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Fair Value Measurements of Financial Instruments | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements of Financial Instruments | 18. Fair Value Measurements of Financial Instruments The carrying amounts and fair values of the Company’s financial instruments as of June 30, 2025, are presented below (in thousands):
|  | Fair Value Measurements |  |  |  |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Money market accounts(1) |  | $ | 7,484 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,484 |
Marketable securities |  |  | 2,417 |  |  |  | — |  |  |  | — |  |  |  | 2,417 |
I Health call option |  |  | — |  |  |  | — |  |  |  | 3,867 |  |  |  | 3,867 |
Total assets |  | $ | 9,901 |  |  | $ | — |  |  | $ | 3,867 |  |  | $ | 13,768 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Sun Labs remaining equity interest purchase |  | $ | — |  |  | $ | — |  |  | $ | 7,352 |  |  | $ | 7,352 |
CFC contingent consideration |  |  | — |  |  |  | — |  |  |  | 11,824 |  |  |  | 11,824 |
CHS contingent consideration |  |  | — |  |  |  | — |  |  |  | 6,339 |  |  |  | 6,339 |
Other(2) |  |  | 1,665 |  |  |  | 3 |  |  |  | 1,966 |  |  |  | 3,634 |
Total liabilities |  | $ | 1,665 |  |  | $ | 3 |  |  | $ | 27,481 |  |  | $ | 29,149 |
(1) Included in cash and cash equivalents. (2) Other consists of the interest rate collar and other contingent consideration liabilities. The carrying amounts and fair values of the Company’s financial instruments as of December 31, 2024, are presented below (in thousands):
|  | Fair Value Measurements |  |  |  |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Money market accounts(1) |  | $ | 3,673 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,673 |
Marketable securities |  |  | 2,378 |  |  |  | — |  |  |  | — |  |  |  | 2,378 |
I Health call option |  |  | — |  |  |  | — |  |  |  | 3,778 |  |  |  | 3,778 |
Interest rate collar |  |  | — |  |  |  | 19 |  |  |  | — |  |  |  | 19 |
Total assets |  | $ | 6,051 |  |  | $ | 19 |  |  | $ | 3,778 |  |  | $ | 9,848 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Sun Labs remaining equity interest purchase |  | $ | — |  |  | $ | — |  |  | $ | 7,352 |  |  | $ | 7,352 |
ADSC contingent consideration |  |  | — |  |  |  | — |  |  |  | 4,285 |  |  |  | 4,285 |
CFC contingent consideration |  |  | — |  |  |  | — |  |  |  | 9,949 |  |  |  | 9,949 |
CHS contingent consideration |  |  | — |  |  |  | — |  |  |  | 5,643 |  |  |  | 5,643 |
Other(2) |  |  | 2,110 |  |  |  | — |  |  |  | 1,366 |  |  |  | 3,476 |
Total liabilities |  | $ | 2,110 |  |  | $ | — |  |  | $ | 28,595 |  |  | $ | 30,705 |
(1) Included in cash and cash equivalents. (2) Other consists of other contingent consideration liabilities. The change in the fair value of Level 3 liabilities is recognized in other income or general and administrative expenses in the accompanying condensed consolidated statements of income. As of June 30, 2025, the reconciliation of our Level 3 liabilities was as follows (in thousands):
|  | Amount |
Balance at January 1, 2025 |  | $ | 28,595 |
Change in fair value of existing Level 3 liabilities |  |  | 3,386 |
Settlement |  |  | (4,500 | )
Balance at June 30, 2025 |  | $ | 27,481 |
Derivative Financial Instruments Interest Rate Collar Agreements From time to time, the Company enters into agreements designed to limit the interest rate risk associated with the Company’s Revolver Loan, including the collar agreement. The principal objective of the collar agreement is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. See Note 8 — “Credit Facility and Bank Loans” for further information on the Company’s debt. Under the terms of the agreement, the ceiling is 5.0% and the floor is 2.34%. The collar agreement is not designated as a hedging instrument. I Health Call Option On March 31, 2024, the Company acquired a 25% equity interest in I Health, including a call option that was amended on May 28, 2025, to allow the Company to purchase an additional 37.5% equity interest on each of the first and second anniversaries from March 31, 2025. The Company determined the fair value of the call option using a probability-weighted model that includes significant unobservable inputs (Level 3). Specifically, the Company considered various scenarios of the purchase price based on EBITDA and assigned probabilities to each such scenario in determining fair value. As of June 30, 2025 and December 31, 2024, the value of the call option was valued at $3.9 million and $3.8 million, respectively. The I Health call option is presented within other assets in the accompanying condensed consolidated balance sheet. The 25% equity interest in I Health is accounted for under the equity method (see Note 5 — “Investments in Other Entities — Equity Method”). In July 2025, the Company exercised the first option to purchase an additional 37.5% equity interest in I Health, thereby owning 62.5% of I Health. Remaining equity interest purchase In 2021, the Company entered into a financing obligation to purchase the remaining equity interest in Sun Clinical Laboratories (“Sun Labs”) within three years from the date the Company consolidated Sun Labs. The purchase of the remaining Sun Labs equity value is considered a financing obligation with a carrying value of $7.4 million as of June 30, 2025 and December 31, 2024, respectively. As the financing obligation is embedded in the non-controlling interest, the non-controlling interest is recognized in other liabilities in the accompanying condensed consolidated balance sheets. Contingent consideration Advanced Diagnostic and Surgical Center (“ADSC”) Upon acquiring 95% of the equity interest of ADSC in 2024, the total consideration of the acquisition included contingent consideration payable if ADSC achieved revenue and EBITDA metrics for fiscal years 2023 and 2024 (“ADSC contingent consideration”). As of December 31, 2024, the ADSC contingent consideration was valued at $4.3 million and included in other liabilities in the accompanying condensed consolidated balance sheets. In April 2025, the Company paid $4.5 million in cash to the sellers of ADSC for the contingent consideration that was achieved. As a result, the contingent liabilities were no longer outstanding as of June 30, 2025. Changes in the ADSC contingent consideration are presented in general and administrative expenses in the accompanying condensed consolidated statements of income. Community Family Care Medical Group IPA, Inc. (“CFC”) Upon acquiring certain assets of CFC in 2024, the total consideration of the acquisition included contingent consideration. The contingent consideration will be settled in cash contingent upon CFC maintaining or exceeding the target member month amount for the first, second, and third measurement period (“CFC contingent consideration”). The first measurement period means the period commencing on the first day of the month immediately following the close of AHMS and ending on the one-year anniversary thereof. The second measurement period is for one year after the first measurement period, and the third measurement period is for one year after the second measurement period. The contingent liability will be paid after achieving the metric in each measurement period. The Company will pay $5.0 million for each metric achieved for each measurement period, or a total of $15.0 million. In the event that the CFC first and/or second contingent consideration metrics are not achieved during the first and/or the second measurement period, if the metric is met within the second and/or third measurement period, there is a catch-up payment that shall be paid concurrently with the payments of the CFC second contingent consideration and/or CFC third contingent consideration. The Company determined the fair value of the contingent consideration using a probability-weighted model that includes significant unobservable inputs (Level 3). Specifically, the Company considered various scenarios of membership and assigned probabilities to each such scenario in determining fair value. As of June 30, 2025 and December 31, 2024, the first metric was valued at $5.0 million and $4.2 million, respectively and was included in other liabilities in the accompanying condensed consolidated balance sheets. As of June 30, 2025 and December 31, 2024, the second metric was valued a t $4.3 million and $3.5 million, respectively, and was included in other liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. As of June 30, 2025 and December 31, 2024, the third metric was valued at $2.5 million and $2.3 million, and was included in other long-term liabilities in the accompanying condensed consolidated balance sheets. In July 2025, the Company paid $5.0 million in cash for the first metric of the contingent consideration that was achieved. Changes in the CFC contingent consideration are presented in general and administrative expenses in the accompanying condensed consolidated statements of income. CHS Upon acquiring 100% of the equity interest of CHS in 2024, the total consideration of the acquisition included contingent consideration. The contingent consideration will be settled i n cash, contingent upon CHS achieving a gross profit per total member months metric for fiscal year 2025 (“CHS 2025 Gross Profit PMPM Metric”) and member enrollment metrics (“CHS Member Enrollment Metrics”) measured over four measurement periods and an additional fifth measurement period contingent upon acquisition of an entity (the “earnout period”) (collectively, “CHS contingent consideration”). For the CHS Member Enrollment Metrics, the first measurement period means the period commencing on the first day immediately following the closure of CHS and ending on the one-year anniversary thereof. The second, third, fourth, and fifth measurement periods are for one year after each of the previous respective measurement periods. If the metrics are achieved, the contingent liability will be paid after the end of the earnout period. The Company will pay up to $4.8 million for the CHS 2025 Gross Profit PMPM Metric, and up to $4.3 million for each metric achieved for each measurement period, or up to a total of $21.5 million, for the CHS Member Enrollment Metrics. T he Company determined the fair value of the contingent consideration using a probability-weighted model that includes significant unobservable inputs (Level 3). Specifically, the Company considered various scenarios of revenue and membership and assigned probabilities to each such scenario in determining fair value. As of June 30, 2025 and December 31, 2024, the CHS contingent consideration was valued at $6.3 million and $5.6 million, respectively. The CHS 2025 Gross Profit PMPM Metric was included in other liabilities and the CHS Member Enrollment Metrics were included in other long-term liabilities in the accompanying condensed consolidated balance sheets. Changes in the CHS contingent consideration are presented in general and administrative expenses in the accompanying condensed consolidated statements of income.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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