of members’ equity on the consolidated balance sheets. Refer to Note 14 for mezzanine equity presentation considerations for redeemable noncontrolling interest. Treasury Stock We account for treasury stock purchased under the cost method and include treasury stock as a component of accumulated paid in capital. Treasury stock purchased with intent to retire (whether or not the retirement is actually accomplished) is charged to common stock. The company repurchased 14,729 shares of class A common stock at the spot rate as of each transaction date for a total cost of less than $0.1 million for the year ended December 31, 2023. For the three months ended March 31, 2024 the Company repurchased an additional 16,441 shares of class A common stock at the spot rate as of each transaction date for a total cost of less than $0.1 million. To date, the Company has repurchased a total of 31,170 shares.
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Equity-Based Compensation | Equity-Based Compensation The Company issues stock-based awards to employees and directors in the form of stock options and restricted stock units. The Company measures and recognizes compensation expense for its stock-based awards granted to its employees and directors based on the estimated grant date fair value in accordance with ASC 718, Compensation-Stock Compensation, and determines the fair value of restricted stock units based on the fair value of its common stock. The Company measures all share-based options granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. The Company records the expense for awards with service-based conditions using the straight-line method over the requisite service period, net of any actual forfeitures. The Company classifies share-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
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Business Combinations | Business Combinations The Company evaluates acquired practices in accordance with ASU 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business. This standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Because substantially all of the value of each acquired practice did not relate to a similar group of assets and as each acquired practice contained both inputs and processes necessary to provide economic benefits to the Company, it was determined that each acquisition represents a business combination. Therefore, the transactions have been accounted for using the acquisition method of accounting, which requires, with limited exceptions, that assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Any excess of the consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. Transaction costs related to business combinations are expensed in the period in which they are incurred.
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Offering Costs | Offering Costs The Company defers specific incremental costs directly attributable to proposed offerings of securities. These costs consist of legal, accounting, and other similar expenses incurred through the balance sheet date that are directly related to a potential offering. If the offering is completed, these costs will be charged against the gross proceeds of the offering. These offering costs will be allocated to the separable financial instruments issued in the transaction on a relative fair value basis of the securities issued, compared to total proceeds received. Offering costs associated with any instruments classified as liabilities will be expensed as incurred, presented as non-operating expenses in the condensed consolidated statement of operations and comprehensive loss.
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Professional Liability | Professional Liability The Company maintains insurance policies for exposure to professional malpractice insurance risk. The limits of malpractice insurance provide each physician/advanced practice provider with a dedicated $1.0 million limit per claim and a $3.0 million limit in the aggregate per policy period – on a first dollar basis, as no deductible applies. The policy further then extends coverage to the Company, by providing a $2.0 million limit per claim and a $4.0 million limit in the aggregate per policy period - on a first dollar basis, additionally, as no deductible applies. Reserves are established for estimates of the loss that will ultimately be incurred on claims that have been reported but not paid and claims that have been incurred but not reported. These reserves are established based on consultation with a third-party actuary. The actuarial valuations consider a number of factors, including historical claims payment patterns, changes in case reserves and the assumed rate of increase in healthcare costs. Management believes the use of actuarial methods to account for these reserves provides a consistent and effective way to measure these subjective accruals. However, due to the sensitive nature of this estimation technique, recorded reserves could differ from ultimate costs related to these claims due to changes in claims reporting, claims payment and settlement practices and differences in assumed future cost increases. Accrued unpaid claims and expenses that are expected to be paid within the next twelve months are classified as current liabilities and included in accrued other. All other accrued unpaid claims and expenses are classified as long-term liabilities and included in other long-term liabilities. Insurance recoveries associated with the unpaid claims are classified as long-term assets included in other assets.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities being measured within the fair value hierarchy. Our financial instruments include cash, short-term marketable securities, accounts receivable, notes receivable, accounts payable, accrued expenses, long-term debt and contractual agreements that resulted in derivative liabilities. Our nonfinancial assets such as property and equipment are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that impairment may exist. The carrying amounts of cash, accounts receivable, accounts payable, notes receivable, and accrued expenses approximate their fair value because of the short-term maturity and highly liquid nature of these instruments. We determine the fair value of long-term debt and marketable securities based on various factors including maturity schedules and current market rates.
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Warrant Liabilities | Warrant Liabilities Upon Closing of the Business Combination, on September 20, 2023, the Company evaluated the Public Warrants and Private Placement Warrants and the Class B Prefunded Warrants, collectively referred to herein as “Warrants”, in accordance with ASC 815-40, “Derivatives and Hedging —- Contracts in Entity’s Own Equity”, and concluded that a provision in the warrant agreements related to potential net cash settlement of the warrants upon an exchange or tender offer that may not result in a change in control of the entity precludes the warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants are recorded as current liabilities within accrued other on the condensed consolidated balance sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement”, with changes in fair value recognized in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss in the period of change. As of March 31, 2024, the Public Warrants were trading separately from the Class A Common Stock and the quoted market price was used to establish fair value. As such, the Public Warrants fair value was determined using a Level 1 input. The fair value of the Public Warrants as of March 31, 2024 is $2.8 million and recorded in other long-term liabilities on the condensed consolidated balance sheets. Management has utilized the public warrant price to value the private warrants and believes the public and private warrants have materially consistent fair values given the existence of the make-whole redemption feature. As of March 31, 2024, a valuation of the private warrants was performed which confirmed the private warrant value was materially consistent with the public warrants. The details of this valuation are included in the paragraph below. The fair value of the Private Placement warrants was determined using Level 3 inputs. As of March 31, 2024, the fair value of the Private Placement Warrants was estimated to be $2.1 million and recorded in other long-term liabilities on the condensed consolidated balance sheets. The fair value was estimated at March 31, 2024, using the Black-Scholes Option Pricing model using the following assumptions: Expected annual dividend yield – 0.0% Expected volatility – 26.40% Risk-free rate of return – 4.31% Expected Option Term – 5.0 years The AON Class B Prefunded Warrants are exercisable into one share of New AON Class B Common Stock. A share of New AON Class B Common Stock, together with an AON LLC Common Unit, may be exchanged for one share of New AON Class A Common Stock. Considering New AON Class B Common Stock has no economic rights and limited liquidity or value if the holder does not also possess an AON LLC Common Unit, and because the AON Class B Prefunded Warrants are exercisable into New AON Class B Common Stock, the Company has estimated fair value of the Class B Prefunded Warrants to be immaterial.
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Earnings Per Share | Earnings Per Share The Company recast Historical AON LLC Equity as AON Inc. common equity for all periods prior to the Reverse Recapitalization, refer to Note 2. However, as 100% of the net losses of AON LLC prior to the Reverse Recapitalization were absorbed by the Legacy AON Shareholders, basic and diluted earnings (loss) per share is zero for the three months ended March 31, 2023. Basic and diluted earnings (loss) per share for the three months ended March 31, 2024 represents the period where the Company had earnings (loss) attributable to Class A Common Stockholders. Class B Common Stock does not have economic rights in AON Inc., including rights to dividends or distributions upon liquidation, and as a result, is not considered a participating security for basic and diluted earnings (loss) per share. As such, basic and diluted earnings (loss) per share of Class B Common Stock has not been presented. The Company has issued and outstanding Sponsor Earnouts, which are subject to forfeiture if the achievement of certain stock price thresholds are not met. In accordance with ASC Topic 260, “Earnings Per Share,” the Sponsor Earnouts are excluded from weighted-average shares outstanding to calculate basic earnings (loss) per share as they are considered contingently issuable shares due to their potential forfeiture. Sponsor Earnouts will be included in weighted-average shares outstanding to calculate basic earnings (loss) per share as of the date of their stock price thresholds are met and they are no longer subject to forfeiture. Basic and diluted earnings (loss) per share is computed by use of the two-class method as a result of outstanding Series A Preferred Stock, which accrue dividends at the annual rate of 8% of the original price per share, participate with common stock on all other dividends, and accordingly have participation rights in undistributed earnings as if all such earnings had been distributed during the period (see Note 12). Under such method income available to common shareholders is computed by deducting both dividends declared or, if not declared, accumulated on Series A Preferred Stock from net income. Loss attributable to common shareholders is computed by increasing net loss by such dividends. Since the participating Series A Preferred Stock has no contractual obligation to share in the losses of the Company, there is no loss allocation between Class A Common Stock and Series A Preferred Stock. Basic earnings (loss) per share is based on the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings (loss) per share is based on the weighted-average number of shares of Class A Common Stock used for the basic earnings (loss) per share calculation, adjusted for the dilutive effect of the Public and Private Warrants and Sponsor Earnout, if any, using the “treasury stock” method and the convertible Series A Preferred Stock and, exchangeable Class B Common Stock and Class B Prefunded Warrants, if any, using the “if-converted” method. Net earnings (loss) for diluted loss per share is adjusted for the Company’s share of AON LLC’s consolidated net earnings (loss), net of AON Inc. taxes, after giving effect to the Class B Common Stock and Class B Prefunded Warrants that are exchanged into potential shares of Class A Common Stock, Public and Private Warrants that are liability classified, and Series A Preferred Stock, to the extent it is dilutive.
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Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, ‘‘Financial instruments-Credit Losses’’ (“ASU 2016- 13”). ASU 2016-13 requires entities to report ‘‘expected’’ credit losses on financial instruments and other commitments to extend credit rather than the current ‘‘incurred loss’’ model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures relating to significant estimates and judgments used in estimating credit losses, as well as the credit quality. ASU 2016-13 is effective for the Company for annual reporting periods beginning after December 15, 2022. ASU 2016-13 was adopted by the Company effective January 1, 2023, with no material impact on the Company’s consolidated financial statements and related disclosures. In October 2021, the FASB issued ASU 2021-08, “Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which provides that an acquirer must recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. The guidance is effective for the Company for annual reporting periods beginning after December 15, 2023, with early adoption permitted. The adoption of this standard as of January 1, 2024, did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker, a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the chief operating decision maker when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280, “Segment Reporting,” to be included in interim periods. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and retrospective application is required for all periods presented. The Company is evaluating the impact this will have on the Company's consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this upgrade enhance the transparency and decision usefulness of income tax disclosures. This ASU requires disclosures of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the effect that ASU 2023-09 will have on its disclosures.
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Business (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Affiliation Agreements | During the three months ended March 31, 2024 and 2023, the Company entered into affiliation agreements with or acquired the following oncology practices.
(a)The Company entered into affiliation agreements with the physicians for these respective practices. The Company evaluated each of the affiliation agreements and determined that the transactions did not represent a business combination.
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Reverse Recapitalization (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||
Reverse Recapitalization [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Reverse Recapitalization | The following table provides the historical cost of assets and liabilities of AON Inc. as of September 20, 2023.
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Variable Interest Entities (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The assets of AON Partners, Partners of Maryland, AON Central Services, and MIBA as of March 31, 2024 and December 31, 2023, are as follows:
The liabilities of AON Partners, Partners of Maryland, AON Central Services, and MIBA as of March 31, 2024 and December 31, 2023, are as follows:
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Marketable Securities (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities, Available-for-Sale | The following table summarizes the Company’s marketable securities financial assets that are measured at fair value on a recurring basis:
(1)Included in cash and cash equivalents in the consolidated balance sheets at March 31, 2024 and December 31, 2023. (2)Cash equivalents as of March 31, 2024 included U.S. Treasury Bills with an initial maturity of 3 months or less and overnight repurchase agreements in which cash from the Company's main operating checking account is invested overnight in highly liquid, short-term investments sponsored by a large financial institution. The company had overnight repurchase agreements as of March 31, 2024 and December 31, 2023. The fair value of the Company’s marketable securities as of March 31, 2024, by remaining contractual maturities, were as follows:
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Supplemental Condensed Balance Sheet Information (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Receivables | Other receivables consisted of the following at March 31, 2024 and December 31, 2023:
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Schedule of Inventory | Inventory consisted of the following at March 31, 2024 and December 31, 2023:
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Schedule of Property and Equipment, net | Property and equipment, net consisted of the following at March 31, 2024 and December 31, 2023:
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Schedule of Other Accrued Liabilities, Current | Accrued other consisted of the following at March 31, 2024 and December 31, 2023:
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Long-term Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Instruments | Debt consisted of the following at March 31, 2024 and December 31, 2023:
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Leases (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Assets And Liabilities | Right-of-use assets and lease liabilities consist of the following at March 31, 2024 and December 31, 2023:
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Lease, Cost | The components of lease costs recognized in the condensed consolidated statements of operations and comprehensive loss consist of the following for the three month periods ended March 31, 2024 and 2023 and are included in selling, general, and administrative expenses unless otherwise noted:
The cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2024 and 2023 is as follows:
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Lessee, Operating Lease, Liability, to be Paid, Maturity | The following table reconciles the undiscounted cash flows expected to be paid in each of the next five years and thereafter recorded in the condensed consolidated balance sheets for operating and finance leases as of March 31, 2024:
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Finance Lease, Liability, to be Paid, Maturity | The following table reconciles the undiscounted cash flows expected to be paid in each of the next five years and thereafter recorded in the condensed consolidated balance sheets for operating and finance leases as of March 31, 2024:
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Related Parties (Tables) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions |
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Equity-Based Compensation (Tables) |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of RSU Activity | A summary of the RSU activity during the three month period ending March 31, 2024 is as follows:
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Equity (Tables) |
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reverse Recapitalization, Changes in Units | The following table summarizes the changes to AON LLC’s Class A, Class A-1, and Class B Units for the three months ended March 31, 2023.
|
Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Unit | Net loss for diluted loss per share is adjusted for the Company’s share of AON LLC’s consolidated net loss, net of AON Inc. taxes, after giving effect to Class B Common Stock and Class B Prefunded Warrants that are exchanged into potential shares of Class A Common Stock, Public and Private Warrants that are liability classified, and Series A Preferred Stock that accrue dividends, to the extent it is dilutive.
The following table details the securities that have been excluded from the calculation of weighted-average shares for diluted loss per share for the period presented as they were anti-dilutive. Note that the Sponsor Earnouts are excluded from the calculation of weighted-average shares for diluted loss per share as the contingency had not been met as of the period end.
|
Redeemable Noncontrolling Interest (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reverse Recapitalization, Ownership Summary | The following table summarizes the economic ownership of AON LLC, for the period beginning December 31, 2023 and ending March 31, 2024.
(1) As discussed in Note 13, Series A Preferred Stock are considered participating securities for basic and diluted loss per share, but do not participate in losses. As a result, the consolidated net loss of AON LLC, during the period of January 1, 2024 through March 31, 2024, were allocated to the NCI to reflect the absorption of the Legacy AON Shareholders to a portion of the consolidated net loss of AON LLC. Net losses were not attributed to Series A Preferred Stock.
|
Business (Details) $ / shares in Units, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Sep. 20, 2023
$ / shares
shares
|
Mar. 31, 2024
USD ($)
state
practice
$ / shares
shares
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
shares
|
|
Business Acquisition [Line Items] | ||||
Number of oncology practices | practice | 32 | |||
Number of states in which entity operates | state | 19 | |||
Reverse recapitalization, equity conversion ratio | 1 | |||
Number of securities called by each warrant (in shares) | 1 | |||
AON LLC | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization costs | $ | $ 0.4 | $ 1.9 | ||
New AON (AON Inc.) | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization costs | $ | $ 0.4 | $ 1.9 | ||
Common Class A | ||||
Business Acquisition [Line Items] | ||||
Shares issued (in shares) | 1,047,343 | |||
Common stock, shares outstanding (in shares) | 10,334,734 | 9,517,816 | ||
Series A Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Stock price (in usd per share) | $ / shares | $ 10.00 | |||
Class B Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 23,725,998 | 25,109,551 | ||
Legacy AON Shareholders | Class B Prefunded Warrants | ||||
Business Acquisition [Line Items] | ||||
Class of warrant outstanding (in shares) | 3,000,245 | |||
Legacy AON Shareholders | AON LLC | ||||
Business Acquisition [Line Items] | ||||
Common unit, units outstanding (in units) | 28,109,796 | |||
Legacy AON Shareholders | Class B Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 25,109,551 | |||
New AON (AON Inc.) | AON LLC | ||||
Business Acquisition [Line Items] | ||||
Common unit, units outstanding (in units) | 9,532,354 | |||
New AON (AON Inc.) | AON LLC | Series A Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Preferred units, outstanding (in units) | 6,651,610 | |||
Digital Transformation Opportunities Corp. (“DTOC”) | Class B Common Stock | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, equity conversion ratio | 1 | |||
DTOC Unredeemed Shareholders | Common Class A | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 147,511 | |||
DTOC Sponsor | Private Placement Warrants | ||||
Business Acquisition [Line Items] | ||||
Class of warrant outstanding (in shares) | 6,113,333 | |||
DTOC Sponsor | Public Warrant | ||||
Business Acquisition [Line Items] | ||||
Class of warrant outstanding (in shares) | 8,337,500 | |||
Warrant, exercise period, after initial public offering | 12 months | |||
Warrant, exercise period, after business combination | 30 days | |||
Warrant, term (in years) | 5 years | |||
DTOC Sponsor | Common Class A | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 5,498,125 | |||
Earnout shares not outstanding (in shares) | 2,839,375 | |||
Stock price (in usd per share) | $ / shares | $ 11.50 | |||
DTOC Sponsor | Common Class A | Public Warrant | ||||
Business Acquisition [Line Items] | ||||
Number of securities called by each warrant (in shares) | 1 | |||
AEA Growth Management LP | Series A Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Shares issued (in shares) | 6,651,610 | |||
Common stock, shares outstanding (in shares) | 6,651,610 | |||
AON LLC | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, equity conversion ratio | 1 | |||
AON LLC | Class B Prefunded Warrants | ||||
Business Acquisition [Line Items] | ||||
Class of warrant outstanding (in shares) | 3,000,245 | |||
AON LLC | Common Class A | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 1,047,343 | |||
AON LLC | Class B Common Stock | ||||
Business Acquisition [Line Items] | ||||
Stock price (in usd per share) | $ / shares | $ 0.01 | |||
AON LLC | Class B Common Stock | Class B Prefunded Warrants | ||||
Business Acquisition [Line Items] | ||||
Number of securities called by each warrant (in shares) | 1 |
Basis of Presentation and Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | 15 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
May 31, 2023
USD ($)
|
Jan. 31, 2023
USD ($)
|
Mar. 31, 2024
USD ($)
segment
$ / shares
shares
|
Jun. 30, 2023
USD ($)
|
Mar. 31, 2023
USD ($)
$ / shares
|
Dec. 31, 2023
USD ($)
shares
|
Mar. 31, 2024
USD ($)
shares
|
Sep. 20, 2023 |
|
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Recapitalization exchange ratio, units | shares | 2,524,000 | 2,524,000 | |||||||
Net income (loss) attributable to common shareholders | $ (7,800) | ||||||||
Net loss attributable to redeemable noncontrolling interest | 17,163 | ||||||||
Net loss and noncontrolling interest attributable to Legacy AON Stockholders prior to the reverse recapitalization | $ 0 | $ 1,486 | |||||||
Number of operating segments | segment | 1 | ||||||||
Number of reportable segments | segment | 1 | ||||||||
Revenue | $ 364,339 | 303,731 | |||||||
Offering costs | $ 97 | $ 0 | |||||||
Shares repurchased (in shares) | shares | 16,441 | 14,729 | 31,170 | ||||||
Cost of shares repurchased (less than) | $ 100 | $ 100 | |||||||
Fair value of warrants | $ 4,913 | $ 0 | $ 4,913 | ||||||
Number of securities called by each warrant (in shares) | shares | 1 | 1 | |||||||
Reverse recapitalization, equity conversion ratio | 1 | 1 | |||||||
Earnings (loss) per unit, diluted (in usd per share) | $ / shares | $ (1.22) | $ 0 | |||||||
Earnings (loss) per unit, basic (in usd per share) | $ / shares | $ (1.22) | $ 0 | |||||||
Accrued dividend rate (in percent) | 8.00% | ||||||||
Participating Threshold, 1 | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Recapitalization exchange ratio, units | shares | 2,524,000 | 2,524,000 | |||||||
Participating Threshold, 2 | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Recapitalization exchange ratio, units | shares | 2,453,000 | 2,453,000 | |||||||
Participating Threshold, 3 | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Recapitalization exchange ratio, units | shares | 1,976,000 | 1,976,000 | |||||||
AON LLC | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Reverse recapitalization, equity conversion ratio | 1 | ||||||||
AON LLC | Series A Preferred Stock | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Recapitalization exchange ratio, units | shares | 2,705,000 | 2,705,000 | |||||||
Preferred Class A | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Offering costs | $ 800 | ||||||||
Accrued dividend rate (in percent) | 8.00% | ||||||||
Public Warrant | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Fair value of warrants | $ 2,800 | $ 2,800 | |||||||
Private Placement Warrants | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Fair value of warrants | $ 2,100 | $ 2,100 | |||||||
Private Placement Warrants | Measurement Input, Expected Dividend Rate | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Warrants, measurement input | 0.000 | 0.000 | |||||||
Private Placement Warrants | Measurement Input, Price Volatility | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Warrants, measurement input | 0.2640 | 0.2640 | |||||||
Private Placement Warrants | Measurement Input, Risk Free Interest Rate | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Warrants, measurement input | 0.0431 | 0.0431 | |||||||
Private Placement Warrants | Measurement Input, Expected Term | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Warrants, measurement input | 5 | 5 | |||||||
Professional Malpractice Liability Insurance | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Malpractice insurance, limit per policy period | $ 3,000 | ||||||||
Malpractice insurance, coverage per claim | 1,000 | ||||||||
Directors and Officers Liability Insurance | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Malpractice insurance, limit per policy period | 4,000 | ||||||||
Malpractice insurance, coverage per claim | 2,000 | ||||||||
OCP Management Arizona, LLP | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Noncash consideration of equity method investment | $ 2,300 | ||||||||
Equity method investment (in percent) | 49.00% | ||||||||
Patient Visits | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Revenue | 246,100 | $ 214,300 | |||||||
Clinical Trials | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Revenue | $ 500 | $ 0 | |||||||
MIBA | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Allocation of income to controlling and noncontrolling interests (in percent) | 56.00% | ||||||||
Payments to acquire interest in subsidiary | $ 200 | $ 200 | |||||||
AON LLC | Legacy AON Shareholders | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Allocation of income to controlling and noncontrolling interests (in percent) | 77.00% | 61.10% | 100.00% | ||||||
AON LLC | AON Inc. | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Allocation of income to controlling and noncontrolling interests (in percent) | 23.00% |
Reverse Recapitalization - Narrative (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2023
USD ($)
|
Sep. 20, 2023
USD ($)
|
Mar. 31, 2024
USD ($)
person
|
Mar. 31, 2023
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Gain (Loss) On Reverse Recapitalization | $ 18,200 | |||
Transaction expenses | $ 13,000 | $ 352 | $ 1,971 | |
Public and Private Warrants | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Gain (loss) on issuance of warrants | $ (5,200) | |||
Fair Value Adjustment of Warrants | $ 4,300 | |||
AON Inc. | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of board of managers designated by company | person | 3 | |||
AON Common Unit | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of board of managers designated by majority common unit holders | person | 2 |
Reverse Recapitalization - Schedule of Historical Cost (Details) |
Sep. 20, 2023
USD ($)
|
---|---|
Reverse Recapitalization [Abstract] | |
Cash and cash equivalents | $ 1,493,000 |
Current Liabilities | (13,295,000) |
Long Term Liabilities | (6,791,000) |
Total Net Liabilities | $ (18,593,000) |
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
May 31, 2023 |
Mar. 31, 2024 |
Jun. 30, 2023 |
|
AON Central | |||
Variable Interest Entity [Line Items] | |||
Ownership interest | 20.00% | ||
MIBA | |||
Variable Interest Entity [Line Items] | |||
Payments to acquire interest in subsidiary | $ 0.2 | $ 0.2 | |
Allocation of income to controlling and noncontrolling interests | 56.00% | ||
MIBA | Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Allocation of income to controlling and noncontrolling interests | 56.00% | ||
Physician Owned | AON Central | |||
Variable Interest Entity [Line Items] | |||
Ownership interest | 80.00% |
Variable Interest Entities - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Assets | ||
Cash and cash equivalents | $ 74,944 | $ 28,539 |
Inventories | 44,288 | 44,569 |
Goodwill and intangibles, net | 1,230 | 1,230 |
Total assets | 421,921 | 374,453 |
Liabilities | ||
Other long-term liabilities | 11,342 | 14,251 |
Total liabilities | 365,813 | 303,740 |
Variable Interest Entity, Primary Beneficiary | ||
Assets | ||
Cash and cash equivalents | 75,796 | 26,574 |
Accounts receivable | 132,300 | 129,151 |
Inventories | 44,288 | 44,569 |
Prepaid expenses and other current assets | 1,157 | 895 |
Goodwill and intangibles, net | 180 | 180 |
Other receivables | 34,297 | 33,809 |
Other assets | 7,880 | 2,091 |
Total assets | 295,898 | 237,269 |
Liabilities | ||
Accounts payable | 184,314 | 122,324 |
Accrued compensation and benefits | 25,713 | 21,380 |
Accrued other | 14,972 | 16,723 |
Other long-term liabilities | 1,078 | 273 |
Due to AON LLC and subsidiaries, net | 107,144 | 117,194 |
Total liabilities | $ 333,221 | $ 277,894 |
Marketable Securities - Schedule of Marketable Securities Measured at Fair Value (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Securities, Available-for-Sale [Line Items] | ||
Cash and cash equivalents | $ 74,944 | $ 28,539 |
Gross Unrealized Gains | 377 | 402 |
Gross Unrealized Losses | (7) | (9) |
Estimated Fair Value | 30,105 | 35,389 |
Cash and cash equivalents and available-for-sale securities, amortized cost | 105,194 | 64,312 |
Cash and cash equivalents and marketable securities, aggregate fair value | 105,564 | 64,705 |
Level 1 | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Cash and cash equivalents | 75,460 | 29,316 |
Cash and cash equivalents, estimated fair value | 75,460 | 29,316 |
Level 1 | Overnight Repurchase Agreements | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Cash and cash equivalents | 73,938 | 28,593 |
Cash and cash equivalents, estimated fair value | 73,938 | 28,593 |
Level 1 | Money market funds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Cash and cash equivalents | 529 | 723 |
Cash and cash equivalents, estimated fair value | 529 | 723 |
Level 1 | U.S. Treasury securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Cash and cash equivalents | 993 | |
Cash and cash equivalents, estimated fair value | 993 | |
Level 2 | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 29,734 | 34,996 |
Gross Unrealized Gains | 377 | 402 |
Gross Unrealized Losses | (7) | (9) |
Estimated Fair Value | 30,104 | 35,389 |
Level 2 | Corporate bonds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 14,267 | 13,678 |
Gross Unrealized Gains | 172 | 191 |
Gross Unrealized Losses | (3) | (9) |
Estimated Fair Value | 14,436 | 13,860 |
Level 2 | U.S. Treasury securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 15,467 | 21,318 |
Gross Unrealized Gains | 205 | 211 |
Gross Unrealized Losses | (4) | |
Estimated Fair Value | $ 15,668 | $ 21,529 |
Marketable Securities - Remaining Contractual Maturities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Total | $ 30,105 | $ 35,389 |
Level 2 | ||
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due in one year or less | 17,858 | |
Due in one to five years | 12,246 | |
Total | 30,104 | 35,389 |
Corporate bonds | Level 2 | ||
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due in one year or less | 5,886 | |
Due in one to five years | 8,550 | |
Total | 14,436 | 13,860 |
U.S. Treasury securities | Level 2 | ||
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due in one year or less | 11,972 | |
Due in one to five years | 3,696 | |
Total | $ 15,668 | $ 21,529 |
Supplemental Condensed Balance Sheet Information - Schedule of Other Receivables (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Rebates receivable | $ 34,112 | $ 33,708 |
Other | 687 | 566 |
Other receivables | $ 34,799 | $ 34,274 |
Supplemental Condensed Balance Sheet Information - Schedule of Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Inventory [Line Items] | ||
Inventories | $ 44,288 | $ 44,569 |
Intravenous drugs | ||
Inventory [Line Items] | ||
Inventories | 33,972 | 32,388 |
Oral pharmaceuticals | ||
Inventory [Line Items] | ||
Inventories | $ 10,316 | $ 12,181 |
Supplemental Condensed Balance Sheet Information - Schedule of Property and Equipment, net (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 67,804 | $ 65,074 |
Accumulated depreciation and amortization | (26,807) | (24,635) |
Property and equipment, net | 40,997 | 40,439 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,985 | 32,490 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,750 | 2,607 |
Medical equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,310 | 15,666 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,395 | 3,285 |
Signs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 176 | 153 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 110 | 59 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,231 | 7,829 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,847 | $ 2,985 |
Supplemental Condensed Balance Sheet Information - Schedule of Accrued Other (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Refund liability | $ 12,879 | $ 15,078 |
Warrant liability | 4,913 | 0 |
Excise taxes payable | 2,700 | 2,700 |
Less: current portion of lease liabilities | 1,205 | 1,189 |
Other | 3,489 | 3,360 |
Accrued other | $ 25,186 | $ 22,327 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued other | Accrued other |
Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 81,250 | $ 81,250 |
Unamortized debt issuance costs | (394) | (609) |
Total debt | 80,856 | 80,641 |
PNC Loan Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Total | $ 81,250 | $ 81,250 |
Long-term Debt - Narrative (Details) - Line of Credit |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Feb. 14, 2022
USD ($)
|
Apr. 30, 2021
USD ($)
|
Jun. 30, 2023
USD ($)
|
Mar. 31, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
Aug. 15, 2022
USD ($)
|
Jul. 29, 2021
USD ($)
|
|
PNC Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from facility | $ 34,600,000 | ||||||
Maximum borrowing capacity | $ 125,000,000 | 65,000,000 | $ 75,000,000 | ||||
Pledged collateral | 10,000,000 | ||||||
Quarterly collateral released | $ 2,500,000 | ||||||
Proceeds from lines of credit | 16,300,000 | ||||||
Unamortized debt issuance costs | $ 400,000 | ||||||
PNC Loan Facility | Debt Instrument, Threshold Limit, Period One | |||||||
Debt Instrument [Line Items] | |||||||
Minimum funding threshold (in percent) | 0.65 | 0.65 | |||||
PNC Loan Facility | Debt Instrument, Threshold Limit, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Minimum funding threshold (in percent) | 0.75 | ||||||
PNC Loan Facility | Alternate Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (in percent) | 1.45% | ||||||
Revolving Credit Facility | PNC Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 10,000,000 | $ 5,000,000 | $ 1,000,000 | ||||
Bank fee (in percent) | 1.65% | ||||||
Unused line fee (in percent) | 0.20% | ||||||
Proceeds from lines of credit | $ 0 | $ 0 | |||||
Revolving Credit Facility | PNC Line of Credit | London Interbank Offered Rate (LIBOR) 1 | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (in percent) | 1.65% | ||||||
Revolving Credit Facility | PNC Line of Credit | Alternate Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (in percent) | 0.65% | ||||||
Revolving Credit Facility | PNC Line of Credit | Bloomberg Short-Term Bank Yield Index | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (in percent) | 1.65% |
Income Taxes (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (in percent) | (13.10%) | 0.00% |
Income tax expense | $ 2,894,000 | $ 0 |
Leases - Right-of-use Assets And Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
||||||
---|---|---|---|---|---|---|---|---|
Assets | ||||||||
Operating lease right-of-use assets, net | [1] | $ 43,358 | $ 43,349 | |||||
Finance lease right-of-use assets, net (included in property and equipment, net) | 5,513 | 5,794 | ||||||
Total right-of-use assets | 48,871 | 49,143 | ||||||
Current | ||||||||
Current portion of operating lease liabilities | [2] | 6,715 | 6,692 | |||||
Current portion of finance lease liabilities (included in accrued other) | 1,205 | 1,189 | ||||||
Current portion of operating and finance lease liabilities | 7,920 | 7,881 | ||||||
Long-term | ||||||||
Long-term operating lease liabilities | [3] | 39,786 | 39,803 | |||||
Long-term finance lease liabilities (included in other long-term liabilities) | 4,239 | 4,548 | ||||||
Total lease liabilities | $ 51,945 | $ 52,232 | ||||||
|
Leases - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Operating lease costs | $ 2,795 | $ 2,870 |
Amortization of finance lease right-of-use assets | 281 | 110 |
Interest on finance lease liabilities (included in interest expense) | 86 | 17 |
Variable lease costs | 586 | 578 |
Total lease costs | $ 3,748 | $ 3,575 |
Leases - Maturities of Operating and Financing Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
||||
---|---|---|---|---|---|---|
Operating Leases | ||||||
2024 (remainder of year after March 31, 2024) | $ 6,959 | |||||
2025 | 10,014 | |||||
2026 | 9,620 | |||||
2027 | 8,370 | |||||
2028 | 6,271 | |||||
Thereafter | 19,147 | |||||
Total lease payments | 60,381 | |||||
Less: amount representing interest | (13,880) | |||||
Present value of lease liabilities | 46,501 | |||||
Less: current portion of lease liabilities | [1] | (6,715) | $ (6,692) | |||
Long-term lease liabilities, net of current portion | [2] | 39,786 | 39,803 | |||
Finance Leases | ||||||
2024 (remainder of year after March 31, 2024) | 1,132 | |||||
2025 | 1,487 | |||||
2026 | 1,249 | |||||
2027 | 1,185 | |||||
2028 | 948 | |||||
Thereafter | 261 | |||||
Total lease payments | 6,262 | |||||
Less: amount representing interest | (818) | |||||
Present value of lease liabilities | 5,444 | |||||
Less: current portion of lease liabilities | (1,205) | (1,189) | ||||
Long-term lease liabilities, net of current portion | $ 4,239 | $ 4,548 | ||||
|
Leases - Narrative (Details) |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Leases [Abstract] | ||
Weighted-average remaining lease term for operating leases (in years) | 4 years 6 months 14 days | 6 years 11 months 4 days |
Weighted-average remaining lease term for finance leases (in years) | 6 years 10 months 2 days | 4 years 9 months 3 days |
Weighted-average discount rate for operating leases (in percent) | 6.33% | 6.64% |
Weighted-average discount rate for finance leases (in percent) | 6.71% | 6.30% |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 2,799 | $ 2,845 |
Operating cash flows from finance leases | 86 | 17 |
Financing cash flows from finance leases | 291 | 105 |
ROU assets obtained in exchange for new lease liabilities | ||
ROU assets obtained in exchange for new operating lease liabilities | $ 2,048 | $ 4,326 |
Related Parties - Narrative (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024
USD ($)
office
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
Related Party Transaction [Line Items] | |||
Notes receivable, amortization period (in months) | 60 months | ||
Incremental borrowing rate | 7.09% | 7.18% | |
Payments for operating leases | $ 2,799 | $ 2,845 | |
Cost of revenue | $ 354,948 | 278,534 | |
Related Party | |||
Related Party Transaction [Line Items] | |||
Number of offices with operating lease | office | 13 | ||
Payments for operating leases | $ 700 | 700 | |
Cost of revenue | 310,877 | 178,166 | |
Related Party | Subsidiary Under Common Control of Class A-1 Member | |||
Related Party Transaction [Line Items] | |||
Cost of revenue | 311,000 | $ 243,000 | |
Accounts payable | $ 183,000 | $ 102,100 | |
Related Party | Cost of Goods and Service Benchmark | Supplier Concentration Risk | Subsidiary Under Common Control of Class A-1 Member | |||
Related Party Transaction [Line Items] | |||
Concentration risk (in percentage) | 88.00% | 87.00% | |
Related Party | Accounts Payable | Supplier Concentration Risk | Subsidiary Under Common Control of Class A-1 Member | |||
Related Party Transaction [Line Items] | |||
Concentration risk (in percentage) | 97.00% | 97.00% |
Related Parties - Notes Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
May 01, 2020 |
Jun. 01, 2019 |
May 01, 2019 |
---|---|---|---|---|---|
Related Party Transaction [Line Items] | |||||
Total notes receivables | $ 2,655 | $ 2,754 | |||
Less: Current portion of notes receivable | (2,498) | (1,604) | |||
Notes receivable - related parties | 157 | 1,150 | |||
Note 2 | |||||
Related Party Transaction [Line Items] | |||||
Total notes receivables | 656 | 656 | |||
Original Principal | $ 5,355 | ||||
Note 3 | |||||
Related Party Transaction [Line Items] | |||||
Total notes receivables | 0 | 17 | |||
Original Principal | $ 491 | ||||
Note 8 | |||||
Related Party Transaction [Line Items] | |||||
Total notes receivables | $ 1,999 | $ 2,081 | |||
Original Principal | $ 2,816 |
Equity-Based Compensation - Summary of RSU Activity (Details) - Restricted Stock - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 28, 2024 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Outstanding, beginning period (in shares) | 0 | 0 |
Granted (in shares) | 3,759,459 | 3,759,459 |
Vested (in shares) | (2,289,181) | |
Forfeited (in shares) | 0 | |
Outstanding, ending period (in shares) | 1,470,278 | |
Weighted Average Grant Date Fair Value | ||
Beginning Balance (usd per share) | $ 0 | $ 0 |
Granted (usd per share) | 5.73 | |
Vested (usd per share) | 5.80 | |
Forfeited (usd per share) | 0 | |
Ending Balance (usd per share) | $ 5.67 |
Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 28, 2024 |
|
Employee Stock | 2023 Incentive Equity Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares authorized (in shares) | 5,300,000 | |
Percentage of outstanding stock maximum (in percent) | 5.00% | |
Number of shares available for grant (in shares) | 2,044,394 | |
Restricted Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Granted (in shares) | 3,759,459 | 3,759,459 |
Stock compensation expense | $ 13.3 | |
Unrecognized compensation expense | $ 8.2 | |
Cost not yet recognized, period for recognition (in years) | 1 year 8 months 12 days | |
Shares awarded upon vesting of RSUs (in shares) | 1 | |
Minimum | Restricted Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Vesting period (in years) | 1 year | |
Maximum | Restricted Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Vesting period (in years) | 2 years |
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
2 Months Ended | 3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 20, 2023 |
Jun. 07, 2023 |
Mar. 04, 2020 |
Jul. 31, 2023 |
Mar. 31, 2024 |
Dec. 31, 2022 |
Dec. 31, 2023 |
Mar. 31, 2023 |
|
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Invested capital contributions | $ 65.0 | |||||||
Accrued dividend rate (in percent) | 8.00% | |||||||
Stockholders' equity, conversion period (in years) | 5 years | |||||||
Common Class A | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common unit, units outstanding (in units) | 19,495,376 | 19,495,376 | ||||||
Accrued dividend rate (in percent) | 8.00% | |||||||
Payments of dividends | $ 4.0 | |||||||
Common Class A-1 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common unit, units outstanding (in units) | 1,842,520 | 1,842,520 | ||||||
Accrued dividend rate (in percent) | 4.00% | |||||||
Payments of dividends | $ 4.1 | |||||||
Class B Common Stock | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common unit, units outstanding (in units) | 4,703,628 | 4,703,628 | ||||||
Class B-1 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Grants in period (in units) | 415 | |||||||
Class C | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Temporary equity, redeemable period | 5 years | |||||||
AON Inc. | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Stockholders' equity, conversion, threshold volume weighted average price period | 30 days | |||||||
Stockholders' equity, conversion, threshold stock price (in dollars per share) (less than) (greater than) | $ 16.00 | |||||||
AON LLC | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of units (in units) | 2,289,181 | |||||||
AON LLC | Common Class A | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common unit authorized (in units) | 19,495,376 | |||||||
Issuance of units (in units) | 19,495,376 | |||||||
Common unit, units outstanding (in units) | 19,495,376 | |||||||
AON LLC | Common Class A-1 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common unit authorized (in units) | 3,000,245 | |||||||
Issuance of units (in units) | 1,842,520 | |||||||
Common unit, units outstanding (in units) | 1,842,520 | |||||||
AON LLC | Class B Common Stock | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Issuance of units (in units) | 5,614,176 | |||||||
Units vested (in units) | 4,703,628 | |||||||
Units vested upon consummation of business combination (in units) | 910,548 | |||||||
Common Class A | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares issued (in shares) | 1,047,343 | |||||||
Stockholders' equity, conversion, threshold volume weighted average price period | 5 days | |||||||
Series A Preferred Stock | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Dividends | $ 2.1 | |||||||
Class A-1 distribution (in shares) | 151,610 | |||||||
Stock price (in usd per share) | $ 10.00 | |||||||
Series A Preferred Stock | Stockholders | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Number of days after five year anniversary | 30 days | |||||||
Stockholders' equity, conversion period (in years) | 5 years | |||||||
Stockholders' equity, conversion, threshold volume weighted average price period | 30 days | |||||||
Stockholders' equity, conversion, threshold stock price (in dollars per share) (less than) (greater than) | $ 10.00 | |||||||
Threshold stock price, conversion price adjustment (in usd per share) | $ 5.00 | |||||||
Series A Preferred Stock | AEA Growth Management LP | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares issued (in shares) | 6,651,610 | |||||||
Series A Preferred Stock | Dividends Paid, Event Prior to June 7, 2024 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Accrued dividend rate (in percent) | 125.00% | |||||||
Series A Preferred Stock | Dividends Paid, Event Prior to June 7, 2025, After June 7, 2024 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Accrued dividend rate (in percent) | 120.00% | |||||||
Series A Preferred Stock | Dividends Paid, Event Prior to June 7, 2026, After June 7, 2025 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Accrued dividend rate (in percent) | 115.00% | |||||||
Series A Preferred Stock | Dividends Paid, Event Prior to June 7, 2027, After June 7, 2026 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Accrued dividend rate (in percent) | 110.00% | |||||||
Series A Preferred Stock | Dividends Paid, Event Prior to June 7, 2028, After June 7, 2027 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Accrued dividend rate (in percent) | 105.00% | |||||||
Series A Preferred Stock | Dividends Paid, Event After June 7, 2028 | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Accrued dividend rate (in percent) | 100.00% |
Equity - Schedule of Changes in Units (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
shares
| |
Common Class A | |
Reverse Recapitalization, Change In Value Of Units [Roll Forward] | |
Beginning of Period | $ | $ 7,725 |
Issuance of Units | $ | 0 |
Impact of the Reverse Recapitalization | $ | 0 |
End of Period | $ | $ 7,725 |
Reverse Recapitalization, Change In Units [Roll Forward] | |
Beginning balance (in units) | shares | 19,495,376 |
Issuance of units (in units) | shares | 0 |
Impact of the Reverse Recapitalization (in units) | shares | 0 |
Ending balance (in units) | shares | 19,495,376 |
Common Class A-1 | |
Reverse Recapitalization, Change In Value Of Units [Roll Forward] | |
Beginning of Period | $ | $ 28,500 |
Issuance of Units | $ | 0 |
Impact of the Reverse Recapitalization | $ | 0 |
End of Period | $ | $ 28,500 |
Reverse Recapitalization, Change In Units [Roll Forward] | |
Beginning balance (in units) | shares | 1,842,520 |
Issuance of units (in units) | shares | 0 |
Impact of the Reverse Recapitalization (in units) | shares | 0 |
Ending balance (in units) | shares | 1,842,520 |
Class B Common Stock | |
Reverse Recapitalization, Change In Value Of Units [Roll Forward] | |
Beginning of Period | $ | $ 80 |
Issuance of Units | $ | 0 |
Impact of the Reverse Recapitalization | $ | 0 |
End of Period | $ | $ 80 |
Reverse Recapitalization, Change In Units [Roll Forward] | |
Beginning balance (in units) | shares | 4,703,628 |
Issuance of units (in units) | shares | 0 |
Impact of the Reverse Recapitalization (in units) | shares | 0 |
Ending balance (in units) | shares | 4,703,628 |
Net Loss Per Share - Calculation Of Earnings Per Share (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to Class A Common Stockholders for basic earnings per share | $ (7,841,000) | $ 0 |
Net loss attributable to Class A Common Stockholders for diluted earnings per share | (7,841,000) | $ 0 |
Undistributed net earnings, basic | $ (9,201,180) | |
Weighted average shares for basic earnings per share (in shares) | 7,527,882 | 0 |
Basic loss per share of Class A Common Stock (in dollars per share) | $ (1.22) | $ 0 |
Diluted loss per share of Class A Common Stock (in dollars per share) | $ (1.22) | $ 0 |
Series A Preferred Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Series A Preferred Cumulative Dividends | $ (1,360,180) |
Net Loss Per Share - Antidilutive Securities (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
shares
| |
Series A Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares excluded from computation of earnings per share (in shares) | 6,651,610 |
Class B Common Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares excluded from computation of earnings per share (in shares) | 23,725,998 |
Class B Prefunded Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares excluded from computation of earnings per share (in shares) | 3,000,245 |
Public and Private Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares excluded from computation of earnings per share (in shares) | 14,450,833 |
Restricted Stock Units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares excluded from computation of earnings per share (in shares) | 1,470,278 |
Redeemable Noncontrolling Interest - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2023 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Noncontrolling Interest [Line Items] | ||||
Redemption ratio | 1 | |||
Number of days after redemption notice date that redemption must be settled | 10 days | |||
Redemption value of noncontrolling interest | $ 157,700 | |||
Excess redeemable noncontrolling interest over carrying amount | 15,600 | |||
Fair value adjustment to redeemable noncontrolling interest | 15,636 | |||
Additional Paid in Capital | ||||
Noncontrolling Interest [Line Items] | ||||
Fair value adjustment to redeemable noncontrolling interest | 9,696 | |||
Retained Earnings (Deficit) | ||||
Noncontrolling Interest [Line Items] | ||||
Fair value adjustment to redeemable noncontrolling interest | $ 5,940 | |||
Common Class A | ||||
Noncontrolling Interest [Line Items] | ||||
Common stock, shares outstanding (in shares) | 10,334,734 | 9,517,816 | ||
Stockholders' equity, conversion, threshold volume weighted average price period | 5 days | |||
Legacy AON Shareholders | AON LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Common unit, units outstanding (in units) | 26,726,243 | |||
Allocation of income to controlling and noncontrolling interests (in percent) | 77.00% | 61.10% | 100.00% | |
Common stock, shares outstanding (in shares) | 23,725,998 | |||
Class of warrant outstanding (in shares) | 3,000,245 | |||
LLC ownership threshold, percentage | 50.00% |
Redeemable Noncontrolling Interest - Schedule of Ownership (Details) - AON LLC |
3 Months Ended |
---|---|
Mar. 31, 2024
shares
| |
Equity, Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance (in units) | 41,439,847 |
Issuances (in units) | 2,289,181 |
Repurchases (in units) | (16,441) |
Redemptions (in units) | 0 |
Total Units Issued (in units) | 43,712,587 |
Ending balance (in units) | 43,712,587 |
Allocation of income to controlling and noncontrolling interests (in percent) | 1 |
Allocation of losses to controlling and noncontrolling interests (in percent) | 1 |
AON Inc. | |
Equity, Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance (in units) | 13,330,051 |
Issuances (in units) | 2,289,181 |
Repurchases (in units) | (16,441) |
Redemptions (in units) | 1,383,553 |
Total Units Issued (in units) | 16,986,344 |
Ending balance (in units) | 16,986,344 |
Allocation of income to controlling and noncontrolling interests (in percent) | 0.389 |
Allocation of losses to controlling and noncontrolling interests (in percent) | 0.230 |
Legacy AON Shareholders | |
Equity, Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance (in units) | 28,109,796 |
Issuances (in units) | 0 |
Repurchases (in units) | 0 |
Redemptions (in units) | 1,383,553 |
Total Units Issued (in units) | 26,726,243 |
Ending balance (in units) | 26,726,243 |
Allocation of income to controlling and noncontrolling interests (in percent) | 0.611 |
Allocation of losses to controlling and noncontrolling interests (in percent) | 0.770 |
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