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SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING

17. SEGMENT REPORTING

 

From January 1, 2023 through April 30, 2024, the Chief Executive Officer (“CEO”) and Executive Chairman served as the Chief Decision Maker (“CODM”), organizing the Company, managing resource allocations and measuring performance among two operating and reportable segments: (i) Healthcare IT and (ii) Medical Practice Management. As of May 1, 2024, the Company’s President, CEO and Executive Chairman served as the CODM. Effective January 1, 2025, the Executive Chairman and the two Co-CEOs serve as the CODM. We report our segment information based on the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments.

 

The CODM evaluates the financial performance of the business units on the basis of revenue, certain individual and total operating expenses and operating income (loss) excluding unallocated amounts, which are mainly corporate overhead costs, for assessing operating results and the allocation of resources. Our CODM does not evaluate operating segments using asset or liability information. The CODM uses segment revenue, certain segment operating expenses and segment operating income (loss) to manage the segments, comparing actual results to forecasted amounts and investigating the reasons for significant variances. Currently, a focus is being placed on reducing costs and managing global headcount. The segment revenue and segment operating income (loss) is also used to assess the performance of personnel and in establishing their compensation.

 

 

The Healthcare IT segment includes revenue cycle management, SaaS solutions and other services. The Medical Practice Management segment includes the management of three medical practices. Each segment is considered a reporting unit. The CODM evaluates the financial performance of the business units on the basis of revenue and direct operating costs excluding unallocated amounts that are mainly corporate overhead costs. Our CODM does not evaluate operating segments using asset or liability information. The accounting policies of the segments are the same as those disclosed in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2024 filed with the SEC on April 3, 2025. The following table presents revenues, operating expenses and operating income (loss) by reportable segment:

 

   Healthcare IT   Medical Practice Management   Total 
   Six Months Ended June 30, 2025 
   ($ in thousands) 
   Healthcare IT   Medical Practice Management   Total 
Net revenue  $48,719   $6,290(a)  $55,009 
Operating expenses:               
Direct operating costs   24,666    5,278    29,944 
Selling and marketing   2,234    15    2,249 
General and administrative   4,455    1,211    5,666 
Research and development   2,255    -    2,255 
Depreciation and amortization   6,555    164    6,719 
Restructuring costs   137    -    137 
Total operating expenses   40,302    6,668    46,970 
Segment operating income (loss)  $8,417   $(378)  $8,039 
                
Reconciliation of profit or loss (segment profit/loss):               
Unallocated corporate expenses            $(3,024)
Net interest expense             (33)
Other expenses             (49)
Income before income taxes            $4,933 

 

(a) This revenue represents fees based on our actual costs plus a percentage of the operating profit.

 

   Healthcare IT   Medical Practice Management   Total 
   Three Months Ended June 30, 2025 
   ($ in thousands) 
   Healthcare IT   Medical Practice Management   Total 
Net revenue  $24,077   $3,300(a)  $27,377 
Operating expenses:               
Direct operating costs   11,763    2,717    14,480 
Selling and marketing   1,110    8    1,118 
General and administrative   2,343    569    2,912 
Research and development   1,020    -    1,020 
Depreciation and amortization   3,300    82    3,382 
Restructuring costs   23    -    23 
Total operating expenses   19,559    3,376    22,935 
Segment operating income (loss)  $4,518   $(76)  $4,442 
                
Reconciliation of profit or loss (segment profit/loss)               
Unallocated corporate expenses             (1,446)
Interest expense             (17)
Other expenses             (35)
Income before income taxes            $2,944 

 

(a) This revenue represents fees based on our actual costs plus a percentage of the operating profit.

 

 

   Healthcare IT   Medical Practice Management   Total 
   Six Months Ended June 30, 2024 
   ($ in thousands) 
   Healthcare IT   Medical Practice Management   Total 
Net revenue  $47,301   $6,751(a)  $54,052 
Operating expenses:               
Direct operating costs   25,254    5,165    30,419 
Selling and marketing   3,417    17    3,434 
General and administrative   4,602    911    5,513 
Research and development   1,968    -    1,968 
Depreciation and amortization   7,478    166    7,644 
Restructuring costs   438    -    438 
Total operating expenses   43,157    6,259    49,416 
Segment operating income  $4,144   $492   $4,636 
                
Reconciliation of profit or loss (segment profit/loss):               
Unallocated corporate expenses            $(2,236)
Net interest expense             (602)
Other income             (287)
Income before income taxes            $1,511 

 

(a) This revenue represents fees based on our actual costs plus a percentage of the operating profit.

 

   Healthcare IT   Medical Practice Management   Total 
   Three Months Ended June 30, 2024 
   ($ in thousands) 
   Healthcare IT   Medical Practice Management   Total 
Net revenue  $24,580   $3,510(a)  $28,090 
Operating expenses:               
Direct operating costs   12,710    2,532    15,242 
Selling and marketing   1,657    7    1,664 
General and administrative   2,021    477    2,498 
Research and development   1,055    -    1,055 
Depreciation and amortization   3,633    81    3,714 
Restructuring costs    116    -    116 
Total operating expenses   21,192    3,097    24,289 
Segment operating income  $3,388   $413   $3,801 
                
Reconciliation of profit or loss (segment profit/loss)               
Unallocated corporate expenses             (1,530)
Interest expense             (264)
Other expenses             (294)
Income before income taxes            $1,713 

 

(a)This revenue represents fees based on our actual costs plus a percentage of the operating profit.