DocGo (DCGO) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive (loss) income, statements of changes in stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's accounting policies, financial instruments, acquisitions, and other significant financial activities for the periods ended June 30, 2025 and December 31, 2024 Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $104,164,128 | $89,241,695 | | Accounts receivable, net | $122,756,182 | $210,899,926 | | Total current assets | $236,574,634 | $304,486,263 | | Total assets | $408,263,751 | $455,621,132 | | Total current liabilities | $100,146,642 | $121,806,577 | | Total liabilities | $120,533,019 | $140,442,002 | | Total stockholders' equity | $287,730,732 | $315,179,130 | Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | Change ($) | Change (%) | | :------------------------------------------------ | :--------------- | :--------------- | :--------- | :--------- | | Revenues, net | $80,417,622 | $164,949,716 | $(84,532,094) | -51.2% | | Total expenses | $97,897,866 | $154,800,567 | $(56,902,701) | -36.8% | | (Loss) income from operations | $(17,480,244) | $10,149,149 | $(27,629,393) | -272.2% | | Net (loss) income | $(13,289,893) | $5,858,574 | $(19,148,467) | -326.9% | | Net (loss) income attributable to stockholders | $(11,155,246) | $6,529,603 | $(17,684,849) | -270.8% | | Net (loss) income per share - Basic | $(0.11) | $0.06 | $(0.17) | -283.3% | | Net (loss) income per share - Diluted | $(0.11) | $0.06 | $(0.17) | -283.3% | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | Change ($) | Change (%) | | :------------------------------------------------ | :--------------- | :--------------- | :--------- | :--------- | | Revenues, net | $176,450,677 | $357,037,245 | $(180,586,568) | -50.6% | | Total expenses | $207,928,359 | $331,012,729 | $(123,084,370) | -37.2% | | (Loss) income from operations | $(31,477,682) | $26,024,516 | $(57,502,198) | -220.9% | | Net (loss) income | $(24,369,193) | $16,461,953 | $(40,831,146) | -248.0% | | Net (loss) income attributable to stockholders | $(20,560,561) | $17,757,052 | $(38,317,613) | -215.8% | | Net (loss) income per share - Basic | $(0.21) | $0.17 | $(0.38) | -223.5% | | Net (loss) income per share - Diluted | $(0.21) | $0.17 | $(0.38) | -223.5% | Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity Changes in Stockholders' Equity (Six Months Ended June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------------------ | :------------ | :---------------- | | Common stock repurchased (shares) | (4,481,069) | (1,953,169) | | Common stock repurchased (amount) | $(10,828,906) | $(5,751,954) | | Stock-based compensation | $7,590,520 | $4,282,366 | | Net loss attributable to stockholders of DocGo Inc. | $(20,560,561) | $(9,405,315) | | Total stockholders' equity | $287,730,732 | $315,179,130 | Unaudited Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2025 (Unaudited) | 2024 (Unaudited) | Change ($) | Change (%) | | :-------------------------------- | :--------------- | :--------------- | :--------- | :--------- | | Net cash provided by operating activities | $43,260,218 | $26,247,436 | $17,012,782 | 64.89% | | Net cash used in investing activities | $(27,110,236) | $(3,619,274) | $(23,490,962) | -649.05% | | Net cash used in financing activities | $(15,900,846) | $(8,948,227) | $(6,952,619) | -77.70% | | Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $1,217,265 | $13,605,408 | $(12,388,143) | -91.05% | Notes to Unaudited Condensed Consolidated Financial Statements 1. Description of Organization and Business Operations - DocGo Inc. is a mobile healthcare services company utilizing proprietary dispatch and communication technology to provide in-person medical treatment at non-traditional locations and healthcare transportation in major metropolitan cities in the U.S. and U.K.[27] - The Company operates in three segments: Mobile Health Services (in-home/event healthcare, underserved populations), Transportation Services (emergency/non-emergency transport), and Corporate (shared services supporting both segments)[28] 2. Summary of Significant Accounting Policies - The Company consolidates Variable Interest Entities (VIEs), primarily professional corporations (PCs) providing healthcare services, as it is deemed the primary economic beneficiary due to providing essential administrative services and absorbing losses[34] Major Customer Revenue Concentration | Period | Customer 1 Revenue (%) | Customer 2 Revenue (%) | | :-------------------------------- | :------------------- | :------------------- | | Three Months Ended June 30, 2025 | 34% | N/A | | Three Months Ended June 30, 2024 | 37% | 31% | | Six Months Ended June 30, 2025 | 42% | N/A | | Six Months Ended June 30, 2024 | 35% | 35% | Restricted Cash Equivalents and Investments (June 30, 2025) | Type | Amortized Cost ($) | Fair Value ($) | | :------------------------ | :------------- | :--------- | | Money market funds | $1,079,249 | $1,079,249 | | Corporate bonds | $994,366 | $999,769 | | U.S. government obligations | $22,334,027 | $22,425,753| | Total | $24,407,642 | $24,504,771| - The Company adopted ASU 2023-07 (Segment Reporting) in Q4 2024, modifying segment disclosures without material impact on financial statements. It is evaluating ASU 2023-09 (Income Tax Disclosures), ASU 2024-03 (Expense Disaggregation), and ASU 2025-03 (Business Combinations/Consolidation) for future impact[116][117][118][119] 3. Property and Equipment, Net Property and Equipment, Net (June 30, 2025 vs. December 31, 2024) | Asset Category | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------ | :------------ | :---------------- | | Vehicles | $16,797,338 | $17,300,595 | | Medical equipment | $9,923,242 | $9,210,203 | | Office equipment and furniture | $4,623,566 | $4,293,100 | | Leasehold improvements | $1,974,963 | $1,239,089 | | Buildings | $527,283 | $527,283 | | Land | $37,800 | $37,800 | | Less: Accumulated depreciation | $(19,461,894) | $(17,726,659) | | Property and equipment, net | $14,422,298 | $14,881,411 | - Depreciation expense for the six months ended June 30, 2025, was $2,432,577, a decrease from $2,907,965 in the same period of 2024[122] 4. Acquisitions - During the six months ended June 30, 2025, the Company acquired Professional Technicians, LLC (PTI) for $4.2 million, including $3.8 million cash and $240,000 in contingent consideration, for mobile phlebotomy services[135][140] - The Company also acquired the remaining noncontrolling interest in Ambulnz CO, LLC for $1,848,000 in cash on July 1, 2024[134][140] - Contingent consideration for prior acquisitions (Exceptional, Ryan Bros., LMS) was fully paid or had no remaining balance as of June 30, 2025, except for CRMS with an estimated $4,707,614 payable[125][129][131][133] 5. Goodwill Goodwill Carrying Value Changes (Six Months Ended June 30, 2025) | Metric | Amount ($) | | :------------------------------ | :------------- | | Balance as of December 31, 2024 | $47,432,550 | | Goodwill acquired during the period | $1,915,010 | | Foreign currency translation adjustment | $606,875 | | Balance as of June 30, 2025 | $49,954,435 | 6. Intangibles Intangible Assets, Net (June 30, 2025) | Asset Category | Estimated Useful Life (years) | Gross Carrying Amount ($) | Net Carrying Amount ($) | | :------------------------ | :-------------------- | :-------------------- | :------------------ | | Computer software | 5 | $247,828 | $4,655 | | Operating licenses | Indefinite | $9,399,004 | $9,399,004 | | Internally developed software | 4-5 | $12,129,913 | $587,455 | | Material contracts | Indefinite | $62,550 | $62,550 | | Customer relationships | 8-14 | $19,993,533 | $13,723,935 | | Trademark | 8-15 | $405,532 | $859,460 | | Non-compete agreements | 5 | $100,000 | $55,000 | | Domain names | 10 | — | $15,324 | | Software license agreement | Indefinite | — | $500,000 | | Trade credits | 5 | $1,500,000 | $1,500,000 | | Total | | $43,838,360 | $26,707,383 | - Amortization expense for intangible assets was $2,751,441 for the six months ended June 30, 2025, down from $3,278,854 in the prior year period[148] - The Company recognized an $8,306,591 non-cash impairment charge on customer relationships in CRMS during 2024 due to reduced growth expectations and decreased future cash flows[147] 7. Investments Investments (June 30, 2025 vs. December 31, 2024) | Investment Type | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------------------- | :------------ | :---------------- | | Equity investment without readily determinable fair value | $5,000,000 | $5,000,000 | | Equity method investments | $468,464 | $547,979 | | Total investments | $5,468,464 | $5,547,979 | - The Company acquired non-marketable equity securities in Firefly Health, Inc. for $5,000,000 on October 25, 2024, measured at cost less impairment, with no impairment or upward adjustments recognized in the current period[151] 8. Accrued Liabilities Accrued Liabilities (June 30, 2025 vs. December 31, 2024) | Accrued Liability Category | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------ | :------------ | :---------------- | | Accrued workers' compensation and other insurance liabilities | $19,871,471 | $16,738,835 | | Accrued general expenses | $13,208,644 | $16,530,363 | | Accrued payroll | $6,026,464 | $4,374,654 | | Accrued subcontractors | $3,798,065 | $9,174,499 | | Accrued bonus | $1,717,639 | $3,078,445 | | Total accrued liabilities | $44,622,283 | $49,896,796 | 9. Line of Credit - The Company maintained a $30,000,000 outstanding balance on its revolving credit facility as of June 30, 2025, with $60,000,000 unused[157] - Interest charges on the revolving facility were $441,282 for Q2 2025 and $852,799 for H1 2025[157] - The Company holds two standby letters of credit totaling $1,213,303, with no amounts drawn as of June 30, 2025[158][159] 10. Notes Payable Notes Payable (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------------------ | :------------ | :---------------- | | Equipment and financing loans payable (2.50% interest, maturing May 2026) | $12,592 | $17,730 | | Total notes payable | $12,592 | $17,730 | | Less: current portion of notes payable | $(12,592) | $(12,515) | | Total non-current portion of notes payable | $0 | $5,215 | - Interest expense on notes payable was $91 for Q2 2025 and $196 for H1 2025, significantly lower than the prior year[161][163] 11. Business Segment Information Segment Revenues (Three Months Ended June 30) | Segment | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | Change ($) | Change (%) | | :-------------------- | :--------------- | :--------------- | :--------- | :--------- | | Mobile Health Services | $30,780,993 | $116,742,328 | $(85,961,335) | -73.6% | | Transportation Services | $49,636,629 | $48,207,388 | $1,429,241 | 2.9% | | Total revenues | $80,417,622 | $164,949,716 | $(84,532,094) | -51.2% | Segment (Loss) Income from Operations (Three Months Ended June 30) | Segment | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :-------------------- | :--------------- | :--------------- | | Mobile Health Services | $(615,354) | $26,024,243 | | Transportation Services | $(716,242) | $(2,094,964) | | Corporate | $(16,148,648) | $(13,780,130) | | Total | $(17,480,244) | $10,149,149 | Segment Revenues (Six Months Ended June 30) | Segment | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | Change ($) | Change (%) | | :-------------------- | :--------------- | :--------------- | :--------- | :--------- | | Mobile Health Services | $75,990,537 | $260,683,486 | $(184,692,949) | -70.8% | | Transportation Services | $100,460,140 | $96,353,759 | $4,106,381 | 4.3% | | Total revenues | $176,450,677 | $357,037,245 | $(180,586,568) | -50.6% | Segment (Loss) Income from Operations (Six Months Ended June 30) | Segment | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :-------------------- | :--------------- | :--------------- | | Mobile Health Services | $1,870,522 | $58,236,268 | | Transportation Services | $475,125 | $(1,078,666) | | Corporate | $(33,823,329) | $(31,133,086) | | Total | $(31,477,682) | $26,024,516 | Long-Lived Assets by Geographic Location | Geographic Location | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------ | :------------ | :---------------- | | U.S. | $102,543,049 | $96,380,597 | | U.K. | $18,816,482 | $18,958,174 | | Total | $121,359,531 | $115,338,771 | 12. Equity - On July 19, 2024, the Company issued 578,350 shares of Common Stock valued at $1,814,345 as the remainder of a True-up Payment for the CRMS acquisition[174] - The Board extended the share repurchase program (New Repurchase Program) to December 31, 2025, authorizing up to $26,000,000 in shares[176] Common Stock Repurchases (Six Months Ended June 30) | Period | Shares Repurchased (shares) | Amount Spent ($) | | :-------------------------------- | :----------------- | :------------- | | Three Months Ended June 30, 2025 | 2,527,900 | $5,076,952 | | Three Months Ended June 30, 2024 | 1,395,957 | $4,904,452 | | Six Months Ended June 30, 2025 | 4,481,069 | $10,828,906 | | Six Months Ended June 30, 2024 | 2,651,571 | $9,782,011 | 13. Stock-Based Compensation - Total recorded stock-based compensation for stock option awards was $2,946,749 for the six months ended June 30, 2025, down from $3,240,846 in the prior year period[186] - Unrecognized compensation for unvested stock options was $8,200,989 as of June 30, 2025, expected to be recognized over 1.24 years[187] - Stock-based compensation expense for RSUs was $3,523,749 for H1 2025, up from $2,815,794 for H1 2024. Unrecognized RSU compensation was $14,052,438 as of June 30, 2025, to be recognized over 2.75 years[191][192] - Stock-based compensation expense for PSUs was $3,185,947 for H1 2025, significantly up from $543,629 for H1 2024. Unrecognized PSU compensation was $8,661,394 as of June 30, 2025, to be recognized over 2.50 years[194] 14. Leases Total Lease Cost (Six Months Ended June 30) | Lease Cost Component | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :------------------- | :--------------- | :--------------- | | Operating lease expense | $2,671,618 | $1,766,779 | | Finance lease expense | $3,029,130 | $2,564,447 | | Short-term lease expense | $582,205 | $889,457 | | Total lease cost | $6,282,953 | $5,220,683 | Lease Position (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $12,611,145 | $11,958,698 | | Operating lease liability | $13,463,499 | $12,443,633 | | Finance lease right-of-use assets | $17,664,270 | $15,337,299 | | Finance lease liability | $16,976,239 | $14,725,605 | - Weighted average remaining lease term for operating leases is 3.42 years with a 5.90% discount rate; for finance leases, it is 3.48 years with a 5.79% discount rate[216][223] 15. Other Expense Total Other Expense (Six Months Ended June 30) | Other Expense Category | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :--------------------- | :--------------- | :--------------- | | Interest expense, net | $869,946 | $882,658 | | Change in fair value of contingent liability | — | $326,192 | | Loss on equity method investments | $79,515 | $147,181 | | Loss on remeasurement of operating and finance leases | $47,444 | $25,889 | | Loss (gain) on disposal of fixed assets | $33,215 | $(65,398) | | Other income (expense) | $(211,823) | $581,883 | | Total other expense | $1,241,943 | $734,639 | 16. Related Party Transactions Related Party Payments (Six Months Ended June 30) | Related Party Service | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :-------------------- | :--------------- | :--------------- | | Legal Services (EDTSLS) | $567,545 | $620,920 | | Subcontractor Services (PrideStaff) | $56,319 | $140,619 | | Transition Services (Anthony Capone) | $0 | $180,000 | | Consulting (Steven Katz) | $2,500 | $0 | - The Company entered into a consulting agreement with Stan Vashovsky (former director/Chair) for advisory services and equity grants, and a separation agreement with Rosario Manco Jr. (former VP of Finance) for transition consulting fees[238][244] 17. Income Taxes Income Tax Benefit (Provision) (Six Months Ended June 30) | Period | Income Tax Benefit (Provision) ($) | | :-------------------------------- | :----------------------------- | | Three Months Ended June 30, 2025 | $4,626,745 | | Three Months Ended June 30, 2024 | $(3,708,920) | | Six Months Ended June 30, 2025 | $8,350,432 | | Six Months Ended June 30, 2024 | $(8,827,924) | - The shift from an income tax provision in 2024 to a benefit in 2025 is primarily due to the Company recording a pretax loss in the current period compared to pretax income in the prior year[246][340] 18. 401(k) Plan - The Company did not make any employer contributions to its 401(k) plan as of June 30, 2025[247] 19. Legal Proceedings - The Company reached a settlement in principle for the California Labor Actions (wage and hour claims, PAGA) and is finalizing settlement documents[252] - A securities class action lawsuit against the Company and its officers had a motion to dismiss partially granted on March 28, 2025, with remaining defendants answering the complaint[253] - Two derivative actions, based on similar allegations as the securities class action, were consolidated in Delaware Court of Chancery, with a motion to dismiss briefing schedule set[254] - A cybersecurity action related to an April 2024 data breach resulted in a settlement in principle, with preliminary court approval granted on May 2, 2025, and a final fairness hearing scheduled for August 22, 2025[255][256] 20. Risk and Uncertainties - The Company's business plan relies on increased demand for Mobile Health Services, driven by patient preference for out-of-traditional-setting treatments and government funding for population health programs[258] - Government contract work, a substantial portion of past revenue, is expected to decline due to the wind-down of large migrant-related projects in New York, posing a material adverse effect if not offset by new customers[259] 21. Subsequent Events - Effective August 6, 2025, Holdings agreed to acquire assets and assume liabilities of Primary Care Ambulance Corporation for $1,600,000 in cash consideration[260] - On August 1, 2025, the Company repaid the entire $30,320,173 outstanding balance on its revolving credit facility[261] - On August 7, 2025, the Company amended its credit agreement, establishing a new revolving credit facility up to $55,000,000 (with an option to increase by $20,000,000), maturing November 1, 2027, and subject to a minimum liquidity covenant[262] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, condition, and future outlook, analyzing key factors influencing results, segment performance, liquidity, and critical accounting policies. It highlights the significant decline in revenues and shift to a net loss, primarily due to the wind-down of migrant-related services, while also noting growth in Transportation Services Cautionary Note Regarding Forward-Looking Statements - The report contains forward-looking statements about the Company's plans, strategies, and financial prospects, which are subject to substantial risks and uncertainties beyond management's control[267][268] - Investors are cautioned not to unduly rely on these statements, as actual results may differ materially due to factors like the wind-down of migrant services, ability to expand programs, economic conditions, and regulatory changes[268][269][271] Overview - DocGo Inc. is a mobile healthcare services company providing in-person medical treatment and healthcare transportation in the U.S. and U.K., leveraging proprietary dispatch and communication technology[273] Net (Loss) Income Overview | Period | 2025 (Unaudited) | 2024 (Unaudited) | | :-------------------------------- | :--------------- | :--------------- | | Three Months Ended June 30, 2025 | Net loss of $13.3 million | Net income of $5.8 million | | Six Months Ended June 30, 2025 | Net loss of $24.3 million | Net income of $16.5 million | Factors Affecting Our Results of Operations - The Mobile Health Services market is influenced by patient acceptance of non-traditional care, healthcare coverage, and government funding for population health programs, with emerging uncertainty in municipal healthcare budgets[277] - The Transportation Services market is driven by demand for post-surgery/treatment transport, increasing chronic conditions, an aging population, and outsourcing by healthcare facilities[278] - Inflation, particularly in wages, fuel, and medical supplies, has compressed gross profit margins as the Company is generally unable to pass these higher costs to customers[282] - Government contract work, previously substantial, is expected to significantly decline in 2025 due to the wind-down of large migrant-related projects in New York, posing a material adverse effect if not offset by new customers[289][290][291] Components of Results of Operations - Revenues are generated from Mobile Health Services and Transportation Services, while cost of revenues includes wages, subcontractor fees, medical supplies, and vehicle-related costs[293][294] - General and administrative expenses have declined in absolute terms but increased as a percentage of revenue due to the wind-down of migrant-related projects, a trend expected to continue in 2025[295] - Technology and development expenses are expected to increase to support growth, including investments in AI and platform optimization[298] Results of Operations Comparison of the Three Months Ended June 30, 2025 and 2024 Key Financial Highlights (Three Months Ended June 30) | Metric | 2025 (Actual) | 2024 (Actual) | Change ($) | Change (%) | | :-------------------------------- | :------------ | :------------ | :--------- | :--------- | | Revenues, net | $80.4 million | $164.9 million | $(84.5) million | -51.2% | | Mobile Health Services revenues | $30.8 million | $116.7 million | $(85.9) million | -73.6% | | Transportation Services revenues | $49.6 million | $48.2 million | $1.4 million | 2.9% | | (Loss) income from operations | $(17.5) million | $10.1 million | $(27.6) million | -273.3% | | Net (loss) income | $(13.3) million | $5.8 million | $(19.1) million | -329.3% | - The significant decline in Mobile Health Services revenue was primarily due to the ongoing wind-down of migrant-related services[304] - Transportation Services revenue increased despite a 1.5% decrease in U.S. trip volumes, driven by a shift towards higher-priced transports, increasing the average trip price to $410 from $393[305] - Cost of revenues decreased by 49.6%, less than the revenue decline, leading to an increase as a percentage of revenues (68.4% vs. 66.2%), mainly due to lower compensation, subcontracted labor, and medical supplies in Mobile Health Services[306][307][308] Comparison of the Six Months Ended June 30, 2025 and 2024 Key Financial Highlights (Six Months Ended June 30) | Metric | 2025 (Actual) | 2024 (Actual) | Change ($) | Change (%) | | :-------------------------------- | :------------ | :------------ | :--------- | :--------- | | Revenues, net | $176.5 million | $357.0 million | $(180.5) million | -50.6% | | Mobile Health Services revenues | $76.0 million | $260.7 million | $(184.7) million | -70.8% | | Transportation Services revenues | $100.5 million | $96.4 million | $4.1 million | 4.3% | | (Loss) income from operations | $(31.5) million | $26.0 million | $(57.5) million | -221.2% | | Net (loss) income | $(24.3) million | $16.5 million | $(40.8) million | -247.3% | - Mobile Health Services revenue decreased by 70.8% due to the ongoing wind-down of migrant-related services, which peaked in Q1 2024[324] - Transportation Services revenue increased by 4.3% due to a 2.1% increase in U.S. trip volumes, despite a slight decrease in average trip price to $394 from $396[325] - Cost of revenues decreased by 48.6%, less than the revenue decline, resulting in an increase as a percentage of revenues (68.1% vs. 65.5%), driven by reduced compensation and subcontractor costs in Mobile Health Services[326][327][328] Liquidity and Capital Resources - Operating activities provided $43.2 million in cash for H1 2025, despite a net loss, primarily due to an $86.2 million decrease in accounts receivable from municipal customer collections[350] - Investing activities used $27.1 million in H1 2025, mainly for restricted investments ($22.2 million) and business acquisitions ($3.6 million)[351] - Financing activities used $15.9 million in H1 2025, primarily due to $10.8 million in share repurchases and $2.7 million in finance lease payments[353] - The Company anticipates existing cash, future operating cash flows, and the new $55 million revolving credit facility will be sufficient to meet operating requirements for at least the next twelve months[347] Critical Accounting Policies - The Company consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, providing administrative services and absorbing losses for professional corporations (PCs) that deliver healthcare services[359] - The allowance for credit losses on accounts receivable is determined quarterly based on historical collection, aging, customer-specific risk, and economic conditions, with a balance of $6,092,588 as of June 30, 2025[370][371] - Revenue recognition follows a five-step model, primarily from Mobile Health and Transportation Services, with performance obligations satisfied immediately and transaction prices based on fixed rates or estimated variable consideration[377][378][379] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines the company's exposure to market risks, specifically interest rate risk and foreign exchange risk, and discusses concentrations of credit risk. It notes that the company does not use hedging strategies and provides hypothetical impacts of rate changes - The Company is exposed to interest rate risk from cash equivalents and its revolving credit facility, but a hypothetical 10% change in interest rates would have had a neutral net impact on H1 2025 financial statements[384] - Limited foreign exchange risk exists due to U.K. operations; a hypothetical 10% change in exchange rates would impact H1 2025 revenues by approximately 0.9% and total assets by 0.3%[385] - The Company has significant customer concentration, with two customers accounting for 28% and 25% of net accounts receivable as of June 30, 2025, and one customer accounting for 42% of H1 2025 revenues[388] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and reported no material changes in internal control over financial reporting during the quarter - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of June 30, 2025[390] - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[391] PART II - OTHER INFORMATION Item 1. Legal Proceedings This section incorporates by reference the detailed descriptions of legal proceedings from Note 19 of the unaudited Condensed Consolidated Financial Statements, covering various lawsuits and investigations - Descriptions of legal proceedings are incorporated from Note 19 of the unaudited Condensed Consolidated Financial Statements[395] Item 1A. Risk Factors This section refers to the risk factors detailed in the Annual Report on Form 10-K for 2024, stating that no material changes have occurred as of the current report's filing date - No material changes to the risk factors disclosed in the 2024 Form 10-K have occurred as of the date of this Quarterly Report[397] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase program, including its extension, discretionary nature, funding sources, and the number of shares repurchased during the quarter, along with the remaining authorization - The Board extended the New Repurchase Program to December 31, 2025, authorizing the purchase of up to $26,000,000 in Common Stock[399] Common Stock Repurchases (Three Months Ended June 30, 2025) | Month | Total Number of Shares Purchased (shares) | Average Price Paid per Share | | :---------------------- | :----------------------------- | :--------------------------- | | April 1 through 30, 2025 | 1,145,700 | $2.52 | | May 1 through 31, 2025 | 382,200 | $1.33 | | June 1 through 30, 2025 | 1,000,000 | $1.63 | | Total | 2,527,900 | $1.99 | - As of June 30, 2025, approximately $11.3 million remained available for share repurchases under the New Repurchase Program[403][405] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[406] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[407] Item 5. Other Information This section discloses the amendment and restatement of the company's credit agreement, establishing new terms for its revolving credit facility, and confirms no changes in Rule 10b5-1 trading arrangements by directors or officers - On August 7, 2025, the Company amended and restated its credit agreement, providing for a revolving credit facility up to $55,000,000 (with an option for an additional $20,000,000) and subject to a minimum liquidity covenant[408] - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[410] Item 6. Exhibits This section lists all exhibits filed or furnished with the Quarterly Report on Form 10-Q, including corporate documents, the amended credit agreement, and certifications - The report includes exhibits such as the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Amended and Restated Credit Agreement, and certifications from the Principal Executive and Financial Officers[411] Signatures This section contains the duly authorized signatures of the registrant's Chief Executive Officer and Chief Financial Officer, affirming the filing of the report - The report is signed by Lee Bienstock, Chief Executive Officer, and Norman Rosenberg, Chief Financial Officer and Treasurer, on August 7, 2025[416]