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ACCRUED EXPENSES AND DEBT

6 Months Ended

Jun. 30, 2025

7. ACCRUED EXPENSES AND DEBT

Accrued expenses as of June 30, 2025 and December 31, 2024 consist of the following:

SCHEDULE OF ACCRUED EXPENSES

	June 30, 2025		December 31, 2024
	($ in thousands)
Accrued expenses	$	3,034	$	3,528
Payable to managed practices		1,593		1,116
Taxes and other		282		307
Total	$	4,909	$	4,951

Bank Debt —The Company has a revolving line of credit with Silicon Valley Bank, a division of First Citizens Bank & Trust Company (“SVB”). The Company’s credit facility is a secured revolving line of credit where borrowings are based on a formula of 200% of repeatable revenue adjusted by an annualized attrition rate as defined in the credit agreement. During February 2023, the line of credit was increased to $25 million and the term was extended for two additional years maturing on October 12, 2025. The Company is currently in the process of renewing the credit line. The financial covenants were also slightly modified for 2023 and subsequent years. Effective August 31, 2023, the credit facility agreement was amended whereby the interest rate was temporarily increased from the prime rate plus 1.5% to the prime rate plus 2.0% and the requirement for the minimum liquidity ratio was slightly reduced. The amendments expired March 31, 2024 and the credit facility reverted to its previous terms. During October 2024, the credit line was reduced to $10 million at the Company’s request. The current unused borrowing base is approximately $9.5 million at June 30, 2025.

As of June 30, 2025 and December 31, 2024, there were no borrowings under the credit facility. Interest on the revolving line of credit was charged at the prime rate plus 2.0% for the first quarter of 2024, but decreased to the prime rate plus 1.5% on April 1, 2024. There is also a fee of one-half of 1% annually for the unused portion of the credit line. The debt is secured by all of the Company’s domestic assets and 65% of the shares in its offshore subsidiaries. Future acquisitions are subject to approval by SVB. The cost of the line of credit, which is included in interest expense, was approximately $13,000 and $25,000 for the three and six months ended June 30, 2025, respectively. Interest expense on the line of credit was approximately $616,000 and $906,000 for the three and six months ended June 30, 2024, respectively.

The SVB credit agreement contains various covenants and conditions governing the revolving line of credit including a current annual fee of $44,000. These covenants include a minimum level of adjusted EBITDA and a minimum liquidity ratio. At June 30, 2025 and December 31, 2024, the Company was in compliance with all covenants.

The Company maintains cash balances at SVB in excess of the FDIC insurance coverage limits. The Company performs periodic evaluations of the relative credit standing of this financial institution to ensure its credit worthiness. As of June 30, 2025 and December 31, 2024, the Company held cash of approximately $1.2 million and $119,000, respectively, in the name of its subsidiaries at banks in Pakistan and Sri Lanka. The banking systems in these countries do not provide deposit insurance coverage. The Company has not experienced any losses on its cash accounts.