Annual report [Section 13 and 15(d), not S-K Item 405]

Acquisitions and Divestitures (Tables)

v3.25.2
Acquisitions and Divestitures (Tables)
 12 Months Ended
Dec. 31, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Assets Acquired and Liabilities Assumed
The allocation of the total purchase price of the 2023 CA Clinics Purchase was as follows:
Property and equipment $ 313,995 
Operating lease right-of-use asset 317,662 
Intangible assets 1,004,513 
Total assets acquired 1,636,170 
Deferred revenue (158,365)
Operating lease liability - current portion (118,081)
Operating lease liability - net of current portion (199,957)
Net purchase consideration $ 1,159,767 
Schedule of Discontinued Operations
During the year ended December 31, 2024, certain long-lived assets groups classified as held and used were determined to not be recoverable and were written down from their carrying values to their respective fair values resulting in the following non-cash impairment losses which are included in (Loss) income from discontinued operations before income tax expense in the consolidated income statement.
Year Ended December 31, 2024
Carrying Value Fair Value Net loss on disposition or impairment related to discontinued operations
(As Restated) (As Restated) (As Restated)
Property and equipment, net $ 3,929,036  $ 2,755,318  $ 1,173,718 
Operating lease right-of-use asset 5,779,712  4,347,457  1,432,255 
Intangible assets, net 298,510  252,746  45,764 
Total Net loss (income) on disposition or impairment related to discontinued operations $ 2,651,737 
During the year ended December 31, 2023, certain long-lived asset groups classified as held and used were determined to not be recoverable were written down from their carrying values to their respective fair values resulting in the following non-cash impairment losses which are included in (Loss) income from discontinued operations before income tax expense in the consolidated income statement.
Year Ended December 31, 2023
Carrying Value Fair Value Net loss on disposition or impairment related to discontinued operations
Property and equipment, net $ 2,893,779  $ 1,233,438  $ 1,660,341 
Operating lease right-of-use asset 80,449  —  80,449 
Total Net loss (income) on disposition or impairment related to discontinued operations $ 1,740,790 
As a result of its evaluation of the recoverability of the carrying value of the assets and liabilities held for sale relative to the clinics estimated fair values, the Company recorded an estimated net loss on disposal,
which is included in (Loss) income from discontinued operations before income tax expense in the consolidated income statement:
Years Ended
2024 2023
(As Restated)
Net loss (income) on disposition or impairment related to discontinued operations $ 4,540,530  $ 657,620 
The following table shows a reconciliation of the Company’s impairment losses and disposal gains and losses recorded in (Loss) income from discontinued operations before income tax expense for the years ended December 31, 2024 and 2023:
Years Ended
2024 2023
(As Restated)
Impairment on long-lived assets held for use
Property and equipment, net $ 1,173,718  $ 1,660,341 
Operating lease right-of-use asset 1,432,255  80,449 
Intangible assets, net 45,764  — 
Impairment on assets held for sale
Assets held for sale 4,540,530  657,620 
Loss on disposal of assets other than by sale
Property and equipment, net 161,057  255,088 
Operating lease right-of-use asset 406,038  — 
Gain on sale of assets (44,807) — 
Total net loss on disposition or impairment related to discontinued operations $ 7,714,555  $ 2,653,498 
The key components of Net (loss) income from discontinued operations that were included in the Company’s consolidated income statements are as follows:
Year Ended December 31,
2024 2023
(As Restated)
Revenues:
Revenues from company-owned or managed clinics $ 69,982,344  $ 70,718,879 
Total revenues 69,982,344  70,718,879 
Cost of revenues:
IT cost of revenues 47,817  65,912 
Total cost of revenues 47,817  65,912 
Selling and marketing expenses 7,850,616  7,852,327 
Depreciation and amortization 3,350,748  7,304,056 
General and administrative expenses 54,988,780  55,234,472 
Total selling, general and administrative expenses 66,190,144  70,390,855 
Net loss on disposition or impairment from discontinued operations 7,714,555  2,653,497 
Loss from discontinued operations (3,970,172) (2,391,385)
Other expense (income), net 2,114  (3,776,135)
(Loss) income before income tax expense (3,972,286) 1,384,750 
Income tax expense from discontinued operations 210,263  367,542 
Net (loss) income from discontinued operations $ (4,182,549) $ 1,017,208 
The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in the Company’s consolidated balance sheets:
December 31,
2024		 December 31,
2023
(As Restated)
ASSETS
Accounts receivable $ 2,484,248  $ 1,138,335 
Prepaid expenses and other current assets 549,605  595,497 
Assets held for sale 38,395,986  17,915,055 
Property and equipment, net 208,074  — 
Deferred tax assets (attributable to VIEs) 1,087,204  — 
Deposits and other assets 425,938  — 
Total current assets, discontinued operations 43,151,055  19,648,887 
Property and equipment, net —  7,238,430 
Operating lease right-of-use asset —  11,946,953 
Intangible assets, net —  5,020,926 
Goodwill —  7,352,879 
Deferred tax assets (attributable to VIEs) —  1,088,801 
Deposits and other assets —  494,095 
Total noncurrent assets, discontinued operations
 —  33,142,084 
Total assets, discontinued operations $ 43,151,055  $ 52,790,971 
LIABILITIES
Accounts payable $ 67,107  $ 371,272 
Accrued expenses 5,066,941  805,187 
Payroll liabilities ($0.9 million and $0.7 million attributable to VIEs as of December 31, 2024 and 2023)
 2,333,335  2,626,882 
Operating lease liability, current portion 153,517  3,343,727 
Finance lease liability, current portion 38,015  25,491 
Deferred revenue from company clinics ($0.0 million and $1.6 million attributable to VIEs as of December 31, 2024 and 2023)
 —  4,463,747 
Other current liabilities (attributable to VIEs) 1,079,441  — 
Liabilities to be disposed of ($5.2 million and $3.6 million attributable to VIEs as of December 31, 2024 and 2023)
 28,629,103  13,831,863 
Total current liabilities, discontinued operations 37,367,459  25,468,169 
Operating lease liability, net of current portion —  10,466,689 
Finance lease liability, net of current portion —  38,016 
Other liabilities, noncurrent (attributable to VIEs) —  1,235,241 
Total noncurrent liabilities, discontinued operations —  11,739,946 
Total liabilities, discontinued operations $ 37,367,459  $ 37,208,115 
The key components of cash flows from discontinued operations are as follows:
Year Ended December 31,
2024 2023
(As Restated)
Depreciation and amortization $ 3,350,748  $ 7,304,056 
Capital expenditures
Acquisition of CA clinics —  1,188,765 
Purchase of property and equipment 664,423  3,857,005 
Significant operating and investing non-cash items
Net loss on disposition or impairment 7,714,555  2,653,497 
The principal components of the held for sale assets and liabilities to be disposed of as of December 31, 2024 and December 31, 2023 were as follows:

December 31, 2024 December 31, 2023
(As Restated)
Assets
Property and equipment, net
$ 8,457,627  $ 4,887,220 
Operating lease right-of-use asset 19,643,917  9,193,496 
Intangible assets, net 6,906,807  3,351,430 
Goodwill 8,459,238  1,140,529 
Valuation allowance (5,071,603) (657,620)
Total assets held for sale $ 38,395,986  $ 17,915,055 
Liabilities
Operating lease liability, current and non-current $ 20,526,714  $ 10,209,382 
Deferred revenue from company clinics 8,102,389  3,622,481 
Total liabilities to be disposed of $ 28,629,103  $ 13,831,863