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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, 2022
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)
Delaware76-0707204
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Embarcadero Center, Suite 1900
San Francisco, CA 94111
(Address of principal executive offices and zip code)

(415) 814-0927
(Registrant’s telephone number, including area code)

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, a 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 18, 2022, the registrant had 194,047,510 shares of common stock, $0.001 par value per share, outstanding. 





Table of Contents
 
  Page
PART I. 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
   
PART II. 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 
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” section of our investor relations website at investor.onemedical.com. Except as specifically noted herein, information on or accessible through our 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”).
We also use our Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 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 par value amounts)
(unaudited)
March 31, 2022December 31, 2021
Assets  
Current assets:  
Cash and cash equivalents$239,978 $341,971 
Short-term marketable securities141,064 111,671 
Accounts receivable, net142,288 103,498 
Inventories6,021 6,065 
Prepaid expenses31,466 28,055 
Other current assets23,311 21,767 
Total current assets584,128 613,027 
Long-term marketable securities47,438 48,296 
Restricted cash3,801 3,801 
Property and equipment, net199,137 193,716 
Right-of-use assets266,592 256,293 
Intangible assets, net341,200 352,158 
Goodwill1,145,094 1,147,464 
Other assets8,639 12,277 
Total assets$2,596,029 $2,627,032 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$15,842 $18,725 
Accrued expenses73,534 72,672 
Deferred revenue, current64,317 47,928 
Operating lease liabilities, current33,316 31,152 
Other current liabilities34,088 31,632 
Total current liabilities221,097 202,109 
Operating lease liabilities, non-current283,206 269,641 
Convertible senior notes310,313 309,844 
Deferred income taxes67,141 73,875 
Deferred revenue, non-current27,385 29,317 
Other non-current liabilities11,042 13,663 
Total liabilities920,184 898,449 
Commitments and contingencies (Note 13)
Stockholders' Equity:
Common stock, $0.001 par value, 1,000,000 and 1,000,000 shares authorized as of March 31, 2022 and December 31, 2021, respectively; 193,483 and 191,722 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
194 193 
Additional paid-in capital2,385,934 2,346,781 
Accumulated deficit(709,057)(618,198)
Accumulated other comprehensive income(1,226)(193)
Total stockholders' equity1,675,845 1,728,583 
Total liabilities and stockholders' equity$2,596,029 $2,627,032 
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 per share amounts)
(unaudited)
 
Three Months Ended March 31,
 20222021
Net revenue:
Medicare revenue$127,422 $ 
Commercial revenue126,680 121,352 
Total net revenue254,102 121,352 
Operating expenses:
Medical claims expense104,966  
Cost of care, exclusive of depreciation and amortization shown separately below101,377 70,092 
Sales and marketing22,459 12,689 
General and administrative97,036 64,345 
Depreciation and amortization20,893 6,607 
Total operating expenses346,731 153,733 
Loss from operations(92,629)(32,381)
Other income (expense), net:
Interest income157 105 
Interest and other expense(5,119)(2,843)
Total other income (expense), net(4,962)(2,738)
Loss before income taxes(97,591)(35,119)
Provision for (benefit from) income taxes(6,732)4,199 
Net loss$(90,859)$(39,318)
Net loss per share — basic and diluted$(0.47)$(0.29)
Weighted average common shares outstanding — basic and diluted193,019 136,516 
 
 
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,
 20222021
Net loss$(90,859)$(39,318)
Other comprehensive loss:
Net unrealized gain (loss) on marketable securities(1,033)12 
Comprehensive loss$(91,892)$(39,306)
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Amounts in thousands)
(unaudited) 
 Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity (Deficit)
 SharesAmount
Balances at December 31, 2021191,722 $193 $2,346,781 $(618,198)$(193)$1,728,583 
Exercise of stock options57912,234 2,235 
Issuance of common stock for settlement of RSUs442 — 
Issuance of common stock in acquisition740 — 
Stock-based compensation expense36,919 36,919 
Net unrealized gain (loss) on marketable securities(1,033)(1,033)
Net loss(90,859)(90,859)
Balances at March 31, 2022193,483 $194 $2,385,934 $(709,057)$(1,226)$1,675,845 

Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity (Deficit)
SharesAmount
Balances at December 31, 2020134,472 $134 $918,118 $(369,785)$8 $548,475 
Impact of adoption of ASU 2020-06(73,393)6,656 (66,737)
Impact of adoption of ASC 326(428)(428)
Exercise of stock options2,584 3 13,476 13,479 
Issuance of common stock for settlement of RSUs241 — 
Stock-based compensation expense26,328 26,328 
Net unrealized gain (loss) on marketable securities12 12 
Net loss(39,318)(39,318)
Balances at March 31, 2021137,297 $137 $884,529 $(402,875)$20 $481,811 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited) 
Three Months Ended March 31,
 20222021
Cash flows from operating activities:  
Net loss$(90,859)$(39,318)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for bad debts281 (60)
Depreciation and amortization20,893 6,607 
Amortization of debt discount and issuance costs469 468 
Accretion of discounts and amortization of premiums on marketable securities, net338 199 
Reduction of operating lease right-of-use assets7,950 4,156 
Stock-based compensation36,919 26,328 
Deferred income taxes(6,734) 
Other non-cash items211 202 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net(39,071)8,583 
Inventories44 2,478 
Prepaid expenses and other current assets(999)(4,870)
Other assets2,625 (171)
Accounts payable(680)(1,248)
Accrued expenses2,529 8,168 
Deferred revenue14,457 11,050 
Operating lease liabilities(6,687)(4,434)
Other liabilities3,230 3,946 
Net cash (used in) provided by operating activities(55,084)22,084 
Cash flows from investing activities:
Purchases of property and equipment, net(19,225)(14,808)
Purchases of marketable securities(54,906)(69,995)
Proceeds from sales and maturities of marketable securities25,000 339,000 
Net cash (used in) provided by investing activities(49,131)254,197 
Cash flows from financing activities:
Proceeds from the exercise of stock options2,235 13,479 
Payment of principal portion of finance lease liability(13)(14)
Net cash provided by financing activities2,222 13,465 
Net (decrease) increase in cash, cash equivalents and restricted cash(101,993)289,746 
Cash, cash equivalents and restricted cash at beginning of period346,054 115,005 
Cash, cash equivalents and restricted cash at end of period$244,061 $404,751 
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses$6,837 $6,115 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
(unaudited)

1.Nature of the Business and Basis of Presentation
1Life Healthcare, Inc. (“1Life”) was incorporated in Delaware on July 25, 2002. 1Life’s headquarters are located in San Francisco, California. 1Life has developed a modernized healthcare membership model based on direct consumer enrollment and third-party sponsorship across commercially insured and Medicare populations. Our membership model includes access to 24/7 digital health services paired with in-office care routinely covered by most health care payers, and allows the Company to engage in value-based care across all age groups, including through At-Risk arrangements as defined in Note 2 “Summary of Significant Accounting Policies” with Medicare Advantage payers and the Center for Medicare & Medicaid Services ("CMS"), in which the Company is responsible for managing a range of healthcare services and associated costs of its members. 1Life is also an administrative and managerial services company that provides services pursuant to contracts with physician-owned professional corporations (“One Medical PCs”) that provide medical services virtually and in-office.
On September 1, 2021, 1Life completed the acquisition of Iora Health, Inc. ("Iora Health"), a human-centered, value-based primary care group with built-for-purpose technology focused on serving the Medicare population.
Iora Health and Iora Senior Health, Inc. (“Iora Senior Health”) are administrative and managerial service companies that provide services pursuant to contracts with physician-owned professional corporations (“Iora PCs”, together with the One Medical PCs, the “PCs”) that provide medical services virtually and in-office.
Iora Health is an administrative and managerial services company that provides services pursuant to contracts with Iora Health NE DCE, LLC, a limited liability company that participates in the Center for Medicare and Medicaid Services’ direct contracting model (the “DCE entity”). Iora Health, Iora Senior Health, the Iora PCs and the DCE entity are collectively referred to herein as “Iora”. See Note 7 "Business Combinations" to the unaudited condensed consolidated financial statements.
1Life, Iora Health, Iora Senior Health, the PCs and the DCE entity are collectively referred to herein as the “Company”. 1Life and the One Medical PCs operate under the brand name One Medical.
Basis of Presentation
The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. GAAP.
The accompanying condensed consolidated financial statements include the accounts of 1Life, Iora Health and Iora Senior Health, their wholly owned subsidiaries, and variable interest entities (“VIE”) in which 1Life, Iora Health and Iora Senior Health have an interest and are the primary beneficiaries. See Note 3, “Variable Interest Entities”. All significant intercompany balances and transactions have been eliminated in consolidation.
In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its condensed consolidated financial position, results of operations, comprehensive loss and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with the SEC on February 23, 2022 (the “Form 10-K”).
Use of Estimates
The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP and regulations of the SEC requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates include, but are not limited to, revenue recognition, liability for medical claims incurred in the period but not yet reported (“IBNR”), valuation of certain assets and liabilities acquired from business combinations, and stock-based compensation. Actual results could differ from these estimates and may result in material effects on the Company’s operating results and financial position.
6


Due to the COVID-19 global pandemic, the global economy and financial markets have been disrupted and there continues to be a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or an adjustment to the carrying value of its assets or liabilities. The accounting estimates and other matters assessed include, but were not limited to, allowance for credit losses, goodwill and other long-lived assets, and revenue recognition. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020. Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes various tax and lending provisions, among others. Under the CARES Act, the Company received an income grant from the Provider Relief Fund administered by the Department of Health and Human Services (“HHS”), which we recognized as Grant income during the three months ended March 31, 2021. The Company did not receive any income grant from the HHS for the three months ended March 31, 2022. See Note 5, "Revenue Recognition".
Cash, Cash Equivalents and Restricted Cash
The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. Cash and cash equivalents consist of cash on deposit, investments in money market funds and commercial paper. Restricted cash represents cash held under letters of credit for various leases and certain At-Risk arrangements. The expected duration of restrictions on the Company’s restricted cash generally ranges from 1 to 8 years.
The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet line items that sum to the total of the same such amount shown in the condensed consolidated statements of cash flows is as follows:
 March 31,December 31,March 31,December 31,
 2022202120212020
Cash and cash equivalents$239,978 $341,971 $402,721 $112,975 
Restricted cash, current (included in other current assets)282 282 119 119 
Restricted cash, non-current3,801 3,801 1,911 1,911 
Total cash, cash equivalents, and restricted cash$244,061 $346,054 $404,751 $115,005 
Concentration of Credit Risk and Significant Customers
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. The Company’s cash balances with individual banking institutions might be in excess of federally insured limits. Cash equivalents are invested in highly rated money market funds and commercial paper. The Company’s marketable securities are invested in U.S. Treasury obligations and commercial paper. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. The Company grants unsecured credit to patients, most of whom reside in the service area of the One Medical or Iora facilities and are largely insured under third-party payer agreements. The Company’s concentration of credit risk is limited by the diversity, geography and number of patients and payers.
The table below presents the customers or payers that individually represented 10% or more of the Company’s accounts receivable, net balance as of March 31, 2022 and December 31, 2021. 
 March 31,December 31,
 20222021
Customer F39 %38 %
Customer I19 %23 %
* Represents percentages below 10% of the Company’s accounts receivable in the period.
7


The table below presents the customers or payers that individually represented 10% or more of the Company’s net revenue for the three months ended March 31, 2022 and 2021.
 Three Months Ended March 31,
 20222021
Customer A*12 %
Customer F*12 %
Customer I27 %N/A
Customer J18 %N/A
* Represents percentages below 10% of the Company’s net revenue in the period.
2.Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 2 “Summary of Significant Accounting Policies” in Item 15 of its Form 10-K for the fiscal year ended December 31, 2021.
Recently Adopted Pronouncements as of March 31, 2022
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021. The Company adopted the standard on January 1, 2022 on a prospective basis. The adoption did not have a material impact to the Company's condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted as of March 31, 2022
There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance or potential significance to the Company as of March 31, 2022.
3.Variable Interest Entities
1Life, Iora Health and Iora Senior Health's agreements with the PCs generally consist of both Administrative Services Agreements (“ASAs”), which provide for various administrative and management services to be provided by 1Life, Iora Health or Iora Senior Health, respectively, to the PCs, and succession agreements, which provide for transition of ownership of the PCs under certain conditions ("Succession Agreements").
The ASAs typically provide that the term of the arrangements is ten to twenty years with automatic renewal for successive one-year terms, subject to termination by the contracting parties in certain specified circumstances. The outstanding voting equity instruments of the PCs are owned by nominee shareholders appointed by 1Life, Iora Health or Iora Senior Health (or the PC in one instance) under the terms of the Succession Agreements or other shareholders who are also subject to the terms of the Succession Agreements. 1Life, Iora Health and Iora Senior Health have the right to receive income as an ongoing administrative fee in an amount that represents the fair value of services rendered and has provided all financial support through loans to the PCs. 1Life, Iora Health and Iora Senior Health have exclusive responsibility for the provision of all nonmedical services including facilities, technology and intellectual property required for the day-to-day operation and management of each of the PCs, and makes recommendations to the PCs in establishing the guidelines for the employment and compensation of the physicians and other employees of the PCs. In addition, the agreements provide that 1Life, Iora Health and Iora Senior Health have the right to designate a person(s) to purchase the stock of the PCs for a nominal amount in the event of a succession event. Based upon the provisions of these agreements, 1Life determined that the PCs are variable interest entities due to its equity holder having insufficient capital at risk, and 1Life has a variable interest in the PCs.
The contractual arrangement to provide management services allows 1Life, Iora Health or Iora Senior Health to direct the economic activities that most significantly affect the PCs. Accordingly, 1Life, Iora Health or Iora Senior Health is the primary beneficiary of the PCs and consolidates the PCs under the VIE model. Furthermore, as a direct result of nominal initial equity contributions by the physicians, the financial support 1Life, Iora Health or Iora Senior Health provides to the PCs (e.g. loans) and the provisions of the nominee shareholder succession arrangements described above, the interests held by noncontrolling interest holders lack economic substance and do not provide them with the ability to participate in the residual
8


profits or losses generated by the PCs. Therefore, all income and expenses recognized by the PCs are allocated to 1Life stockholders. The aggregate carrying value of the assets and liabilities included in the condensed consolidated balance sheets for the PCs after elimination of intercompany transactions and balances were $136,405 and $122,520, respectively, as of March 31, 2022 and $129,474 and $115,744, respectively, as of December 31, 2021.
4.Fair Value Measurements and Investments
Fair Value Measurements
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis:
 Fair Value Measurements as of March 31, 2022 Using:
 Level 1Level 2Level 3Total
Cash equivalents:
Money market fund$195,964 $ $ $195,964 
Short-term marketable securities:
U.S. Treasury obligations107,619   107,619 
Commercial paper 33,445  33,445 
Long-term marketable securities:
U.S. Treasury obligations47,438   47,438 
 Total financial assets$351,021 $33,445 $ $384,466 
 Fair Value Measurements as of December 31, 2021 Using:
 Level 1Level 2Level 3Total
Cash equivalents:
Money market fund$315,817 $ $ $315,817 
Short-term marketable securities:
U.S. Treasury obligations58,232   58,232 
Foreign government bonds 5,012  5,012 
Commercial paper 48,427  48,427 
Long-term marketable securities:
U.S. Treasury obligations48,296   48,296 
 Total financial assets$422,345 $53,439 $ $475,784 
Our financial assets are valued using market prices on both active markets (Level 1) and less active markets (Level 2). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs.
During the three months ended March 31, 2022 and 2021, there were no transfers between Level 1, Level 2 and Level 3.
Valuation of Convertible Senior Notes
The Company has $316,250 aggregate principal amount outstanding of 3.0% convertible senior notes due in 2025 (the “2025 Notes”). See Note 9, “Convertible Senior Notes” for details.
The fair value of the 2025 Notes was $275,210 and $288,461 as of March 31, 2022 and December 31, 2021, respectively. The fair value was determined based on the closing trading price of the 2025 Notes as of the last day of trading for the period. The fair value of the 2025 Notes is primarily affected by the trading price of the Company's common stock and market interest rates. The fair value of the 2025 Notes is considered a Level 2 measurement as they are not actively traded.
9


Investments
At March 31, 2022 and December 31, 2021, the Company’s cash equivalents and marketable securities were as follows:
 March 31, 2022
Amortized
cost
Gross
unrealized
gains (losses)
Fair value
Cash equivalents:
Money market fund$195,964 $— $195,964 
Total cash equivalents195,964 — 195,964 
Short-term marketable securities:
U.S. Treasury obligations108,020 (401)107,619 
Commercial paper33,445  33,445 
Total short-term marketable securities141,465 (401)141,064 
Long-term marketable securities:
U.S. Treasury obligations48,263 (825)47,438 
Total cash equivalents and marketable securities$385,692 $(1,226)$384,466 
 December 31, 2021
Amortized
cost
Gross
unrealized
gains (losses)
Fair value
Cash equivalents:
Money market fund$315,817 $— $315,817 
Total cash equivalents315,817 — 315,817 
Short-term marketable securities:
U.S. Treasury obligations58,293 (61)58,232 
Foreign government bonds5,013 (1)5,012 
Commercial paper48,427  48,427 
Total short-term marketable securities111,733 (62)111,671 
Long-term marketable securities:
U.S. Treasury obligations48,427 (131)48,296 
Total cash equivalents and marketable securities$475,977 $(193)$475,784 
10


5.Revenue Recognition
The following table summarizes the Company’s net revenue by primary source:
Three Months Ended March 31,
 20222021
Net revenue:  
Capitated revenue$124,630 $ 
Fee-for-service and other revenue2,792  
Total Medicare revenue127,422  
Partnership revenue60,935 54,931 
Net fee-for-service revenue41,514 44,462 
Membership revenue24,231 20,196 
Grant income 1,763 
Total commercial revenue126,680 121,352 
Total net revenue$254,102 $121,352 
Net fee-for-service revenue (previously reported as net patient service revenue) is primarily generated from commercial third-party payers with which the One Medical entities have established contractual billing arrangements. The following table summarizes net fee-for-service revenue by source:
Three Months Ended March 31,
 20222021
Net fee-for-service revenue:
  
Commercial and government third-party payers$36,606 $42,235 
Patients, including self-pay, insurance co-pays and deductibles4,908 2,227 
Net fee-for-service revenue
$41,514 $44,462 
The CARES Act was enacted on March 27, 2020 to provide economic relief to those impacted by the COVID-19 pandemic. The CARES Act includes various tax and lending provisions, among others. Under the CARES Act, the Company received an income grant of $1,763 from the Provider Relief Fund administered by the Health and Human Services ("HHS") during the three months ended March 31, 2021. The Company did not receive any income grants from the HHS for the three months ended March 31, 2022. Management has concluded that the Company met conditions of the grant funds and has recognized it as Grant income for the three months ended March 31, 2021.
During the three months ended March 31, 2022, the Company recognized revenue of $19,015, which was included in the beginning deferred revenue balances as of January 1, 2022. During the three months ended March 31, 2021, the Company recognized revenue of $14,321, which was included in the beginning deferred revenue balances as of January 1, 2021.
As of March 31, 2022, a total of $5,571 is included within deferred revenue related to variable consideration, of which $4,425 is classified as non-current as it will not be recognized within the next twelve months. The estimate of variable consideration is based on the Company’s assessment of historical, current, and forecasted performance.
11


As summarized in the table below, the Company recorded contract assets and deferred revenue as a result of timing differences between the Company’s performance and the customer’s payment.
 March 31,December 31,
 20222021
Balances from contracts with customers:  
Capitated accounts receivable, net
$34,083 $23,903 
All other accounts receivable, net108,205 79,595 
Contract asset (included in other current assets)382 458 
Deferred revenue$91,702 $77,245 
Capitated accounts receivable and payable related to At-Risk arrangements are recorded net in the condensed consolidated balance sheets when a legal right of offset exists. A right of offset exists when all of the following conditions are met: 1) each of two parties (the Company and the third-party payer) owes the other determinable amounts; 2) the reporting party (the Company) has the right to offset the amount owed with the amount owed by the other party (the third-party payer); 3) the reporting party (the Company) intends to offset; and 4) the right of offset is enforceable by law. All of the aforementioned conditions were met as of March 31, 2022.
The capitated accounts receivable and payable are recorded at the contract level and consist of the Company’s Capitated Revenue attributed from enrolled At-Risk members less actual paid medical claims expense. If the Capitated Revenue exceeds the actual medical claims expense at the end of the reporting period, such surplus is recorded as capitated accounts receivable within accounts receivable, net in the condensed consolidated balance sheets. If the actual medical claims expense exceeds the Capitated Revenue, such deficit is recorded as capitated accounts payable within other current liabilities in the condensed consolidated balance sheets. As of March 31, 2022, the Company has capitated accounts receivable, net, of $34,083 and capitated accounts payable, net, of $6,132, representing amounts due from and to Medicare Advantage payers and CMS in At-Risk arrangements, respectively.
The capitated accounts receivable and payable are presented net of IBNR claims liability and other adjustments. There were no significant prior period adjustments or changes to the assumptions used in estimating the IBNR claims liability as of March 31, 2022. The Company believes the amounts accrued to cover IBNR claims as of March 31, 2022 are adequate.
Components of capitated accounts receivable, net is summarized below:
 March 31,December 31
 20222021
Capitated accounts receivable
$72,286 $56,384 
IBNR claims liability(36,989)(32,320)
Other adjustments(1,214)(161)
Capitated accounts receivable, net
$34,083 $23,903 
12


Components of capitated accounts payable, net is summarized below:
 March 31,December 31
 20222021
Capitated accounts payable
$4,874 $5,483 
IBNR claims liability1,315 1,438 
Other adjustments(57)299 
Capitated accounts payable, net
$6,132 $7,220 
Activity in IBNR claims liability from December 31, 2021 through March 31, 2022 is summarized below:
Amount
Balance as of December 31, 2021
$33,758 
Incurred related to:
Current period102,864 
Prior periods2,102 
104,966 
Paid related to:
Current period(67,755)
Prior periods(32,665)
(100,420)
Balance as of March 31, 2022
$38,304 
The Company does not disclose the value of remaining performance obligations for (i) contracts with an original contract term of one year or less, (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice when that amount corresponds directly with the value of services performed, and (iii) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct service that forms part of a single performance obligation. For those contracts that do not meet the above criteria, the Company’s remaining performance obligation as of March 31, 2022, is expected to be recognized as follows:
Less than
or equal to
12 months
Greater
than
12 months
Total
As of March 31, 2022$15,671 $30,279 $45,950 
6.Leases
Most leases contain clauses for renewal at the Company’s option with renewal terms that generally extend the lease term from 1 to 7 years. Certain lease agreements contain options to terminate the lease before maturity. The Company does not have any lease contracts with the option to purchase as of March 31, 2022. The Company’s lease agreements do not contain any significant residual value guarantees or material restrictive covenants imposed by the leases.
Certain of the Company’s furniture and fixtures and lab equipment are held under finance leases. Finance-lease-related assets are included in property and equipment, net in the condensed consolidated balance sheets and are immaterial as of March 31, 2022.
The components of operating lease costs were as follows:
 Three Months Ended March 31,
20222021
Operating lease costs$13,004 $7,333 
Variable lease costs2,047 1,311 
Total lease costs$15,051 $8,644 
13


Other information related to leases was as follows:
Supplemental Cash Flow Information
 Three Months Ended March 31,
20222021
Cash paid for amounts included in the measurement of lease liabilities:  
Operating cash flows from operating leases$12,066 $7,855 
Non-cash leases activity:
Right-of-use lease assets obtained in exchange for new operating lease liabilities$18,249 $16,086 
Lease Term and Discount Rate
 March 31,December 31,
20222021
Weighted-average remaining lease term (in years)8.088.02
Weighted-average discount rate6.61 %6.55 %
At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or leases do not contain an implicit rate, the Company’s incremental borrowing rate is used as the discount rate. Management determines the appropriate incremental borrowing rates for each of its leases based on the remaining lease term at lease commencement.
Future minimum lease payments under non-cancellable operating leases as of March 31, 2022 were as follows (excluding the effect of lease incentives to be received that are recorded in other current assets of $13,990 which serve to reduce total lease payments):
 March 31, 2022
Remainder of 2022
$39,186 
202355,546 
202453,831 
202550,127 
202646,658 
Thereafter168,984 
Total lease payments414,332 
Less: interest(97,810)
Total lease liabilities$316,522 

7.Business Combinations
Acquisition of Iora
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On September 1, 2021 ("Acquisition Date"), 1Life acquired all outstanding equity and capital stock of Iora Health, a human-centered, value-based primary care group with built-for-purpose technology focused on serving the Medicare population, for an aggregate purchase consideration of $1,424,836, which was paid through the issuance of 1Life common shares with a fair value of $1,313,312, in part by cash of $62,881, and in part by stock options of Iora assumed by 1Life towards pre-combination services of $48,643. The acquisition was accounted for as a business combination. Subsequent to the Acquisition Date, the Company recorded $2,370 decrease to goodwill during the measurement period in the first quarter of 2022. The preliminary purchase price allocations resulted in $1,117,913 of goodwill and $363,031 of acquired identifiable intangible assets related to Iora trade name and contracts in existing geographies valued using the income method. Goodwill recorded in the acquisition is not expected to be deductible for tax purposes. Goodwill was primarily attributable to the planned growth in new geographies, synergies expected to be achieved in the combined operations of 1Life and Iora, and assembled workforce of Iora.
The acquisition expanded the Company's reach to become a premier national human-centered, technology-powered, value-based primary care platform across all age groups. The acquisition allows the Company to participate in At-Risk arrangements with Medicare Advantage payers and CMS, in which the Company is responsible for managing a range of healthcare services and associated costs of its members.
Preliminary Purchase Price Allocation
The purchase price components are summarized in the following table:
Consideration in 1Life common stock (1)$1,313,312 
Cash consideration (2)62,881 
Stock options of Iora assumed by 1Life towards pre-combination services (3)48,643 
Total Purchase Price$1,424,836 
(1) Represents the fair value of 53,583 shares of 1Life common stock transferred as consideration consisting of 53,146 shares issued and 437 shares to be issued to former Iora shareholders for outstanding Iora capital stock based on 77,687 Iora shares with the Exchange Ratio of 0.69 for a share of Iora and 1Life's stock price of $24.51 as of the closing date. The fair value of the 53,583 shares transferred as consideration was determined on the basis of the closing market price of the Company's common stock one business day prior to the Acquisition Date.
(2) Included in the cash consideration are:
$5,993 for the settlement of vested phantom stock awards and cash bonuses contingent on the completion of the merger. Iora's unvested phantom stock awards, to the extent they relate to post-combination services, will be paid out and expensed as they vest subsequent to the acquisition and will be treated as stock-based compensation expense.

$30,253 of loans made by the Company to Iora prior to the Acquisition Date.

$5,391 of repayment of the existing Silicon Valley Bank (“SVB”) loan, which was not legally assumed as part of the merger.

The remainder of the cash consideration primarily relates to transaction expenses incurred by Iora and paid by the Company as of the closing date.
(3) Represents the fair value of Iora’s equity awards assumed by 1Life for pre-combination services. Pursuant to the terms of the merger agreement, Iora’s outstanding equity awards that are vested and unvested as of the effective time of the merger were replaced by 1Life equity awards with the same terms and conditions. The vested portion of the fair value of 1Life’s replacement equity awards issued represents consideration transferred, while the unvested portion represents post-combination compensation expense based on the vesting terms of the equity awards. The awards that include a provision for accelerated vesting upon a change of control are included in the vested consideration. The fair value of the stock options of Iora assumed by 1Life was determined by using a Black-Scholes option pricing model with the applicable assumptions as of the Acquisition Date. The fair value of the unvested stock awards, for which post-combination service is required, will be recorded as share-based compensation expense over the respective vesting period of each award. See Note 10, "Stock-Based Compensation".
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The following table presents the preliminary purchase price allocation recorded in the Company's unaudited condensed consolidated balance sheet as of the Acquisition Date:
Cash and cash equivalents acquired$17,808 
Accounts receivable, net20,451 
Prepaid expenses and other current assets3,043 
Restricted cash2,069 
Property and equipment, net29,565 
Right-of-use assets70,249 
Intangible assets, net363,031 
Other assets (1)7,405 
Total assets513,621 
Accounts payable1,974 
Accrued expenses9,819 
Deferred revenue, current5,989 
Operating lease liabilities, current6,617 
Operating lease liabilities, non-current63,558 
Deferred revenue, non-current24,316 
Deferred income taxes80,537 
Other non-current liabilities (1)13,888 
Total liabilities206,698 
Net assets acquired306,923 
Estimated Merger Consideration1,424,836 
Estimated goodwill attributable to Merger$1,117,913 
(1) Included in the other assets was an escrow asset of $2,875 related to 1Life common stock held by a third-party escrow agent to be released to the former stockholders of Iora, less any amounts that would be necessary to satisfy any then pending and unsatisfied or unresolved claim for indemnification for any 1Life indemnifiable loss pursuant to the indemnity provisions of the Merger Agreement. A corresponding indemnification liability of $9,600 was recorded in other non-current liabilities in the Company's unaudited condensed consolidated balance sheet. During the three months ended March 31, 2022, a reduction in escrow asset and indemnification liability of $1,013 and $3,383, respectively was recorded as part of the measurement period adjustment. The indemnification asset is subject to remeasurement at each reporting date due to changes to the underlying value of the escrow shares until the shares are released from escrow, with the remeasurement adjustment reported in the Company's condensed consolidated statement of operations as interest and other expense. During the three months ended March 31, 2022, the fair value of the escrow asset had reduced and the unrealized loss recorded was $2,277 for the period.
The Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on the preliminary estimates of fair values, which were determined primarily using the income method based on estimates and assumptions made by management at the time of the Iora acquisition and are subject to change during the measurement period which is not expected to exceed one year. The primary tasks that are required to be completed include valuation of certain assets and liabilities, including any related tax impacts. Any adjustments to the preliminary purchase price allocation identified during the measurement period will be recognized in the period in which the adjustments are determined.
The Company recognized a net deferred tax liability of $80,537 in this business combination that is included in long-term liabilities in the accompanying condensed consolidated balance sheet. This primarily related to identified intangible assets recorded in acquisition for which there is no tax basis.
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Identifiable intangible assets are comprised of the following:
Preliminary Fair ValueEstimated Useful Life (in years)
Intangible Asset:
Medicare Advantage contracts - existing geographies$298,000 9
CMS Direct Contracting contract - existing geographies52,000 9
Trade name: Iora13,031 3
Total$363,031 
Net tangible assets were valued at their respective carrying amounts as of the Acquisition Date, which approximated their fair values. Medicare Advantage contracts and CMS Direct Contracting contract represent the At-Risk arrangements that Iora has with Medicare Advantage plans or directly with CMS. Trade names represent the Company’s right to the Iora trade names and associated design.
Loan Agreement
Under the Merger Agreement, 1Life and Iora have also entered into a Loan and Security Agreement on June 21, 2021. See Note 15 "Note Receivable" for more details.
Iora had an existing credit facility with SVB, which is referred to as the SVB Facility. The SVB facility of $5,391 was repaid on September 1, 2021, of which $50 is related to the prepayment penalty. Repayment of the existing SVB loan is accounted for as part of the acquisition purchase consideration.
Supplemental Unaudited Pro Forma Information
The following unaudited pro forma financial information summarizes the combined results of operations for 1Life and Iora as if the companies were combined as of the beginning of fiscal year 2020. The unaudited pro forma information includes transaction and integration costs, adjustments to amortization and depreciation for intangible assets and property and equipment acquired, stock-based compensation costs and tax effects.
The table below reflects the impact of material adjustments to the unaudited pro forma results for the three months ended March 31, 2021 that are directly attributable to the acquisition:
Three Months Ended March 31,
Material Adjustments2021
(Decrease) / increase to expense as result of transaction costs$(3,237)
(Decrease) / increase to expense as result of amortization and depreciation expenses11,541 
(Decrease) / increase to expense as a result of stock-based compensation costs698 
(Decrease) / increase to expense as result of changes in tax effects$(4,909)
The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our condensed consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2020 or the results of our future operations of the combined businesses.

Three Months Ended March 31,
2021
Revenue$183,620 
Net Loss$(62,374)
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Other Acquisitions
In 2021, the Company completed three other acquisitions for $9,908 of total cash consideration. The acquisitions were each accounted for as business combinations. The Company does not consider these acquisitions to be material, individually or in aggregate, to the Company’s condensed consolidated financial statements. The purchase price allocations resulted in $5,880 of goodwill and $3,921 of acquired identifiable intangible assets related to customer relationships valued using the income method. Intangible assets are being amortized over their respective useful lives of three or seven years. Acquisition-related costs were immaterial and were expensed as incurred in the condensed consolidated statements of operations.
8.Goodwill and Intangible Assets
Goodwill
As of March 31, 2022 and December 31, 2021, goodwill was $1,145,094 and $1,147,464, respectively. Due to the recent decline in the Company's stock price and uncertainties in general economic conditions, the Company considered the recoverability of its goodwill and determined, during three months ended March 31, 2022, there were no events or circumstances that have changed since the last annual test that could more likely than not reduce the fair value of the Company's reporting unit below its carrying value. No goodwill impairments were recorded during the three months ended March 31, 2022. Changes in economic and operating conditions and any further decline in the Company's stock price could result in potential goodwill impairment in future periods.
Goodwill balances as of March 31, 2022 and December 31, 2021 were as follows:
Goodwill
Balance as of December 31, 2021
$1,147,464 
Measurement period adjustments(2,370)
Balance as of March 31, 2022
$1,145,094 
Intangible Assets
The following summarizes the Company’s intangible assets and accumulated amortization as of March 31, 2022:
 March 31, 2022
Original CostAccumulated AmortizationNet Book Value
Medicare Advantage contracts - existing geographies$298,000 $(19,315)$278,685 
CMS Direct Contracting contract - existing geographies52,000 (3,370)48,630 
Trade name: Iora13,031 (2,534)10,497 
Customer relationships3,921 (533)3,388 
Total intangible assets$366,952 $(25,752)$341,200 
The following summarizes the Company’s intangible assets and accumulated amortization as of December 31, 2021:
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 December 31, 2021
Original CostAccumulated AmortizationNet Book Value
Medicare Advantage contracts - existing geographies$298,000 $(11,037)$286,963 
CMS Direct Contracting contract - existing geographies52,000 (1,926)50,074 
Trade name: Iora13,031 (1,448)11,583 
Customer relationships3,921 (383)3,538 
Total intangible assets$366,952 $(14,794)$352,158 

The Company did not record any amortization expense of intangible assets for the three months ended March 31, 2021.
Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.
As of March 31, 2022, estimated future amortization expense related to intangible assets were as follows:
 March 31, 2022
Remainder of 2022
$32,876 
202343,835 
202442,356 
202539,417 
202639,417 
Thereafter143,299 
Total$341,200 

9.Convertible Senior Notes
In May 2020, the Company issued and sold $275,000 aggregate principal amount of 3.0% convertible senior notes due 2025 in a private offering exempt from the registration requirements of the Securities Act of 1933, and in June 2020, the Company issued an additional $41,250 aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment option by the initial purchasers of the notes (the “2025 Notes”). The 2025 Notes are unsecured obligations and bear interest at a fixed rate of 3.0% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2020. The 2025 Notes will mature on June 15, 2025, unless earlier converted, redeemed or repurchased. The total net proceeds from the debt offering, after deducting the initial purchasers’ commissions and other issuance costs, were $306,868
Each $1 principal amount of the 2025 Notes will initially be convertible into 0.0225052 shares of the Company’s common stock, which is equivalent to an initial conversion price of $44.43 per share, subject to adjustment upon the occurrence of specified events but not for any accrued and unpaid interest.
Holders may convert the 2025 Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2025 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined below) per $1 principal amount of the 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the
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redemption date; or (4) upon the occurrence of specified corporate events. It is the Company’s current intent to settle conversions through combination settlement comprising of cash and equity.
On or after March 15, 2025 until the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their 2025 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election and in accordance with the terms of the indenture governing the 2025 Notes. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 40 trading day observation period. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or notice of redemption, as the case may be. If the Company undergoes a fundamental change prior to the maturity date, holders of the 2025 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
In addition, if specific corporate events occur prior to the applicable maturity date, the Company will increase the conversion rate for a holder who elects to convert their 2025 Notes in connection with such a corporate event in certain circumstances. The Company may not redeem the 2025 Notes prior to June 20, 2023. The Company may redeem for cash all or any portion of the 2025 Notes, at the Company’s option, on or after June 20, 2023 and prior to March 15, 2025, if the last reported sale price of the Company’s common stock has been at least