onem-10q_20200331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to

Commission File Number: 001-39203

 

1LIFE HEALTHCARE, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

76-0707204

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

One Embarcadero Center, Suite 1900

San Francisco, CA 94111

94111

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(415) 658-6792

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value

 

ONEM

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  

As of April 30, 2020, the registrant had 126,126,553 shares of common stock, $0.001 par value per share, outstanding.

 

 

 


Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Comprehensive Loss

3

 

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Equity (Deficit)

4

 

Condensed Consolidated Statements of Cash Flows

6

 

Notes to Unaudited condensed consolidated financial statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

34

 

 

 

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

39

Item 3.

Defaults Upon Senior Securities

40

Item 4.

Mine Safety Disclosures

40

Item 5.

Other Information

40

Item 6.

Exhibits

41

Signatures

42

 

Where You Can Find More Information

Investors and others should note that we announce material financial and other information using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also post supplemental materials on the “Events and Presentations” section of its investor relations website at investor.onemedical.com. Except as specifically noted herein, information on or accessible through One Medical’s website is not, and will not be deemed to be, a part of this Quarterly Report on Form 10-Q or incorporated by reference into any other filings we may make with the U.S. Securities and Exchange Commission (the “SEC”).

The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on our investor relations website.

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

1LIFE HEALTHCARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

(unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

309,647

 

 

$

27,390

 

Short-term marketable securities

 

 

65,784

 

 

 

119,146

 

Accounts receivable, net

 

 

42,826

 

 

 

33,601

 

Inventories

 

 

3,694

 

 

 

3,192

 

Prepaid expenses and other current assets

 

 

22,370

 

 

 

16,708

 

Total current assets

 

 

444,321

 

 

 

200,037

 

Restricted cash

 

 

1,922

 

 

 

1,922

 

Property and equipment, net

 

 

103,500

 

 

 

90,716

 

Right-of-use assets

 

 

128,476

 

 

 

108,046

 

Intangible assets, net

 

 

-

 

 

 

23

 

Goodwill

 

 

21,301

 

 

 

21,301

 

Other assets

 

 

4,854

 

 

 

8,249

 

Total assets

 

$

704,374

 

 

$

430,294

 

Liabilities, Redeemable Convertible Preferred Stock and Equity (Deficit)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

9,263

 

 

$

13,853

 

Accrued expenses

 

 

24,921

 

 

 

24,863

 

Deferred revenue

 

 

39,463

 

 

 

27,024

 

Operating lease liabilities, current

 

 

14,457

 

 

 

12,575

 

Notes payable, current

 

 

2,191

 

 

 

3,282

 

Other current liabilities

 

 

2,393

 

 

 

1,884

 

Total current liabilities

 

 

92,688

 

 

 

83,481

 

Operating lease liabilities, non-current

 

 

143,248

 

 

 

120,497

 

Redeemable convertible preferred stock warrant liability

 

 

-

 

 

 

7,220

 

Other non-current liabilities

 

 

627

 

 

 

639

 

Total liabilities

 

 

236,563

 

 

 

211,837

 

Commitments and contingencies (Note 14 )

 

 

 

 

 

 

 

 

Redeemable convertible preferred stock (Series A, B, C, D, E, F, G, H and I),

   $0.001 par value; 0 and 89,338,425 shares authorized as of March 31, 2020 and December 31, 2019, respectively; 0 and 86,251,669 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $0 and $405,585 as of March 31, 2020 and December 31, 2019, respectively

 

 

-

 

 

 

402,488

 

Equity (deficit):

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares and 0 shares authorized as of March 31, 2020 and December 31, 2019, respectively; 0 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively

 

 

-

 

 

 

-

 

Common stock, $0.001 par value, 1,000,000,000 and 150,000,000 shares authorized as of March 31, 2020 and December 31, 2019, respectively; 126,102,772 and 18,951,416 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively

 

 

126

 

 

 

19

 

Additional paid-in capital

 

 

780,194

 

 

 

93,945

 

Accumulated deficit

 

 

(314,922

)

 

 

(281,068

)

Accumulated other comprehensive income

 

 

82

 

 

 

38

 

Total stockholders' equity (deficit) attributable to 1Life Healthcare,

   Inc. stockholders'

 

 

465,480

 

 

 

(187,066

)

Noncontrolling interests

 

 

2,331

 

 

 

3,035

 

Total equity (deficit)

 

 

467,811

 

 

 

(184,031

)

Total liabilities, redeemable convertible preferred stock and

   equity (deficit)

 

$

704,374

 

 

$

430,294

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


1LIFE HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Net revenue

 

$

78,756

 

 

$

63,010

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of care, exclusive of depreciation and amortization shown

   separately below

 

 

51,550

 

 

 

37,780

 

Sales and marketing

 

 

11,155

 

 

 

8,275

 

General and administrative

 

 

39,866

 

 

 

22,419

 

Depreciation and amortization

 

 

5,213

 

 

 

2,699

 

Total operating expenses

 

 

107,784

 

 

 

71,173

 

Loss from operations

 

 

(29,028

)

 

 

(8,163

)

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest income

 

 

1,035

 

 

 

1,347

 

Interest expense

 

 

(54

)

 

 

(155

)

Change in fair value of redeemable convertible preferred

   stock warrant liability

 

 

(6,560

)

 

 

(63

)

Total other income (expense), net

 

 

(5,579

)

 

 

1,129

 

Loss before income taxes

 

 

(34,607

)

 

 

(7,034

)

Provision (benefit) for income taxes

 

 

(49

)

 

 

10

 

Net loss

 

 

(34,558

)

 

 

(7,044

)

Less: Net loss attributable to noncontrolling interests

 

 

(704

)

 

 

(374

)

Net loss attributable to 1Life Healthcare, Inc. stockholders

 

$

(33,854

)

 

$

(6,670

)

Net loss per share attributable to 1Life Healthcare, Inc.

   stockholders basic and diluted

 

$

(0.40

)

 

$

(0.37

)

Weighted average common shares outstanding — basic and

   diluted

 

 

84,884,066

 

 

 

18,204,715

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


1LIFE HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Net loss

 

$

(34,558

)

 

$

(7,044

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

Net unrealized gain on short-term marketable securities

 

 

44

 

 

 

31

 

Comprehensive loss

 

 

(34,514

)

 

 

(7,013

)

Less: Comprehensive loss attributable to noncontrolling

   interests

 

 

(704

)

 

 

(374

)

Comprehensive loss attributable to 1Life Healthcare, Inc.

   stockholders

 

$

(33,810

)

 

$

(6,639

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

3


 

1LIFE HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)

(Amounts in thousands, except share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders'

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

to 1Life

 

 

 

 

 

 

 

 

 

 

 

Redeemable Convertible

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Healthcare,

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Inc.

 

 

Noncontrolling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Stockholders'

 

 

Interests

 

 

Equity (Deficit)

 

Balances at December 31, 2018

 

 

86,251,669

 

 

$

402,488

 

 

 

18,135,457

 

 

$

18

 

 

$

76,029

 

 

$

(228,449

)

 

$

(14

)

 

$

(152,416

)

 

$

4,176

 

 

$

(148,240

)

Impact of adoption of ASC 606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(65

)

 

 

 

 

 

 

(65

)

 

 

 

 

 

 

(65

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

587

 

 

 

 

 

 

 

 

 

 

 

587

 

 

 

 

 

 

 

587

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,954

 

 

 

 

 

 

 

 

 

 

 

2,954

 

 

 

 

 

 

 

2,954

 

Net unrealized gain on short-term marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

31

 

 

 

 

 

 

 

31

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,670

)

 

 

 

 

 

 

(6,670

)

 

 

(374

)

 

 

(7,044

)

Balances at March 31, 2019

 

 

86,251,669

 

 

$

402,488

 

 

 

18,135,457

 

 

$

18

 

 

$

79,570

 

 

$

(235,184

)

 

$

17

 

 

$

(155,579

)

 

$

3,802

 

 

$

(151,777

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements

4


1LIFE HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)

(Amounts in thousands, except share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders'

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

to 1Life

 

 

 

 

 

 

 

 

 

 

 

Redeemable Convertible

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

Healthcare,

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Inc.

 

 

Noncontrolling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Stockholders'

 

 

Interests

 

 

Equity (Deficit)

 

Balances at December 31, 2019

 

 

86,251,669

 

 

$

402,488

 

 

 

18,951,416

 

 

$

19

 

 

$

93,945

 

 

$

(281,068

)

 

$

38

 

 

$

(187,066

)

 

$

3,035

 

 

$

(184,031

)

Exercise of redeemable convertible preferred stock warrant

 

 

5,573

 

 

 

76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

Conversion of redeemable convertible preferred stock into common

    stock upon closing of initial public offering

 

 

(86,257,242

)

 

 

(402,564

)

 

 

86,257,242

 

 

 

86

 

 

 

402,478

 

 

 

 

 

 

 

 

 

 

 

402,564

 

 

 

 

 

 

 

402,564

 

Issuance of common stock upon closing of initial

    public offering, net of issuance costs and underwriting

    fees of $23,631

 

 

 

 

 

 

 

 

 

 

20,125,000

 

 

 

20

 

 

 

258,099

 

 

 

 

 

 

 

 

 

 

 

258,119

 

 

 

 

 

 

 

258,119

 

Fair value adjustment to redeemable convertible preferred stock warrants upon conversion into common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,740

 

 

 

 

 

 

 

 

 

 

 

13,740

 

 

 

 

 

 

 

13,740

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

293,807

 

 

 

-

 

 

 

1,534

 

 

 

 

 

 

 

 

 

 

 

1,534

 

 

 

 

 

 

 

1,534

 

Exercise of common stock warrants

 

 

 

 

 

 

 

 

 

 

11,010

 

 

 

-

 

 

 

73

 

 

 

 

 

 

 

 

 

 

 

73

 

 

 

 

 

 

 

73

 

Cashless exercise of common stock warrants

 

 

 

 

 

 

 

 

 

 

464,297

 

 

 

1

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

1

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,325

 

 

 

 

 

 

 

 

 

 

 

10,325

 

 

 

 

 

 

 

10,325

 

Net unrealized gain on short-term marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44

 

 

 

44

 

 

 

 

 

 

 

44

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33,854

)

 

 

 

 

 

 

(33,854

)

 

 

(704

)

 

 

(34,558

)

Balances at March 31, 2020

 

 

-

 

 

$

-

 

 

 

126,102,772

 

 

$

126

 

 

$

780,194

 

 

$

(314,922

)

 

$

82

 

 

$

465,480

 

 

$

2,331

 

 

$

467,811

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

 

5


 

1LIFE HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(34,558

)

 

$

(7,044

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Provision for bad debts

 

 

150

 

 

 

-

 

Depreciation and amortization

 

 

5,213

 

 

 

2,699

 

Accretion of discounts and amortization of premiums on short-term marketable securities, net

 

 

(298

)

 

 

(1,118

)

Change in fair value of redeemable convertible preferred stock warrant liability

 

 

6,560

 

 

 

63

 

Amortization of right-of-use assets

 

 

3,177

 

 

 

2,358

 

Stock-based compensation

 

 

10,325

 

 

 

2,954

 

Other non-cash items

 

 

(1

)

 

 

37

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(9,375

)

 

 

(9,044

)

Inventories

 

 

(502

)

 

 

248

 

Prepaid expenses and other current assets

 

 

(2,225

)

 

 

(3,186

)

Other assets

 

 

(232

)

 

 

(298

)

Accounts payable

 

 

(4,022

)

 

 

1,661

 

Accrued expenses

 

 

2,552

 

 

 

(3,479

)

Deferred revenue

 

 

12,439

 

 

 

4,420

 

Operating lease liabilities

 

 

(2,411

)

 

 

(1,831

)

Other liabilities

 

 

508

 

 

 

133

 

Net cash used in operating activities

 

 

(12,700

)

 

 

(11,427

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment, net

 

 

(20,458

)

 

 

(6,319

)

Purchases of short-term marketable securities

 

 

(47,573

)

 

 

(87,267

)

Maturities of short-term marketable securities

 

 

101,314

 

 

 

104,800

 

Net cash provided by investing activities

 

 

33,283

 

 

 

11,214

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from initial public offering

 

 

281,750

 

 

 

-

 

Payment of underwriting discount and commissions and offering costs

 

 

(20,609

)

 

 

-

 

Proceeds from the exercise of stock options

 

 

1,534

 

 

 

587

 

Proceeds from the exercise of redeemable convertible preferred and common stock

   warrants

 

 

110

 

 

 

-

 

Repayment of notes payable

 

 

(1,100

)

 

 

(1,100

)

Payment of principal portion of finance lease liability

 

 

(11

)

 

 

-

 

Net cash provided by (used in) financing activities

 

 

261,674

 

 

 

(513

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

282,257

 

 

 

(726

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

29,329

 

 

 

38,656

 

Cash, cash equivalent and restricted cash at end of period

 

$

311,586

 

 

$

37,930

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

49

 

 

$

133

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued

   expenses

 

$