424b3 - Q1 2024 10-Q

424B3 1 a424b3-q1202410xq.htm 424B3 424b3 - Q1 2024 10-Q

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-274975

Prospectus Supplement No. 5

AMERICAN ONCOLOGY NETWORK, INC.

Primary Offering of

8,337,500 Shares of Class A Common Stock

Secondary Offering of

51,161,832 Shares of Class A Common Stock

6,113,333 Warrants to Purchase Shares of Class A Common Stock

This prospectus supplement is being filed to update and supplement the information contained in the prospectus dated May 3, 2024 (the “Prospectus”), which forms part of our registration statement on Form S-1 (No. 333-274975), as amended, with the information contained in our Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on August 14, 2024 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to: (i) the issuance by us of up to 8,337,500 shares of class A common stock, par value $0.0001 per share (the “Class A Common Stock”), of American Oncology Network, Inc., a Delaware corporation (the “Company” “we,” “us,” or “AON”), to be issued upon the exercise of 8,337,500 public warrants, which entitles its holder to purchase shares of Class A Common Stock at an exercise price of $11.50 per share and (ii) the resale of (a) an aggregate of 51,161,832 shares of Class A Common Stock by certain of the selling securityholders named in the Prospectus (each a “Selling Securityholder” and, collectively, the “Selling Securityholders”) and (b) 6,113,333 private placement warrants to purchase shares of Class A Common Stock issued to the Selling Securityholders.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement. Terms used in this prospectus supplement but not defined herein shall have the meanings given to such terms in the Prospectus.

You should read the Prospectus, this prospectus supplement and any additional prospectus supplement or amendment carefully before you invest in our securities. Our Class A Common Stock is listed on the Nasdaq Stock Market under the symbol “AONC”. Our warrants are listed on the Nasdaq Stock Market under the symbol “AONCW.” On August 14, 2024, the closing price of our Class A Common Stock was $3.39 and the closing price of our warrants was $0.12.

Investing in our Class A Common Stock and warrants involves a high degree of risk. See the section titled “Risk Factors” beginning on page 13 of the Prospectus and in our other documents subsequently filed with the SEC.

Neither the SEC nor any other state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of the Prospectus or this prospectus supplement. Any representation to the contrary is a criminal offense.

August 14, 2024

US_ACTIVE\126893289\V-1

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2024


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

Commission file number 001-04177

American Oncology Network, Inc.

(Exact name of registrant as specified in its charter)


Delaware			85-3984427
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

14543 Global Parkway, Suite 110, Fort Myers, Florida			33913
(Address of Principal Executive Offices)			(Zip Code)

(833) 886-1725

Registrant's telephone number, including area code

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock, par value $0.0001, per share	AONC	NONE
Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	AONCW	NONE

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No o

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


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

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. o

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

As of August 12, 2024, the registrant had outstanding 15,871,684 shares of Class A common stock, inclusive of the Sponsor Earnout shares, and 20,445,123 shares of Class B common stock.

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TABLE OF CONTENTS


			PAGE
Cautionary Note Regarding Forward-Looking Statements			i
Part I - Financial Information			1
Item 1. Financial Statements			1
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)			3
Condensed Consolidated Statements of Mezzanine and Stockholders’ Deficit			5
Condensed Consolidated Statements of Cash Flows			7
Notes to Consolidated Financial Statements			9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			47
Item 3. Quantitative and Qualitative Disclosures About Market Risk			59
Item 4. Controls and Procedures			60
Part II - Other Information			61
Item 1. Legal Proceedings			61
Item 1A. Risk Factors			61
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities			61
Item 3. Defaults Upon Senior Securities			62
Item 4. Mine Safety Disclosures			62
Item 5. Other Information			62
Item 6. Exhibits			62
Signatures			64

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Form 10-Q”), including, without limitation, statements under the headings “Management's Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements about the financial condition, results of operations, earnings outlook and prospects of American Oncology Network, Inc. (“AON”, “New AON”, “AON Inc.”, or the “Company”). Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements are based on current expectations and projections about future events and various assumptions. AON cannot guarantee that it will actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements and you should not place undue reliance on AON’s forward-looking statements.

These forward-looking statements involve a number of risks, uncertainties (many of which are beyond the control of AON), or other assumptions that may cause actual results or performance to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in AON’s filings with the Securities and Exchange Commission, including “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risks described in the “Risk Factors” sections are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can AON assess the impact of all such risk factors on the business of AON, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement. The statements made herein are made as of the date of this Quarterly Report and, except as may be required by law, AON undertakes no obligation to update them, whether as a result of new information, developments, or otherwise.

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Part I - Financial Information

Item 1. Financial Statements

American Oncology Network, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

($ in thousands, except share and per share data)


	As of June 30, 2024		As of December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	33,818	$	28,539
Short-term marketable securities	21,391		35,389
Patient accounts receivable, net	125,421		129,151
Inventories	54,280		44,569
Other receivables	60,928		34,274
Prepaid expenses and other current assets	8,250		4,277
Current portion of notes receivable - related parties	2,174		1,604
Total current assets	306,262		277,803

Property and equipment, net	42,510		40,439
Operating lease right-of-use assets, net (1)	50,609		43,349
Notes receivable - related parties	-		1,150
Other assets	18,005		7,588
Goodwill	10,900		1,230
Intangibles, net	2,476		-
Deferred tax asset, net	-		2,894
Total assets	$	430,762	$	374,453

Liabilities, Mezzanine Equity, and Stockholders' Equity
Current liabilities
Accounts payable (2)	$	189,483	$	127,645
Accrued compensation related costs	11,640		11,410
Accrued other	18,202		22,327
Income tax payable	971		971
Current portion of operating lease liabilities (3)	7,450		6,692
Current portion of long-term debt	3,809		-
Total current liabilities	231,555		169,045

Long-term debt, net	88,241		80,641
Long-term operating lease liabilities (4)	46,167		39,803
Other long-term liabilities	10,948		14,251
Total liabilities	$	376,911	$	303,740

Mezzanine equity

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Series A convertible preferred stock; $0.0001 par value; 7,500,000 shares authorized; 6,651,610 issued and outstanding at June 30, 2024 and December 31, 2023, with an aggregate liquidation preference of $70,744,488 and $68,009,015 at June 30, 2024 and December 31, 2023, respectively.	64,986		64,986
Redeemable noncontrolling interest	28,331		167,025

Stockholders' equity
Class A Common Stock; $0.0001 par value; 200,000,000 shares authorized; 13,495,847 and 9,517,816 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.	1		1
Class B Common Stock; $0.0001 par value; 100,000,000 shares authorized; 20,571,323 and 25,109,551 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.	3		3
Additional paid-in capital	27,074		-
Treasury stock, at cost, 122,743 shares at June 30, 2024 and 14,729 shares at December 31, 2023	(368)		-
Accumulated other comprehensive income	26		81
Retained deficit	(66,720)		(161,812)
Total AON stockholders' deficit	(39,984)		(161,727)
Noncontrolling interest	518		429
Total deficit	$	(39,466)	$	(161,298)
Total liabilities, mezzanine equity, noncontrolling interest, and stockholders' equity	$	430,762	$	374,453

(1)Includes related party operating right-of-use assets, net of $15,605 and $10,931 at June 30, 2024 and December 31, 2023, respectively

(2)Includes amounts due to related party of $178,460 and $120,857 at June 30, 2024 and December 31, 2023, respectively

(3)Includes related party current portion of operating lease liabilities of $3,524 and $1,888 at June 30, 2024 and December 31, 2023, respectively

(4)Includes related party long-term operating lease liabilities of $10,712 and $9,472 at June 30, 2024 and December 31, 2023, respectively

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

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American Oncology Network, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

($ in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue
Patient service revenue, net	$	431,750	$	311,713	$	793,258	$	613,486
Other revenue	2,232		3,254		5,063		5,212
Total revenue	433,982		314,967		798,321		618,698
Costs and expenses
Cost of revenue (1)	404,589		291,399		759,537		569,933
General and administrative expenses (2)	36,738		23,915		65,015		47,633
Transaction expenses	664		3,312		1,016		5,282
Total costs and expenses	441,991		318,626		825,568		622,848
Loss from operations	(8,009)		(3,659)		(27,247)		(4,150)

Other income (expense)
Interest expense	(1,833)		(1,551)		(3,596)		(2,968)
Interest income	1,025		68		1,818		126
Other (expense) income, net	5,547		(4,846)		3,639		(4,380)
Loss before income taxes, equity loss in affiliate, and noncontrolling interest	(3,270)		(9,988)		(25,386)		(11,372)
Income tax expense (benefit)	(324)		-		2,570		-
Loss before equity loss in affiliate and noncontrolling interest	(2,946)		(9,988)		(27,956)		(11,372)
Equity in loss of affiliate	(179)		(118)		(130)		(219)
Net loss before noncontrolling interest	$	(3,125)	$	(10,107)	$	(28,086)	$	(11,591)
Net loss attributable to noncontrolling interest	(334)		-		(291)		-
Net loss before redeemable noncontrolling interest	(2,791)		(10,107)		(27,795)		(11,591)
Net loss and noncontrolling interest attributable to Legacy AON Stockholders prior to the reverse recapitalization	-		(10,107)		-		(11,591)
Net loss attributable to redeemable noncontrolling interest	(6,412)		-		(23,575)		-
Net income (loss) attributable to AON Inc.	$	3,621	$	-	$	(4,220)	$	-
Series A Preferred Cumulative Dividends	(1,375)		-		(2,735)		-
Undistributed net income to participating securities	(856)		-		-		-
Net income (loss) attributable to Class A Common Stockholders	$	1,390	$	-	$	(6,955)	$	-
Reallocation of net income (loss) attributable to Class A Common Stockholders as a result of the impact and conversion of dilutive securities	(5,556)		-		(23,575)		-
Net income (loss) attributable to Class A Common Stockholders for diluted earnings per share	$	(4,166)	$	-	$	(30,530)	$	-

Income (loss) per share of Class A Common Stock:
Basic	$	0.12	$	-	$	(0.74)	$	-
Diluted	$	(0.11)	$	-	$	(0.84)	$	-

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Weighted average shares of Class A Common Stock Outstanding:
Basic	11,377,407		-		9,457,518		-
Diluted	37,089,605		-		36,430,441		-

Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities	(167)		24		(189)		88
Other comprehensive (loss) gain	(167)		24		(189)		88
Comprehensive loss	$	(2,958)	$	(10,083)	$	(27,984)	$	(11,503)
Other comprehensive loss attributable to Legacy AON Shareholders	—		(10,083)		—		(11,503)
Other comprehensive loss attributable to noncontrolling interests	(6,528)		—		(23,708)		—
Total comprehensive income (loss) attributable to AON Inc.	$	3,570	$	-	$	(4,276)	$	-

(1)Includes related party inventory expense of $364,664 and $253,083 and $675,541 and $500,569 for the three and six months ended June 30, 2024 and 2023, respectively.

(2)Includes related party rent of $672 and $679 and $1,378 and $1,358 for the three and six months ended June 30, 2024 and 2023, respectively.

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

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American Oncology Network, Inc.

Condensed Consolidated Statements of Mezzanine and Stockholders’ Deficit

(Unaudited)($ in thousands, except share and per share data)


	Mezzanine Equity - Series A Preferred Stock			NCI(1)		Class A Common Stock			Class B Common Stock
In thousands (except share and per share data)	Stock	$				Stock	$		Stock	$		APIC(1)		Treasury Stock	AOCI(1)		Noncontrolling Interest		Retained Deficit		Total Equity (Deficit)
Balances at March 31, 2024	6,652	$	64,986	$	157,716	10,334,734	$	1	23,725,998	$	3	$	8,164	(97)	$	77	$	852	$	(175,594)	$	(166,594)

Other comprehensive income				(116)											(51)						(51)
Equity based compensation & NCI rebalancing				30		116,725	—					1,276									1,276
Repurchases of Class A Common Stock						(110,287)								(271)							(271)
Capital contribution from noncontrolling interest member						—															—
Net loss				(6,412)													(334)		3,621		3,287
Fair value adjustment to redeemable noncontrolling interest				(114,949)								9,696							105,253		114,949
Redemptions of Class B Common Stock to Class A Common Stock				(7,938)		3,154,675			(3,154,675)			7,938									7,938
Balances at June 30, 2024	6,652	$	64,986	$	28,331	13,495,847	$	1	20,571,323	$	3	$	27,074	(368)	$	26	$	518	$	(66,720)	$	(39,466)

Balances at December 31, 2023	6,652	64,986		167,025		6,678,441	1		25,109,551	3		—		—	81		429		(161,812)		(161,298)

Other comprehensive income	—	—		(133)		—	—		—	—		—		—	(55)		—		—		(55)
Equity based compensation & NCI rebalancing	—	—		429		2,405,906	—		—	—		10,972		—	—		—		—		10,972
Repurchases of Class A Common Stock	—	—		—		(126,728)	—		—	—		—		(368)	—		—		—		(368)
Capital contribution from noncontrolling interest member	—	—		—		—	—		—	—		—		—	—		380		—		380
Net loss	—	—		(23,575)		—	—		—	—		—		—	—		(291)		(4,221)		(4,512)
Fair value adjustment to redeemable noncontrolling interest	—	—		(99,313)		—	—		—	—		—		—	—		—		99,313		99,313
Redemptions of Class B Common Stock to Class A Common Stock	—	—		(16,102)

SEC Form 424B3 filed by American Oncology Network Inc.