Quality of Revenue (QoR), Coding, and EBITDA Normalization
$7.70M
Reported EBITDA
$620K
Provider Comp Normalization (Dr. Santos)
$180K
Locum Tenens Costs
$95K
One-Time EMR Migration Costs
$140K
Malpractice Insurance True-Up
$-120K
Below-Market Rent (Founder-Owned Building)
$0
Reimbursement Rate Change Impact
$0
Coding Intensity Audit Adjustment
$320K
Pro Forma Add-On #3 (Sports Medicine)
$95K
Non-Cash Stock Compensation
$-280K
Customer Loss (Q4 2025 — Employer Group)
$8.75M
Adjusted EBITDA
| Line Item | Seller Amount | Shadow Amount | Variance | Shadow Note |
|---|---|---|---|---|
| Reported EBITDA | $7.70M | $7.70M | -- | Per trailing twelve months ending December 2025 |
| Provider Comp Normalization (Dr. Santos) | $620K | $420K | +$200K | Replacement is $350K in this market, not $280K. Market data supports $130K add-back, not $200K. Variance: $200K. |
| Locum Tenens Costs | $180K | $0 | +$180K | Recurs every summer — 3 of 4 years had locum costs. Not non-recurring. Full reversal of add-back. Variance: $180K. |
| One-Time EMR Migration Costs | $95K | $95K | -- | Confirmed one-time. Supportable add-back. |
| Malpractice Insurance True-Up | $140K | $140K | -- | Timing adjustment, supportable. |
| Below-Market Rent (Founder-Owned Building) | ($120K) | ($185K) | +$65K | Medical office comps in Orlando: $26-$30/sqft. Normalize to $27/sqft. Variance: $65K. |
| Reimbursement Rate Change Impact | $0 | ($280K) | +$280K | Medicare outpatient PT cap restored effective Jan 2026. $280K annual impact on Medicare volume. Should be in run-rate. Variance: $280K. |
| Coding Intensity Audit Adjustment | $0 | ($140K) | +$140K | CPT code distribution shows 15% higher E&M coding than PT specialty benchmark. Recoupment exposure estimated at $140K. Variance: $140K. |
| Pro Forma Add-On #3 (Sports Medicine) | $320K | $210K | +$110K | Trailing 6-month annualized is $210K, not peak quarter extrapolation. Variance: $110K. |
| Non-Cash Stock Compensation | $95K | $95K | -- | Standard non-cash add-back. Supportable. |
| Customer Loss (Q4 2025 — Employer Group) | ($280K) | ($350K) | +$70K | Annualized margin impact higher than seller calculated. Full-year impact is $350K, not $280K partial-year. Variance: $70K. |
| Adjusted EBITDA | $8.75M | $7.71M | $1.04M |
Seller Adjusted EBITDA: $8.75M|Shadow EBITDA: $7.71M|Variance: $1045K|At 11.5x: $12.0M overpayment risk