ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

6 Months Ended

Dec. 31, 2024

Receivables [Abstract]

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

Receivables, net are comprised of the following at December 31, 2024, and June 30, 2024:

Schedule of financing receivable noncurrent allowance for credit loss
	December 31, 2024
	Gross Receivable		Allowance for credit losses		Net
Accounts receivable	$	3,663	$	273	$	3,390
Accounts receivable - related party	$	60	$	—	$	60
Medical receivable	$	23,496	$	—	$	23,496
Management and other fees receivable	$	55,148	$	12,663	$	42,485
Management and other fees receivable from related medical practices (“PC’s”)	$	16,666	$	6,989	$	9,677

	June 30, 2024
	Gross Receivable		Allowance for credit losses		Net
Accounts receivable	$	4,201	$	166	$	4,035
Medical receivable	$	23,992	$	—	$	23,992
Management and other fees receivable	$	54,324	$	12,370	$	41,954
Management and other fees receivable from related medical practices (“PC’s”)	$	15,975	$	6,110	$	9,865

The Company’s customers are concentrated in the healthcare industry.

Accounts Receivable

Credit risk with respect to the Company’s accounts receivable related to product sales and service and repair fees is limited due to the customer advances received prior to the commencement of work performed and the billing of amounts to customers as sub-assemblies are completed. Service and repair fees are billed on a monthly or quarterly basis and the Company does not continue providing these services if accounts receivable become past due. The Company has established a current expected credit loss (“CECL”) to address the risk that a portion of these fees will not be paid. The Company controls credit risk with respect to accounts receivable from service and repair fees through its credit evaluation process, credit limits, monitoring procedures and reasonably short collection terms. The Company performs ongoing credit authorizations before a product sales contract is entered into or service and repair fees are provided.

Long Term-Accounts Receivable

Long term-accounts receivable balances at December 31, 2024 and June 30, 2024 amounted to approximately $724 and $830 respectively. The Company will generate revenue from long-term, non-cancellable contracts to provide service and repair services. Future revenue to be recognized over the following four years as of December 31, 2024 is as follows:

Schedule of future revenue
2026	$	677
2027		242
2028		87
2029		44
Total	$	1,050

Medical Receivables

Medical receivables are due under fee-for-service contracts from third party payors, such as hospitals, government sponsored healthcare programs, patient’s legal counsel and directly from patients. Substantially all the revenue relates to patients residing in Florida. Medical receivables are recorded at net realizable value based on the estimated amounts the Company expects to receive from patients and third-party payors. The medical receivable is reduced by contractual adjustments based on the historical experience with each payor class at each location.

Management and Other Fees Receivable

Management fees receivable is related to management fees outstanding from the related and non related PCs under management agreements. The Company has established a CECL to address the risk that a portion of the contractually obligated management fees receivable from the PCs may not be paid. The PC’s may be limited in their ability to pay the full management fee receivable if they do not collect sufficient expected fees from third-party payers and patients. The Company’s management fees are collateralized, individually and collectively, by the assets of the PCs. The CECL is determined based on the difference between the management fee receivable and the current amount of outstanding fees estimated to be collected by the PCs.

Management and Other Fees Receivable (Continued)

The Company’s considerations into the estimate of the PC’s fee collection is based on a combination of factors. As each management agreement specifies the Company’s ultimate collateral for unpaid management fees are the patient fee receivables owned by each PC, the Company considers the historical loss rates to pools of receivables with similar risks characteristics, aging of the patient fee receivables, and the financial condition of each PC. In addition, the Company subjectively adjusts its estimated expected credit losses for current and forward-looking economic conditions which would include trends seen within the industry and newly enacted regulation. The Company also incorporates qualitative factors, such as changes in the nature and volume of receivables, regulatory changes, and other relevant factors. Specifically, insurance carriers covering automobile no-fault and workers compensation claims incur longer payment cycles and rigorous informational requirements and certain other disallowed claims. Approximately 58.2% and 54.4% of the Company’s owned PCs’ net revenues were derived from no-fault and personal injury protection claims for the three months ending December 31, 2024 and 2023, respectively. In addition, 59.3% and 57.5% of the Company’s owned PC’s net revenues were derived from no-fault and personal injury protection claims for the six months ending December 31, 2024 and 2023, respectively. Also approximately 72.5% and 71.7% of the Company’s managed PCs’ net revenues were derived from no-fault and personal injury protection claims for the three months ending December 31, 2024 and 2023, respectively. In addition 72.2% and 71.8% of the Company’s net revenues were derived from no-fault and personal injury protection claims for the six months ending December 31, 2024 and 2023, respectively.

The Company combines an objective and subjective loss-rate methodology to estimate expected credit losses based on the collateral owned by each PC. This involves objectively using historical loss rates to pools of receivables with similar risk characteristics (i.e. various insurance payors) and then subjectively adjusting for current and forward-looking economic conditions which would include trends seen within the industry and newly enacted regulation. The Company also incorporates qualitative factors, such as changes in the nature and volume of the receivables, regulatory changes, and other relevant factors. Additional Company managed entities also operate under a guaranty agreement, pursuant to which management fees are payable to the Company.

Net revenues from management and other fees charged to the related PCs accounted for approximately 12.0% and 11.8% of the consolidated net revenues for the three months ended December 31, 2024 and 2023, respectively. Net revenues from management and other fees charges to the related PCs accounted for approximately 12.0% and 11.7% of the consolidated net revenues for the six months ended December 31, 2024 and 2023, respectively.