STLN 10-K & 10-Q changes, risk factors and insider trading

We operate in a rapidly changing environment that involves a number of risks. Our operations and financial results are subject to various risks and uncertainties including those described below. You should consider carefully the risks and uncertainties described below, in addition to other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and related notes, as well as our other public filings with the Securities and Exchange Commission. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. The risks and uncertainties described below reflect the Company’s beliefs and opinions as to matters that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially adversely affected. In that case, the trading price of our common stock could decline.

Our business strategy is to grow rapidly by expanding our network of oncology care clinics and is significantly dependent on our ability to open new TOI PC clinics in our existing markets, expand into new geographical locations through existing TOI PCs or affiliating with new professional entities that would become a TOI PC, recruit new patients and partner or contract with payors, existing medical practices or other healthcare providers to provide oncology care services. We seek growth opportunities both organically and through TOI PCs’ agreements with payors or other oncology care providers. Our ability to grow organically depends upon a number of factors, including our affiliated providers obtaining referrals for cancer patient care services, the TOI PCs entering into contracts with additional payors, identifying appropriate facilities, obtaining leases, completing internal build-outs of new facilities within proposed timelines and budgets and hiring care teams and other employees. We cannot guarantee that we will be successful in pursuing our growth strategy. If we fail to evaluate and execute new business opportunities properly, we may not achieve anticipated benefits and may incur increased costs.

We incurred a net loss of $64,663,000$60,606,000 in 2024,2025, and a loss from operations $36,083,000 in 2024.2025. We expect our losses will continue as we expect to invest heavily in increasing our patient base, expanding our operations, and operating as a public company. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale of our equity, revenue from our patient services and the incurrence of indebtedness. We may not generate positive cash flow from operations or profitability in any given period, and our limited operating history may make it difficult for you to evaluate our current business and our future prospects.

The TOI PCs’ membership remains concentrated in certain geographic areas in the United States. We have clinic locations in five states. As of December 31, 2024,2025, the vast majority of the TOI PC members under capitation agreements were residents of California. In addition, during 2024, approximately 85% of our revenues were generated in California. Unfavorable changes in health care or other benefit costs or reimbursement rates or increased competition in the states in which we operate or any other geographic area where the TOI PCs’ membership becomes concentrated in the future could therefore have a disproportionately adverse effect on our operating results. Additionally, the geographic concentration of a significant portion of the TOI PCs’ membership may make them more vulnerable to events such as the COVID-19 pandemic.

In response to the COVID-19 pandemic, theThe Centers for Medicare and Medicaid Services, or CMS, the federal agency responsible for administering the Medicare program,program has made several changes in the manner in which Medicare will pay for telehealth visits, many of which relax previous requirements, including site requirements for both the providers and patients, telehealth modality requirements and others. TheMedicare Consolidatedpatients Appropriationscan Actreceive ofservices 2023at extendedhome manywithout ofrestriction the COVID-19 public health emergency provisions related to telehealth untilthrough December 31, 2024.2027. State law applicable to telehealth, particularly licensure requirements, haswere also been relaxed in many jurisdictions as a result ofduring the COVID-19Covid pandemic.emergency. It is unclear which,how iflong any,any of these changes will remain in placeplace, permanentlyif andat which will be rolled-back.all. If regulations change to restrict the TOI PCs’ or our affiliated providers ability to deliver care through telehealth or remote modalities, our financial condition and results of operations may be adversely affected.

Moreover, the Medicaid program and its reimbursement rates and policies are subject to frequent change. By way of example, Medi-Cal recently implemented a new policy regarding reimbursement for pharmacy services. Although the policy was not intended to change the manner in which physician-administered drugs billed under the medical benefit are reimbursed, certain Medi-Cal managed care plans nevertheless began to transition these claims to be payable as a pharmacy benefit and exclude coverage of prescription drugs formerly available through the medical benefit or direct their subcontractors or network providers to no longer bill for prescription drugs through their medical claims. The California Department of Health Care Services, or DHCS, later issued clarifying guidance which instructed Medi-Cal managed care plans to ensure all medically necessary prescription drugs administered in an outpatient office or clinic setting by a health care professional continue to be available through the medical benefit, even though some may be available as a pharmacy benefit. In addition, during the COVID-19 public health emergency, DHCS delayed the processing of Medi-Cal annual redeterminations and delayed discontinuances and negative actions for Medi-Cal and other state and county healthcare programs. At the federal level, the Trump administration has significantly reduced Medicaid funding. On July 4, 2025, President Trump signed the 2025 budget reconciliation legislation, known as the “One Big Beautiful Bill Act,” which imposes new administrative requirements and conditions on Medicaid eligibility and funding, increases costs and premiums for certain beneficiaries, and imposes new limitations on states’ abilities to fund programs. These measures are expected to result in a substantial reduction in funding for Medi-Cal, a reduction in coverage eligibility and an increase in the number of uninsured. As a result,result of these changes to the Medicaid program, the TOI PCs could experience a reduction in membership, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of 2%, which began in 2013 and will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022. Under current legislation, the actual reduction in Medicare payments varies from 1% from April 1, 2022 to June 30, 2022, up to 3% in the final fiscal year of this sequester, unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect consumer demand and affordability for our products and services and, accordingly, the results of our financial operations. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement. The Inflation Reduction Act of 2022, or IRA, signed into law on August 16, 2022, also contains a number of provisions designed to limit or reduce drug prices under the Medicare program, reduce beneficiary out-of-pocket spending under Medicare’s prescription drug benefit, and expand subsidies for individuals to obtain private health insurance under the ACA. However, the ACA marketplace premium tax credits provided by the IRA expired at the end of 2025, and Congress has not taken action to extend them. As a result, a significant number of individuals who currently obtain insurance through the ACA marketplace may lose coverage or face substantially higher premiums, which could increase the number of uninsured. While these provisions of the IRA do not apply directly to healthcare providers like the TOI PCs, we are continuing to evaluate the potentialexpiration impact,or ifmodifications any,of thatcertain provisions in the IRA may haveindirectly onaffect our business.business by altering the payer mix of patients served by TOI PCs.

Uncertainty regarding future amendments to the ACA as well asACA, new legislative proposals to reform healthcare and government insurance programs, and Trump administration initiatives aimed at increasing access to and lowering prices for prescription drugs, along with the trend toward managed healthcare in the United States, could result in reduced demand and prices for our services. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments and other third party payers will pay for healthcare products and services, which could adversely affect our business, financial condition and results of operations.

Finally, while we were impacted by the Change Healthcare cyberattack in February 2024, which caused disruptions to healthcare companies across the US, our team actively collaborated with our practice management vendor to swiftly establish alternative channels for transmitting claims to payors. Significant progress was made in successfully submitting claims to commercial payors and applications were completed for Medicare and Medicaid agencies to accept our claims through a new intermediary. Delays in claim submissions temporarily impacted our cash flow in the first and second quarters of 2024. Nevertheless, we do not believe the impact to have been material and remain confident in our ability to resolve these challenges. On November 3, 2025, we determined that a cybersecurity incident affecting an information technology software provider would potentially delay fee-for-service collections. Based on our current assessment, this incident resulted in a brief immaterial delay in the collection of some claims in our fee-for-service segment. To date, the software provider has not indicated to us that there is any evidence that any patient personal information was compromised as a result of this incident, and an investigation remains ongoing. We worked closely with the software provider to mitigate the effects and restored normal billing operations in a timely manner. Although, we are confident that thisthese recent cyberattackcyberattacks did not have a material adverse impact, similar cybersecurity breaches could be successfully launched in the future, and there is no assurance that such attacks will not have material adverse effect on our results of operations and cash flows.

The TOI PCs have employment contracts with physicians and other health professionals in many states. Some of these contracts include provisions preventing these physicians and other health professionals from competing with us both during and after the term of our contract with them. The law governing non- competenon-compete agreements and other forms of restrictive covenants varies from state to state. Some jurisdictions prohibit the TOI PCs from using non-competition covenants with our professional staff. Other states are reluctant to strictly enforce non-compete agreements and restrictive covenants applicable to physicians and other healthcare professionals. Additionally, the Federal Trade Commission recently proposed new rules which, if enforced, would ban non-compete agreements in employee contracts. There can be no assurance that the TOI PCs’ non-compete agreements related to physicians and other health professionals will be found enforceable if challenged in certain states. In such event, the TOI PCs would be unable to prevent physicians and other health professionals formerly employed by the TOI PCs from competing with us, potentially resulting in the loss of some of our patients.

States are also constantly amending existing laws, requiring attention to frequently changing requirements, and we expect these changes to continue. For example, in June 2018, California enacted the California Consumer Privacy Act, or the CCPA, which became effective on January 1, 2020, and, among other things, requires covered companies to provide disclosures to California consumers, and affords such consumers certain data protection rights, including the ability to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information that may increase data breach litigation. While the CCPA includes certain exceptions for health-related information, including PHI, it still may require us to modify our data practices and policies and to incur substantial costs and expenses in an effort to comply. Further, the California Privacy Rights Act, or CPRA, generally went into effect on January 1, 2023 and significantly amendsamended the CCPA. The CPRA imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It will also create a newThe California dataprivacy protection agency is authorized to issue substantive regulations andwhich couldis expected to result in increased privacy and information security enforcement. Additional compliance investment and potential business process changes may be required. Similar laws have passed in Virginia, Colorado, Connecticut and Utah, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.

We and the TOI PCs are required to comply with all applicable federal, state and local laws and regulations related to the operation of our business. These regulations include regulations governing the TOI PCs’ dispensaryspecialty pharmacy services, the construction, the use of our managed clinics and the treatment of hazardous waste or drug products. Changes in regulations or new regulations could increase our costs, cause the TOI PCs to lose licenses or accreditations or otherwise harm our business or the business of the TOI PCs.

As of December 31, 2024,2025, we had federal income tax NOLs of $184,835,785$227,510,540 and state income tax NOLs of $175,187,277$220,729,030 available to offset our future taxable income, if any, prior to consideration of annual limitations that may be imposed under Section 382 of the Code or otherwise. The federal NOLs will be carried forward indefinitely and the state NOLs begin expiring after 2040. Utilization of these NOLs depends on many factors, including our future income, which cannot be assured. Some of these NOLs could expire unused and be unavailable to offset our future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (very generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain stockholders or groups of stockholders over a rolling three-year period), the corporation’s ability to use is pre-ownership change NOLs to offset its post-ownership change income may be limited. In 2022 and 2023, we completed an ownership change analysis pursuant to IRC Section 382 of the Code for the period from September 10, 2018 through taxable year ended December 31, 2021 and from January 1, 2022 through taxable year ended December 31, 2023 in which we determined that the Company did not experience an ownership change. We are in the process of completing an analysis to determine whether thereThere was ano change in ownership during the yearyears ended December 31, 20242025 and we do not anticipate a change in ownership during the year ended December 31, 2024. Additionally, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. The deferred tax asset associated with the Company’s federal and state net operating losses are fully offset by a valuation allowance. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate. To the extent we are not able to offset future taxable income with our NOLs, our net income and cash flows may be adversely affected.

Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. For example, if our market capitalization drops significantly below the amount of the carrying equity recorded on our balance sheet, it might indicate a decline in our fair value and would require us to further evaluate whether our goodwill has been impaired. If, as part of our annual review of goodwill, we are required to write down all or a significant part of our goodwill, our net earnings could be materially adversely affected, which could affect our flexibility to obtain additional financing. In addition, if our assumptions used in preparing our valuations for purposes of impairment testing differ materially from actual future results, we may record impairment charges in the future and our financial results may be materially adversely affected. We had $7,230,000 of goodwill recorded on our Consolidated Balance Sheets at December 31, 20242025 and 2023.2024. GoodwillThere were no goodwill impairment charges of $0 and $16,867,000 were recorded during the years ended December 31, 20242025 and 2023,2024, respectively, based on management's evaluation of the value of goodwill. It is not possible at this time, under current market conditions, to determine if there will be any future impairment charge, or if there is, whether such charges would be material.

Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in the Company’s Business Combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Based on a qualitative assessment factoring in our share price decrease, as well as factors related to macroeconomic conditions, industry and market considerations, cost factors, financial performance and market capitalization, we determined it was likely that our reporting unit fair value was less than the carrying value. After conducting a two-step quantitative assessment, we recorded an impairment of $16,867,000 of goodwill during the three monthsyear ended MarchDecember 31, 2023 (there was no impairment recorded in 2024 or 2025). If our stock price remains low, or negative macroeconomic, industry or business factors worsen, we may be required to perform another goodwill impairment analysis, which could result in an impairment of up to the entire balance of the remaining goodwill. Additionally, significant impairment charges may negatively affect our compliance with the financial covenants of our Facility Agreement.

From time to time in the future, we may issue additional shares of our Common Stock, Preferred Stock, Warrants or other securities convertible into Common Stock pursuant to a variety of transactions, including acquisitions. Additional shares of our Common Stock may also be issued upon exercise of outstanding stock options and Warrants. The issuance by us of additional shares of our Common Stock, Preferred Stock, Warrants or other securities convertible into our Common Stock would dilute your ownership interest in us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Common Stock and Warrants. Shares issuable upon exercise of options will be available for resale immediately in the public market without restriction.

In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our Common Stock and Warrants, or both. Future Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. We currently have approximately 194,000 shares of Preferred Stock outstanding which convert, subject to the terms and conditions of the Company’s Certificate of Designation, into Common Stock at a 1:100 ratio or 19.3 million shares of Common Stock. Additional such shares of Preferred stock, if issued, would be expected to have the same conversion ratio and be highly dilutive. In addition, other Preferred Stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Common Stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. As a result, holders of our Common Stock and Warrants bear the risk that our future offerings may reduce the market price of our Common Stock and Warrants and dilute their percentage ownership.

Our Common Stock and Warrants may be delisted if we fail to comply with the requirements for continued listing on The Nasdaq Stock Market LLC (“Nasdaq”), and if our securities were delisted, the price of our Common Stock and Warrants, our ability to access the capital markets and our ability to comply with the covenants in our Facility Agreement could be negatively impacted.

Our Common Stock and Warrants are listed for trading on Nasdaq. To maintain this listing, we must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share, among others. On June 20, 2024, we received a letter from Nasdaq indicating that, for the previous 30 consecutive business days, the bid price for the Company’s Common Stock had closed below the minimum $1.00 per share requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(2). We had an initial period of 180 calendar days, or until December 17, 2024 to regain compliance. In a letter dated December 19, 2024, Nasdaq notified the Company that the Company was eligible for an additional 180 calendar day period, or until June 16, 2025, to regain compliance. If we fail to regain compliance with the minimum bid requirement by June 16, 2025 (including effecting a reverse stock split, if necessary) or if we fail to continuemaintain to meet all applicable continued listing requirements for Nasdaq in the future,Nasdaq, Nasdaq could delist our securities.

We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal control over financial reporting. AsWe apreviously result,took weadvantage haveof incurredcertain andexemptions willfrom continuevarious to incur increased legal, accountingreporting and other expensesrequirements thatapplicable Legacyto TOIpublic didcompanies due to our status as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and a non-accelerated filer. However, we ceased to be an emerging growth company as of December 31, 2025 and became an accelerated filer as of close of business on December 31, 2025 and we are now subject to the following additional obligations, including but not previously incur. Our entire management team and many of our other employees have devoted and will continuelimited to devote substantial time to compliance and may not effectively or efficiently manage our transition into a public company.:

In addition, the need to establish and maintain the corporate infrastructure demanded of a public company may also divert management’s attention from implementing our business strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal control over financial reporting, including IT controls, and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations. In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements. We anticipate that these costs will materially increase our general and administrative expenses.

Simultaneously with the closing of its IPO, DFP Healthcare Acquisitions Corp., issued in a private placement an aggregate of 4,333,333 private placement warrants, each exercisable to purchase one share of Common Stock at $11.50 per share through November 2026. AsIn addition, as of December 31, 2024,2025, there were 2,187,283 private placement warrants outstanding.from the Business Combination outstanding and there were 8,216,918 Common Warrants outstanding from the Company’s 2025 Private Placement. To the extent such warrants are exercised, additional shares of our Common Stock will be issued, which will result in dilution to our stockholders and increase the number of shares of Common Stock eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Common Stock.

On August 9, 2022, we entered into a $110 million Facility Agreement with Deerfield Partners and certain of its affiliates, of which $90$85.9 million is currently outstanding. The Facility Agreement contains various covenants, including a requirement to maintain a minimum revenue of $50,000,000, $75,000,000, and $100,000,000 for each fiscal quarter ending during the fiscal year 2023, 2024,2026 and 2025,while the Facility Agreement is in effect in 2027, respectively. In addition, the Facility Agreement restricts our and the guarantors’ ability to, among other things, (i) merge, consolidate, dissolve or liquidate into or convey, transfer, lease or dispose of all or substantially all of its assets (other than into another Loan Party or if the Company determines in good faith in the best interest of a subsidiary and not materially disadvantageous), (ii) create or incur any lien on our assets beyond those outstanding on the date of the Facility Agreement and certain other permitted liens, (iii) dispose of any assets or property or issue, transfer, or provide a controlling, management, or other interest in certain securities of the Company or its guarantors, (iv) incur any indebtedness not to exceed $1,000,000 or as otherwise permitted, (v) make any investments other than as otherwise permitted, (vi) amend our organizational documents or any material agreements in a manner that would reasonably be expected to be materially adverse to the rights of the lenders or (vii) change our reporting practices or fiscal year, in each case, subject to exceptions set forth in the Facility Agreement. Furthermore, under the Facility Agreement, we are required to, among other things, (i) remain a reporting company and maintain the listing of our common shares on an eligible market, (ii) provide the lenders with information regarding any event of default or the occurrence of any material adverse event and (iii) publicly disclose material, nonpublic information that is provided to the lenders without their prior written consent. Subject to customary exceptions and exclusions, our obligations under the Facility Agreement are guaranteed by a perfected, first-priority security interest in substantially all of our personal property, including our intellectual property and the equity ownership interests directly and indirectly held by us in our wholly-owned subsidiaries. Compliance with such covenants and our indebtedness will result in the following, which could materially and adversely affect our business, financial condition and results of operations:

The Company is a leading value-based oncology company that manages community-based oncology practices for the Company and for independent oncology practices that together serve patients at 86 clinic locations across 1617 markets and five states throughout the United States. The Company commenced operations in Oregon in October 2024. As of December 31, 2024,2025, ourwe operate 65 community-based oncology practices arepractices, staffed with 130116 oncologists and advanced practice providers. 72 of these clinics are staffed with 119 providers employed by our affiliated physician-owned professional corporations, referred to as the "TOI PCs,PCs." whichIn providedaddition careto forour moreTOI-affiliated thanproviders, 72,000we patientsalso manage a network of 207 providers in 2023Florida andunder 2024,the respectively,Florida andOncology managedNetwork brand. Collectively across the provider base, we manage a population of approximately 1.92.0 million patients under value-based agreements as of December 31, 2024. The Company also provides management services to 14 clinic locations owned by independent oncology practices.2025. The Company's mission is to heal and empower cancer patients through compassion, innovation, and state-of-the-art medical care.

Operationally, the Company’s medical centers provide a complete suite of medical oncology services including: physician services, in-house infusioninfusion, andin-house specialty pharmacy, clinical trials, radiation,radiation therapy, educational seminars, support groups, counseling, and 24/7 patient assistance. Many of our services, such as managing clinical trials and palliative care programs, are traditionally accessed through academic and tertiary care settings, while the TOI PCs bring these services to patients in a community setting. As scientific research progresses and more treatment options become available, cancer care is shifting from acute care episodes to chronic disease management. With this shift, it is increasingly important for high-quality, high-value cancer care to be available in a local community setting to all patients in need.

The Company receives payments from the following sources for services rendered: (i) commercial insurers; (ii) pharmacy benefit managers (“PBMs”), (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services (“CMS”); (iv) state governments under Medicaid and other programs; (v) other third-party payors and managed care organizations (e.g., risk bearing organizations and independent practice associations (“IPAs”)); and (vi) individual patients and clients.

Revenue primarily consists of capitation revenue, fee-for-service (“FFS”) revenue, dispensaryspecialty pharmacy revenue, and clinical trials revenue. Capitation and FFS revenue comprise the revenues within the Company’s patient services segment and are presented together in the results of operations. The following paragraphs provide a summary of the principal forms of our billing arrangements and how revenue is recognized for each type of revenue.

Capitation revenues consist primarily of fees for medical services provided by the TOI PCs or network providers to the Company's patients under a capitated arrangement with various risk-bearing medical groups or managed care organizations. Capitation revenue is paid monthly based on the number of enrollees by the contracted managed care organizationpayor (per member per month or “PMPM”). Capitation contracts generally have a legal term of one year or longer. Payments in capitation contracts are variable since they primarily include PMPM fees associated with unspecified membership that fluctuates throughout the term of the contract; however, based on our experience, our total underlying membership generally increases over time as penetration of Medicare Advantage products grows.grows and our payor partners, who tend to be the larger and more sophisticated operators within the industry, consolidate. Certain contracts include terms for a capitation deduction where the cost of out-of-network referrals of members are deducted from the future payment. Revenue is recognized in the month services are rendered on the basis of the transaction price established at that time.

FFS revenue represents revenue earned under contracts in which we bill and collect for specific medical services rendered by the TOI PCs’ employed physicians. The terms for FFS contracts are short in duration and only last for the period over which services are rendered (typically, one day). FFS revenue consists of fees for medical services provided to patients. As specialist providers, our FFS revenue is dependent on referrals from other physicians, such as primary care physicians. The Company's affiliated providers build trusted, professional relationships with these physicians and their associated medical groups, which can lead to recurring FFS volume; however, this volume is subject to numerous factors the Company cannot control and can fluctuate over time. The Company also receives FFS revenue for capitated patients that receive medical services which are excluded from the Company's capitation contracts. Under the FFS arrangements, third-party payors and patients are billed for patient care services provided by the TOI PCs. Payments for services provided are generally less than billed charges. The Company records revenue net of an allowance for contractual adjustments, which represents the net revenue expected to be collected from third-party payors (including managed care, commercial, and governmental payors such as Medicare and Medicaid), and patients. These expected collections are based on fees and negotiated payment rates in the case of third-party payors, the specific benefits provided for under each patient’s healthcare plan, mandated payment rates in the case of Medicare and Medicaid programs, and historical gross charges and cash collections (net of recoveries). The recognition of net revenue (gross charges less contractual allowances) from such services is dependent on certain factors, such as the proper completion of medical charts following a patient visit, the forwarding of such charts to our billing center for medical coding and entering into the Company's billing system, and the verification of each patient’s submission or representation at the time services are rendered as to the payor(s) responsible for payment of such services. Revenue is recorded on the date the services are rendered based on the information known at the time of entering of such information into the Company's billing systems as well as an estimate of the revenue associated with medical services.

Oral prescription drugs prescribed by doctors to their patients are sold directly through the TOI PCs’ dispensaries and our newly-acquiredretail pharmacy.pharmacies. Revenue for the prescriptions is based on fee schedules set by various PBMs and other third-party payors. The fee schedule is often subject to direct and indirect remuneration (“DIR”) fees, which are based primarily on pre-established metrics. DIR fees may be assessed in the periods after payments are received against future payments. The Company recognizes revenue, deducted by estimated DIR fees, at the time the patient takes possession of the oral drug.

The TOI PCs also enter into contracts to perform clinical research trials. The terms for clinical trial contracts last many months as the clinical research is performed. Each contract represents a single, integrated set of research activities that are satisfied over time as the output of results from the trial is captured for the trial sponsor to review. Under the clinical trial contracts, the TOI PCs receive a fixed payment for administrative, set-up, and close-down fees; a fixed amount for each patient site visit; and certain expense reimbursements. The Company recognizes revenue for these arrangements on the fees earned to date based on the state of the trial, as established under contract with the customer. On March 31, 2025, the Company entered into a Research Services Agreement ("RSA") with Helios CR, Inc. ("Helios"), effective May 5, 2025, pursuant to which the Clinical Trials segment is operated by Helios in its entirety under a profit sharing arrangement with the Company. As part of the RSA, there is a Transition Services Agreement, in which certain administrative and professional services are provided by Helios for a certain period of time. Additionally, the Company pays a management fee to Helios on a periodic basis for certain shared services.

Direct costs - dispensaryspecialty pharmacy

Direct costs - dispensaryspecialty pharmacy primarily includes the cost of oral medications dispensed in the TOI PCs’ clinic locations.

For the year ended December 31, 2024,2025, the increasedecrease in clinical trials and other revenue was primarily due to an increase in other revenue compared to the priorprofit year.sharing agreement as described in Note 1 of the consolidated financial statements.

The increase in dispensaryspecialty pharmacy cost was primarily due to a 85.9%66.6% increase in the number of prescriptions filled offset by a 2.1%12.5% decrease in the average cost of the prescriptions filled.filled, reflecting both changing drug mix as well as improvement in drug procurement performance resulting from TOI's increasing purchasing scale in addition to the deployment of enhanced analytics and coordination within TOI's medical economics and procurement functions used to optimize drug formulary and rebate attainment.

The decrease in selling, general and administrative expense was primarily driven by a 5.6%59.2% decrease in share-based compensation expense, a 2.1%9.4% decrease in non-clinical payroll, a 2.2% decrease in insurance expense, and a 1.5% decrease in deferred purchase price expensepartially offset by a 2.2%22.5% increase in professional fees,fees and a 1.6%27.5% increase in realsupport estateservices and equipment expenses and a 5.1% increase in office expenses and supplies due to the growth in the Company's management and corporate teams.expenses.

The increase in interest expense compared to the prior year was primarily the result of interesta and amortizationprepayment related to the Senior Secured Convertible NotesNote issuedin which the Company recognized a one-time loss of extinguishment of debt of $2,900 during the yearfirst endedquarter Decemberof 31, 2024.2025.

The decrease in non-operating (income) expense was primarily due to the decrease in gains of $803 and $1,819, respectively during the year ended December 31, 2024, as a result of decreasesincrease in the fair value of earnoutliabilities was primarily due to an unfavorable increase in the fair value of conversion option derivative liabilities due to the stock price increasing year over year with the increased likelihood of redemption. The increase in the derivative warrant liability is due to the increase in the publicly traded warrant price. These measures are related to the derivative warrant liabilities and conversion option derivative liabilities, which were created as part of the Business Combination and the issuance of the Senior Secured Convertible Note, respectively.

(1) IncludesClinics operated under the TOI PCs, whereby we receive a percentage of revenue under our management services agreements, or MSAs, and are consolidated. Additionally, includes independent oncology practices to which we provide limited management services,services and have network provider agreements, but do not bear the operating costs.

(43) Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees during the years ended December 31, 2024 and 2023,fees, and related to certain non-recurring advisory projects,projects softwareduring implementations,the year ended December 31, 2025 and legal fees for debt financing and predecessor litigation matters.2024.

(54) Infrastructure and workforce costs were primarily comprised of non-recurring legal fees related to infrastructure build out and settlements of $2,256 and $3,656, recruiting expenses to build out corporate infrastructure of $1,294$1,338 and $2,227,$1,294, severance expenses resulting from cost rationalization programs of $343$257 and $979,$343, stop-loss contract timing of approximately $1,248 and $0, and temporary labor of $748$217 and $1,365, and lease terminations, settlements, and penalty addbacks of $3,921 and $1,289$748 during the yearsyear ended December 31, 20242025 and 2023,2024, respectively.

(65) Transaction costs were comprised of consulting and legal fees associated with non-recurring due diligence projectsincurred during the year ended December 31, 2024,2025 and related2024 towere comprised of consulting, legal, administrative and regulatory fees associated with sharenon-recurring repurchasesdue anddiligence practice acquisitions during the year ended December 31, 2023.projects.

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. In connection with the preparation of the consolidated financial statements for the year ended December 31, 2024,2025, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to its ability to continue as a going concern within one year after the date of the issuance of such financial statements. The Company had cash and cash equivalents of $49,669$33,565 and an accumulated deficit of $210,813$271,419 at December 31, 2024,2025, and a net loss of $64,663$60,606 and net cash used in operating and investing activities of $26,538$24,587 for the year ended December 31, 2024.2025. In February 2025, the Company entered into an Amendment to the Facility Agreement (see Note 11 - Debt) in which the Company made a partial prepayment of approximately $20 million together with accrued and unpaid interest. Among other items, the Amendment provided for the removal of the financial covenant that required the Company to hold at least $40 million of cash and cash equivalents (see Note 22 — Subsequent Events).equivalents. Additionally, in March 2025, the Company entered into a securities purchase agreement for a private placement that resulted in gross proceeds of approximately $16.5 million, before deducting placement agent fees and offering expenses. Additionally,Also, the Company's lender and existing investor, entered into an exchange agreement, in which approximately $4.1 million aggregate principal amount of the Company's senior secured convertible notes would be exchanged for common-equivalent preferred stock and warrants for common stock. Additionally, from August 2025 through October 2025, the Company raised approximately $13.8 million in net proceeds from a at-the-market offering. The Company does not intend to further use the at-the-market sales agreement related to this offering program.

The Company has also taken a number of other actions to increase cash flow. As one of our strategic priorities in 20242025 and beyond, the Company implemented an initiative to eliminate cash burn. Due to efforts towards working capital management that saw improvements across receivables, inventory, and payables,management, the Company was able to generate a positive cash flow from operations in Q4 20242025 of approximately $4 million.$3,233. Additionally, we generated ana 11%2.1% reduction in SG&A expenses compared to the prior year directly as a result of our ongoing efforts to streamline operations, improve efficiency, and optimize our overhead resourcing.

•Cash usedimpacted by accounts receivable increaseddecreased $1,411$6,333 for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 due to new contract wins and therefore more services being provided and billed.billed;

•Cash providedimpacted by accounts payable and accrued expenses increased $10,527$504 for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 primarily due to an increase in vendor payables resulting from the growth in the Company's business and strategic cash management;

•Cash used by purchasing inventory decreasedincreased $8,024$10,475 for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 asdue ato resultthe year-end buy-in with our primary drug supplier to take advantage of favorablerebates paymentrelated termsto with suppliers and improved inventory management;purchases

Net cash provided by investing activities decreased $16,429$49,285 for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 was primarily due to the decrease in salesales of marketable securities of $31,258,$50,000 offsetduring bythe $9,595same reductionperiod in purchasesthe ofprior marketableyear, securities,which anddid anot decreaseoccur in cashthe usedcurrent for purchases of practice acquisitions and intangibles of $4,456.period.

Net cash used by financing activities decreasedincreased $3,355$15,049 for the year ended December 31, 20242025 as compared to the year ended December 31, 20232024 was primarily due to athe $1,019net decreaseproceeds from the private placement offering of $15,359, net proceeds from at-the-market offering of $13,841, and an increase in theproceeds commonfrom stockoptions repurchaseand thatwarrants wasexercised doneof in$3,285, partially offset by principal payments on the priorsenior year,secured andconvertible anote $2,113of decrease in finance insurance premium payments during year ended December 31, 2024.$20,000.

Our significant accounting policies are more fully described in the notes to our audited consolidated financial statements elsewhere in this Annual Report on Form 10-K. We believe that the following accounting policies and estimates reflects the most critical judgments and estimation uncertainty used in the preparation of our Consolidated Financial Results.

The Company presents the financial statements by segment in accordance with the relevant accounting literature to provide investors with transparency into how the chief operating decision maker (“CODM”) manages the business. The Company's CODM is our Chief Executive Officer. The CODM reviews financial information and allocates resources across three operating segments: dispensary,specialty pharmacy, patient services, and clinical trials & other.

Consolidated revenue primarily consists of capitation revenue, fee-for-service (FFS) revenue, dispensaryspecialty pharmacy revenue, and clinical trials revenue. Revenue is recognized in the period in which services are rendered or the period in which the TOI PCs are obligated to provide services. The form of billing and related risk of collection for such services may vary by type of revenue and the payor. The following paragraphs provide a summary of the principal forms of billing arrangements and how revenue is recognized for each.

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of TheStarling Oncology Institute,Oncology, Inc. ("TOISTLN") along with its consolidating subsidiaries (the "Company"). The discussion should be read together with the unaudited condensed consolidated financial statements and the related notes that are included elsewhere in this Report.Quarterly Report on Form 10-Q. The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are based upon current expectations, as well as management's beliefs and assumptions and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words "believes," "anticipates," "plans," "expects." "intends," and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to such differences include those described under the heading "Risk Factors" (Item 1A) in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission on March 12, 2026. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the filing date of this Quarterly Report on Form 10-Q and we assume no obligation to update any forward-looking statementsstatements, orexcept theas reasonsrequired whyby our actual results may differ. All dollar values are expressed in thousands, unless otherwise noted.law.

Unless the context dictates otherwise, references in this Report on Form 10-Q to the “Company,” “we,” “us,” “our,” and similar words are references to TheStarling Oncology Institute,Oncology, Inc., a Delaware corporation (“TOISTLN”), and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”). All dollar values are expressed in thousands, unless otherwise noted.

The Company is a leading value-based oncology company that manages community-based oncology practices for the Company and for independent oncology practices that together serve patients across 17 markets and five states throughout the United States. As of MarchJune 31,30, 2026, we operate 65 community-based oncology practices, staffed with 116125 oncologists and advanced practice providers employed by our affiliated physician-owned professional corporations, referred to as the "TOIStarling PCs." In addition to our TOI-affiliatedStarling-affiliated providers, we also manage a network of 275791 providers in Florida under the Florida Oncology Network brand and 11 network providers in California. Collectively across the provider base, as of June 30, 2026, we manage a population of approximately 2.02.1 million patients under value-based agreements as of March 31, 2026.agreements. The Company's mission is to heal and empower cancer patients through compassion, innovation, and state-of-the-art medical care..

Operationally, the Company’s medical centers provide a complete suite of medical oncology servicesservices, including: physician services, in-house infusion, in-house specialty pharmacy, clinical trials, radiation therapy, educational seminars, support groups, counseling, and 24/7 patient assistance. Many of our services, such as managing clinical trials and palliative care programs, are traditionally accessed through academic and tertiary care settings, while the TOIStarling PCs bring these services to patients in a community setting. As scientific research progresses and more treatment options become available, cancer care is shifting from acute care episodes to chronic disease management. With this shift, it is increasingly important for high-quality, high-value cancer care to be available in a local community setting to all patients in need.

Capitation revenues consist primarily of fees for medical services provided by the TOIStarling PCs to the Company's patients under a capitated arrangement with various managed care organizations. Capitation revenue is paid monthly based on the number of enrollees by the contracted managed care organization (per member per month or “PMPM”). Capitation contracts generally have a legal term of one year or longer. Payments in capitation contracts are variable since they primarily include PMPM fees associated with unspecified membership that fluctuatesfluctuate throughout the term of the contract; however, based on our experience, our total underlying membership generally increases over time as penetration of Medicare Advantage products grows. Certain contracts include terms for a capitation deduction where the cost of out-of-network referrals of members are deducted from the future payment. Revenue is recognized in the month services are rendered on the basis of the transaction price established at that time.

FFS revenue represents revenue earned under contracts in which we bill and collect for specific medical services rendered by the TOIStarling PCs’ employed physicians. The terms for FFS contracts are short in duration and only last for the period over which services are rendered (typically, one day). FFS revenue consists of fees for medical services provided to patients. As specialist providers, our FFS revenue is dependent on referrals from other physicians, such as primary care physicians. The Company's affiliated providers build trusted, professional relationships with these physicians and their associated medical groups, which can lead to recurring FFS volume; however, this volume is subject to numerous factors the Company cannot control and can fluctuate over time. The Company also receives FFS revenue for capitated patients that receive medical services which are excluded from the Company's capitation contracts. Under the FFS arrangements, third-party payors and patients are billed for patient care services provided by the TOIStarling PCs. Payments for services provided are generally less than billed charges. The Company records revenue net of an allowance for contractual adjustments, which represents the net revenue expected to be collected from third-party payors (including managed care, commercial, and governmental payors such as Medicare and Medicaid), and patients. These expected collections are based on fees and negotiated payment rates in the case of third-party payors, the specific benefits provided for under each patient’s healthcare plan, mandated payment rates in the case of Medicare and Medicaid programs, and historical cash collections (net of recoveries). The recognition of net revenue (gross charges less contractual allowances) from such services is dependent on certain factors, such as the proper completion of medical charts following a patient visit, the forwarding of such charts to our billing center for medical coding and entering into the Company's billing system, and the verification of each patient’s submission or representation at the time services are rendered as to the payor(s) responsible for payment of such services. Revenue is recorded on the date the services are rendered based on the information known at the time of entering of such information into the Company's billing systems as well as an estimate of the revenue associated with medical services.

Oral prescription drugs prescribed by doctors to their patients are sold directly through the TOIStarling PCs’ dispensaries. Revenue for the prescriptions is based on fee schedules set by various PBMs and other third-party payors.

The TOIStarling PCs also enter into contracts to perform clinical research trials. The terms forof the clinical trial contracts lastvary manydepending monthson asthe length of time required for the clinical research is performed.research. Each contract represents a single, integrated set of research activities that are satisfied over time as the output of results from the trial is captured for the trial sponsor to review. Under the clinical trial contracts, the TOIStarling PCs receive a fixed payment for administrative, set-up, and close-down fees; a fixed amount for each patient site visit; and certain expense reimbursements. The Company recognizes revenue for these arrangements on the fees earned to date based on the state of the trial, as established under contract with the customer. On March 31, 2025, the Company entered into a Research Services Agreement ("RSA") with Helios CR, Inc. ("Helios"), effective May 5, 2025, pursuant to which the Helios operates our Clinical Trials & other segment is operated by Helios in its entirety under a profit sharing arrangement with the Company. As part of the RSA, there is a Transition Services Agreement, inpursuant to which certain administrative and professional services are provided by Helios for a certain period of time. Additionally, the Company pays a management fee to Helios on a periodic basis for certain shared services.

Direct costs - patient services primarily includes chemotherapy drug costs, clinician salaries and benefits, and medical supplies. Clinicians include oncologists, advanced practice providers such as physician assistants and nurse practitioners, and registered nurses employed by the TOIStarling PCs.

Direct costs - specialty pharmacy primarily includes the cost of oral medications dispensed in the TOIStarling PCs’ clinic locations.

Network medical expense is the cost of care delivered by our independent network providers and paid by TOIStarling under our fully delegated contracts. For presentation purposes, we eliminate the portion of network medical expense that is paid to TOIStarling PCs who participate in these fully delegated networks.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

The increase in patient services revenue for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in the prior year was primarily due to a 54%48% and 51% increase in capitated revenue, respectively, partially offset by a 10%17% decreaseand 13% decrease, respectively in fee-for-service revenue.revenue Thisfor the prior year three and six month periods. The increase in capitated revenue was driven by momentum in new markets in addition to the impact of our investments in referral relationship management and our ramp up in new capitated contracts.

The decreaseincrease in clinical trials and other revenuerevenue, compared to the three and six months ended June 30, 2025, was due to the profit sharing agreement as described in Note 1 of the financial statements, compared to the three months ended March 31, 2025.statements.

The increase in patient services cost for the three months ended MarchJune 31,30, 2026 as compared to the same quarter prior year was primarily due to a 10%17.3% increase in clinical payroll costs as the Company adjusts physician compensation to better match performance and volume.volume, primarily offset by 11.7% decrease in IV drug costs as the Company leverages it's rebate programs with its primary vendor. The increase in patient service costs for the six months ended June 30, 2026 as compared to the same period prior year was primarily due to increases in clinical payroll costs, partially offset by a decrease in IV drug costs.

The increase in specialty pharmacy cost for the three months ended MarchJune 31,30, 2026 was primarily due to a 102.8%88.3% increase in the number of prescriptions filled offset by a 12.5%19.6% decrease in the average cost of the prescriptions filled, as compared to the samethree quartermonths priorended year.June 30, 2025. The increase in specialty pharmacy cost for the six months ended June 30, 2026 was primarily due to a 94.5% increase in the number of prescriptions filled, partially offset by a 16.3% decrease in the average cost of the prescriptions filled, as compared to the six months ended June 30, 2025.

The decrease in interest expense for the three and six months ended MarchJune 31,30, 2026 compared to the prior year same periodperiods was primarily the result of a prepayment and debt conversion related to the Senior Secured Convertible Note in which the Company recognized a loss of extinguishment of debt of $2,900 during the first quarter of 2025. The decrease in the principal balance of the Senior Secured Convertible NoteNotes decreased the Company's interest payments for the remainder of 2025 and continuing into 2026.

The decreasechange in the fair value of liabilities was primarily due to athe $4,996 favorable increasechange in the fair value of conversion option derivative liabilities due to the stock price decreasingfluctuations, term, risk-free rates and volatility for the three and six months ended MarchJune 31,30, 20262026, as compared to the same period prior quarter.year period.

(1) ClinicsNumber of clinics operated under the TOIStarling PCs, whereby we receive a percentage of revenue under our management services agreements, or MSAs, and are consolidated. Additionally, includes independent oncology practices to which we provide limited management services and have network provider agreements, but do not bear the operating costs.

(1) During the three months ended MarchJune 31,30, 2026, non-cash addbacks was primarily comprised of non-cash rent expense. During the three months ended June 30, 2025, non-cash addbacks was primarily comprised of the write-off of the net assets of the Clinical Trials segment of $2,398.

(3) Consulting fees were comprised of a subset of the Company’s total consulting fees,fees primarily related to re-branding, and related to certain non-recurring advisory projects during the three months ended MarchJune 31,30, 2026.2026 and 2025.

(4) Infrastructure and workforce costs were primarily comprised of recruiting expenses to build out corporate infrastructure of $169$305 and $277,$150, severance expenses resulting from cost rationalization programs of $242$15 and $140,$49, stop-loss contract timing of approximately $1$0 and $0, EOM/CMS performance period non-recurring addback of $818$1,099, and $0,reversal and non-recurring legal fees related to infrastructure build out andof settlements of $321$165 and $782$487 during the three months ended MarchJune 31,30, 2026 and 2025, respectively.

The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. In connection with the preparation of the condensed consolidated financial statements for the three months ended MarchJune 31,30, 2026, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to its ability to continue as a going concern within one year after the date of the issuance of such financial statements. The Company had cash and cash equivalents of $30,280 and an accumulated deficit of $273,911 at March 31, 2026, and a net loss of $2,492 and net cash used in operations of $2,215 for the three months ended March 31, 2026.

Significant changes impacting net cash and cash equivalents provided by (used in) operating activities for the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025 were as follows:

•Cash used by inventory decreased $5,146$2,611 due to ana increasedecrease in quarterly drug buy-ins at period end for participation in rebate programs with our primary supplier; and

•Cash provided by accounts payable and accrued expenses increased by $905$10,713 primarily due to cash management initiatives with our primary vendors.

Net cash used in investing activities increased $840$540 for the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025 primarily due to the increase in purchases of property and equipment of $714$414 as compared to same period in the prior year.

Net cash used in financing activities decreased $4,712$2,531 for the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to principal payments on the convertible note of $20,000, offset by proceeds from the private placement offering of $15,359 and proceeds from option exercises of $2,340 during the threesix months ended MarchJune 31,30, 2025.

The Company's material cash requirements for the following five years consist of debt servicing requirements, operating leases and other miscellaneous administrative expenses. Additionally, the Company is subject to certain outside claims and litigation arising out of the ordinary course of business, however, no such litigation requires future cash expenditure as of MarchJune 31,30, 2026.

The Company consolidates entities for which it has a variable interest and is determined to be the primary beneficiary. The Company holds variable interests in the TOIStarling PCs, comprised of TOIStarling CA, TOIStarling FL, TOIStarling OR and TOIStarling TX due to jurisdictional laws governing the corporate practice of medicine or other restrictions. The TOIStarling PCs employ physicians and other clinicians in order to provide professional services to patients of our managed clinics, and under substantially similar MSAs, we serve as the exclusive manager and administrator of the TOIStarling PCs’ non-medical functions and services. The TOIStarling PCs are considered variable interest entities (“VIEs”) as they do not have sufficient equity to finance their activities without additional financial support from the Company. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits — that is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance (power), and (2) the obligation to absorb the losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power to control all financial activities of the TOIStarling PCs, the rights to receive substantially all benefits from the VIEs, and consequently consolidates the TOIStarling PCs. Revenues, expenses, and income along with the balance sheet accounts from the TOIStarling PCs are included in the consolidated amounts as presented on the Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets.

The Company presents the condensed consolidated financial statements by segment in accordance with the relevant accounting literature to provide investors with transparency into how the chief operating decision makermaker, or “or CODM” manages the business. The Company's CODM is our Chief Executive Officer. The CODM reviews financial information and allocates resources across three operating segments: specialty pharmacy, patient care, and clinical trials and other.

Consolidated revenue primarily consists of capitation revenue, fee-for-service (FFS) revenue, specialty pharmacy revenue, and clinical trials revenue. Revenue is recognized in the period in which services are rendered or the period in which the TOIStarling PCs are obligated to provide services. The form of billing and related risk of collection for such services may vary by type of revenue and the payor. The following paragraphs provide a summary of the principal forms of billing arrangements and how revenue is recognized for each.