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FINANCING RECEIVABLES
 9 Months Ended
Sep. 30, 2025
FINANCING RECEIVABLES  
FINANCING RECEIVABLES

(9) FINANCING RECEIVABLES

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The Company entered into a receivable funding agreement during the third quarter of 2025 to provide near-term liquidity from medical lien receivables. Under the arrangement, the funding counterparty advances approximately 21% of billed charges for eligible receivables and will fund 18% on future receivables. The funding counterparty retains collections up to specified multiples of the advance, which range from 120% to 270%, depending on the time between funding and collection. Any amounts collected in excess of these retention thresholds are remitted back to the Company.

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The agreement also contains a recourse provision that requires the Company, under certain circumstances (including disputes, litigation, or billing-related errors), to replace affected receivables or allow the counterparty to offset such amounts against future funding or distributions.

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Management concluded that the transfers do not qualify for sale accounting under ASC 860, Transfers and Servicing, primarily because the recourse and offset provisions expose the Company to potential losses. Accordingly, the arrangement is accounted for as a secured borrowing, with proceeds received recorded as a liability and the related receivables remaining on the balance sheet.

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As of September 30, 2025, the Company received total cash advances of $2.2 million which were recorded as a secured borrowing and included within accounts payable and accrued liabilities on the balance sheet. The underlying receivables related to billed charges of approximately $10.3 million, a significant portion of which had previously been written down or derecognized under the Company’s portfolio level accounts receivable valuation approach. Due to these prior adjustments, the carrying value of the related receivables on

the Company’s condensed consolidated balance sheet is substantially lower than the gross billed amount. The recognition of these cash advances and secured borrowings had no material impact on the Company’s condensed consolidated statements of operations.

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