Filed Pursuant to Rule 424(b)(4)
File Number 333-201947

PROSPECTUS

9,642,857 Class A Units consisting of Common Stock and Warrants and 750 Class B Units consisting of Series A Convertible Preferred Stock and Warrants

American CareSource Holdings, Inc.

This is a firm commitment offering of 9,642,857 Class A Units (consisting of one share of our common stock and a warrant to purchase one share of our common stock (the “Warrant”)). The Warrants will have an exercise price of $0.875, will be exercisable upon issuance and will expire five years from the date of issuance. The shares of common stock and Warrants part of a Class A Unit are immediately separable and will be issued separately in this offering.

We are also offering to those purchasers whose purchase of Class A Units in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of our outstanding common stock immediately following the consummation of this offering, the opportunity, in lieu of purchasing Class A Units, to purchase an aggregate of 750 Class B Units. Each Class B Unit will consist of one share of our Series A Convertible Preferred Stock (the “Series A Preferred”), with a stated value of $1,000 and convertible into 1,429 shares of our common stock, together with 1,429 Warrants. The Series A Preferred do not generally have any voting rights but are convertible into shares of common stock. The shares of Series A Preferred and Warrants part of a Class B Unit are immediately separable and will be issued separately in this offering.

We are issuing in this offering (i) an aggregate of 9,642,857 shares of our common stock and Warrants to purchase 9,642,857 shares of common stock as components of the Class A Units and (ii) an aggregate of 750 shares of our Series A Preferred and 1,071,750 Warrants as components of the Class B Units. The Series A Preferred included in the Class B Units will be convertible into an aggregate of 1,071,750 shares of common stock.

Our common stock is listed on The NASDAQ Capital Market under the symbol “GNOW.” On December 3, 2015, the last reported sale price of our common stock on The NASDAQ Capital Market was $0.92 per share.

Investing in our securities involves a high degree of risk. See “Risk Factors” on page 15 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

		Per Class A Unit				Per Class B Unit				Total
Public offering price		$	0.700			$	1,000.00			$	7,499,999.90
Underwriting discounts and commissions(1)		$	0.049			$	70.00			$	524,999.99
Proceeds, before expenses, to us		$	0.651			$	930.00			$	6,974,999.91

Certain of our officers, directors and holders of more than 5% of our common stock, or their affiliates, have agreed to purchase an aggregate of 5,857,141 Class A Units in this offering at the public offering price. We have granted a 45-day option to the underwriters to purchase up to $1,124,999.85 of additional securities, solely to cover over-allotments, if any.

The underwriters expect to deliver the securities against payment therefor on or about December 9, 2015.

Aegis Capital Corp

December 3, 2015

TABLE OF CONTENTS

		Page
PROSPECTUS SUMMARY			1
RISK FACTORS			15
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS			45
USE OF PROCEEDS			46
MARKET PRICE AND DIVIDENDS ON COMMON EQUITY AND RELATED STOCKHOLDER MATTERS			47
DILUTION			49
CAPITALIZATION			50
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			52
INDUSTRY			68
BUSINESS			70
MANAGEMENT			86
EXECUTIVE COMPENSATION			91
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			101
PRINCIPAL STOCKHOLDERS			104
DESCRIPTION OF MATERIAL INDEBTEDNESS			106
DESCRIPTION OF CAPITAL STOCK			109
DESCRIPTION OF THE SECURITIES WE ARE OFFERING			116
UNDERWRITING			118
LEGAL MATTERS			121
EXPERTS			121
WHERE YOU CAN FIND MORE INFORMATION			121
INDEX TO FINANCIAL STATEMENTS			F-1

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You should rely only on the information contained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or made available to you. We have not, and the underwriters have not, authorized anyone to provide you with any information other than that contained in this prospectus or any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus may only be used where it is legal to offer and sell our securities. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. Persons outside the United States must inform themselves about, and observe any restrictions relating to, the offering of securities and the distribution of this prospectus outside the United States.

Industry and Market Data

Market data and other statistical information contained in this registration statement are based on independent industry publications, government publications, reports by market research firms, and other published independent sources. Some data are also based on our good faith estimates, which are derived from other relevant statistical information, as well as the independent sources listed above. Although we believe these sources are reliable, we have not independently verified the information.

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RISK FACTORS

Any investment in our securities involves significant risks. You should consider carefully the risks and uncertainties described below, together with the other information contained in this prospectus, before you decide whether to purchase our securities. If any of the following risks or uncertainties actually occurs, our business, financial condition, results of operations and prospects would likely suffer, possibly materially. In addition, the trading price of our securities could decline due to any of these risks or uncertainties, and you may lose part or all of your investment.

Risks Related to Our General Business

We have incurred losses in most of our years of operation, and we may never be profitable again, despite our new business strategy.

With the exception of the years 2008, 2009 and 2010, we have incurred losses in each year since our inception. At September 30, 2015, we had an accumulated deficit of approximately $31.1 million. We incurred a net loss of $2.2 million for the three months ended September 30, 2015, and losses are continuing through the date of this prospectus. All losses prior to the second half of 2014 were attributable to our ancillary network business. The Company’s prospects in our ancillary network business must be considered in light of the numerous risks, expenses, delays and difficulties frequently encountered in a highly-competitive, consolidating industry as well as the risks inherent in our new management arrangement with HealthSmart. No assurances can be given that our future revenue from the ancillary network business will not continue to decline, which will result in continued operating losses.

We announced our entry into the urgent and primary care market in April 2014. We incurred losses of approximately $0.3 million and $2.6 million, respectively, from this business segment for the year ended December 31, 2014 and the nine months ended September 30, 2015. Although we plan to grow and operate the urgent and primary care business profitably, no assurances can be given that our efforts will be successful.

We will require additional capital to fund our operating and expansion costs, and our inability to obtain such capital will likely harm our business.

We will require additional capital to fund our urgent and primary care growth and expansion plans. We may also need additional capital if we are unable to reduce or eliminate the losses in our ancillary network business or if we are unable to operate our urgent and primary care business profitably. Furthermore, if the profit we receive from our two business lines is not sufficient to cover our central overhead costs, we will also need additional capital. Although we believe the anticipated net proceeds from this offering along with the remaining borrowing capacity under the December 2014 credit agreement will be sufficient to satisfy our immediate liquidity requirements, including the funding of the purchase price for the Medac Asset Acquisition, we anticipate needing additional capital in the first quarter of 2016. We cannot assure you that we will be able to obtain such financing in a timely manner, on favorable terms or at all.

If additional financing is not available on satisfactory terms or at all, we may be unable to expand our business or acquire new centers at our projected rate and our operating results may suffer. Debt financing increases expenses and must be repaid regardless of operating results and may impose restrictions on the manner in which we operate our business. Equity financing, or debt financing that is convertible into equity, could result in additional dilution to our existing stockholders. Furthermore, if we are unable to obtain adequate capital, whether in the form of equity or debt, to fund our business and growth strategies we may be required to delay, scale back or eliminate some or all of our expansion plans, which may have a material adverse effect on our business, operating results, financial condition, or prospects.

When such financing is required, there can be no assurance that we would be successful in obtaining sufficient capital financing on commercially reasonable terms or at all, or, if we did obtain capital financing, that it would not be dilutive to current stockholders.

We may need to raise additional capital to satisfy our indebtedness.

Our indebtedness to Wells Fargo Bank, National Association, or Wells Fargo, under our credit agreements, which totaled $10.8 million at September 30, 2015, matures in part on June 1, 2016 ($5.0 million) and on October 1, 2016 (remainder). If we are unable to extend or refinance the Wells Fargo

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debt, we will need to raise additional capital to repay Wells Fargo on the applicable maturity dates. In addition, our indebtedness to sellers of urgent and primary care centers that we acquired in 2014 now totals approximately $0.2 million and is payable at varying times and in varying amounts until October 2016. We can provide no assurances that any additional sources of financing will be available to us on favorable terms, if at all, to repay our indebtedness or for any other purpose. Our failure to raise a sufficient amount of additional capital may significantly impact our ability to operate and expand our business. For further discussion of our liquidity requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources,” elsewhere in this prospectus.

Failure to complete the Medac Asset Acquisition could negatively impact our stock price and our future operations and financial results.

Although we presently anticipate closing the Medac Asset Acquisition immediately after consummation of this offering, there is no assurance we can do so at that time, or at all. If the Medac Asset Acquisition is not completed, our ongoing business may be adversely affected as a result of the following factors, among others:

If the Medac Asset Acquisition is not completed, we cannot assure you that these risks will not materialize and will not materially affect our operations, financial results, and stock price.

Our subleases, management services agreement and other contractual arrangements may not result in our realizing the financial benefits of direct ownership of Medac and may not be as effective as direct ownership in providing managerial control over Medac.

There is a risk that state authorities in some jurisdictions, including North Carolina, may find that certain of our contractual relationships, including those entered into in connection with the Medac Asset Acquisition, violate laws prohibiting the corporate practice of medicine and fee-splitting arrangements, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our common stock. These laws are generally intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing a physician’s professional judgment and may prevent or limit the sharing or assignment of income generated by certain of our physicians. See “Business — Our Urgent Care and Primary Care Business — Government Regulation — State Laws Regarding Prohibition of Corporate Practice of Medicine and Fee — Splitting Arrangements.”

Under applicable state law, we are prohibited from directly owning an interest in a medical practice in North Carolina, including Medac. Accordingly, we intend to realize the benefit of the Medac Asset Acquisition though our subleases, management services agreement and other contractual arrangements, each of which remains subject to negotiation of the parties and will become effective, if at all, at the closing of the Medac Asset Acquisition. These arrangements may not be as effective as direct ownership in providing us with the financial benefits of or managerial control over Medac. For example, with limited exceptions, the annual consideration due to us under the subleases, management services agreement and other contractual arrangements must be set in advance, which could result in our receipt of less than all of Medac’s annual earnings. In the event we or our contractual arrangements are found to violate applicable North Carolina law, such contractual arrangements could be deemed void and unenforceable as a matter of law, which may have a material adverse effect on our business, operating results, cash flow and financial condition.

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If we had direct ownership of Medac, we would be able to exercise our rights as an equity holder directly to effect changes to the board of directors of Medac, which could effect changes at the management and operational levels. With contractual arrangements, we may not be able to directly change the members of the board of directors of Medac and would have to rely on the rights provided in our subleases, management services agreement and other contractual arrangements for such purposes. The parties to our subleases, management services agreement and other contractual arrangements may have conflicts of interest with us or our stockholders, and they may not act in our best interests or may not perform their obligations under these contracts. Such risks would exist throughout the period in which we intend to manage Medac through such contractual arrangements unless a change in the law is effected. If any dispute relating to such contracts remained unresolved, we would have to enforce our rights under these contracts under state law through arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the legal system. Any such dispute could result in the ultimate termination of such contracts, which would require that we identify a new medical company to operate the clinical aspects of the business. Therefore, our subleases, management services agreement and other contractual arrangements may not be as effective in ensuring our financial rights or control over the relevant portion of Medac’s business operations as direct ownership would be.

We have experienced significant turnover in our senior management and our business may be adversely affected by the transitions in our senior management team or by our inability to effectively handle our transition and any future succession planning.

We are highly dependent on the executive leadership of our senior management and key employees and their extensive experience in the urgent and primary care industry, as well as their extensive knowledge of healthcare operations and center acquisitions. Our success depends, in large part, on the contributions and strategic vision of our senior management team as well as those other key personnel who manage our operations. In October 2014, we received resignation notices from our then-serving CFO and Principal Accounting Officer after we announced the relocation of our corporate headquarters from Dallas, Texas to Atlanta, Georgia, in April 2015, our President, Chairman and Chief Executive Officer, Richard W. Turner, Ph.D., died unexpectedly, and in July 2015, our then-serving CFO announced his resignation. Although our Acting Chief Executive Officer is and has been a member of our Board of Directors, and our Interim Chief Financial Officer is also our Vice President of Acquisitions, Secretary and General Counsel, we cannot assure you that their duties to us on an interim and less than full-time basis in these new roles will not distract them from their existing responsibilities or that their other roles will not distract them from their interim duties to us.

These transitions in our executive team may be disruptive to our business, and if we are unable to manage orderly transitions, our business may be adversely affected. Additionally, the loss of other members of our senior management team or key personnel could harm our ability to implement our business strategy and respond to the rapidly changing market conditions in which we operate. There may be a limited number of persons with the requisite skills to serve in these positions, and we cannot assure you that we would be able to identify or employ such qualified personnel on acceptable terms, if at all. The search for permanent replacements could also result in significant recruiting and relocation costs. If we fail to successfully attract and appoint a permanent CEO and permanent CFO with the appropriate expertise, we could experience increased employee turnover and harm to our business, results of operations, cash flow and financial condition.

Our business depends on numerous complex information systems, and any failure to successfully maintain these systems or implement new systems could materially harm our operations.

We depend on complex, integrated information systems and standardized procedures for operational and financial information. We may not have the necessary resources to enhance existing information systems or implement new systems where necessary to handle our needs. Furthermore, we may experience unanticipated delays, complications and expenses in implementing, integrating and operating our systems. Any interruptions in operations during periods of implementation would adversely affect our ability to properly allocate resources and process information in a timely manner, which could result in customer dissatisfaction and delayed cash flow. In addition, our technology systems, or a disruption in the operation of such systems, could be subject to physical or electronic break-ins, and similar disruptions from unauthorized tampering. The failure

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to successfully implement and maintain operational, financial and billing information systems could have an adverse effect on our ability to obtain new business, retain existing business and maintain or increase our profit margins.

A failure in or a breach of our operational or security systems or infrastructure, or those of the third party vendors and other service providers or other third parties with which we transact business, including as a result of cyber attacks, could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs or cause losses.

We rely on communications and information systems to conduct our business. Information security risks have generally increased in recent years in part because of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct transactions, and the increased sophistication and activities of organized crime, hackers, and terrorists, activists, and other external parties. Our business, financial, accounting, and data processing systems, or other operating systems and facilities may stop operating properly or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond our control.

Although we have information security procedures and controls in place, our technologies, systems and networks and our payors’ systems may become the target of cyber attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss, or destruction of our or our payors’ or other third parties’ confidential information.

Although we have disaster recovery and other policies and procedures designed to prevent or limit the effect of the failure, interruption or security breach of our information systems, there can be no assurance that any such failures, interruptions or security breaches will not occur or, if, they do occur, that they will be adequately addressed. We may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate information security vulnerabilities. Disruptions or failures in the physical infrastructure or operating systems that support our business, or cyber attacks or security breaches of our networks, systems or devices could have a material adverse effect on our business, results of operations or financial condition.

We have identified material weaknesses in our internal control over financial reporting, and our management has concluded that our disclosure controls and procedures are not effective.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. Based on the results of management’s assessment and evaluation of our internal controls following the end of our 2014 fiscal year, our then-serving CEO and then-serving CFO concluded that our internal control over financial reporting was not effective due to the material weaknesses described below.

Following the relocation of our corporate headquarters from Dallas, Texas to Atlanta, Georgia, in connection with our efforts to pursue urgent and primary care acquisitions in the southeast United States, in October 2014, we received resignation notices from our then-serving CFO and Principal Accounting Officer. Later in the fourth quarter of 2014, we learned that none of the other members of our accounting or finance divisions would be moving with the Company to our new headquarters in Atlanta, Georgia. This loss left us without the necessary expertise on staff to address our more complex accounting matters and also resulted in routine year-end accounting processes and procedures not being timely performed. Our acquisition of our urgent and primary care centers placed additional stress on our accounting controls. At the time of our acquisitions, none of the centers employed full-time, dedicated accounting personnel, only two maintained their books and records on an accrual basis of accounting, and none had effective internal controls over financial reporting. Furthermore, four of the five transactions were closed in the second half of 2014. The timing of these acquisitions, combined with center-level accounting challenges and the issues created by our personnel deficiencies, rendered us unable to appropriately implement adequate processes and procedures to effectively exercise internal control at the center level.

Our management also has concluded that our disclosure controls and procedures are not effective such that the information relating to our Company required to be disclosed in the reports we file with the

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SEC (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Further, effective August 14, 2015, our then-serving CFO resigned and our then-serving Vice President of Acquisitions, Secretary and General Counsel was appointed to serve in the additional capacity of Interim Chief Financial Officer. We are presently attempting to identify a new CFO and are taking specific action to address and remediate a material portion of our significant deficiencies and material weaknesses by December 31, 2015. We cannot assure you, however, that our current remediation efforts will resolve all of our material weaknesses by that date or any other date, or that other material weaknesses or other deficiencies will not arise in the future. If our existing material weaknesses persist or if new deficiences arise, we may be unable to accurately report our financial results on a timely basis, which could cause our reported financial results to be materially misstated and require restatement which could result in the loss of investor confidence, delisting or cause the market price of our common stock to decline.

We may not be able to adequately secure or protect our intellectual property and other proprietary rights that are material to our business, or to defend successfully against intellectual property infringement claims by third parties.

Our ability to compete effectively depends in part upon our intellectual property rights, including but not limited to our trademarks. Our use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property rights may not be adequate. Litigation may be necessary to enforce our intellectual property rights, or to defend against claims by third parties that the conduct of our businesses or our use of intellectual property infringes upon such third party’s intellectual property rights. For example, a complaint was filed against us in the U.S. District Court for the Northern District of Alabama by American Family Care, Inc. and Irwin Holdings, LLC. The complaint alleged, among other things, that our use of the trade name “American CareSource” in the urgent and primary care business infringed upon their trademark, “American Family Care.” The parties have settled the dispute and have asked the court to dismiss the case. Any intellectual property litigation or claims brought against us, whether or not meritorious, could result in substantial costs and diversion of our resources, and there can be no assurances that favorable final outcomes will be obtained in all cases. The terms of any settlement or judgment may require us to pay substantial amounts to the other party or cease exercising our rights in such intellectual property, including ceasing the use of certain trademarks used by us to distinguish our services from those of others or ceasing the exercise of our rights in copyrightable works. In addition, we may have to seek a license to continue practices found to be in violation of a third party’s rights, which may not be available on reasonable terms, or at all. Our business, financial condition, and results of operations could be adversely affected as a result.

The credit agreements governing our indebtedness contain restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities.

Our credit agreements contain restrictive covenants that limit our ability to, among other things:

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We also cannot assure you that any third party or unaffiliated guarantors will permit us to respond to changes in market conditions or pursue business opportunities.

The limitation on additional investments in fixed assets could limit our ability to execute our de novo clinic growth strategy if the lender does not waive compliance with this covenant. The requirement that we comply with these provisions may materially adversely affect our ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund desired capital expenditures or withstand a continuing or future downturn in our business.

If we are unable to comply with the restrictions and covenants in our credit agreements, there could be an event of default under the terms of such agreements, which could result in an acceleration of repayment.

Our ability to comply with the restrictions and covenants in our credit agreements may be affected by events beyond our control. For example, in April 2015, we received notice from Wells Fargo that an event of default had occurred under our July 2014 credit agreement following the unexpected death of our President, Chairman and Chief Executive Officer, Dr. Richard W. Turner, who had guaranteed part of our indebtedness under the July 2014 credit agreement. Although that event of default was cured to the satisfaction of Wells Fargo, and Wells Fargo notified us that it will not enforce its rights and remedies related to Dr. Turner’s death, we cannot assure you that in the future we or our guarantors will be willing or able to comply with the restrictions and covenants in our credit agreements, or that any future events of default will be waived. In the event of a default under our credit agreements, the lender could terminate its commitment to lend or could accelerate the loan and declare all amounts borrowed due and payable. If any of these events occur, we could be forced to liquidate all or a portion of our assets, which might not be sufficient to repay in full all of our outstanding indebtedness and we may be unable to find alternative financing. Even if we could obtain alternative financing, it might not be on terms that are favorable or acceptable to us. Additionally, we may not be able to amend our credit agreements or obtain needed waivers on satisfactory terms.

Our borrowing under our credit agreements exposes us to interest rate risk.

Our results of operations are exposed to interest rate risk associated with borrowing under our credit agreements, which bear interest at daily one month London Interbank Offered Rate, or LIBOR, plus 1.75%. By its nature, a variable interest rate will move up or down based on changes in the economy and other factors, all of which are beyond our control. If interest rates increase, so will our interest costs, which may have a material adverse effect on our results of operations, cash flows available for working capital and capital expenditures, and our overall financial condition.

We may be adversely affected by prevailing economic conditions and financial, business and other factors beyond our control.

Our ability to attract and retain patients, invest in and grow our business and meet our financial objectives and obligations depends on our operating and financial performance, which, in turn, is subject to numerous factors, including the prevailing economic conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the extent and severity of illness, the number of uninsured persons in the United States and inflationary pressures. We cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.

The financial instability of our patients, many of whom may be adversely affected by volatile economic conditions, could present a variety of risks that are beyond our control. For example, unemployment and underemployment, and the resultant loss of insurance, may decrease the demand for healthcare services and pharmaceuticals. If fewer patients are seeking medical care because they do not have insurance coverage, our centers may experience reductions in revenues, profitability or cash flow. This, in turn, could adversely affect our financial condition and liquidity. In addition, widespread and prolonged unemployment, notwithstanding the enforceability of the Patient Protection and Affordable Care Act, or ACA, could result in a substantial number of people becoming uninsured or underinsured. In turn, this may lead to fewer individuals pursuing or being able to afford our services. To the extent prevailing economic conditions result in fewer patients being treated, our business, results of operations, financial condition and cash flows could be adversely affected.

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Our intangible assets may be impaired following the disposition of our legacy business.

We evaluate intangible assets for impairment annually during the fourth quarter and in any interim period in which circumstances arise that indicate our intangible assets may be impaired. Indicators of impairment include, but are not limited to, the loss of significant business or significant adverse changes in industry or market conditions. Our disposition of the legacy business may subject us to a write-down in intangible assets of up to approximately $0.4 million (as of the date hereof) in a future period, which could affect our results of operations and the price of our common stock.

Our ability to use our NOL carryforwards to offset future taxable income may be subject to limitations.

In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change by value in its equity ownership over a three-year period, is subject to limitations on its ability to utilize its pre-change NOLs. As of December 31, 2014 and 2013, our NOL carryforwards were approximately $19.6 million and $14.5 million, respectively, which expire from 2025 through 2034. Our existing NOL carryforwards may be subject to limitations arising from previous ownership changes. Either alone, or when aggregated with past transactions, this offering and future changes in our stock ownership, some of which might be beyond our control, could result in an ownership change under Section 382 of the Code. We have not conducted a study to assess whether an ownership change under Section 382 has occurred or will occur as a result of this offering. In the event we are deemed to experience such a change in control, we may not be able to utilize some or all of the NOL carryforwards for state or federal income tax purposes even if we attain profitability.

Risks Related to Our Urgent and Primary Care Business

We may not be able to implement successfully our growth strategy for our urgent and primary care business on a timely basis or at all, which could harm our business, financial condition and results of operations.

The growth of our urgent and primary care business depends on our ability to execute our plan to open and acquire new centers. Our ability to acquire and open profitable centers depends on many factors, including our ability to:

Further, applicable laws, rules and regulations (including licensure requirements) could negatively impact our ability to operate both new and existing centers.

Accordingly, we may not be able to achieve our planned growth or, even if we are able to grow our center base as planned, any new centers may not be profitable or otherwise perform as planned. Failure to implement successfully our growth strategy would likely have an adverse impact on our business, financial condition and results of operations.

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We are operating a new business line, and management has limited experience operating such a line for us.

Our urgent and primary care business is a new business line for us, and members of our management team do not have substantial experience operating in this segment with our Company. As a result, our historical financial results may not be comparable to future results. Also, we may be subject to risks that we are unable to presently identify, such as regulatory risks. We cannot assure you that management will be able to profitably operate our urgent and primary care business. Such failure may have an adverse impact on our business, financial condition and results of operations.

The long-term success of our urgent and primary care business is highly dependent on our ability to successfully identify and acquire target centers and open new centers.

To achieve our growth strategy, we will need to acquire and open new centers and operate them on a profitable basis. We take into account numerous factors in identifying target markets where we can enter or expand.

The number and timing of new centers acquired and opened during any given period may be negatively impacted by a number of factors including, without limitation:

If we are unable to find and secure attractive target centers to expand in existing markets or enter new markets, our revenues and profitability may be harmed, we may not be able to implement our growth strategy and our financial results may be negatively affected.

Our acquisition, integration and opening of centers in new markets exposes us to various risks and may require us to develop new business models.

Our growth and profitability depend on our ability to successfully implement our growth strategy by expanding the number of centers we operate in both new and existing markets. We cannot assure you our efforts to expand into new markets, particularly where we do not currently operate, will succeed. To operate in new markets, we may be required to modify our existing business model and cost structure to comply with local regulatory or other requirements, which may expose us to new operational, regulatory or legal risks.

We may be unable to acquire target centers within our current price ranges. This may reduce the pace of our growth and increase the need for additional debt and equity capital. The patient population of centers we acquire may be loyal to existing ownership, making it difficult to maintain pre-closing revenue and profit levels. The re-branding of acquired centers may have an adverse market effect in local communities, and our brand may not be received as favorably in the local communities as we anticipate.

The process of integration of an acquired center may subject us to a number of risks, including:

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If we are unable to successfully integrate acquired centers or if there are delays in integration, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected.

Additionally, centers we open in new markets may take longer to reach expected revenue and profit levels on a consistent basis. The cost of opening and operating new centers may exceed our budget, thereby affecting our overall profitability. New markets may have competitive conditions, consumer preferences, and healthcare spending patterns that are more difficult to predict, identify or satisfy than our existing markets. We may need to make greater investments than we originally planned in advertising and promotional activity in new markets and after closing acquisitions to build brand awareness. We may find it more difficult in new markets to hire, and we may not be able to retain and motivate, qualified physicians, nurse practitioners, physician assistants, medical technologists and other personnel. We may need to augment our labor model to meet regulatory requirements and the overall cost of labor may increase or be higher than anticipated.

As a result of any of the foregoing, any new or acquired centers may be less successful than expected, may not achieve target profit margins or our growth objectives and our reputation, business, financial condition and results of operations could be adversely affected.

If we open new centers in existing markets, revenue at our existing centers may be affected negatively.

The number and type of patients using our centers varies by location and depends on a number of factors, including population density, availability of other sources for convenient medical services, area demographics and geography. The opening of a new center in or near our existing centers could adversely affect the revenues of those existing centers. Existing centers could also make it more difficult to build our patient base for a new center in the same market. We may selectively open new centers in and around areas of existing centers that are operating at or near capacity to serve effectively our patients, but revenue cannibalization between our centers may become significant in the future as competition increases and as we continue to expand our operations. This could adversely affect our revenue growth, which could, in turn, adversely affect our business, financial condition, and results of operations.

We may be required to make capital expenditures in connection with our acquisitions to implement our growth strategy.

In order to effectively integrate our acquired centers, we may need to make significant capital expenditures to the interior and exterior of those centers. This may include making real property improvements and upgrading our medical equipment to serve our patients and remain competitive. Changing competitive conditions or the emergence of significant advances in medical technology could require us to invest significant capital in additional equipment or capacity in order to remain competitive. Along these lines, if the systems and technology of our target centers differ from those we have chosen to utilize, we may be required to invest significant capital to either convert, terminate, or integrate the varying technology platforms. If we are unable to fund any such investment or otherwise fail to make necessary capital expenditures, our business, financial condition, and results of operations could be materially and adversely affected.

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Damage to our reputation or our brand could negatively impact our business, financial condition and results of operations.

We must grow the value of our brand to be successful. We intend to develop a reputation based on the high quality of our medical services, clinic personnel, as well as on our unique culture and the experience of our patients in our centers. If we do not make investments in areas such as marketing and advertising, as well as the day-to-day investments required for center operations, equipment upgrades, and personnel training, the value of our brand may not increase or may be diminished. Any incident, real or perceived, regardless of merit or outcome, that adversely affects our brand, such as, but not limited to, patient disability or death due to medical malpractice or allegations of medical malpractice, failure to comply with federal, state, or local regulations, including allegations or perceptions of non-compliance or failure to comply with ethical and operational standards, could significantly reduce the value of our brand, expose us to negative publicity and damage our overall business and reputation.

Our marketing activities may not be successful.

We incur costs and expend other resources in our marketing efforts to attract and retain patients. Our marketing activities are principally focused on increasing brand awareness in the communities in which we provide services. As we open and acquire new centers, we expect to undertake aggressive marketing campaigns to increase community awareness about our presence and our service capabilities. We conduct our targeted marketing efforts in neighborhoods through channels such as direct mail, billboards, radio advertisements, physician open houses, community sponsorships and various social media. If we are not successful in these efforts, we will have incurred expenses without materially increasing revenue.

The urgent and primary care market is highly competitive, including competition for patients, strategic relationships, and commercial payor contracts.

The market for providing urgent care and primary care services is highly competitive. Our centers face competition from existing walk-in clinics, hospital emergency rooms, private doctors’ offices, freestanding emergency centers, independent laboratories, occupational medicine clinics, in-store clinics, and hospital- and payor-supported urgent care facilities, depending on the type of patient and geographic market. Our centers compete on the basis of quality, price, accessibility, and overall experience. We compete with national, regional, and local enterprises, many of which have greater financial and other resources available to them, greater access to physicians or greater access to potential patients. We also compete on the basis of our multistate, regional footprint, which we believe will be of value to both employers and third-party payors. As a result of the differing competitive factors within the markets in which we operate and will operate, the individual results of our centers may be volatile. If we are unable to compete effectively with any of these entities or groups, or we are unable to implement our business strategies, there could be a material adverse effect on our business, prospects, results of operations and financial condition.

We may not be able to recruit and retain qualified physicians and other healthcare professionals for our urgent and primary care centers.

Our success depends upon our ability to recruit and retain qualified physicians, nurse practitioners, physician assistants, nurses, medical technologists and other staff. There is currently a national shortage of certain of these healthcare professionals. To the extent a significant number of physicians within an individual community or market decides to partner with our competitors and not with us, we may not be able to operate our centers in such community. We face competition for such personnel from existing urgent and primary care operators, hospital systems, entrepreneurial start-ups, and other organizations. This competition may require us to enhance wages and benefits to recruit and retain qualified personnel. Our inability to recruit and retain these professionals could have a material adverse effect on our ability to grow or be profitable.

We may not be able to prohibit or limit our physicians and other healthcare professionals from competing with us in our local markets.

In certain states in which we operate or intend to operate, non-compete, non-solicitation, and other negative covenants applicable to employment or ownership are judicially or statutorily limited in their effectiveness or are entirely unenforceable against physicians and other healthcare professionals. As a result,

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we may not be able to retain our patient relationships or protect our market share, operational processes or procedures, or limit insiders from using competitive information against us or competing with us, which could have a material adverse effect on our business, financial condition and ability to remain competitive.

We may be unable to enter into or maintain contracts for our urgent and primary care centers on favorable terms with commercial payors.

A significant portion of our net patient service revenue is derived from nongovernmental, third-party payors, or commercial payors, such as managed care organizations, commercial insurance providers and employer-sponsored healthcare plans. These commercial payors use a variety of methods for reimbursement depending on the arrangement involved. These arrangements include fee-for-service, PPOs and health maintenance organizations, as well as prepaid and discounted medical service packages and capitated, or fixed fee, contracts.

Frequently, commercial payors classify or may reclassify us as either a primary care or urgent care provider. Such distinctions may result in different payment and reimbursement structures. Such differences may result in increased costs to the patient through higher co-payments, deductibles and other cost-sharing mechanisms. If, due to our classification with commercial payors or to the structure of our contracts with such payors, patients are made to pay higher amounts out of pocket than they are at our competitors, we could experience a decrease in our patient volume which could have a material adverse effect on our business and our financial condition.

There is often pressure to renegotiate reimbursement levels, including, in particular, in connection with changes to Medicare. Frequently, commercial payors reimburse us based upon contracted discounts to our established base rates. If managed care organizations and other commercial payors reduce their rates or we were to experience a significant shift in our revenue mix toward Medicare or Medicaid reimbursements, then our revenue and profitability would be adversely affected and our operating margins would be reduced. Commercial payors often demand discounted fee structures, and the trend toward consolidation among commercial payors tends to increase their bargaining power over fee structures. Because some commercial payors rely on all or portions of Medicare fee schedules to determine payment rates, changes to government healthcare programs that reduce payments under these schedules may negatively impact payments from commercial payors. Other healthcare providers may impact our ability to negotiate increases and other favorable terms in our reimbursement arrangements with commercial payors. For example, some of our competitors may negotiate exclusivity provisions with commercial payors or otherwise restrict the ability of commercial payors to contract with us. We may be excluded from participating in commercial payor networks, making it more expensive for certain patients to receive treatment at our centers. Our results of operations will depend, in part, on our ability to retain and renew managed care contracts as well as enter into new managed care contracts on terms favorable to us. Our inability to maintain suitable financial arrangements with commercial payors could have a material adverse impact on our business.

As various provisions of the ACA are implemented, commercial payors may increasingly demand fee reductions. In addition, there is a growing trend for commercial payors to take steps to shift the primary cost of care to the plan participant by increasing co-payments, co-insurance and deductibles, and these actions could discourage such patients from seeking treatment at our centers. Patient volumes could be negatively impacted if we are unable to enter into or maintain acceptable contracts with such commercial payors, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

Government healthcare programs may reduce reimbursement rates.

In recent years, new legislation has been proposed and adopted at both the federal and state level that is effecting major changes in the healthcare system. Any change in the laws, regulations, or policies governing the healthcare system could adversely affect reimbursement rates and our operations and financial condition. Enacted in 2010, the ACA seeks to expand healthcare coverage, while increasing quality and limiting costs. The ACA substantially changes the way healthcare is financed by both governmental and commercial payors. As a result of the ACA or the adoption of additional federal and state healthcare reforms measures there could be limits to the amounts that federal and state governments will pay for healthcare services, which could result in reduced demand for, or profitability of, our services.

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Furthermore, if due to an allegation of fraud or any other reason one or more of our physicians or other licensed healthcare providers are no longer entitled to bill and receive payment for services rendered to patients whose treatment is paid in whole or in part by a governmental payor, our revenue may be negatively impacted, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

If payments from commercial or governmental payors are significantly delayed, reduced or eliminated, our business, prospects, results of operations and financial condition could be adversely affected.

We depend upon compensation from third-party payors for the services provided to patients in our centers. The amount that our centers receive in payment for services may be adversely affected by factors we do not control, including federal or state regulatory or legislative changes, cost-containment decisions and changes in reimbursement schedules of third-party payors. Any reduction or elimination of these payments could have a material adverse effect on our business, prospects, results of operations and financial condition.

Additionally, the reimbursement process is complex and can involve lengthy delays. Although we recognize revenue when healthcare services are provided, there can be delays before we receive payment. In addition, third-party payors may reject, in whole or in part, requests for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, that services provided were not medically necessary, that additional supporting documentation is necessary, or for other reasons. Retroactive adjustments by third-party payors may be difficult or cost prohibitive to appeal, and such changes could materially reduce the actual amount we receive from those payors. Delays and uncertainties in the reimbursement process may be out of our control and may adversely affect our business, prospects, results of operations and financial condition.

Significant changes in our payor mix resulting from fluctuations in the types of patients seen at our centers could have a material adverse effect on our business, prospects, results of operations and financial condition.

Our results may change from period to period due to fluctuations in our payor mix. Payor mix refers to the relative amounts we receive from the mix of persons or entities that pay or reimburse us for healthcare services. Because we generally receive relatively higher payment rates from commercial payors than from governmental payors or self-pay patients, a significant shift in our payor mix toward a higher percentage of self-pay or patients whose treatment is paid in whole or part by a governmental payor, which could occur for reasons beyond our control, could have a material adverse effect on our business, prospects, results of operations and financial condition.

Failure to bill timely or accurately for our services could have a negative impact on our net revenues, bad debt expense and cash flow.

Billing for our services is often complex and time consuming. The practice of providing medical services in advance of payment or prior to assessing a patient’s ability to pay for such services may have a significant negative impact on our patient service revenue, bad debt expense and cash flow. We bill numerous and varied payors, including self-pay patients and various forms of commercial insurance providers. Billing requirements that must be met prior to receiving payment for services rendered often vary by payor. Self-pay patients and third-party payors may fail to pay for services even if they have been properly billed. Reimbursement is typically dependent on our providing the proper procedure and diagnosis codes.

Additional factors that could affect our collections for the services we render include:

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The complexity associated with billing for our services may lead to delays in our cash collections, resulting in increased carrying costs associated with the aging of our accounts receivable as well as the increased potential for bad debt expense.

We are dependent on our third-party revenue cycle managers for billing and collection of our claims.

We submit our claims for services rendered to commercial payors and governmental payors electronically through our third-party revenue cycle managers. We are dependent on our revenue cycle managers for the timely billing and collections of our claims. Any delay by or failure of our revenue cycle managers to timely bill and collect our claims could have a material adverse effect on our business, results of operations and financial condition.

We may incur costs resulting from security risks in connection with the electronic data processing by our partner banks.

Because we accept electronic payment cards for payments at our facilities, we may incur costs resulting from related security risks in connection with the electronic processing of confidential information by our partner banks. Recently, several large national banks have experienced potential or actual breaches in which similar data has been or may have been stolen. Such occurrences could cause patient dissatisfaction resulting in decreased visits or could also distract our management team from the management of the day-to-day operations.

A successful challenge by tax authorities to our treatment of certain healthcare providers as independent contractors or the elimination of an existing safe harbor could materially increase our costs relating to these healthcare providers.

Certain of our physicians and other licensed healthcare providers are engaged as independent contractors by our operating subsidiaries. Because these personnel are treated as independent contractors rather than as employees, our operating subsidiaries do not (i) withhold federal or state income taxes or other employment related taxes from their compensation, (ii) make federal or state unemployment tax or Federal Insurance Contributions Act payments with respect to them, (iii) provide workers compensation insurance with respect to them (except in states where they are required to do so for independent contractors), or (iv) allow them to participate in benefits and retirement programs available to employees. Although we have contracts with these physicians and other licensed healthcare providers obligating them to pay these taxes and other costs, if a challenge to our treatment of these physicians and other licensed healthcare providers as independent contractors by federal or state authorities were successful and they were treated as employees instead of independent contractors, we could be liable for taxes, penalties and interest. In addition, there are currently, and have been in the past, proposals made to eliminate an existing safe harbor that would potentially protect us from the imposition of taxes in these circumstances, and similar proposals could be made in the future. If such a challenge were successful or if the safe harbor were eliminated, this could cause a material increase in our costs relating to these physicians and other personnel and have a material adverse effect on our business, financial condition and results of operations.

Currently, our centers are located in Georgia, Florida, Alabama and Virginia, making us particularly sensitive to regulatory, economic, and other conditions in those states.

Our current centers are located in Georgia, Florida, Alabama and Virginia. Following the Medac Asset Acquisition, we will also manage centers located in North Carolina. If there were an adverse regulatory, economic or other development in any of those states, our patient volume could decline, our ability to operate our centers under our existing business model could be impacted, or there could be other unanticipated adverse impacts on our business that could have a material adverse effect on our business, prospects, results of operations and financial condition.

If we fail to effectively and timely transition to the ICD-10 coding system, our operations could be adversely affected.

CMS has adopted final rules that require all healthcare providers covered by HIPAA, including our centers, to transition to the new ICD-10 coding system. Use of the ICD-10 coding system is required beginning October 1, 2015. The ICD-10 coding system greatly expands the number and detail of billing codes

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used for claims compared to the existing International Classification of Diseases, Ninth Revision, or ICD-9, coding system. Transition to the ICD-10 system may require significant investment to train staff and physicians on the updated coding practices. In addition, it is possible that our centers could experience disruption or delays in reimbursement due to technical or coding errors or other implementation issues involving our systems, the systems or processes of our revenue cycle vendors, or those of our payors. Further, the ICD-10 coding system could result in decreased reimbursement if the use of ICD-10 codes results in our patients being assigned lower levels of reimbursement than were assigned under the ICD-9 coding system.

Our business is seasonal, which impacts our results of operations.

Our centers’ patient volumes are sensitive to seasonal fluctuations in urgent care and primary care activity. Typically, winter months see a higher occurrence of influenza, bronchitis, pneumonia and similar illnesses; however, the timing and severity of these outbreaks vary dramatically. Additionally, as consumers shift toward high deductible insurance plans, they are responsible for a greater percentage of their bill, particularly in the early months of the year before other healthcare spending has occurred, which may lead to lower than expected patient volume or an increase in bad debt expense during that period. Our quarterly operating results may fluctuate significantly in the future depending on these and other factors.

We could be subject to lawsuits for which we are not fully insured.

Healthcare providers have become subject to an increasing number of lawsuits alleging medical malpractice and related legal theories such as negligent hiring, supervision and credentialing. Some of these lawsuits involve large claim amounts and substantial defense costs. We generally procure professional liability insurance coverage for our affiliated medical professionals and professional and corporate entities. We are currently insured under policies in amounts management deems appropriate, based upon the nature and risk of our business. Nevertheless, there are exclusions and exceptions to coverage under each insurance policy that may make coverage for any claim unavailable, future claims could exceed the limits of available insurance coverage, existing insurers could become insolvent and fail to meet their obligations to provide coverage for such claims, and such coverage may not always be available with sufficient limits and at reasonable cost to insure us adequately and economically in the future. One or more successful claims against us not covered by, or exceeding the coverage of, our insurance could have a material adverse effect on our business, prospects, results of operations and financial condition. Moreover, in the normal course of our business, we may be involved in other types of lawsuits, claims, audits and investigations, including those arising out of our billing and marketing practices, employment disputes, contractual claims and other business disputes for which we may have no insurance coverage. Furthermore, for our losses that are insured or reinsured through commercial insurance providers, we are subject to the financial viability of those insurance companies. Although we believe our commercial insurance providers are currently creditworthy, they may not remain so in the future. The outcome of these matters could have a material adverse effect on our financial position, results of operations, and cash flows.

Risks Related to Our Legacy Business

One client accounts for a substantial portion of our ancillary network business.

HealthSmart, our largest client and now the manager of our ancillary network business, accounted for approximately 34% of our ancillary network net revenue in 2014, and 22% in 2013. The loss of this client or significant declines in the level of use of our services by this client, would have a material adverse effect on our business and results of operations. Although we have entered into a management services agreement with HealthSmart to manage our ancillary network business, there is no assurance that it will continue to use our ancillary network services as a customer at the same or greater level as it did in 2014. The initial term of our current payor contract with HealthSmart, which is unrelated to our management services agreement, terminates on December 31, 2015, and there is no assurance that it will be extended beyond that date.

Large competitors in the healthcare industry may choose to compete with us, reducing our margins. Some of these potential competitors may be our current clients.

Traditional health insurance companies, specialty provider networks, and specialty healthcare services companies are potential competitors of our ancillary network business. These entities include well-established

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companies that may have greater financial, marketing and technological resources than we have. Pricing pressure caused by competition has caused many of these companies to reduce the prices charged to clients for core services and to pass on to clients a larger portion of the formulary fees and related revenues received from service providers. Increased price competition from such companies’ entry into the market could reduce our margins and have a material adverse effect on our financial condition and results of operations. In fact, our clients could choose to establish their own network of ancillary care providers. As a result, we would not only lose the benefit of revenue from such clients, but we could face additional competition in our market.

We may not be able to successfully complete the disposition of our ancillary network business to HealthSmart, or at all.

To focus our attention and resources on our urgent and primary care business, on October 1, 2014, we entered into a management services agreement with our largest ancillary network client, HealthSmart. Under the management services agreement, HealthSmart manages and operates our ancillary network business. The agreement also provides that at any time between October 1, 2016 and the expiration date of the management services agreement, HealthSmart may purchase, or we may require that HealthSmart purchase, our ancillary network business. Although HealthSmart’s option to purchase and our option to sell the ancillary network business do not become exercisable until October 1, 2016, we are currently in negotiations with HealthSmart to facilitate a disposition of our ancillary network business at a price between $2.5 million and $4.0 million, which would be in addition to $1.7 million of net profit received by us since the beginning of the management arrangement. See “Business—Ancillary Network—Management Services Agreement.”

Consummation of such a disposition would be subject to a number of conditions, including entering into a binding agreement with HealthSmart to acquire our ancillary network business. There can be no assurance that the Company will be successful in negotiating such an agreement on terms that will be favorable to the Company and its stockholders, if at all, or that the other conditions to closing will be satisfied. If we do not consummate the disposition, we expect to market the business for sale or expeditiously wind down the business.

If a disposition of our ancillary network business to HealthSmart is not completed, our ongoing business may be adversely affected and we will be subject to several risks, including the following:

Any of the foregoing could materially and adversely affect our business, results of operations and financial condition, as well as the price of our stock.

Fluctuations in the number and types of claims we process in our ancillary network business could make it more difficult to predict our net revenues in our ancillary network business from quarter to quarter.

Monthly fluctuations in the number and types of claims we process will impact our quarterly and annual results. Our margins vary depending on the type of ancillary healthcare service provided, the rates associated with those services and the overall mix of these claims, each of which will impact our profitability. Consequently, it may be difficult to predict the net revenue from our ancillary network business from one quarter to another quarter.

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Limited barriers to entry into the ancillary healthcare services market could result in greater competition.

There are limited barriers to entering the market for ancillary service providers, meaning that it is relatively easy for other companies to replicate our ancillary network business model and provide the same or similar services that we currently provide. Major benefit management companies and healthcare companies not presently offering ancillary healthcare services may decide to enter the market. These companies may have greater financial, marketing and other resources than are available to us. Competition from other companies may have a material adverse effect on our financial condition and results of operations.

Our ancillary network business is dependent upon payments from third-party payors which may reduce rates of reimbursement.

Our ability to achieve profitability in our ancillary network business depends, in part, on payments made by third-party payors. Competition for patients, efforts by traditional third-party payors to contain or reduce healthcare costs and the increasing influence of managed care payors, such as health maintenance organizations, have resulted in reduced rates of reimbursement in recent years. If continuing, these trends could adversely affect our results of operations and decrease profitability unless we can implement measures to offset the loss of revenues. In addition, changes in reimbursement policies of private and governmental third-party payors, including policies relating to the Medicare and Medicaid programs, could reduce the amounts reimbursed to our clients for the services provided through us, and consequently, the amount these clients would be willing to pay for our services. Also, under the medical loss ratio, or MLR, regulations included in the ACA, it is possible that a portion of the fees our existing and prospective payors are contractually required to pay us and that do not qualify as “incurred claims” may not be included as expenditures for activities that improve health care quality. Such a determination may make it more difficult for us to retain existing clients or add new clients, because our clients’ or prospective clients’ MLR may otherwise not meet the specified targets. This may reduce our net revenues and profit margins.

We are dependent upon our network of qualified providers, and our provider agreements may be terminated at any time.

A network of qualified providers is an essential component of our ancillary network business. The typical form of agreement from ancillary healthcare providers provides that these agreements may be terminated at any time by either party with or without cause. If these agreements are terminated, particularly with our significant providers, such ancillary healthcare providers could enter into new agreements with our competitors which would have an adverse effect on our ability to continue our ancillary network business as it is currently conducted.

For any given claim, we are subject to the risk of paying more to the provider than we receive from the payor.

Our agreements with our payors, on the one hand, and our ancillary network service providers, on the other, are negotiated separately. We have complete discretion in negotiating both the prices we charge our payors and the financial terms of our agreements with the providers. As a result, our profit is primarily a function of the spread between the prices we have agreed to pay our ancillary network service providers and the prices our payors have agreed to pay us. We bear the pricing risk because we are responsible for providing the agreed-upon services to our payors, whether or not we are able to negotiate fees and other agreement terms with our ancillary network service providers that result in a positive margin for us. There can be no assurances that these pricing arrangements will not result in losses to us.

The length of the current sales cycle may impede our efforts to add new client accounts.

Over the past several years, we have experienced a lengthening of the period between identification of a prospective payor client and that prospect becoming a new client. Despite efforts to strategically improve our implementation process and our new management arrangement with HealthSmart, we can give no assurances that the process of converting a sales prospect into a new client account will not be lengthy and that our revenues will not continue to decline due to the lack of new client accounts.

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We are dependent on our manager to operate our ancillary network business.

We are dependent on HealthSmart to operate our ancillary network business. We have no employees in our ancillary network business and the individuals who perform services for us are employees of our manager. Our manager may terminate our management agreement at any time after October 1, 2017, or before that date with 90 days’ advanced written notice, and we may not be able to find a suitable replacement in a timely manner, at a reasonable cost, or at all. We are also subject to the risk that our manager will not manage our ancillary network business in a manner that is in our best interests, particularly because HealthSmart operates its own preferred provider network that competes for clients with our ancillary network.

Additionally, we pay our manager cash fees for the services it provides in managing our ancillary network business. The payment of these fees may impact the amount of cash available for investment in our urgent and primary care business. We cannot assure you that, after payment of these fees, our ancilliary network business will be profitable.

If our ancillary network business is sold to HealthSmart under the terms provided for in our management services agreement, the business may not generate net profits sufficient for us to be paid the full purchase price.

Under the terms of the asset purchase agreement that was negotiated with HealthSmart in conjunction with our entry into the management services agreement, if HealthSmart buys the ancillary network business it will be obligated to pay the purchase price to us only from the net profits generated by the ancillary network business after closing. Accordingly, we will be dependent on the ancillary network business, and HealthSmart’s operation thereof, to generate net profits sufficient to pay the full purchase price to us. Consequently, there is no assurance that we will receive the full purchase price for the ancillary network business if it is sold to HealthSmart. See “Business — Ancillary Network Business — Management Services Agreement.”

Our manager may be subject to conflicts of interest.

Our manager has potential conflicts of interest in its management of our ancillary network business. Circumstances under which a conflict could arise between us and our manager include:

We are also subject to the risk that our manager will not manage our ancillary network business in a manner that is in our best interests, particularly because HealthSmart operates its own preferred provider network that competes for clients with our ancillary network.

Risks Related to Our Regulatory Environment

The healthcare industry is heavily regulated, and if we fail to comply with these laws and government regulations we could incur penalties or be required to make significant changes to our operations.

The healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which we provide and bill for services, our contractual relationships with our physicians, vendors, patients and clients, our marketing activities and other aspects of our operations. If we fail to comply with these laws and regulations, we could be exposed to civil and criminal penalties such as fines, damages, overpayment recoupment, loss of enrollment status and exclusion from government healthcare programs. Any action against us for violation of these laws

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or regulations, even if successfully defended, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Our physicians and other licensed healthcare providers are also subject to ethical guidelines and operating standards of professional and private accreditation agencies.

The laws, regulations and standards governing the provision of healthcare services may change significantly in the future, and these changes may materially and adversely affect our business. Furthermore, a review of our business by regulatory or accreditation authorities could result in determinations that could adversely affect our operations.

Our urgent and primary care centers are and will be subject to numerous statutes and regulations in the states in which we operate now or in the future and the failure to comply with these laws and regulations could result in civil or criminal sanctions.

The operation of urgent and primary care centers subjects us, and will subject us, to many state laws and regulations. In general, states, whether directly or through boards, agencies or other delegated authorities, regulate the ownership and dispensing of controlled substances, the retention and storage of medical records, the ownership and management of entities engaged in healthcare services, patient privacy and protection of health information, the licensure of healthcare providers, and the clinical supervision by physicians of nurse practitioners and physicians assistants, training, client monitoring and supervision of staff, among other aspects of our operations. All such laws and regulations, and the applicable interpretations of such laws and regulations, are subject to change.

Additional regulation of centers such as ours has been proposed in several states. The adoption of any such regulations in the states in which we operate now or in the future could force us to change our operational or transactional approach or lead to a finding by regulators that we do not meet legal requirements. We may be subject to criminal prosecution, regulatory fines, penalties or other sanctions if our operations or centers are found to not comply with applicable laws and regulations. In addition, we may be required to refund all funds received from patients and third-party payors during the period of noncompliance.

Although we monitor compliance concerns on a corporate level and at each center, and seek to institute best practices on compliance matters, we do not have a dedicated chief compliance officer whose sole job is to monitor and manage compliance matters. Consequently, we may not immediately identify practices that need to be changed or remediated. Further, as we integrate acquired centers, we seek to ensure they comply with the relevant regulations, but we cannot assure you that compliance or regulatory issues will not arise.

Failure to comply with laws and regulations governing us and the centers we manage could result in civil or criminal sanctions, which could have a material adverse effect on our business, results of operations, financial condition and prospects.

State regulation of the expansion of urgent and primary care centers could prevent us from reaching our expansion objectives.

Many states have certificate of need programs that require some level of prior approval for the development, acquisition or expansion of certain healthcare facilities. Although the states where our current centers operate do not require that we obtain a certificate of need to acquire or operate our centers, in the event we choose to acquire or open centers in a state that does require such approval, we may be required to obtain a certificate of need before the acquisition or opening occurs. If we are unable to obtain such approvals, we may not be able to move forward with the planned activity.

Only a few states, including Florida, currently require the licensure of centers such as ours. The lack of a specific licensure process for our centers in the vast majority of states may lead state legislators or regulators to regulate aggressively the growth of our industry, potentially seeking to treat our industry in a manner similar to hospitals or freestanding emergency departments. Further, the growing number of urgent care centers and freestanding emergency departments may lead to legislation or regulations requiring us to change substantially our operations or cease our operations in that state entirely. Any such requirements could have a material adverse effect on our prospects and growth strategy.

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Our urgent and primary care centers are subject to comprehensive laws and regulations that govern the manner in which we bill and are paid for our services by third-party payors, and the failure to comply with these requirements can result in civil or criminal sanctions, including exclusion from federal and state healthcare programs.

A substantial portion of our urgent and primary care services are paid for by commercial payors and governmental payors. These third-party payors typically have differing and complex billing and documentation requirements. If we fail to meet these requirements, we may not be paid for our services or payment may be substantially delayed or reduced.

Numerous state and federal laws also apply to our claims for payment, including but not limited to (i) “coordination of benefits” rules that dictate which payor must be billed first when a patient has coverage from multiple payors, (ii) requirements that overpayments be refunded within a specified period of time, (iii) “reassignment” rules governing the ability to bill and collect professional fees on behalf of other providers, (iv) requirements that electronic claims for payment be submitted using certain standardized transaction codes and formats, and (v) laws requiring all health and financial information of patients in a manner that complies with applicable security and privacy standards.

Third-party payors carefully monitor compliance with these and other applicable rules. Our failure to comply with these rules could result in our obligation to refund amounts previously paid for such services or non-payment for our services.

If we are found to have violated any of these or any of the other laws or regulations which govern our activities, the resulting penalties, damages, fines or other sanctions could adversely affect our ability to operate our business and our financial results.

Changes in coverage and the rates or methods of third-party reimbursements may adversely affect our urgent and primary care revenue and operations.

A substantial portion of our urgent and primary care revenue is derived from direct billings to patients and third-party payors. As a result, any changes in the rates or methods of reimbursement for the services we provide could have a material adverse effect on our revenue and financial results. Reimbursement rates can vary depending on whether our center is an in-network or out-of-network provider. Our centers may be out-of-network for some patients. When acting as an out-of-network provider, reimbursement rates may be lower, co-payments and deductibles may be higher and we may have difficulties complying with the billing requirements of certain third-party payors. Additionally, the continued implementation of the ACA could result in substantial changes in coverage and reimbursement, including changes in coverage and amounts paid by private payors, which could have an adverse impact on our revenue from those sources.

Past and future healthcare reform legislation and other changes in the healthcare industry could adversely affect our business, financial condition and results of operations.

The healthcare industry is subject to changing political, regulatory and other influences. In March 2010, the President signed the ACA into law, which made major changes in how healthcare is delivered and reimbursed and increased access to health insurance benefits for the uninsured and underinsured population of the United States.

Because of the continued uncertainty about the implementation of various provisions of the ACA, we cannot predict with any certainty the impact of the ACA on our business models, prospects, financial condition and results of operations. Also, Congress and state legislatures may continue reviewing and assessing alternative healthcare delivery and payment systems and may in the future adopt legislation making additional fundamental changes in the healthcare system. There is no assurance that such changes will not have a material adverse effect on our business, financial condition and results of operations. Continued efforts to shift healthcare costs to the patient (through co-payments, deductibles, and other mechanisms) could adversely affect our business, financial condition and results of operations.

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If we are required to restructure our arrangements with physicians because of current or future laws, we may incur additional costs, lose contracts or suffer a reduction in net revenue.

Various laws bear on our relationships with the physicians staffing our urgent and primary care centers. Authorities in some states could find that our contractual relationships with our physicians violate laws prohibiting the corporate practice of medicine and fee-splitting. These laws are generally intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing the physician’s professional judgment, but they may also prevent the sharing of professional services income with non-professional or business interests. Approximately 30 states have some form of corporate practice of medicine restrictions, and, as we continue to expand into new markets, our current business model may implicate these restrictions. One of the states in which we currently operate, Georgia, and North Carolina, where we will manage centers following the Medac Asset Acquisition, have adopted certain corporate practice of medicine restrictions against non-professional entities. Although we believe we are currently in material compliance with applicable law, including with respect to the corporate practice of medicine and fee-splitting, regulatory authorities or other parties, including our employed and contracted physicians, or our physicians, may assert that, among other things, our state-level operating subsidiaries are impermissibly engaged in the practice of medicine. In that event, we could be subject to adverse judicial or administrative interpretations, to civil or criminal penalties, our contracts could be found legally invalid and unenforceable or we could be required to modify our organizational structure, any of which could have a material adverse effect on our business and our ability to execute our growth strategy. Moreover, if we are required to modify our structure and organization to comply with these laws and rules, our financing agreements may prohibit such modifications and require us to obtain the consent of the holders of our debt or require the refinancing of such debt.

We are subject to the data privacy, security and breach notification requirements of HIPAA, HITECH and other data privacy and security laws, and the failure to comply with these rules, or allegations that we have failed to do so, could result in civil or criminal sanctions.

Numerous federal and state laws and regulations, including HIPAA and HITECH, govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information. As required by HIPAA, HHS has adopted standards to protect the privacy and security of this health-related information. The HIPAA privacy regulations contain detailed requirements concerning the use and disclosure of individually identifiable health information and the grant of certain rights to patients with respect to the use and disclosure of such information by “covered entities.” The Company and each of our centers are considered covered entities under HIPAA. We have taken actions to comply with the HIPAA privacy regulations including the creation and implementation of policies and procedures, staff training, execution of HIPAA-compliant contractual arrangements with certain service providers and various other measures. Although we believe we are in substantial compliance, ongoing implementation and oversight of these measures involves significant time, effort and expense.

In addition to the privacy requirements, HIPAA-covered entities must implement certain administrative, physical, and technical security standards to protect the integrity, confidentiality and availability of certain electronic health-related information received, maintained, or transmitted by covered entities or their business associates. Although we have taken actions in an effort to be in compliance with these security regulations, a security incident that bypasses our information security systems causing an information security breach, loss of protected health information, or PHI, or other data subject to privacy laws or a material disruption of our operational systems could have a material adverse effect on our business, along with fines. Furthermore, ongoing implementation and oversight of these security measures involves significant time, effort and expense.

Further, HITECH, as implemented in part by an omnibus final rule published in the Federal Register on January 25, 2013, further requires that patients be notified of any unauthorized acquisition, access, use, or disclosure of their unsecured PHI that compromises the privacy or security of such information. HHS has established the presumption that all unauthorized uses or disclosures of unsecured PHI constitute breaches unless the covered entity or business associate establishes that there is a low probability the information has been compromised. HITECH and implementing regulations specify that such notifications must be made without unreasonable delay and in no case later than 60 calendar days after discovery of the breach. Breaches affecting 500 patients or more must be reported immediately to HHS, which will post the name of the breaching entity on its public website. Furthermore, breaches affecting 500 patients or more in the same state

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or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS of such breaches at least annually. These breach notification requirements apply not only to unauthorized disclosures of unsecured PHI to outside third parties but also to unauthorized internal access to or use of such PHI.

The scope of the privacy and security requirements under HIPAA was substantially expanded by HITECH, which also increased penalties for violations. Currently, violations of the HIPAA privacy, security and breach notification standards may result in civil penalties ranging from $100 to $50,000 per violation, subject to a cap of $1.5 million in the aggregate for violations of the same standard in a single calendar year. The amount of penalty that may be assessed depends, in part, upon the culpability of the applicable covered entity or business associate in committing the violation. Some penalties for certain violations that were not due to “willful neglect” may be waived by the Secretary of HHS, in whole or in part, to the extent that the payment of the penalty would be excessive relative to the violation. HITECH also authorized state attorneys general to file suit on behalf of residents of their states. Applicable courts may be able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. HITECH also mandates that the Secretary of HHS conduct periodic compliance audits of a cross-section of HIPAA-covered entities and business associates. Every covered entity and business associate is subject to being audited, regardless of the entity’s compliance record.

State laws may impose more protective privacy restrictions related to health information and may afford individuals a private right of action with respect to the violation of such laws. Both state and federal laws are subject to modification or enhancement of privacy protection at any time. We are subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA. These statutes vary and could impose additional requirements on us and more severe penalties for disclosures of health information. If we fail to comply with HIPAA, similar state laws or any new laws, including laws addressing data confidentiality, security or breach notification, we could incur substantial monetary penalties and substantial damage to our reputation.

States may also impose restrictions related to the confidentiality of personal information that is not considered PHI under HIPAA, including certain identifying information and financial information of our patients. Theses state laws may impose additional notification requirements in the event of a breach of such personal information. Failure to comply with such data confidentiality, security and breach notification laws may result in substantial monetary penalties.

HIPAA and HITECH also include standards for common healthcare electronic transactions and code sets, such as claims information, plan eligibility and payment information. Covered entities such as the Company and each of our centers are required to conform to such transaction set standards.

Our centers participate in the federal Medicare program and, as a result, we must comply with a number of additional federal regulatory requirements.

Our centers participate as providers the federal Medicare program. As participants in the Medicare program, we are directly subject to certain federal regulatory requirements, including the Stark Law and the Anti-Kickback Statute. Furthermore, the Medicare program is particularly susceptible to statutory and regulatory changes, retroactive and prospective rate adjustments, spending freezes, federal and state funding reductions and administrative rulings and interpretations concerning, without limitation, patient eligibility requirements, funding levels and the method of calculating payments or reimbursements.

Since 1992, Medicare has paid for the “medically necessary” services of physicians, non-physician practitioners, and certain other suppliers under a physician fee schedule, a system that pays for covered physicians’ services furnished to a person with Medicare Part B coverage. Under the physician fee schedule, relative values are assigned to each of more than 7,000 services to reflect the amount of work, the direct and indirect (overhead) practice expenses, and the malpractice expenses typically involved in furnishing that service. Each of these three relative value components is multiplied by a geographic adjustment factor to adjust the payment for variations in the costs of furnishing services in different localities. The resulting relative value units, or RVUs, are summed for each service and then are multiplied by a fixed-dollar conversion factor to establish the payment amount for each service. The higher the number of RVUs assigned

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to a service, the higher the payment. Under the Medicare fee-for-service payment system, an individual can choose any licensed physician enrolled in Medicare and use the services of any healthcare provider or facility certified by Medicare.

Historically, CMS was required to limit the growth in spending under the physician fee schedule by a predetermined sustained growth rate, or SGR. Congress typically responded to these automatic physician payment cuts with a series of temporary fixes. On April 16, 2015, however, the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, was enacted which includes permanent repeal of the SGR formula. With MACRA, the long sought after goal of permanently repealing the SGR was achieved and overrides a 21.2% across-the-board cut in Medicare physician payments that briefly took effect on April 1, 2015. Under MACRA, physician payment updates are to be linked to quality and value measurement and participation in alternative payment models. Enactment of MACRA and repeal of the SGR could be offset by further reductions in Medicare payments, and any such reductions could have a material adverse effect on our business.

Furthermore, the ACA reduces annual payment updates for certain providers and reduces Medicare payments for certain procedures, and the Budget Control Act of 2011, or BCA, requires automatic spending reductions for each fiscal year through 2021. As a result of the BCA and subsequent activity in Congress, a $1.2 trillion sequester (across-the-board spending cuts) in discretionary programs took effect in 2013. In particular, a 2% reduction in Medicare payments took effect on April 1, 2013 and has recently been extended for an additional two years beyond the original expiration date of 2021.

We are subject to CMS’ RAC program.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003, or MMA, introduced on a trial basis the use of RACs for the purpose of identifying and recouping Medicare overpayments and underpayments. Any overpayment received from Medicare is considered a debt owed to the federal government. In October 2008, CMS made the RAC program permanent. RACs review Medicare claims to determine whether such claims were appropriately reimbursed by Medicare. RACs engage in an automated review and in a complex review of claims. Automated reviews are conducted when a review of the medical record is not required and there is certainty that the service is not covered or is coded incorrectly. Complex reviews involve the review of all underlying medical records supporting the claim, and are generally conducted where there is a high likelihood, but not certainty, that an overpayment has occurred. RACs are paid a contingency fee based on overpayments identified and collected.

A Medicare administrative contractor, or MAC, may suspend Medicare payments to a provider if it determines that an overpayment has occurred. When a Medicare claim for payment is filed, the MAC will notify the patient and the provider of its initial determination regarding reimbursement. The MAC may deny the claim for one of several reasons, including the lack of necessary information or lack of medical necessity for the services rendered. Providers may appeal any denials for claim payments.

Any such reviews under the RAC program or denials by the MAC could have a material adverse effect on our results of operations.

We are subject to the Anti-Kickback Statute, Stark Law, FCA, Civil Monetary Penalties statute and analogous provisions of applicable state laws and could face substantial penalties if we fail to comply with such laws.

Anti-Kickback Statute

The Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of remuneration, directly or indirectly, in return for the referral of patients or arranging for the referral of patients, or in return for the recommendation, arrangement, purchase, lease or order of items or services that are covered, in whole or in part, by a federal healthcare program such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing anything at less than its fair market value. The ACA amended the intent requirement of the Anti-Kickback Statute such that a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violation the statute. Further, the ACA now provides that claims submitted in violation of the Anti-Kickback Statute constitute false or fraudulent claims

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for purposes of the FCA, including the failure to timely return an overpayment. Many states have adopted similar prohibitions against kickbacks and other practices that are intended to influence the purchase, lease or ordering of healthcare items and services reimbursed by a governmental health program or state Medicaid program. Some of these state prohibitions apply to remuneration for referrals of healthcare items or services reimbursed by any third-party payor, including commercial payors.

Because we currently accept funds from governmental healthcare programs, we are subject to the Anti-Kickback Statute. Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties, such as $25,000 per violation and up to three times the remuneration involved. If in violation, we may be required to enter into settlement agreements with the government to avoid such sanctions. Typically, such settlement agreements require substantial payments to the government in exchange for the government to release its claims and may also require entry into a corporate integrity agreement, or CIA. Any such sanctions or obligations contained in a CIA could have a material adverse effect on our business, financial condition and results of operations.

Stark Law

The Stark Law prohibits a physician from referring a patient to a healthcare provider for certain “designated health services” reimbursable by Medicare if the physician (or close family members) has a financial relationship with that provider, including an ownership or investment interest, a loan or debt relationship or a compensation relationship. The designated health services covered by the law include, among others, laboratory and imaging services and the provision of durable medical equipment. Some states have self-referral laws similar to the Stark Law for Medicaid claims and commercial claims.

We have entered into several types of financial relationships with physicians who staff our urgent and primary care centers, including compensation arrangements. We believe that the compensation arrangements under our employment agreements and independent contractor agreements satisfy one or more exceptions to the Stark Law. Although we believe that the compensation provisions included in our written physician agreements, which are the result of arm’s length negotiations, result in fair market value payments for medical services rendered or to be rendered, an enforcement agency could nevertheless challenge the level of compensation that we pay our physicians.

The ownership of our stock by any of our physicians will constitute a “financial relationship” for purposes of the Stark Law. As a result, in order to bill Medicare for the designated health services referred by such physician stockholder, we must qualify for one or more exceptions to the Stark Law. Although an exception exists for publicly traded securities, we will not qualify until our stockholders’ equity exceeds $75.0 million at the end of our most recent fiscal year or on average during the previous three years. If we are unable to qualify for another exception to the Stark Law, we will not be entitled to bill Medicare for services rendered by a physician stockholder. As a result, we may suffer losses to our net revenue. Further, it may become necessary for us to perform regular compliance tests to determine which, if any, of our physicians own our stock, and, if so, to determine whether or not we meet an applicable exception to the Stark Law. Such efforts could have a material adverse effect on our business and our ability to compensate physicians, and could result in damage to our reputation.

Violation of the Stark Law may result in prohibition of payment for services rendered, a refund of any Medicare payments for services that resulted from an unlawful referral, $15,000 civil monetary penalties for specified infractions, criminal penalties, and potential exclusion from participation in government healthcare programs, and potential false claims liability. The repayment provisions in the Stark Law are not dependent on the parties having an improper intent; rather, the Stark Law is a strict liability statute and any violation is subject to repayment of all amounts arising out of tainted referrals. If physician self-referral laws are interpreted differently or if other legislative restrictions are issued, we could incur significant sanctions and loss of revenues, or we could have to change our arrangements and operations in a way that could have a material adverse effect on our business, prospects, damage to our reputation, results of operations and financial condition.

False Claims Act

The federal civil FCA prohibits providers from, among other things, (i) knowingly presenting or causing to be presented, claims for payments from the Medicare, Medicaid or other federal healthcare programs that

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are false or fraudulent; (ii) knowingly making, using or causing to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the federal government; or (iii) knowingly making, using or causing to be made or used, a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government. The “qui tam” or “whistleblower” provisions of the FCA allow private individuals to bring actions under the FCA on behalf of the government. These private parties are entitled to share in any amounts recovered by the government, and, as a result, the number of “whistleblower” lawsuits that have been filed against providers has increased significantly in recent years. Defendants found to be liable under the FCA may be required to pay three times the actual damages sustained by the government, plus mandatory civil penalties ranging between $5,500 and $11,000 for each separate false claim as well as possible expulsion from participation in the Medicare and Medicaid programs.

There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud such as coding errors, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality. The ACA also provides that claims submitted in connection with patient referrals that results from violations of the Anti-Kickback Statute constitute false claims for the purpose of the FCA, and some courts have held that a violation of the Stark law can result in FCA liability as well. In addition, a number of states have adopted their own false claims and whistleblower provisions whereby a private party may file a civil lawsuit in state court. We are required to provide information to our employees and certain contractors about state and federal false claims laws and whistleblower provisions and protections.

Civil Monetary Penalties Statute

The federal Civil Monetary Penalties statute prohibits, among other things, the offering or giving of remuneration to a Medicare or Medicaid beneficiary that the person or entity knows or should know is likely to influence the beneficiary’s selection of a particular provider or supplier of items or services reimbursable by a federal or state healthcare program.

The scope and enforcement of each of these laws is uncertain and subject to constant change. Federal and state enforcement entities have significantly increased their scrutiny of healthcare companies and providers which has led to investigations, prosecutions, convictions and large settlements. Although we intend to conduct our business in compliance with all applicable federal and state fraud and abuse laws, many of these laws are broadly worded and may be interpreted or applied in ways that cannot be predicted with any certainty. Therefore, we cannot assure you that our arrangements or business practices will not be subject to government scrutiny or will be found to be in compliance with applicable fraud and abuse laws. Further, responding to investigations can be time consuming and result in significant legal fees and can potentially divert management’s attention from the operation of our business.

The Office of Inspector General, or OIG, is authorized to seek different amounts of civil monetary penalties and assessments based on the type of violation at issue. For example, in a case of false or fraudulent claims, the OIG may seek a penalty of up to $10,000 for each item or service improperly claimed, and an assessment of up to three times the amount improperly claimed. In a kickback case, the OIG may seek a penalty of up to $50,000 for each improper act and damages of up to three times the amount of remuneration at issue (regardless of whether some of the remuneration was for a lawful purpose).

If we fail to effectively and timely implement electronic health record systems, our operations could be adversely affected.

As required by the American Recovery and Reinvestment Act of 2009, the Secretary of HHS has developed and implemented an incentive payment program for eligible healthcare professionals that adopt and meaningfully use electronic health record, or EHR, technology. HHS uses the Provider Enrollment, Chain and Ownership System, or PECOS, to verify Medicare enrollment prior to making EHR incentive program payments. If our professionals are unable to meet the requirements for participation in the incentive payment program, including having an enrollment record in PECOS, we will not be eligible to receive incentive payments that could offset some of the costs of implementing EHR systems. Further, healthcare professionals that fail to demonstrate meaningful use of certified EHR technology are subject to reduced payments from Medicare. System conversions to comply with EHR could be time consuming and disruptive for physicians

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and employees. Failure to implement EHR systems effectively and in a timely manner could have a material adverse effect on our financial position and results of operations.

We are in process of converting certain of our clinical and patient accounting information system applications to newer versions of existing applications or altogether new applications. In connection with our implementation and conversions, we have incurred capitalized costs and additional training and implementation expenses.

If we fail to comply with laws and regulations related to the protection of the environment and human health and safety, we could incur substantial penalties and fines.

We are subject to various federal, state and local and regulations relating to the protection of the environment and human health and safety, including those governing the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites and the maintenance of a safe workplace. Some of our operations include the use, generations and disposal of hazardous materials. We also plan to acquire ownership in new facilities and properties, some of which may have had a history of commercial or other operations. We may, in the future, incur liability under environmental statutes and regulations with respect to contamination of sites we own or operate, including contamination caused by prior owners or operators of such sites, abutters or other persons, and the off-site disposal of hazardous substances. Violations of these laws and regulations may result in substantial civil penalties or fines.

Risks Related to Ownership of Our Securities and This Offering

Investors may experience dilution of their ownership interests because of the future issuance of additional shares of our common stock.

We may issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in the future in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes, resulting in the dilution of the ownership interests of our stockholders at that time. At September 30, 2015, we had outstanding options to purchase an aggregate of 648,650 shares of our common stock at a weighted average exercise price of $4.00 per share, warrants to purchase an aggregate of 2,082,222 shares of our common stock at a weighted average exercise price of $1.46 per share (assumes adjustment of exercise price for warrants to purchase 249,990 shares is approved by stockholders), and 4,388,623 shares of our common stock reserved for issuance under our 2005 Stock Option Plan and our Amended and Restated 2009 Plan. On August 12, 2015, we issued warrants to purchase 300,000 shares of our common stock in connection with the guarantee of our indebtedness at an initial exercise price of $1.70 per share. The exercise prices of the warrants to purchase 800,000 shares of our common stock that were issued on July 30, 2014 at an initial exercise price of $3.15 per share and to purchase 960,000 shares of our common stock that were issued on December 4, 2014 at an initial exercise price of $2.71 per share and the warrant to purchase 50,010 shares issued on August 12, 2015 to an individual who is not an officer or director of the Company have been adjusted downward to $1.46 per share to reflect the closing price of our common stock on August 28, 2015, the date restricted stock was awarded to our directors pursuant to our director compensation plan. The adjustment resulted from our issuing such restricted stock at a price per share less than the exercise price of such warrants. Holders of warrants representing substantially all of the shares issuable under the July 2014 warrants have waived any adjustment in the number of shares that could be purchased pursuant to their warrants as a result of the change in the exercise price. The adjusted exercise price of the December 4, 2014 warrants and the warrant for 50,010 shares issued on August 12, 2015 will be subject to an additional adjustment to $0.70, the public offering price of the Class A Units in this offering. If our stockholders approve certain anti-dilution provisions of the August 12, 2015 warrants to purchase 249,990 shares issued to Mr. Pappajohn and Mr. Oman, the exercise price of those warrants will be adjusted to $0.70 per share, the public offering price of the Class A Units in this offering. We intend to seek such stockholder approval at our 2016 annual meeting of stockholders. The exercise of such outstanding awards and warrants, the issuance of future awards under our 2005 Stock Option Plan and Amended and Restated 2009 Plan, the exercise of Warrants or conversion of Series A Preferred offered hereby, or the future issuance of any such additional shares of common stock, will result in further dilution of your investment and may create downward pressure on the trading price of the common stock. There can also be no assurance that we will not be required to issue additional shares, warrants or other

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convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of our common stock are currently traded on The NASDAQ Capital Market, and new investors could gain rights superior to those of our stockholders at that time.

There is no public market for the Series A Preferred or the Warrants being offered by us in this offering.

There is no established public trading market for the Series A Preferred or the Warrants being offered by us in this offering, and we do not expect a market to develop. In addition, we do not intend to apply to list the Series A Preferred or the Warrants on any national securities exchange or other nationally recognized trading system, including The NASDAQ Capital Market. Without an active market, the liquidity of the Series A Preferred and the Warrants will be limited.

Due to the speculative nature of warrants, there is no guarantee that it will ever be profitable for investors in the offering to exercise their Warrants.

The Warrants offered hereby do not confer any rights of share ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire our common stock at a fixed price for a limited period of time. Investors in this offering may exercise their right to acquire the shares of common stock underlying their Warrants at any time after the date of issuance by paying an exercise price of $0.875 per share, prior to their expiration on the date that is five years from the date of issuance, after which date any unexercised Warrants will expire and have no further value. See“Description of the Securities We are Offering.” There can be no assurance that the market price of our common stock will ever equal or exceed the exercise price of the Warrants, and, consequently, whether it will ever be profitable for investors to exercise their Warrants.

After this offering, our executive officers, directors and principal stockholders will continue to have significant voting power.

As of November 3, 2015, our executive officers, directors and holders of more than 5% of our outstanding common stock together beneficially owned approximately 60.88% of our common stock. Upon the closing of this offering, these executive officers, directors and more than 5% stockholders, or their affiliates, will, in the aggregate, beneficially own shares representing approximately 69.64% of our common stock, assuming they purchase all Class A Units they have agreed to purchase in this offering. See “Principal Stockholders.” As a result, if these stockholders were to choose to act together, they may be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, may be able to control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of ownership control may:

The market price of our common stock may be volatile and this may adversely affect our stockholders.

The price at which our common stock trades may be volatile. The stock market can experience significant price and volume fluctuations that have affect the market prices of securities, including securities of healthcare companies. The market price of our common stock may be influenced by many factors, including:

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In addition, the stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of healthcare companies. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our financial condition, results from operations, business or prospects. In the past, securities class-action litigation has often been brought against companies following periods of volatility in the market price of their respective securities. We may become involved in this type of litigation in the future. Litigation of this type is often expensive to defend and may divert our management team’s attention as well as resources from the operation of our business. There is no assurance that the market price of our common stock will not fall in the future.

We do not anticipate paying dividends on our common stock in the foreseeable future and, consequently, your ability to achieve a return on your investment will depend solely on any appreciation in the price of our common stock.

We do not pay dividends on our shares of common stock and currently intend to retain all future earnings to finance the continued growth and development of our business. In addition, we do not anticipate paying cash dividends on our common stock in the foreseeable future and our credit agreements limit our ability to pay dividends. Any future payment of cash dividends will depend upon our financial condition, capital requirements, earnings and other factors deemed relevant by our Board of Directors. As a result, capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our common stock. See “Market Price For Common Equity and Related Stockholder Matters — Dividend Policy.”

Our common stock may be delisted from The NASDAQ Capital Market, which may make it more difficult for you to sell your shares.

Our common stock is listed on The NASDAQ Capital Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly-held shares and minimum bid price per share, among others, and requirements relating to board and committee independence. If we fail to satisfy one or more of the requirements, we may be delisted from The NASDAQ Capital Market.

On May 21, 2015, we received a letter from NASDAQ indicating that as of March 31, 2015, our reported stockholders’ equity of $407,000 did not meet the $2.5 million minimum required to maintain continued listing, as set forth in NASDAQ Listing Rule 5550(b)(1). The letter further stated that as of May 20, 2015 we did not meet either of the alternatives of market value of listed securities or net income from continuing operations.

Under NASDAQ rules, we submitted a plan to NASDAQ to regain compliance, which NASDAQ accepted, granting us until November 17, 2015 to evidence compliance. However, because we were unable to raise equity capital as we anticipated, we did not evidence compliance with NASDAQ Listing Rule 5550(b)(1) by November 17, 2015. On November 18, 2015, we received a letter from NASDAQ stating that we have not regained compliance with the continued listing requirements of The NASDAQ Capital Market. As a result, NASDAQ determined that our common stock would be delisted from The NASDAQ Capital Market effective November 30, 2015. We appealed that determination which stayed the delisting of our common stock until the appeal is heard on January 14, 2016 by the NASDAQ Hearings Panel, but there is no assurance that our request for continued listing will be granted.

Following this offering, our stockholders’ equity at September 30, 2015 on a pro forma as adjusted basis would allow us to meet the $2.5 million minimum stockholders’ equity requirement for continued listing on NASDAQ. However, we cannot assure you that NASDAQ will deem us to be in compliance with this requirement and continue the listing of our common stock on The NASDAQ Capital Market. Moreover, our

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losses are continuing and, even if NASDAQ permits listing of our common stock to continue, we may not be able to continue to satisfy this listing standard in the future. Accordingly, we will likely need to raise additional equity financing to satisfy the NASDAQ minimum stockholders’ equity requirement for continued listing on The NASDAQ Capital Market in the future. Furthermore, even if we meet the minimum stockholders’ equity requirement, our stock price may not meet the minimum closing bid price of at least $1.00 per share for continued listing on The NASDAQ Capital Market or we may fail to meet other requirements for continued listing.

Delisting from The NASDAQ Capital Market may adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investor interest business development opportunities.

If we are delisted from The NASDAQ Capital Market and we are not able to list our common stock on another exchange, our common stock could be quoted on the OTC Bulletin Board or in the “pink sheets.” As a result, we could face significant adverse consequences including, among others:

If our common stock becomes subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on The NASDAQ Capital Market and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

The market price of our common stock in the future may be affected by different factors than in the past.

With our entry into the urgent and primary care line of business and our plans to transform the Company over the next few years into primarily an urgent and primary care business, the market price of our common stock in the future may be impacted by different factors than those that have affected the market price of our common stock in the past.

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Anti-takeover provisions of our certificate of incorporation, our bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the current members of our board and management.

Certain provisions of our certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other change of control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. Furthermore, these provisions could prevent or frustrate attempts by our stockholders to replace or remove members of our Board of Directors. These provisions also could limit the price that investors might be willing to pay in the future for our common stock, thereby depressing the market price of our common stock. Stockholders who wish to participate in these transactions may not have the opportunity to do so. These provisions, among other things:

In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or the DGCL, which may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on our common stock, from merging or combining with us for a prescribed period of time.

We may not have an active market for our common stock and, as a result, it may be difficult for you to sell your shares of our common stock.

Despite our listing on The NASDAQ Capital Market, there may not be a meaningful, consistent, trading market for our common stock. Generally, trading in our common stock has been limited. An inactive market may impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic partnerships or acquire companies or products by using our shares of common stock as consideration. We cannot predict with any certainty the prices at which our common stock will trade. It is possible that in one or more future periods our results of operations may be below the expectations of public market analysts and investors and, as a result of these and other factors, the price of our common stock may fall. If we do not have an active market for our common stock, it may be difficult for investors to sell their shares without depressing the market prices for the shares or at all.

You will experience immediate and substantial dilution in the net tangible book value per share as a result of this offering.

Because the price per share of our common stock being offered is higher than the net tangible book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on the public offering price of $0.70 per Class A Unit, and after deducting the underwriting discount and estimated offering expenses payable by us, if you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of $(1.23) per share in the pro forma as adjusted net tangible book value of the common stock. This calculation and the conversion of the Series A Preferred excludes the proceeds, if any, from the exercise of the Warrants and the conversion of the Series A Preferred issued in this offering. If the underwriters exercise their over-allotment option, or if outstanding options and warrants to purchase our common stock are exercised, you will experience additional dilution. See the section entitled “Dilution” in this prospectus for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.

We may sell shares of our common stock in the future at a price that is less than the price per share of our common stock in this offering.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or

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other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors in this offering.

Our management will have broad discretion in allocating the net proceeds of this offering and may use the proceeds in ways with which you disagree.

Our management has significant flexibility in applying the net proceeds we expect to receive in this offering. Because the net proceeds are not required to be allocated to any particular investment or transaction, investors in this offering may not agree with how the net proceeds are used. The failure by our management to apply these funds in an effective manner could have a material adverse effect on our business, results of operations and financial condition. See “Use of Proceeds” for a description of how we presently intend to apply the net proceeds from this offering.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements can be identified by forward-looking words such as “may,” “will,” “seek,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “believe,” “estimate” and “continue” or similar words and discuss our strategy, future operations, future financial position, prospects and future development or contain other “forward-looking” information. These include, without limitation, those statements under the headings “Prospectus Summary — Recent Developments — Medac Asset Acquisition,” “Prospectus Summary — Our Strategies” and “Business — Urgent and Primary Care Business — Our Strategies.”

Such forward-looking statements are based on current information, assumptions and belief of management, and are not guarantees of future performance. Substantial risks and uncertainties could cause actual results or future events to differ materially from those indicated by such forward-looking statements, including, but not limited to:

The preceding list is not intended to be an exhaustive list of all of the risks and uncertainties that could cause our actual results or future events to differ materially from those expressed or implied by our forward-looking statements. Our actual results or future events could differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in our “Risk Factors” section. Given these uncertainties, you should not place undue reliance on our forward-looking statements, and we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus, to conform these statements to actual results, or to changes in our expectations.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately $6.2 million, or approximately $7.2 million if the underwriters exercise their over-allotment option in full, after deducting the underwriting discounts and commissions and estimated offering expenses.

We expect to use approximately $5.1 million of the net proceeds to pay the cash portion of the purchase price for the Medac Asset Acquisition and the remaining proceeds to acquire and open urgent and primary care centers in the eastern and southeastern United States and for general corporate purposes. Among the general corporate purposes for which we may use any remaining net proceeds is to repay approximately $0.2 million of indebtedness incurred to finance prior urgent and primary care center acquisitions, see “Description of Material Indebtedness — Acquisition Indebtedness.”

Although we presently anticipate closing the Medac Asset Acquisition immediately following the consummation of this offering, there is no assurance we can do so at that time, or at all. If we do not consummate the Medac Asset Acquisition, we will use the net proceeds from this offering to acquire and open urgent and primary care centers in the eastern and southeastern United States, to repay the indebtedness described above and for general corporate purposes. See “Prospectus Summary — Medac Asset Acquisition.” This offering is not conditioned on the Medac Asset Acquisition. We cannot assure you that the Medac Asset Acquisition will close as expected or at all. See “Risk Factors — Failure to complete the Medac Asset Acquisition could negatively impact our stock price and our future operations and financial results.”

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition, which could change in the future as our plans and business conditions evolve. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend on the uses set forth above. The amount and timing of our actual expenditures will depend upon numerous factors, including the timing of our closing of any acquisition of urgent and primary care centers, and our ability to identify, negotiate and close future urgent and primary care transactions. As a result, our management will have broad discretion over the use of the net proceeds from this offering. Pending the use of the proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation instruments, including short- and intermediate-term interest bearing obligations, investment grade instruments, certificates of deposit or U.S. government securities.

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MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is traded on The NASDAQ Capital Market under the symbol “GNOW.”

The following table sets forth, for the fiscal periods indicated, the range of the high and low sales prices for our common stock on The NASDAQ Capital Market from January 1, 2013 through December 3, 2015.

		High				Low
2015
Fourth Quarter (through December 3, 2015)		$	1.50			$	0.73
Third Quarter		$	1.80			$	1.17
Second Quarter		$	3.88			$	1.29
First Quarter		$	3.48			$	2.27
2014
Fourth Quarter		$	3.11			$	2.06
Third Quarter		$	3.99			$	2.89
Second Quarter		$	3.75			$	1.61
First Quarter		$	2.32			$	1.54
2013
Fourth Quarter		$	1.85			$	1.32
Third Quarter		$	2.01			$	1.50
Second Quarter		$	2.10			$	1.62
First Quarter		$	2.01			$	1.50

The closing price on The NASDAQ Capital Market for our common stock on December 3, 2015 was $0.92.

On September 21, 2011, we received a letter from NASDAQ stating that for 30 consecutive business days immediately preceding the date of the letter, our common stock did not maintain a minimum closing bid price of $1.00 per share, as required by NASDAQ Listing Rule 5550(a)(2) and, therefore, our common stock was subject to delisting. We were given 180 calendar days, or until March 19, 2012, to regain compliance with the minimum bid price requirement.

In a letter dated March 20, 2012, NASDAQ stated that although we had not regained compliance with the minimum bid price requirement, we were eligible for an additional 180-day compliance period, or until September 17, 2012, based on the Company meeting the continued listing requirements for market value of publicly held shares and all other applicable standards for initial listing on The NASDAQ Capital Market (except for the minimum bid price requirement) and having notified NASDAQ of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

With the requisite approval of our stockholders, on August 31, 2012 we amended our Certificate of Incorporation to effect a 1-for-3 reverse stock split of our common stock effective September 4, 2012. On that date, every three shares of our common stock then issued and outstanding were automatically combined into one share of common stock. Stockholders left with fractional shares as a result of the reverse split received cash in lieu of the fractional shares. In addition, any options, warrants and RSUs outstanding were adjusted accordingly. As a result of the reverse split, we had 5,706,443 shares of common stock issued and outstanding at December 31, 2012.

On September 18, 2012, we received notification from NASDAQ that we were in compliance with the minimum bid price requirement.

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On November 25, 2014, we received a letter from NASDAQ indicating that the issuance of RSUs to our non-employee directors had violated NASDAQ Listing Rule 5635(c). Such rule provides, in relevant part, that stockholder approval is required prior to the issuance of securities when equity compensation arrangements are made pursuant to which stock may be acquired by officers, directors, employees or consultants. NASDAQ granted us until May 26, 2015 to obtain stockholder approval for such awards. On May 20, 2015, we obtained the requisite approval and on May 26, 2015, NASDAQ informed us that we had regained compliance with NASDAQ Listing Rule 5635(c).

On May 21, 2015, we received a letter from NASDAQ indicating that as of March 31, 2015, our reported stockholders’ equity of $407,000 did not meet the $2.5 million minimum required to maintain continued listing, as set forth in NASDAQ Listing Rule 5550(b)(1). The letter further stated that as of May 20, 2015, we did not meet either of the alternatives of market value of listed securities or net income from continuing operations.

Under NASDAQ rules, we submitted a plan to NASDAQ to regain compliance, which NASDAQ accepted, granting us until November 17, 2015 to evidence compliance. However, because we were unable to raise equity capital as we anticipated, we did not evidence compliance with NASDAQ Listing Rule 5550(b)(1) by November 17, 2015. On November 18, 2015, we received a letter from NASDAQ stating that we have not regained compliance with the continued listing requirements of The NASDAQ Capital Market. As a result, NASDAQ determined that our common stock would be delisted from The NASDAQ Capital Market effective November 30, 2015. We appealed that determination which stayed the delisting of our common stock until the appeal is heard on January 14, 2016 by the NASDAQ Hearings Panel, but there is no assurance that our request for continued listing will be granted.

As a result of this offering, our stockholders’ equity at September 30, 2015 on a pro forma as adjusted basis would allow us to meet the $2.5 million minimum stockholders’ equity requirement for continued listing on The NASDAQ Capital Market.

See “Risk Factors — Risks Related to Ownership of Our Securities and This Offering — Our common stock may be delisted from The NASDAQ Capital Market, which may make it more difficult for you to sell your shares.”

Holders

As of November 16, 2015, according to the records of our transfer agent, we had 137 record holders of our common stock. The number of record holders is based on the actual number of holders registered on the books of our transfer agent and does not reflect holders of shares in “street name” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.

Dividend Policy

Historically, we have not paid dividends on our common stock, and we currently do not intend to pay any dividends on our common stock after the completion of this offering. We currently plan to retain any earnings to support the operations and to finance the growth of our urgent and primary care business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on our financial condition, results of operations, and capital requirements as well as other factors deemed relevant by our Board of Directors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

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DILUTION

If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

As of September 30, 2015, our historical net tangible book value was $(13.6) million, or $(1.95) per share of common stock. Our historical net tangible book value per share represents the amount of our total tangible assets less total liabilities divided by the number of shares of common stock outstanding as of September 30, 2015.

Dilution per share to new investors is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the public offering price per share paid by new investors and the Medac Asset Acquisition. The pro forma as adjusted net tangible book value per share is calculated assuming conversion of the Series A Preferred into 1,071,750 shares of common stock. The following table illustrates this dilution:

Public offering price per share (attributing no value to the Warrants)						$	0.70
Historical net tangible book value per share as of September 30, 2015		$	(1.95	)
Increase attributable to this offering			1.55
Increase attributable to warrant reclassification			0.09
Pro forma net tangible book value per share as of September 30, 2015			(0.31	)
Decrease in net tangible book value per share attributable to the Medac Asset Acquisition			(0.22	)
Pro forma as adjusted net tangible book value per share after this offering and the Medac Asset Acquisition							(0.53	)
Dilution per share to new investors						$	1.23

If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value will increase to $(0.44) per share, representing an immediate dilution of $1.14 per share to new investors.

The foregoing excludes the shares of common stock that may be issued under the Warrants to be issued in this offering and assumes conversion of the Series A Preferred issued as part of the Class B Units sold in this offering into shares of common stock.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization at September 30, 2015:

The application of the net proceeds is described in “Use of Proceeds.” You should read this table in conjunction with the other sections of this prospectus, including our consolidated financial statements and notes thereto. This offering is not conditioned on the consummation of the Medac Asset Acquisition.

		As of September 30, 2015
		Unaudited
		Actual				As Adjusted(1)(2)				Pro Forma As Adjusted(2)
(in thousands except per share amounts)
Cash and cash equivalents(3)		$	197			$	6,727			$	1,687
Current portion of senior secured credit facility			5,000				5,000				5,000
Long-term debt:
Senior secured credit facility			5,800				5,800				5,800
Capital lease obligations			1,666				1,666				1,666
Notes payable			—				—				560
Other long-term liabilities			356				356				356
Total long-term debt			7,822				7,822				8,382
Stockholders’ equity:
Preferred stock, $1,000 stated value; 10,000 shares authorized, none issued, actual; 10,000 shares authorized, 750 issued and outstanding, as adjusted and pro forma as adjusted		$	—			$	750			$	750
Common stock, $0.01 par value; 40,000 shares authorized, 6,952 shares issued and outstanding, actual; 40,000 shares authorized, 16,595 shares issued and outstanding, as adjusted and pro forma as adjusted			69				165				165
Additional paid-in capital			26,188				33,201				33,201
Accumulated deficit			(31,071	)			(31,071	)			(31,246	)
Total stockholders’ equity			(4,814	)			3,045				2,870
Total capitalization		$	8,088			$	15,867			$	16,252

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that are based upon current expectations and involve risks, assumptions and uncertainties. You should review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis.

Overview

We engage in two lines of business: our urgent and primary care business and our ancillary network business. Although we have been engaged in our ancillary network business for a number of years, with our entry into the urgent and primary care business and our management arrangement with HealthSmart, we now focus primarily on our urgent and primary care business. We believe that urgent and primary care centers are and will continue to be an essential component of the effective delivery of healthcare services in the United States. Accordingly, our resources are focused on the growth of that line of business.

Our Urgent and Primary Care Business

In early May 2014, we announced our entry into the urgent and primary care market. During the remainder of 2014, we, through our wholly-owned subsidiaries, consummated five transactions resulting in our acquisition of ten urgent and primary care centers, three of which are located in Georgia, two in Florida, three in Alabama and two in Virginia.

Our healthcare centers offer a wide array of services for non-life-threatening medical conditions. We strive to improve access to quality medical care by offering extended hours and weekend service primarily on a walk-in basis. Our comprehensive services generally fall within the urgent care, primary care, family care, and occupational medicine classifications. Specifically, we offer non-life-threatening, out-patient medical care for the treatment of acute, episodic, and some chronic medical conditions. When hospitalization or specialty care is needed, referrals to appropriate providers are made.

Patients typically visit our centers on a walk-in basis when their condition is not severe enough to warrant an emergency visit, when they do not have a relationship with a primary care provider, or when treatment by their primary care provider is inconvenient. We also attempt to capture follow-up, preventative and general primary care business after walk-in visits. The services provided at our centers include, but are not limited to, the following:

We staff our centers with a combination of licensed physicians, nurse practitioners, physician assistants, medical support staff, and administrative support staff. Our medical support staff includes licensed nurses, certified medical assistants, laboratory technicians, and registered radiographic technologists.

Our patient volume, and therefore our revenue, is sensitive to seasonal fluctuations in urgent and primary care activity. Typically, winter months see a higher occurrence of influenza, bronchitis, pneumonia and similar illnesses; however, the timing and severity of these outbreaks can vary dramatically. Additionally, as consumers shift towards high deductible insurance plans, they are responsible for a greater percentage of their bill, particularly in the early months of the year before other healthcare spending has occurred. Our inability

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to collect the full patient liability portion of the bill at the time of service may lead to an increase in bad debt expense during that period. Our quarterly operating results may fluctuate significantly in the future depending on these and other factors.

In keeping with the retail nature of the services we offer, we have initiated a rebranding campaign with our new tradename, GoNow Doctors. We believe our new name and logo will enable us to effectively market our services in our existing and target communities:

We intend to grow our urgent and primary care business through the acquisition of new centers, by expanding service offerings in our existing centers, by improving patient volume and overall performance in existing centers and by developing de novo (new) centers in strategic areas located in the eastern and southeastern United States.

Our Legacy Business

Our legacy ancillary network business offers cost containment strategies to our payor clients, primarily through the utilization of a comprehensive national network of ancillary healthcare service providers. This service is marketed to a number of healthcare companies including TPAs, insurance companies, large self-funded organizations, various employer groups and PPOs. We are able to lower the payors' ancillary care costs through our network of high quality, cost effective providers that we have under contract at more favorable terms than the payors could generally obtain on their own.

Payors route healthcare claims to us after service has been performed by participant providers in our network. We process those claims and charge the payor according to an agreed upon, contractual rate. Upon processing the claim, we are paid directly by the payor or the insurer for the service. We then pay the medical service provider according to a separately negotiated contractual rate. We assume the risk of generating positive margin, which is calculated as the difference between the payment we receive for the service from the payor and the amount we are obligated to pay the service provider.

On October 1, 2014, we entered into a management services agreement with HealthSmart. Under the management services agreement, HealthSmart manages the operation of our ancillary network business, subject to the supervision of a five-person oversight committee comprised of three members selected by us and two members selected by HealthSmart. As a result of this arrangement, we no longer employ the workforce of our ancillary network business. Under the management services agreement, HealthSmart operates our ancillary network business for a management fee equal to the sum of (a) 35% of the net profit derived from operation of our ancillary network business, plus (b) 120% of all direct and documented operating expenses and liabilities actually paid during such calendar month by HealthSmart in connection with providing its management services. For purposes of the fee calculation, the term “net profit” means gross ancillary network business revenue, less the sum of (x) the provider payments and administrative fees and (y) 120% of all direct and documented operating expenses and liabilities actually paid during such calendar month by HealthSmart in connection with providing its management services. Any remaining net profit accrues to us. During the term of the agreement, HealthSmart is responsible for the payment of all expenses incurred in providing the management services with respect to our ancillary network business, including personnel salaries and benefits, the cost of supplies and equipment, and rent. The initial term of the management services agreement is three years, and it renews annually thereafter for one-year terms unless either party gives notice of termination at least 90 days prior to the end of the then-current term.

Our management services agreement with HealthSmart provides that at any time after October 1, 2016 and during the remaining term of the management services agreement, HealthSmart may purchase, or we may require that HealthSmart purchase, our ancillary network business for a price equal to $6.5 million less the aggregate sum of net profit received by us since the beginning of the management arrangement. As of

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September 30, 2015, the aggregate net profit received by us since the beginning of the management services agreement was approximately $1.7 million. Consummation of the transaction will be subject to the satisfaction of certain material conditions, currently including stockholder approval of the sale. The purchase price is to be payable by HealthSmart as follows: Within 30 days following each calendar month after the closing, HealthSmart will be obligated to pay to us 65% of the net profit derived from the operation of the ancillary network business minus 120% of all direct and documented operating expenses and liabilities actually paid by HealthSmart during such calendar month in connection with operating the ancillary network business until the purchase price is paid in full.

Although HealthSmart’s option to purchase and our option to sell the ancillary network business do not become exercisable until October 1, 2016, we currently are in negotiations with HealthSmart to facilitate an earlier disposition at a price in the range of $2.5 million to $4.0 million, which would be in addition to $1,700,000 of net profit received by us since the beginning of the management arrangement. However, we cannot assure you such negotiations will result in us disposing of our legacy business within such price range, earlier than October 1, 2016 or at all. See “Prospectus Summary — Our Legacy Business” and “Risk Factors—Risks Related to Our Legacy Business—We may not be able to successfully complete the disposition of our ancillary network business to HealthSmart, or at all.”

In the event HealthSmart purchases our ancillary network business, the urgent and primary care business will be our only business line following completion of that transaction, and we believe we will be the only publicly-traded, pure-play urgent care consolidator in the United States. If for any reason the sale of our ancillary network business to HealthSmart is not consummated during or at the end of the term of the management services agreement, we expect to then re-assume management of that line of business, seek to sell that business on the most favorable terms we are able to obtain or wind down that line of business.

Results of Operations

Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014

The following table summarizes our results of operations for the nine months ended September 30, 2015 and 2014 (in thousands) (certain prior period amounts have been reclassified for comparability purposes):

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		September 30, 2015																September 30, 2014																Change
		Urgent and Primary Care				Ancillary Network				Shared Services				Total				Urgent and Primary Care				Ancillary Network				Shared Services				Total				$				%
Other (income) expense: Gain on cancellation of acquisition promissory note															(289	)															—				(289	)			N/A
Interest expense:
Interest expense															277																37				240				N/A
(Gain)/loss on warrant liability, net of deferred loan fee amortization															(489	)															24				(513	)			N/A
Total other income (loss) and interest expense															(501	)															61				(562	)			921	%
Loss before income taxes														$	(9,200	)														$	(4,456	)		$	(4,744	)			106	%

Our Urgent and Primary Care Business

Our urgent and primary care business segment reported an operating loss of $2,642,000 during nine months ended September 30, 2015. Because we entered the urgent and primary care business in May 2014, and owned only two centers for the nine-month period ended September 30, 2014, a comparison of the results for the nine months ended September 30, 2015 with those for the nine months ended September 30, 2014 would not be meaningful. Contributing to the segment's operating loss in the third quarter of 2015 were, among other things, the following:

Net Revenues

Net revenues are recognized at the time services are rendered at the estimated net realizable amounts from patients, third-party payors and others, after reduction for estimated contractual adjustments pursuant to agreements with third-party payors and an estimate for bad debts. For the nine months ended September 30, 2015, our urgent and primary care business experienced, in the aggregate, approximately 64,000 patient visits which generated net revenues of approximately $7,251,000. We averaged 23 patient visits per day per center, resulting in average net revenue per patient visit of approximately $113 for the nine months ended September 30, 2015.

Salaries, Wages, Contract Medical Professional Fees, and Related Expenses

Salaries, wages and benefits primarily consist of compensation and benefits to our clinical providers and staff at our centers. We employ a staffing model at each center that generally includes at least one board-certified physician, one or more physician assistants or nurse practitioners, nurses or medical assistants and a front office staff member on-site at all times. Salaries, wages, benefits and taxes are the most significant operating expense components of our urgent and primary care business. For the nine months ended September 30, 2015, salaries, wages, benefits, and taxes represented, in the aggregate, approximately 76% of net revenue, which includes approximately $417,000 of labor costs paid or payable to our contracted (not employed) medical professionals for the nine months ended September 30, 2015.

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Facility Expenses

Facility expenses consist of our urgent and primary care centers' rent, property tax, insurance, utilities, telephone, and internet expenses. For the nine months ended September 30, 2015, facility expenses were 11% of net revenue.

Medical Supplies

Medical supplies expenses consist of medical, pharmaceutical, and laboratory supplies used at our ten urgent and primary care center locations. For the nine months ended September 30, 2015, medical supplies were 9% of net revenue.

Other Operating Expenses

Other operating expenses primarily consist of radiology and laboratory fees, premiums paid for medical malpractice and other insurance, marketing, information technology, non-medical professional fees, including accounting and legal, and amounts paid to our third-party revenue cycle manager to bill and collect our urgent and primary care revenue. For the nine months ended September 30, 2015, other operating expenses were 28% of net revenue.

Intangible Asset Impairment

At the time we purchased one of our urgent and primary care centers, we allocated $600,000 of the purchase price to a contract held by the acquired center that related to non-urgent care services. During the nine months ended September 30, 2015 we suspended our provision of services under that contract and have recorded a one-time impairment charge of $520,000 relating to the unamortized balance of that intangible asset.

Our Ancillary Network Business

Our ancillary network business segment reported operating losses of $664,000 and $83,000 for the nine months ended September 30, 2015 and 2014, respectively.

Net Revenues

Revenue from our ancillary network business is recognized when we bill our client payors for services performed and collection is reasonably assured. We estimate revenues using average historical collection rates. When estimating collectability, we assess the impact of items such as non-covered benefits, payments made directly to the service provider by the client payor, denied claims, deductibles and co-payments. Periodically, revenues and related estimates are adjusted to reflect actual cash collections so that revenues recognized accurately reflect cash collected. There are no assurances that actual cash collections will meet or exceed estimated cash collections. There can be variations in revenue from period-to-period due to the demand for various ancillary service specialties by our clients' members. The variations can impact revenue, revenue per claim, collectability and margins after payments made to the ancillary service providers. Also impacting revenue is the mix of ancillary service specialties billed and the ancillary service providers that are utilized. During the nine months ended September 30, 2015, net revenue decreased 3%. We believe we will continue to experience declines in revenue in our ancillary network business.

Provider Payment and Administrative Fees

We make payments to our providers and pay administrative fees to our clients for converting claims to electronic data interchange and routing them to both the Company for processing and to their payors for payment. Payments to providers are the most significant cost and they consist of our payments for ancillary care services in accordance with contracts negotiated separately with providers for specific ancillary services.

Other Operating Costs

Ancillary network other operating costs amounted to $2,985,000 for the nine months ended September 30, 2015. This amount represents profit sharing and expense reimbursement amounts paid or payable to

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HealthSmart under the management services agreement. The majority of the operating costs were attributable to payroll expenses in 2014 prior to the management services agreement. HealthSmart began managing our ancillary network business under our management services agreement on November 1, 2014, at which time HealthSmart hired substantially all our employees dedicated to our ancillary network business.

Network Prepaid Write-Off

During the first quarter of 2014, we advanced $500,000 to one of our ancillary network customers, which was to be withheld from future administrative fees earned by the customer. During the nine months ended September 30, 2015, the customer terminated its contract with us and filed bankruptcy. Accordingly, we have recorded a one-time charge of $487,000 to write-off the remaining balance of this asset that was recorded as prepaid expense and other non-current assets.

Shared Services

Shared services include the common costs related to both the urgent and primary care and ancillary network lines of business such as the salaries of our Chief Executive Officer, Chief Financial Officer, Chief Information Officer and the remainder of the executive management team, whose time is allocable across both business segments. The following functions are also included in shared services: finance and accounting; human resources; legal; marketing; information technology; and general administration. In addition, all strategic functions, including but not limited to transactional activities and the related integration of the acquired businesses, are included in shared services. As of September 30, 2015, shared services included 22 full-time employees compared to 17 at September 30, 2014. Certain expenses for the nine months ended September 30, 2014 were reclassified to conform to the shared services presentation for the nine months ended September 30, 2015. Shared services expenses totaled $6,395,000 and $4,269,000 for the nine months ended September 30, 2015 and September 30, 2014, respectively. The increase was primarily due to the expansion of our infrastructure to operate and grow our urgent and primary care business, including interim staffing and accounting costs related to personnel changes and relocation of our corporate office to Atlanta, Georgia.

Interest Expense, Warrant Gain

We issued warrants to individuals who provide guarantees in connection with our credit agreements. The warrant fair value at date of grant has been capitalized as deferred loan fees and is being amortized over the term of credit agreement and a warrant liability was established. These warrants are considered derivative warrants because they contain exercise-price adjustment features. Accordingly, the warrant liability is adjusted to its fair market value at the end of each reporting period. For the nine months ended September 30, 2015, the gain due to change in warrant liability amounted to $1,877,000 and amortization of deferred loan fees amounted to $1,388,000, resulting in an income effect of $489,000.

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Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

The following table sets forth a comparison of consolidated statements of operations by our business segments and shared services for the respective years ended December 31 (certain prior year amounts have been reclassified for comparability purposes).

Our Urgent and Primary Care Business

Our urgent and primary care business segment reported an operating loss of $302,000 during 2014. We entered the urgent and primary care business in May 2014 with the acquisition of two centers in Georgia, and we acquired eight additional centers at various dates during the remainder of 2014. Accordingly, we have been in the urgent and primary care business for less than one year. Factors resulting in our segment operating loss for 2014 include:

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Net Revenues

Our urgent and primary care business, through the ten sites that were acquired by us at various times during 2014 generated net revenues of approximately $3,906,000 for the year ended December 31, 2014. We were not in the urgent and primary care business in 2013 so there is no comparable prior year data. For the year ended December 31, 2014, we experienced, in the aggregate, approximately 33,000 patient visits, which resulted in an average of 31 patient visits per day per center. The average reimbursement per patient visit was approximately $120 for the year ended December 31, 2014.

Salaries, Wages, Benefits and Taxes

Salaries, wages, benefits and taxes are the most significant operating expense components of our urgent and primary care business. For the year ended December 31, 2014, salaries, wages and associated benefits and taxes aggregated approximately 66.6% of net revenue.

Other Operating Expenses

Other operating expenses primarily consist of facility and operating lease costs, medical and laboratory supplies, billing and collection fees, radiology overhead and laboratory fees, utilities, software licensing fees, premiums for medical malpractice and other insurance, and costs related to office administration and information technology. For the year ended December 31, 2014, other operating expenses were 34.1% of net revenue.

Our Ancillary Network Business

Our ancillary network business segment reported operating income of $587,000 and $155,000 for the years ended December 31, 2014 and 2013, respectively. During the year ended December 31, 2013, shared service cost and expenses were included in the ancillary network business. These costs have been allocated to shared services rather than to our two operating segments.

Net Revenues

During the year ended December 31, 2014, net revenue declined 13.5% due to the deterioration of billed claims volume from our legacy clients compared to the prior year period. The decline in claims volume was the result of the following:

Provider Payment and Administrative Fees

Payments to providers are the most significant cost and consist of our payments for ancillary care services in accordance with contracts negotiated separately with providers for specific ancillary services.

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Operating Costs under Management Services Agreement

Profit sharing and expense reimbursement amounts due HealthSmart under our management services agreement, which began on October 1, 2014 totaled $903,000 in 2014.

Other Operating Costs

Other operating costs primarily relate to salaries, wages, benefits and taxes, as well as other operating expenses. Salaries, wages, benefits and taxes as a percent of net revenues were 12.4% for the year ended December 31, 2014 and 12.2% for the comparable period in 2013. Professional fees as a percent of net revenues were 0.4% for the year ended December 31, 2014 and 1.7% for the comparable period in 2013. Other operating expenses as a percent of net revenues were 2.9% for the year ended December 31, 2014 and 4.5% for the comparable period in 2013. HealthSmart began managing our ancillary network business on October 1, 2014 and effective November 1, 2014, HealthSmart hired substantially all our employees dedicated to our ancillary network business. The HealthSmart management services agreement enabled us to reduce our other operating costs, as a percent of revenue, when compared to the prior year.

Shared Services

As of December 31, 2014, shared services included 17 full-time employees compared to 15 at December 31, 2013. Certain 2013 expenses were reclassified to conform to the 2014 shared services presentation. Shared services expenses totaled $6,437,000 and $3,937,000 for the years ended December 31, 2014 and December 31, 2013, respectively. The increase was primarily due to the expansion of our infrastructure to operate and grow our urgent and primary care business, including interim staffing and accounting costs related to personnel changes and relocation of our corporate office to Atlanta, Georgia.

During the year ended December 31, 2014, shared services costs included approximately $333,000 of costs related to acquisitions and various strategic initiatives, including the negotiation and finalization of the management services agreement with HealthSmart. Costs incurred consisted primarily of professional fees paid to attorneys and accountants. In addition, shared services costs reflect various marketing investments, which included website development and branding activities.

Liquidity and Capital Resources

We had negative working capital of $8,112,000 at September 30, 2015 compared to negative working capital of $1,181,000 at December 31, 2014 and positive working capital of $5,626,000 at December 31, 2013. The increase in negative working capital in the first nine months of 2015 was due to additional operating losses. Contributing to the decline in working capital in 2014 were expenses incurred in connection with our entry into the urgent and primary care business, including the costs of creating our urgent and primary care brand and acquiring and integrating our urgent and primary care centers. We expect to incur additional operating losses until we acquire or develop sufficient centers to generate positive operating income. The table below reconciles the loss before income taxes to the net decrease in cash for the nine months ended September 30, 2015 and the year ended December 31, 2014.

		Nine Months Ended September 30, 2015				Year Ended December 31, 2014
Loss before income taxes		$	(9,200	)		$	(6,693	)
Borrowings under line of credit			6,084				4,716
Cash paid for acquisitions			—				(6,921	)
Proceeds from issuance of common stock			—				2,000
Depreciation and amortization			857				866
Non-cash stock-based compensation expense			426				592
Other			1,010				253
Decrease in cash		$	(823	)		$	(5,187	)

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Our cash and cash equivalents balance decreased to approximately $197,000 as of September 30, 2015 compared to $1,020,000 at December 31, 2014 and $6,207,000 at December 31, 2013. Our available borrowing capacity under existing lines of credit was $1,000,000 and $6,284,000 at September 30, 2015 and December 31, 2014, respectively. We had no line of credit at December 31, 2013. At November 16, 2015 our available borrowing capacity was $1,000,000.

On May 5, 2014, we closed a private placement of 1,000,000 shares of our common stock, par value $0.01 per share, at a purchase price of $2.00 per share for an aggregate purchase price of $2,000,000 for the shares.

On July 30, 2014, we entered into the July 2014 credit agreement with Wells Fargo providing for a $5,000,000 revolving line of credit, which we used primarily to fund our urgent and primary care acquisitions. Our obligation to repay advances under the July 2014 credit agreement is evidenced by a credit note, with a fluctuating interest rate per annum of 1.75% above daily one month LIBOR, as in effect from time to time. The credit note matures on June 1, 2016, and all borrowings under the July 2014 credit agreement are due and payable on that date.

Borrowings under the July 2014 credit agreement are secured by guarantees provided by certain individuals then serving as officers and directors of the Company and two stockholders of the Company who were not at that time officers or directors of the Company. On July 30, 2014, we issued warrants to the guarantors to purchase an aggregate of 800,000 shares of our common stock at an initial exercise price of $3.15 per share, subject to certain adjustments under certain circumstances, in consideration of their guaranteeing such indebtedness. The warrants vested immediately and are exercisable any time prior to their expiration on October 30, 2019.

To further our ability to execute our strategy of acquiring urgent care and primary care facilities and operations, on December 4, 2014, we entered into the December 2014 credit agreement with Wells Fargo providing for a $6,000,000 line of credit. Our obligation to repay advances under the December 2014 credit agreement is evidenced by a credit note, with a fluctuating interest rate per annum of 1.75% above daily one month LIBOR, as in effect from time to time. On August 12, 2015, we increased the line of credit to $7,000,000 and extended the maturity date to October 1, 2016, and all borrowings under the December 2014 credit agreement are due and payable on that date. The obligations under the July 2014 credit agreement and the December 2014 credit agreement and the credit notes are secured by all the assets of the Company and its subsidiaries. The credit agreements include customary covenants related to, among other things, additional debt, further encumbrances, sales of assets, and investments and lending. See “Description of Material Indebtedness — Credit Agreements — Covenants & Events of Default.”

Borrowings under the December 2014 credit agreement are secured by guarantees provided by two directors of the Company and a third party who is not an officer or director of the Company. On December 4, 2014, we issued warrants to the guarantors to purchase an aggregate of 960,000 shares of our common stock at an initial exercise price of $2.71 per share, subject to certain adjustments under certain circumstances, in consideration of their guaranteeing such indebtedness. The warrants vested immediately and are exercisable any time prior to their expiration on December 4, 2019. In connection with the $1,000,000 increase in the line of credit under the December 2014 credit agreement, we issued warrants as of August 12, 2015 to the guarantors to purchase an additional 300,000 shares of our common stock at an initial exercise price of $1.70 per share, subject to certain adjustments under certain circumstances, in consideration of their guaranteeing such indebtedness. The warrants vested immediately and are exercisable at any time prior to their expiration on August 12, 2020.

The exercise prices of the warrants to purchase 800,000 shares of our common stock that were issued on July 30, 2014 at an initial exercise price of $3.15 per share and to purchase 960,000 shares of our common stock that were issued on December 4, 2014 at an initial exercise price of $2.71 per share and the warrant to purchase 50,010 shares issued on August 12, 2015 to an individual who is not an officer or director of the Company have been adjusted downward to $1.46 per share to reflect the closing price of our common stock on August 28, 2015, the date restricted stock was awarded to our directors pursuant to our director compensation plan. The adjustment resulted from our issuing such restricted stock at a price per share less than the exercise price of such warrants. Holders of warrants representing substantially all of the shares

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issuable under the July 2014 warrants have waived any adjustment in the number of shares that could be purchased pursuant to their warrants as a result of the change in the exercise price. The adjusted exercise price of the December 4, 2014 warrants and the warrant for 50,010 shares issued on August 12, 2015 will be adjusted to $0.70, the public offering price of the Class A Units in this offering. If our stockholders approve certain anti-dilution provisions of the August 12, 2015 warrants to purchase 249,990 shares issued to Mr. Pappajohn and Mr. Oman, the exercise price of those warrants will be adjusted to $0.70, the public offering price of the Class A Units in this offering. We intend to seek such stockholder approval at our 2016 annual meeting of stockholders. Certain of the holders of the July 30, 2014 warrants, December 4, 2014 warrants and August 12, 2015 warrants have agreed that such warrants will not be subject to any further exercise price anti-dilution protection.

In connection with the $1,000,000 increase in the line of credit under the December 2014 credit agreement in August 2015, we and Messrs. Pappajohn and Oman have entered into a security and inter-creditor clarification agreement in order to clarify and reaffirm the parties’ respective rights and obligations under the inter-creditor agreement, including the indebtedness contemplated by the December 2014 credit agreement and the $1.0 million extension in credit thereunder.

In April 2015, we received notice from Wells Fargo that an event of default occurred under our July 2014 credit agreement following the unexpected death of our President, Chairman and Chief Executive Officer, Dr. Richard W. Turner, who had guaranteed part of our indebtedness under the July 2014 credit agreement. That event of default was cured to the satisfaction of Wells Fargo, and Wells Fargo notified us that it will not enforce its rights and remedies related to Dr. Turner’s death. See “Description of Material Indebtedness — Credit Agreements —  Covenants and Events of Default.”

As of September 30, 2015, we had outstanding borrowings of $5,000,000 and $5,800,000 under our July 2014 and December 2014 credit agreements, respectively. As of September 30, 2015, the weighted-average interest rate on these borrowings was 1.94%. The July 2014 credit agreement matures on June 1, 2016, and the December 2014 credit agreement matures on October 1, 2016.

In connection with the acquisitions of our urgent and primary care centers in 2014, our wholly-owned subsidiaries issued promissory notes to the sellers in the transactions in the aggregate original principal amount of $1,500,000, as follows:

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On July 31, 2015, our wholly owned subsidiary, ACSH Management, entered into an asset purchase agreement with Medac and its shareholders to purchase certain assets used by Medac in the operation of its four urgent care centers in the greater Wilmington, North Carolina area. The purchase price for the assets is $5,700,000, with $5,140,000 payable in cash at closing and the balance of $560,000 payable in the form of a promissory note with interest at 5% per annum and maturing 18 months after the closing. At the closing of the transaction, ACSH Management will, among other things:

Under the terms of the management services agreement, after the closing ACSH Management will, among other things, manage the non-clinical operations of the centers and will assist in certain aspects of Medac's emergency department staffing business in exchange for a fixed management fee, which is subject to adjustment not more frequently than annually. Medac will retain control over all of the clinical aspects of its urgent care business, including the employment or engagement of all individuals whose duties include the rendition of medical care. Concurrent with the execution of the asset purchase agreement or the closing, certain agreements ancillary to the asset purchase agreement, including a restrictive covenant agreement and the management services agreement, have been or will be executed. The asset purchase agreement contains customary representations and warranties, covenants and agreements and indemnification provisions. The asset purchase agreement also provides that consummation of the transaction is subject to the satisfaction or waiver of certain conditions, including ACSH Management having received financing in an amount no less than $5,700,000. We expect to use a portion of the proceeds of this offering to fund the purchase price of the Medac Asset Acquisition and expect the transaction to close immediately following the consummation of this offering. On October 20, 2015, we agreed to close the Medac Asset Acquisition no later than November 20, 2015 and provided a nonrefundable $150,000 deposit. We did not close the Medac Asset Acquisition by November 20, 2015 and therefore forfeited the $150,000 deposit, which will no longer be applied towards the purchase price. On November 20, 2015, we also agreed, subject to certain customary conditions, to close the Medac Asset Acquisition no later than December 20, 2015 and provided an additional nonrefundable $100,000 deposit towards the purchase price. Consummation of this offering is not conditioned upon the closing of the Medac Asset Acquisition. We cannot assure you that the Medac Asset Acquisition will close as expected or at all. See “Prospectus Summary — Recent Developments — Medac Asset Acquisition,” “Risk Factors — Failure to complete the Medac Asset Acquisition could negatively impact our stock price and our future operations and financial results” and “Risk Factors — Our subleases, management services agreement and other contractual arrangements may not result in our realizing the financial benefits of direct ownership of Medac and may not be as effective in providing managerial control over Medac as direct ownership.”

We estimate that we will receive net proceeds from this offering of $6,220,000, or $7,243,000 if the underwriters exercise their over-allotment option in full, after deducting the estimated underwriting discounts and commissions and estimated offering expenses. See “Use of Proceeds.” Although we believe the anticipated net proceeds from this offering along with the remaining borrowing capacity under the December 2014 credit agreement will be sufficient to satisfy our immediate liquidity requirements, including the funding of the purchase price for the Medac Asset Acquisition, we anticipate needing additional capital in the first quarter of 2016. We expect to raise additional capital in early 2016 to fund our operations, to repay indebtedness and to facilitate the expansion of our urgent and primary care business. We may raise such capital through one or more public or private equity offerings, debt financings, borrowings or a combination thereof. If we raise funds through the incurrence of additional debt or the issuance of debt securities, the lenders or purchasers of debt securities may require security that is senior to the rights of our common stockholders. In addition, our incurrence of additional debt could result in the imposition of covenants that

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restrict our operations or limit our ability to achieve our business objectives. The issuance of any new equity securities will likely dilute the interest of our current stockholders. In light of our historical performance, additional capital may not be available when needed on acceptable terms, or at all. If adequate funds are not available, we will need to curb our expansion plans, which would have a material adverse impact on our business prospects and results of operations.

Inflation

Inflation did not have a significant impact on our costs during the year ended December 31, 2014. We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2014 or 2013 or for the periods then ended.

Critical Accounting Policies and Estimates

Critical accounting policies are those that require application of management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our significant accounting policies are described in the Notes to the Consolidated Financial Statements. Not all of these significant accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following accounting policies are deemed to be critical by our management:

Revenue Recognition

Our Urgent and Primary Care Business

We have agreements with governmental and other third-party payors that provide for payments to us based on contractual adjustments to our established, base rates. Net revenue is reported at the time service is rendered at the estimated net realizable amount, after giving effect to patient co-payment and deductible obligations, contractual discounts to third-party payors, other adjustments including those for uninsured or self-pay patients, and an estimate for bad debts.

Contractual adjustments are accrued on an estimated basis in the period the related services are rendered, and are adjusted in future periods as final settlements are determined. We grant credit without collateral to certain of our patients, who consist primarily of local residents insured by third-party payors. A summary of the basis of reimbursement with major third-party payors is as follows:

Commercial and HMO — We have entered into agreements with certain commercial insurance carriers, health maintenance organizations, and preferred provider organizations. Billing methodologies under these agreements include discounts from established charges and prospectively determined rates.

Medicare — Services rendered to Medicare program beneficiaries are recorded at prospectively determined rates. These rates vary according to a patient classification system that is based on clinical, diagnostic, and other factors.

In establishing allowance for bad debts, we consider historical collection experience, the aging of the account, payor classification and patient payment patterns. We adjust this allowance prospectively.

We collect for services provided to patients without insurance coverage at the time of service.

Our Ancillary Network Business

We recognize revenue on the services that we provide, which includes (i) providing payor clients with a comprehensive network of ancillary healthcare providers; (ii) providing claims management, reporting, processing and payment services; (iii) providing network/need analysis to assess the benefits to payor clients of adding additional/different service providers to the client-specific provider networks; and (iv) providing credentialing of network service providers for inclusion in the client payor-specific provider networks. Revenue is recognized when services are delivered, which occurs after processed claims are billed to the

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payor clients and collections are reasonably assured. We estimate revenues and costs of revenues using average historical collection rates and average historical margins earned on claims. Periodically, revenues are adjusted to reflect actual cash collections so that revenues recognized accurately reflect cash collected.

We record a provision for refunds based on an estimate of historical refund amounts. Refunds are paid to payors for overpayment on claims, claims paid in error, and claims paid for non-covered services. In some instances, we will recoup payments made to the ancillary service provider if the claim has been fully resolved. The evaluation is performed periodically and is based on historical data. We present revenue net of the provision for refunds on the consolidated statement of operations.

After careful evaluation of the key gross and net revenue recognition indicators, we have concluded that our circumstances are most consistent with those key indicators that support gross revenue reporting, since we are fulfilling the services of a principal versus an agent.

Following are the key indicators that support our conclusion that we act as a principal when settling claims for service providers through our contracted service provider network:

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We have evaluated the other indicators of gross and net revenue recognition, including whether or not we have general inventory risk. We do not have any general inventory risk, as our business is not related to the manufacture, purchase or delivery of goods and we do not purchase in advance any of the services to be provided by the ancillary healthcare service providers. While the absence of this risk would be one indicator in support of net revenue reporting, as described in detail above, we have carefully evaluated all of the key gross and net revenue recognition indicators and have concluded that our circumstances are more consistent with those key indicators that support gross revenue reporting.

If, however, we were to report our ancillary network revenues, net of provider payments rather than on a gross reporting basis, for the years ended December 31, 2014 and 2013, our revenues would have been approximately $6,900,000 and $7,000,000, respectively.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset or group of assets might not be recoverable. We perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would indicate a potential impairment include a significant decline in the observable market value of an asset or a significant change in the extent or manner in which an asset is used. The impairment review includes a comparison of future projected cash flows generated by the asset or group of assets with its associated net carrying value. If the net carrying value of the asset or group of assets exceeds expected cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value.

Goodwill

Goodwill resulted from the acquisitions of urgent and primary care businesses during the year ended December 31, 2014. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, the purchase method of accounting requires that the excess of the purchase price paid over the estimated fair value of identifiable tangible and intangible net assets of acquired businesses be recorded as goodwill. In accordance with ASC 350, Intangibles — Goodwill and Other, we are required to test goodwill for impairment annually. We established October 1 as the date of our annual impairment review.

Intangible Assets

Intangible assets are recorded based on their fair values at the date of acquisition. Our intangible assets have finite useful lives and are amortized over their estimated useful lives.

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Warrant Derivative Liability

We have issued certain warrants, which contain an exercise price adjustment feature in the event we issue additional equity instruments at a price lower than the exercise price of the warrant. The warrants are described herein as derivative warrants. We account for these derivative warrants as liabilities. These common stock purchase warrants do not trade in an active securities market.

Pending Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 660): Summary and Amendments that Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40). The guidance in this update supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the codification. This guidance, as revised by ASU 2015-14, will be effective for interim and annual periods beginning after December 15, 2017. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance relates to the disclosures around going concern. The new standard update provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. We do believe the adoption of this guidance will have a material impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The guidance relates to the presentation of debt issuance costs. The new standard update provides guidance that would require debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

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INDUSTRY

Overview of Urgent and Primary Care Industry

Since its inception, the urgent care sector has represented one of the fastest-growing segments of the American healthcare system. According to the IBISWorld Report, it was estimated that in 2013 there were over 9,000 urgent care centers in the United States. The IBISWorld Report projected that number to grow to over 12,000 centers by the end of 2018 generating an estimated $18.8 billion of annual revenue.

According to a July 2015 article in The New England Journal of Medicine, the United States’ increasing demand for convenient, walk-in healthcare was created by a confluence of factors: expanded health coverage resulting in more insured individuals, increasingly long wait times for primary care appointments due to physician shortages and higher demand from an aging population, overcrowded and expensive emergency departments, and the creation of more cost-conscious consumeristic patient behavior caused by the shifting of higher healthcare costs to patients through higher co-pays and deductibles. We expect these more informed healthcare decisions will result in strong future patient growth for urgent care centers across the United States. Americans made approximately 136.3 million visits to emergency rooms in 2011, according to data released by the CDC. According to The New England Journal of Medicine article, between approximately 13% and 27% of such visits could have been treated in an urgent care setting, which would have resulted in overall cost savings of up to approximately $4.4 billion.

Although primary care offices, including family practices, that provide services by appointment have existed for many decades, urgent care centers first opened in the United States in the early 1980s. After experiencing a period of brief decline in the mid-1990s, the industry has grown at a remarkable pace. According to the IBISWorld Report, there were approximately 9,000 urgent care centers in the United States as of 2013. Although the number of centers owned by multi-site, corporate operators has grown with the industry’s continued consolidation, operators of single locations comprised over half of the industry population in 2012.

In general, urgent care centers tend to be located in suburban areas and are operated out of convenient, retail locations. Other factors affecting the location of urgent care centers include the local population’s age distribution and the location of the local hospital serving the community. The majority of operators lease their sites, and centers are generally situated in either freestanding buildings or retail strip centers. The size of centers typically ranges from 2,000 to 4,500 square feet, with the majority of operators occupying around 3,500 square feet.

Typical urgent and primary care centers treat a similar proportion of male and female patients, and the greatest number of urgent and primary care patients fall between the ages of 27 and 55. Urgent care centers typically offer a variety of services, such as diagnostic testing, laboratory services, medication dispensing, and several non-life-threatening procedures. The urgent care business is largely seasonal with the greatest patient volumes occurring during the fall and winter months. Urgent and primary care operators that successfully integrate occupational health into their business tend to experience less variation between the summer and winter months.

Occupational health services are offered to employers in an urgent or primary care center’s local community and are complementary to the core services offered at these centers. Treatment offerings within the occupational health line generally include, among others, pre-employment physicals, drug screenings, and treatment of workplace injuries. Revenue from occupational medicine services generally makes up approximately 14% of an urgent and primary care center’s operating revenue.

The UCAOA reported that, on average, urgent care companies collected approximately $117.45 per patient, with the majority of centers treating between 21 and 50 patients per day in 2013. Urgent and primary care centers employ a range of licensed clinicians, including physicians, nurse practitioners, physician assistants, medical assistants and laboratory technicians.

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Industry Trends

The urgent care sector represents one of the fastest-growing segments of the United States healthcare system. According to the IBISWorld Report, over the five-year period ending in 2018, industry revenue is projected to grow at an annualized rate of 5.3%, to an estimated $18.8 billion, with expected profit margins expanding slightly to 10.5%. According to the UCAOA, since 2008, new urgent care centers continue to open at a rapid pace. Furthermore, cost-saving initiatives implemented by employers and third-party payors have encouraged the use of urgent care centers over hospital and freestanding emergency rooms for low-acuity patients and have facilitated strong industry growth.

Urgent care centers generally provide primary care as well as low-acuity, ancillary services, such as x-ray, CLIA-waived laboratory testing, and low-level trauma treatment to patients on a walk-in basis. The rising costs and wait times associated with both primary- and emergency-care providers leave urgent care centers as an increasingly viable alternative for patients. Patients prefer to access facilities that are close to their homes, creating strong demand for strategically located urgent care centers.

We believe that as a greater portion of the healthcare financial burden is shifted to patients through high-deductible and high co-payment plans, patients will become even more cost conscious, which will further increase the preference for quality care at a lower price point. We expect this cost awareness to result in higher demand for our services.

During the next five years, the urgent care industry is expected to continue expanding, particularly in underserved rural areas of the United States. The Association of American Medical Colleges projects that by 2020, there will be a shortage of 45,000 primary care physicians. We believe the increasing shortage of primary care physicians will exacerbate existing problems relating to access to care and extended primary care wait times, both of which we believe will further drive demand for our services.

Additionally, we believe the expansion of private insurance coverage in the United States through the continued implementation of the ACA presents a sustainable tailwind for growth in the urgent care industry. According to the IBISWorld Report, the expected surge in demand from the ACA will emphasize the urgent care industry’s growing importance to the healthcare system, as traditional primary care providers will likely not be able to accommodate the influx of patients. In accordance with rising demand, the IBISWorld Report forecasts the number of urgent care centers to rise at an annualized rate of 4.4% to an estimated 12,299 locations by 2018. A greater share of urgent care centers will likely be distributed to rural areas of the United States that have limited access to primary-care physicians.

We believe the urgent care industry is somewhat insulated from general economic and market risks. In fact, growth in the urgent care sector continued during the 2008 recession despite the fact that the number of Americans with private health insurance decreased during that period. According to the IBISWorld Report, the majority of the industry’s revenue (54.8%) is garnered through private health insurance payments, while Medicare makes up 17.2% of revenue. The remainder is generated through out-of-pocket expenses, Medicaid and other sources of government funding.

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BUSINESS

Overview

We are a leading publicly-traded provider of urgent and primary care services. We currently own and operate ten urgent and primary care centers in the east and southeast United States, and plan to manage four additional centers upon completion of the planned Medac Asset Acquisition described in this prospectus. Our centers deliver convenient, affordable urgent and primary care primarily on a walk-in basis to local community members. We also own an ancillary services network business, which we intend to exit in the near future and refer to as our “legacy business.” Upon our disposition of our legacy business, we believe we will be the only publicly-traded, pure-play urgent and primary care provider in the United States.

Urgent and Primary Care Business

Our Business

Our community-based, walk-in medical centers offer an expansive array of convenient and affordable medical services. Our primary clinical objective is to meet the everyday healthcare needs of the patients and employers in our communities.

We treat colds, influenzas, ear infections, hypertension and other routine medical conditions, which we consider to be among our “primary care” offerings, and we also treat higher acuity conditions such as lacerations, dislocations, bruises, sprains and strains, which we consider our “urgent care” offerings. We also offer occupational health services to local employers, which involve our performance of pre-employment drug screens, physicals and the treatment of on-the-job injuries to employees or contractors of our employer clients.

All of our centers are equipped with digital x-ray machines, electrocardiograph machines and basic laboratory equipment, and are generally staffed with a combination of licensed physicians, nurse practitioners, physician assistants, medical support staff, and administrative support staff. Our medical support staff includes licensed nurses, certified medical assistants, laboratory technicians, and registered radiographic technologists.

Although we treat patients of all ages, the majority of our patients are between the ages of 27 and 55 years. When hospitalization, emergency or other specialty care is needed, we make referrals to appropriate providers.

Purchasing urgent and primary care services on a walk-in basis represents a growing, consumer-driven trend in healthcare delivery. We believe that focusing our primary attention on delivering such services in a prompt and patient-centric manner, and in appealing environments, will allow us to operate more efficiently, productively and at higher quality levels than our competitors.

In keeping with the retail nature of the services we offer, we have initiated a rebranding campaign with our new tradename, GoNow Doctors. We believe our new name and logo will enable us to effectively market our services in our existing and target communities:

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We believe that by offering affordable urgent care and primary care services to patients and their families at convenient times and locations, as well as easily accessible occupational health services to local employers, we are uniquely positioned to serve as a meaningful part of the solution to the United States’ ongoing healthcare problems.

Our Strategies

We intend to grow our urgent and primary care business in three ways:

Growth by Acquisition

Our experienced acquisition team utilizes its extensive healthcare industry contacts, as well as referrals from current physician partners, brokers and bankers and other sources to identify, contact and develop acquisition leads at attractive valuations. We intend to continue our pattern of acquiring what we view as quality businesses at favorable purchase price multiples. We target one- to four-center chains that we can acquire in the range of four to five times EBITDA, which we believe presents an attractive arbitrage opportunity when compared with the up to 15 times EBITDA multiples we believe are currently being paid for large, profitable operators.

We also analyze several factors in determining whether or not to make an investment in a target, including, without limitation, the following:

We believe there are numerous acquisition opportunities in our target geographies at attractive valuations. Once identified, we carefully evaluate each opportunity through an extensive due diligence process to determine which have the greatest potential for growth and profitability improvements under our operating structure. Our comprehensive post-acquisition strategic plan also facilitates the integration of acquired centers by, among other things, receiving the benefits of our best practices and group purchasing agreements designed to promote quality care, efficiency and expense reduction.

De Novo Clinic Growth

In addition to pursuing our existing pipeline of acquisition opportunities, we intend to establish new centers in the communities in close proximity to our acquired centers. We believe that doing so will enable us to better leverage our existing brand recognition, marketing resources, and our physician and non-physician providers in the area. Our evaluation of such opportunities includes an analysis of local competition, desirability of available sites, and surrounding market demographics (including income, population density, percentage of insured population, and median age of the surrounding area).

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Organic Revenue Growth at Existing Centers

We seek to increase revenue at our centers by broadening our range of services to new and existing patients through marketing, advertising and rebranding efforts, and by increasing insurance reimbursement rates. In addition, we will seek to increase patient counts in our existing facilities, with a focus on increasing occupational medicine patients and self-pay patients who pay specified fees, as well as by expanding our days and hours of operation at select centers. For the nine months ended September 30, 2015, our centers averaged a total of 23 patients per day per center. We believe our management team can increase our patient volume significantly while contemporaneously leveraging group purchasing arrangements and other benefits derived from economies of scale to reduce expenses.

Our Centers

Locations

We own and operate ten urgent and primary care centers, three of which are located in Georgia, two in Florida, three in Alabama and two in Virginia.

Staffing

We staff our centers with a combination of licensed physicians, nurse practitioners, physician assistants, medical support staff, and administrative support staff. Our medical support staff includes licensed nurses, certified medical assistants, laboratory technicians, and registered radiographic technologists.

Hours of Operation

Although our hours of operation vary based on local patient demand, in general we operate from 8:00 a.m. to 8:00 p.m., Monday through Friday, and from 9:00 a.m. to 6:00 p.m. on Saturday and Sunday.

Services and Service Lines

Our centers offer a broad array of medical services that include urgent care, primary care, family practice and occupational medicine. Specifically, we offer non-emergent, out-patient medical care for the treatment of acute, episodic, and some chronic medical conditions. When hospitalization, emergency or other specialty care is needed, we make referrals to appropriate providers.

Patients typically visit our centers on a walk-in basis if they do not have an existing relationship with a primary care provider, when their condition is beyond the scope of their regular primary care provider but not severe enough to warrant an emergency visit or when treatment by their primary care provider is inconvenient. We strive to deliver quality care and an exceptional patient experience to every patient who seeks care at our centers. We also attempt to capture follow-up, preventive and general primary care business after each walk-in visit. The services provided at our centers include, but are not limited to, the following:

We are currently analyzing our in-clinic dispensing of common prescriptions at our busiest center and plan to extend this service to certain of our other centers.

Our occupational medicine service line involves the rendering of treatment to employees or contractors of employer clients. Occupational medicine services are sold directly to employers and are generally paid for in cash by the employer. The services typically rendered to such employers include, but are not limited to:

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Our Acquisition Pipeline and De Novo Opportunities

The growing urgent and primary care industry is highly-fragmented making it, in our opinion, poised for consolidation by companies with experienced management teams and access to capital. The UCAOA reported that, in 2012, one and two center operators comprised approximately 71% of the industry. According to the IBISWorld Report, the largest four urgent and primary care operators accounted for approximately just over 1% of industry revenue in 2013.

We have identified and are currently evaluating several acquisition opportunities that we believe will enhance our growth and performance. On July 31, 2015, our wholly owned subsidiary, ACSH Management, entered into an asset purchase agreement with Medac and its shareholders to purchase certain assets used by Medac in the operation of its four urgent care centers in the greater Wilmington, North Carolina area. Under applicable state law, we are prohibited from directly owning an interest in a medical practice in North Carolina. As a result, we intend to realize the benefit of this transaction through subleases, a management services agreement and other contractual arrangements with Medac. For more details on the Medac Asset Acquisition, see “Prospectus Summary — Recent Developments — Medac Asset Acquisition.”

In addition, as of the date of this prospectus, we are at various stages of discussions with other prospective sellers and sellers’ representatives, but we do not have letters of intent, binding purchase agreements, rights of first offer or rights of first refusal with respect to any of the prospective acquisitions. Accordingly, none of these possible acquisitions, other than the Medac Asset Acquisition, is deemed probable as of the date of this prospectus. There is no assurance that we will consummate the Medac Asset Acquisition or any of the other transactions or acquire any additional centers.

We are also evaluating several opportunities to develop new centers in proximity to our existing locations. Although we have not entered into lease or purchase arrangements with respect to any real property, we believe the locations we have identified will support our growth plans. There is no assurance, however, that we will open new centers in the locations currently being considered, or at all.

Fees and Revenue Cycle Management

We receive payment for services rendered at our centers from patients, commercial payors, governmental payors, including Medicare, and from our occupational medicine clients. The fees charged are generally determined by the nature of medical services rendered. We believe that the charges at our centers are significantly lower than the charges of hospital emergency departments for similar services and are generally competitive with those charged by local physicians and other similar providers in our service areas.

In general, our centers attempt to collect amounts owed by patients at the time of their service (including co-payments and deductibles). The amounts collected from patients often differ depending on whether the patient visit is reimbursable under an urgent or primary care contract. We submit claims for services rendered to commercial payors, occupational medicine payors and governmental payors electronically through third-party revenue cycle managers. In most cases, commercial payors process our claims and pay us based on negotiated rates set forth in our applicable contract.

We rely on our outside revenue cycle managers to collect amounts owed to us from commercial and governmental payors.

Marketing

Because the success of our centers is dependent on the acceptance of our brand in the local communities in which we operate, we market at the center-level through various community outreach activities. These activities are coordinated locally by the individual center and are supported by dedicated marketing personnel. Through the local centers, we host and sponsor community activities and events and become involved in local business organizations such as rotary clubs. We also implement a broad range of targeted marketing strategies via direct mail, radio, search engine optimization and social media.

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In connection with the acquisition of a new center, we expect to commence marketing efforts to introduce ourself to the local community. This may include inviting community members to attend a tour of the center, conducting a direct mail campaign, or sponsoring an activity or event. Decisions regarding acquired center branding or co-branding are made on a case-by-case basis. Although we plan to rebrand our existing ten centers with our “GoNow Doctors” name and logo, we currently have no plans to change the Medac brand after closing the Medac Asset Acquisition.

Information Systems and Controls

We use integrated clinical/practice management and accounting systems to manage information flow and day-to-day operations at each of our centers. The overall system functionality allows for the following:

•   Point-of-sale		•   Charge capture and processing
•   Registration		•   Billing
•   Scheduling		•   Accounts receivable management
•   Insurance rates, allowables, and adjustments processing		•   Accounting
		•   Reporting and trending
•   Eligibility and verification checking		•   Clinical and coding documentation

Related claims activities are processed electronically with each of our payors through a national clearinghouse. Our systems are integrated with a commercially available reporting/dashboard solution, which allows for the real-time tracking, trending, and reporting of key operating and financial statistics. Management uses these tools and the resulting data to measure results against target thresholds and to identify needs for improvement in certain core operational areas.

We attempt to integrate acquired centers into our systems within 30 to 60 days after we close a transaction. Because our acquisitions close on varying dates throughout the year, certain of our newly acquired sites may be not be fully transitioned to our systems on any given date. Consequently, it may be difficult to capture and analyze information from such newly acquired sites electronically, requiring us to capture and report manually for some period after the acquisition is completed.

Competition

Urgent and primary care industry participants must compete with other local operators, hospitals, traditional primary care physicians, family care practices, and other facilities that offer similar services. Clinics operated by nurse practitioners and physician assistants, including “retail clinics,” are increasing in number. Such clinics are expected to increase in number as states continue to relax the rules pertaining to the ability of such mid-level providers to prescribe medications and to the supervision of such mid-level providers by physicians. Although our current strategy does not involve the operation of pure, mid-level operated centers, we plan to closely analyze this option and monitor the success of such competition in our markets.

Because we offer walk-in, urgent care, we are also in competition with hospital-based and freestanding emergency departments. In 2012, Americans made about 136.1 million visits to an emergency room, according to the CDC. Unlike our centers, emergency departments provide acute care, which may be life threatening or require immediate attention, 24 hours a day, 7 days a week. Also different from our centers, hospital emergency departments that accept payment from governmental sources are required by federal law to provide care to all patients regardless of their ability to pay.

Ancillary Network Business

Ancillary healthcare services are cost effective alternatives to physician and hospital-based services. The ancillary healthcare service market is an often over-looked, but very important segment of the overall U.S. healthcare system. As more and more care is delivered in highly cost effective out-patient and ancillary care settings, the need for better organization and cost containment should only increase over the next several years.

Our ancillary network business offers cost containment strategies to our clients, primarily through the utilization of a comprehensive national network of ancillary healthcare service providers. This service is marketed to a number of healthcare companies including TPAs, insurance companies, large self-funded organizations, various employer groups and preferred provider organizations, or PPOs. We are able to lower

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the payors’ ancillary care costs through our ancillary network of high quality, cost effective providers that we have under contract at more favorable terms than they could generally obtain on their own.

We have experienced significant revenue declines over the past several years in our ancillary network business. Due to a variety of factors, including, but not limited to, healthcare legislation, industry consolidation, as well as change in strategic direction of our clients, we have experienced secular declines in our revenue. These declines have not been offset by our new business development efforts. Although we have been engaged in our ancillary network business for a number of years, with our entry into the urgent and primary care business and our new management arrangement with HealthSmart, we intend to focus our efforts primarily on the urgent care and primary care business.

Management Services Agreement

As a result of continuing revenue declines in our ancillary network business and our recent focus on the urgent and primary care business, on October 1, 2014, we entered into a management services agreement with HealthSmart. HealthSmart is a comprehensive benefits management company and is a large independent administrator of health plans for self-funded employers in the United States. HealthSmart has several provider networks that include hospitals, physicians and other healthcare providers and facilities. It contracts with over 600,000 providers across the United States and tailors its various provider network solutions to meet its customers’ needs and to help control their healthcare costs. In addition, HealthSmart provides claims and benefits administration, pharmacy benefits management services, business intelligence, onsite employer clinics and care management. Under the management services agreement, HealthSmart manages our ancillary network business, subject to the supervision of a five-person oversight committee comprised of three members appointed by us and two members appointed by HealthSmart. As part of the management arrangement, HealthSmart hired substantially all of our ancillary network business employees, purchased substantially all of our furniture, fixtures and equipment located in our former Dallas, Texas office and assumed our lease for that office. As a result of this arrangement, none of our employees works directly in our ancillary network business. Under the management services agreement, HealthSmart manages and operates our ancillary network business for a monthly management fee equal to the sum of (a) 35% of the net profit derived from the operation of our ancillary network business plus (b) 120% of all direct and documented operating expenses and liabilities actually paid during such calendar month by HealthSmart in connection with providing its management services. For purposes of the fee calculation, the term “net profit” means gross ancillary network business revenue less the sum of (x) provider payments and administrative fees and (y) 120% of all direct and documented operating expenses and liabilities actually paid during such calendar month by HealthSmart in connection with providing its management services. Any remaining net profit accrues to us. The initial term of the management services agreement is three years, and it renews annually thereafter for one year terms unless either party gives notice of termination at least 90 days prior to the end of the then-current term. At September 30, 2015, the aggregate sum of net profit received by us was $1.7 million.

Our management services agreement with HealthSmart provides that at any time between October 1, 2016 and the expiration date of the management services agreement, HealthSmart may purchase, or we may require that HealthSmart purchase, our ancillary network business for a price equal to $6.5 million less the aggregate sum of net profit received by us since the beginning of the management arrangement. The purchase price would be payable by HealthSmart solely out of the net profit it derives from the operation of the ancillary network business after consummation of the transaction. Each month, HealthSmart will be obligated to pay us 65% of the net profit derived from the operation of the ancillary network business, with the net profit to be calculated for such purpose in the same manner net profit is calculated for the purpose of the management fee as set forth above. Consummation of the transaction would be subject to the satisfaction of certain material conditions, including approval by our stockholders if our annual gross revenue from the urgent and primary care business does not then exceed $40.0 million. In the event HealthSmart purchases our ancillary network business, the urgent and primary care business will be our only business line following completion of that transaction.

Although HealthSmart’s option to purchase and our option to sell the ancillary network business do not become exercisable until October 1, 2016, we currently are in negotiations with HealthSmart to facilitate an earlier disposition at a price in the range of $2.5 million to $4.0 million, which would be in addition to $1.7 million of net profit received by us since the beginning of the management arrangement. However, we

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cannot assure you such negotiations will result in us disposing of our legacy business within such price range, earlier than October 1, 2016 or at all. See “Risk Factors — Risks Related to Our Legacy Business — We may not be able to successfully complete the disposition of our ancillary network business to HealthSmart, or at all.”

In the event HealthSmart purchases our ancillary network business, the urgent and primary care business will be our only business line, and we believe we will be the only publicly-traded, pure-play urgent care consolidator in the United States. If for any reason the sale of our ancillary network business to HealthSmart is not consummated during or at the end of the term of the management services agreement, we expect to market the business for sale or expeditiously wind down the business.

Services and Capabilities

Ancillary healthcare services include a broad array of services that supplement or support the care provided by hospitals and physicians.

Provider Network

In order to meet contractual obligations to our healthcare payors to make available a comprehensive and client-specific ancillary healthcare provider network, we have agreements with ancillary healthcare service providers operating nationwide. The agreements define the scope of services to be provided by each ancillary healthcare provider to covered persons and the amounts to be charged for those services. These agreements are negotiated independently from the agreements we reach with our payor clients. The terms of the agreements between the Company and the ancillary healthcare service providers make it clear that we, and not our payor clients, are obligated to the service providers for payments under the contracts with them and that there is no contractual relationship between our payors and the service providers, who are not permitted to pursue claims directly against the our payors.

When providers initially enter into our provider network, they are credentialed for inclusion in the network and they are re-credentialed on a periodic basis. From time to time, provider relationships are reviewed to determine whether any changes to the relationship are appropriate through sanction monitoring and other methods.

Our Ancillary Network Structure

Payors route healthcare claims to us after service is performed by providers in our network. We process those claims and charge the payor according to its rate for the services according to our contract with the payor. In processing the claim, we are paid directly by the payor or the insurer for the service and pay the provider of service according to its independently-negotiated contractual rate. We are at risk for any shortfall in the amount of payment we receive for the service and the amount we are obligated to pay the provider of service.

We may receive a claims submission from a payor either electronically or via a paper based claim. As part of our relationship with the payors, we may pay an administrative fee to the payors for the modifications that may be required to the payor’s technology systems and processes to create electronic connectivity with us, as well as for the aggregation of claims and the electronic transmission of those claims to us.

Sales and Marketing

Pursuant to our management services agreement, HealthSmart is primarily responsible for securing new clients and provider contracts and maintaining and growing existing relationships.

We expect HealthSmart to continue marketing our services to PPOs, insurance companies, large self-funded organizations and employer groups. Our manager utilizes a senior sales executive that focuses on new business as well as a client services team of two professionals to contract with new payor organizations and then maximize the revenue and margin potential of each new payor. The new business sales executive uses a variety of channels to reach potential clients including professional relationships, direct marketing efforts, attendance at industry-specific trade shows and conferences, and through strategic partnerships with market channel partners, independent brokers, and consultants. The client services group is engaged with each

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new payor to help manage the implementation process. In addition, a client services director is generally assigned to each new payor organization and is responsible for all aspects of our relationship with the entity including the expanded utilization of our services over time and the enhancement of our relationship with the payor.

Payor Clients

Our healthcare payor clients engage us to manage a comprehensive array of ancillary healthcare services that they and their payors have agreed to make available to their insureds or beneficiaries or for which they have agreed to provide insurance coverage. The typical services our healthcare payors require us to provide include, but are not limited to:

Under our agreements with payors, we are obligated to provide or arrange for all of the services covered by such agreements. In addition, we are responsible for ensuring that the contractual terms are met and such services are provided.

Our manager is our most significant client. For the years ended December 31, 2014 and 2013, we derived approximately 34% and 22%, respectively, of our total net revenue from HealthSmart and its affiliates. Our top three clients generated 51% and 45%, respectively, of our ancillary network revenues for the years ended December 31, 2014 and 2013.

Under our current client contract with HealthSmart, which is separate from our management services agreement, we agreed to enhance our network of ancillary service providers to address markets outside of the commercial group health space and utilize an administrative fee rate differential to encourage HealthSmart to add payors that will access our network of ancillary providers. As part of the agreement, we pay HealthSmart a monthly administrative services fee, subject to an annual maximum, to reimburse and to compensate it for the work it is required to perform to support our program. The fee is based upon paid claims arising from our network of providers. The agreement, the initial term of which expires on December 31, 2015, is subject to an automatic, two-year renewal term. After this initial renewal term, the agreement will automatically renew for successive periods of one year. The agreement may be terminated by either party for breach or by notice of non-renewal no less than 90 days prior to the expiration of the initial term or any renewal term. Although this contract continues our client relationship with HealthSmart, the agreement does not provide that we are its exclusive ancillary care network, and HealthSmart can engage other ancillary care providers directly into its network. Accordingly, we cannot be certain of any level of continued claims volume from HealthSmart.

Competition

We face the following types of direct competitors in our ancillary network business:

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Research and Development

We have invested in our information technology infrastructure to enhance the capabilities of our databases, data retrieval tools, data exchange capabilities and claims processing engine. In addition, we believe that our extensive claims database of ancillary healthcare services and costs is a strategic asset. Our capitalized development costs totaled approximately $177,000 and $303,000, respectively, for the years ended December 31, 2014 and 2013. The development expenses during those periods were related primarily to enhancements made to our internally developed claims management application. The enhancements have allowed us to develop and launch a variety of innovative products and services as well as gain competitive market advantage through faster and more accurate claims processing.

Government Regulation

The healthcare industry is subject to extensive regulation by federal, state and local governments. Government regulation affects our businesses in a number of ways, including requiring licensure or certification of facilities, regulating billing and payment for certain of our services, regulating how we maintain health-related information and patient privacy, and regulating how we pay and contract with our physicians. Our ability to conduct our business and to operate profitability depends in part upon obtaining and maintaining all necessary licenses and other approvals, and complying with applicable healthcare laws and regulations. See “Risk Factors — Risks Related to Our Regulatory Environment.”

Our Urgent and Primary Care Business

State Laws Regarding Prohibition of Corporate Practice of Medicine and Fee-Splitting Arrangements

The laws and regulations relating to our operations vary from state to state, and approximately 30 states, including North Carolina, prohibit general business corporations from practicing medicine or controlling physicians’ medical decisions. These laws are generally intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing the physicians’ professional judgment. They also may prevent or limit the sharing or assignment of income generated by our physicians. We believe that we are in material compliance with these laws in the states in which we operate. Regulatory authorities or other parties, however, including our physicians, may attempt to assert that we are impermissibly engaged in the practice of medicine or that our contractual arrangements with our physicians constitute unlawful fee-splitting. In that event, we could be subject to adverse judicial or administrative interpretations, to civil or criminal penalties, our contracts could be found legally invalid and unenforceable, we could be made to refund amounts received during our noncompliance, or we could be required to restructure our contractual arrangements with our physicians.

State Law Regulation of Construction, Acquisition or Expansion of Healthcare Facilities

Thirty-six states have certificate of need programs that require some level of prior approval for the construction of a new facility, acquisition or expansion of an existing facility, or the addition of new services at various healthcare facilities. Although the states in which we currently operate do not require a certificate of need to acquire or operate our centers, other states where we may seek to expand our operations may. See “Risk Factors — Risks Related to Our Regulatory Environment.”

State Licensure

Only a few states, including Florida, currently require the licensure of centers such as ours. This absence of a uniform licensing process leads to inconsistencies in the nature and scope of services offered at urgent care centers. To effectively control the nature of services rendered and the environments in which they are offered, state legislators or regulators may attempt to regulate the urgent care industry in a manner similar to hospitals and freestanding emergency rooms. Such regulations could have a material impact on our growth strategy and expansion plans.

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Laws and Rules Regarding Billing

Numerous state and federal laws apply to our claims for payment, including but not limited to (i) “coordination of benefits” rules that dictate which payor must be billed first when a patient has coverage from multiple payors, (ii) requirements that overpayments be refunded within a specified period of time, (iii) “reassignment” rules governing the ability to bill and collect professional fees on behalf of other providers, (iv) requirements that electronic claims for payment be submitted using certain standardized transaction codes and formats, and (v) laws requiring all health and financial information of patients in a manner that complies with applicable security and privacy standards.

Additionally, on January 16, 2009, HHS released the final rule mandating that providers covered by the Administrative Simplification Provisions of HIPAA, including our centers, must implement the ICD-10 for medical coding on October 1, 2013. Although the deadline for implementation of ICD-10 codes was delayed until October 15, 2015, the ICD-10 codes will require significantly more information than the ICD-9 codes currently used for medical coding and will require covered entities to code with much greater detail and specificity than with ICD-9 codes. We may incur additional costs to implement these changes. See “Risk Factors — Risks Related to our Urgent and Primary Care Business — If we fail to effectively and timely transition to the ICD-10 coding system, our operations could be adversely affected.”

Medicare and Medicaid

Our centers participate in the federal Medicare program and currently one state Medicaid program on a limited basis. Since 1992, Medicare has paid for the “medically necessary” services of physicians, non-physician practitioners, and certain other suppliers under a physician fee schedule, a system that pays for covered physicians’ services furnished to a person with Medicare Part B coverage. Under the physician fee schedule, relative values are assigned to each of more than 7,000 services to reflect the amount of work, the direct and indirect (overhead) practice expenses, and the malpractice expenses typically involved in furnishing that service. Each of these three relative value components is multiplied by a geographic adjustment factor to adjust the payment for variations in the costs of furnishing services in different localities. RVUs are summed for each service and then are multiplied by a fixed-dollar conversion factor to establish the payment amount for each service. The higher the number of RVUs assigned to a service, the higher the payment. Under the Medicare fee-for-service payment system, an individual can choose any licensed physician enrolled in Medicare and use the services of any healthcare provider or facility certified by Medicare.

Historically, CMS was required to limit the growth in spending under the physician fee schedule by an SGR. Congress typically responded to these automatic physician payment cuts with a series of temporary fixes. On April 16, 2015, however, MACRA was enacted which includes permanent repeal of the SGR formula. With MACRA, the long sought after goal of permanently repealing the SGR was achieved and overrides a 21.2% across-the-board cut in Medicare physician payments that briefly took effect on April 1, 2015. Under MACRA, physician payment updates are to be linked to quality and value measurements and participation in alternative payment models. Enactment of MACRA, and repeal of the SGR, could be offset by further reductions in Medicare payments, and any such reductions could have a material adverse effect on our business.

CMS’s RAC Program

The MMA introduced on a trial basis the use of RACs for the purpose of identifying and recouping Medicare overpayments and underpayments. Any overpayment received from Medicare is considered a debt owed to the federal government. In October 2008, CMS made the RAC program permanent. RACs review Medicare claims to determine whether such claims were appropriately reimbursed by Medicare. RACs engage in an automated review and in a complex review of claims. Automated reviews are conducted when a review of the medical record is not required and there is certainty that the service is not covered or is coded incorrectly. Complex reviews involve the review of all underlying medical records supporting the claim, and are generally conducted where there is a high likelihood, but not certainty, that an overpayment has occurred. RACs are paid a contingency fee based on overpayments they identify and collect.

A MAC may suspend Medicare payments to a provider if it determines that an overpayment has occurred. When a Medicare claim for payment is filed, the MAC will notify the patient and the provider of its

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initial determination regarding reimbursement. The MAC may deny the claim for one of several reasons, including the lack of necessary information or lack of medical necessity for the services rendered. Providers may appeal any denials of claims.

Anti-Kickback Statute

As participants in the Medicare program, we are subject to the Anti-Kickback Statute. The Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of remuneration, directly or indirectly, in return for the referral of patients or arranging for the referral of patients, or in return for the recommendation, arrangement, purchase, lease or order of items or services that are covered, in whole or in part, by a federal healthcare program such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything of value such as gifts, discounts, rebates, waiver of payments or providing anything at less than its fair market value. The ACA amended the intent requirement of the Anti-Kickback Statute such that a person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violation the statute. Further, the ACA now provides that claims submitted in violation of the Anti-Kickback Statute constitute false or fraudulent claims for purposes of the civil False Claims Act, or FCA, including the failure to timely return an overpayment. Many states have adopted similar prohibitions against kickbacks and other practices that are intended to influence the purchase, lease or ordering of healthcare items and services reimbursed by a governmental health program or state Medicaid program. Some of these state prohibitions apply to remuneration for referrals of healthcare items or services reimbursed by any third-party payor, including commercial payors.

Because we currently accept funds from governmental health programs, we are subject to the Anti-Kickback Statute. Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties, such as $25,000 per violation and up to three times the remuneration involved. If in violation, we may be required to enter into settlement agreements with the government to avoid such sanctions. Typically, such settlement agreements require substantial payments to the government in exchange for the government to release its claims, and may also require entry into a CIA. Any such sanctions or obligations contained in a CIA could have a material adverse effect on our business, financial condition and results of operations.

Stark Law

Because we participate in the Medicare program, we are also subject to the Stark Law. The Stark Law prohibits a physician from referring a patient to a healthcare provider for certain designated health services reimbursable by Medicare if the physician (or close family members) has a financial relationship with that provider, including an ownership or investment interest, a loan or debt relationship or a compensation relationship. The designated health services covered by the law include, among others, laboratory and imaging services and the provision of durable medical equipment. Some states have self-referral laws similar to the Stark Law for Medicaid claims and commercial claims.

We have entered into several types of financial relationships with physicians who staff our urgent and primary care centers, including compensation arrangements. We believe that the compensation arrangements under our employment agreements and independent contractor agreements satisfy one or more exceptions to the Stark Law. Although we believe that the compensation provisions included in our written physician agreements, which are the result of arm’s length negotiations, result in fair market value payments for medical services rendered or to be rendered, an enforcement agency could nevertheless challenge the level of compensation that we pay our physicians.

The ownership of our stock by any of our physicians will constitute a “financial relationship” for purposes of the Stark Law. As a result, in order to bill Medicare for the designated health services referred by such physician stockholder, we must qualify for one or more exceptions to the Stark Law. Although an exception exists for publicly traded securities, we will not qualify until our stockholders’ equity exceeds $75,000,000 at the end of our most recent fiscal year or on average during the previous three years. If we are unable to qualify for another exception to the Stark Law, we will not be entitled to bill Medicare for services rendered by a physician stockholder. As a result, we may suffer losses to our net revenue. Further, it may become necessary for us to perform regular compliance tests to determine which, if any, of our physicians own our stock, and, if so, to determine whether or not we meet an applicable exception to the Stark Law.

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Such efforts could have a material adverse effect on our business and our ability to compensate physicians, and could result in damage to our reputation.

Violation of the Stark Law may result in prohibition of payment for services rendered, a refund of any Medicare payments for services that resulted from an unlawful referral, $15,000 civil monetary penalties for specified infractions, criminal penalties, exclusion from Medicare and Medicaid programs, and potential false claims liability. The repayment provisions in the Stark Law are not dependent on the parties having an improper intent; rather, the Stark Law is a strict liability statute and any violation is subject to repayment of all amounts arising out of tainted referrals. If physician self-referral laws are interpreted differently or if other legislative restrictions are issued, we could incur significant sanctions and loss of revenues, or we could have to change our arrangements and operations in a way that could have a material adverse effect on our business, prospects, damage to our reputation, results of operations and financial condition.

False Claims Act

The federal civil FCA prohibits providers from, among other things, (1) knowingly presenting, or causing to be presented, claims for payments from the Medicare, Medicaid or other federal healthcare programs that are false or fraudulent; (2) knowingly making, using or causing to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the federal government; or (3) knowingly making, using or causing to be made or used, a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government. The “qui tam” or “whistleblower” provisions of the FCA allow private individuals to bring actions under the FCA on behalf of the government. These private parties are entitled to share in any amounts recovered by the government, and, as a result, the number of “whistleblower” lawsuits that have been filed against providers has increased significantly in recent years. Defendants found to be liable under the FCA may be required to pay three times the actual damages sustained by the government, plus mandatory civil penalties ranging between $5,500 and $11,000 for each separate false claim and possible expulsion from the program.

There are many potential bases for liability under the FCA. The government has used the FCA to prosecute Medicare and other government healthcare program fraud such as coding errors, billing for services not provided, and providing care that is not medically necessary or that is substandard in quality. The ACA also provides that claims submitted in connection with patient referrals that results from violations of the Anti-Kickback Statute constitute false claims for the purpose of the FCA, and some courts have held that a violation of the Stark law can result in FCA liability as well. In addition, a number of states have adopted their own false claims and whistleblower provisions whereby a private party may file a civil lawsuit in state court. We are required to provide information to our employees and certain contractors about state and federal false claims laws and whistleblower provisions and protections.

Civil Monetary Penalties Statute

The federal Civil Monetary Penalties statute prohibits, among other things, the offering or giving of remuneration to a Medicare or Medicaid beneficiary that the person or entity knows or should know is likely to influence the beneficiary’s selection of a particular provider or supplier of items or services reimbursable by a federal or state healthcare program.

EHRs

As required by the American Recovery and Reinvestment Act of 2009, the Secretary of HHS has developed and implemented an incentive payment program for eligible healthcare professionals that adopt and meaningfully use EHR technology. HHS uses PECOS to verify Medicare enrollment prior to making EHR incentive program payments. If our employed professionals are unable to meet the requirements for participation in the incentive payment program, including having an enrollment record in PECOS, we will not be eligible to receive incentive payments that could offset some of the costs of implementing EHR systems. Further, healthcare professionals that fail to demonstrate meaningful use of certified EHR technology are subject to reduced payments from Medicare. System conversions to comply with EHR could be time consuming and disruptive for physicians and employees. Failure to implement EHR systems effectively and in a timely manner could have a material adverse effect on our financial position and results of operations.

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We are in process of converting certain of our clinical and patient accounting information system applications to newer versions of existing applications or altogether new applications. In connection with our implementation and conversions, we have incurred capitalized costs and additional training and implementation expenses.

Our Ancillary Network Business

During 2010, President Obama signed the ACA and the Health Care and Educational Affordability Reconciliation Act legislating broad-based changes to the United States healthcare system. Among other things, the healthcare reform legislation includes insurance industry reforms including, but not limited to guaranteed coverage requirements, elimination of pre-existing condition exclusions and annual and lifetime maximum limits, and restrictions on the extent to which policies can be rescinded; creation of new market mechanisms through the creation of health benefit exchanges; and creation of new and significant taxes on health insurers and, in some circumstances healthcare benefits.

Section 1001 of the ACA amended Title 27 of the Public Health Service Act of 1994, or the Public Health Service Act, to add, among other things, a new Section 2718, entitled “Bringing Down the Cost of Health Care Coverage.” This new provision requires health insurance issuers to publicly report “the ratio of the incurred loss (or incurred claims) plus the loss adjustment expense (or change in contract reserves) to earned premiums” and account for premium revenue related to reimbursement for clinical services, activities that improve health care quality, and all other non-claims costs. The law also requires issuers to provide annual rebates to their enrollees if their MLR does not meet specific targets. For issuers in the large group market, the MLR must be at least 85%, and for issuers in the small group and individual markets, the MLR must be at least 80%. The law also gives the National Association of Insurance Commissioners, or NAIC, subject to certification of the Secretary of the HHS, authority to develop definitions and standards by which to determine compliance with the new requirements.

In December 2010, HHS published final MLR regulations and agency guidance, based upon the recommendations of the NAIC, implementing the new sections of the Public Health Service Act as mandated by the ACA. The new regulations apply to issuers offering group or individual health insurance coverage. Under the MLR regulations, an issuer’s MLR is calculated as the ratio of (i) incurred claims plus expenditures for activities that improve health care quality to (ii) premium revenue. The two key aspects to this calculation involve what comprises an “incurred claim” and what qualifies as an “expenditure for health care quality improvement.”

Incurred claims are reimbursement for clinical services, subject to specific deductions and exclusions. Specifically, incurred claims represent the total of direct paid claims, unpaid claim reserves, change in contract reserves, reserves for contingent benefits, the claim portion of lawsuits and any experience rating refunds. Prescription drug rebates received by the issuer and overpayment recoveries from providers must be deducted from incurred claims. Also, the following amounts are explicitly excluded and therefore may not be included in the calculation of incurred claims: (i) amounts paid to third party vendors for secondary network savings; (ii) amounts paid to third party vendors for network development, administrative fees, claims processing, and utilization management; and (iii) amounts paid, including amounts paid to a provider, for professional or administrative services that do not represent compensation or reimbursement for covered services provided to an enrollee. The regulation permits that some amounts “may” be included in incurred claims — market stabilization payments, state subsidies based on stop-loss methodologies, and incentive and bonus payments made to providers. The regulations themselves provide examples of specifically excluded amounts. With regard to amounts paid for network development (as noted in (ii) above), if an issuer contracts with a behavioral health, chiropractic network, or high technology radiology vendor, or a pharmacy benefit manager, and the vendor reimburses the provider at one amount but bills the issuer a higher amount to cover its network development, utilization management costs, and profits, then the amount that exceeds the reimbursement to the provider must not be included in incurred claims. With regard to administrative services (as noted in (iii) above), medical record copying costs, attorneys’ fees, subrogation vendor fees, compensation to paraprofessionals, janitors, quality assurance analysts, administrative supervisors, secretaries to medical personnel and medical record clerks must not be included in incurred claims.

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In order to properly classify what activities “improve health care quality,” the activity must be designed to improve health quality, increase the likelihood of desired health outcomes, be directed toward individual enrollees or incurred for the benefit of specific segments of enrollees, or be grounded in evidence based medicine. In addition, the activity must be primarily designed to improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors, implement, promote and increase wellness activities and/or enhance the use of health care data to improve quality. The regulations also contain a list of 14 expenditures that are specifically excluded from ‘improvement of health care quality’ activities. Among these excluded expenditures are: (1) those that are designed primarily to control or contain costs; (2) activities that can be billed or allocated by a provider for care delivery and which are, therefore, reimbursed as clinical services; (3) expenditures related to establishing or maintaining a claims adjudication system, including costs directly related to upgrades in health information technology that are designed primarily or solely to improve claims payment capabilities or to meet regulatory requirements for processing claims (for example, costs of implementing new administrative simplification standards and code sets adopted pursuant to HIPAA, including the new ICD-10 requirements); (4) all retrospective and concurrent utilization review; (5) costs of developing and executing provider contracts and fees associated with establishing or managing a provider network, including fees paid to a vendor for the same reason; (6) provider credentialing; (7) marketing expenses; (8) costs associated with calculating and administering individual enrollee or employee incentives; (9) portions of prospective utilization that does not meet the definition of activities that improve health quality; and (10) any function or activity not expressly included, unless otherwise approved by and within the discretion of the Secretary.

It is possible that a portion of the fees payors are contractually required to pay us and that do not qualify as “incurred claims” may not be included as expenditures for activities that improve health care quality. Such a determination may make it more difficult for us to retain existing clients or to add new clients, because our clients’ or prospective clients’ MLR may otherwise not meet the specified targets.

Privacy and Security Regulations

Numerous federal and state laws and regulations, including HIPAA and HITECH, govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information. As required by HIPAA, HHS has adopted standards to protect the privacy and security of this health-related information. The HIPAA privacy regulations contain detailed requirements concerning the use and disclosure of individually identifiable health information and the grant of certain rights to patients with respect to such information by “covered entities.” We believe that all or substantially all of our entities qualify as covered entities under HIPAA. We have taken actions to comply with the HIPAA privacy regulations including the creation and implementation of policies and procedures, staff training, execution of HIPAA-compliant contractual arrangements with certain service providers and various other measures. Although we believe we are in substantial compliance, ongoing implementation and oversight of these measures involves significant time, effort and expense.

In addition to the privacy requirements, HIPAA covered entities must implement certain administrative, physical, and technical security standards to protect the integrity, confidentiality and availability of certain electronic health-related information received, maintained, or transmitted by covered entities or their business associates. Although we have taken actions in an effort to be in compliance with these security regulations, a security incident that bypasses our information security systems causing an information security breach, loss of PHI, or other data subject to privacy laws or a material disruption of our operational systems could have a material adverse effect on our business, along with fines. Furthermore, ongoing implementation and oversight of these security measures involves significant time, effort and expense.

Further, HITECH, as implemented in part by an omnibus final rule published in the Federal Register on January 25, 2013, further requires that patients be notified of any unauthorized acquisition, access, use, or disclosure of their unsecured protected health information, or PHI, that compromises the privacy or security of such information. HHS has established the presumption that all unauthorized uses or disclosures of unsecured PHI constitute breaches unless the covered entity or business associate establishes that there is a low probability the information has been compromised. HITECH and implementing regulations specify that such notifications must be made without unreasonable delay and in no case later than 60 calendar days after discovery of the breach. Breaches affecting 500 patients or more must be reported immediately to HHS, which

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will post the name of the breaching entity on its public website. Furthermore, breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS of such breaches at least annually. These breach notification requirements apply not only to unauthorized disclosures of unsecured PHI to outside third parties but also to unauthorized internal access to or use of such PHI.

The scope of the privacy and security requirements under HIPAA was substantially expanded by HITECH, which also increased penalties for violations. Currently, violations of the HIPAA privacy, security and breach notification standards may result in civil penalties ranging from $100 to $50,000 per violation, subject to a cap of $1.5 million in the aggregate for violations of the same standard in a single calendar year. The amount of penalty that may be assessed depends, in part, upon the culpability of the applicable covered entity or business associate in committing the violation. Some penalties for certain violations that were not due to “willful neglect” may be waived by the Secretary of HHS in whole or in part, to the extent that the payment of the penalty would be excessive relative to the violation. HITECH also authorized state attorneys general to file suit on behalf of residents of their states. Applicable courts may be able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. HITECH also mandates that the Secretary of HHS conduct periodic compliance audits of a cross-section of HIPAA covered entities and business associates. Every covered entity and business associate is subject to being audited, regardless of the entity’s compliance record.

State laws may impose more protective privacy restrictions related to health information and may afford individuals a private right of action with respect to the violation of such laws. Both state and federal laws are subject to modification or enhancement of privacy protection at any time. We are subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA. These statutes vary and could impose additional requirements on us and more severe penalties for disclosures of health information. If we fail to comply with HIPAA, similar state laws or any new laws, including laws addressing data confidentiality, security or breach notification, we could incur substantial monetary penalties and substantial damage to our reputation.

States may also impose restrictions related to the confidentiality of personal information that is not considered PHI under HIPAA, including certain identifying information and financial information of our patients. Theses state laws may impose additional notification requirements in the event of a breach of such personal information. Failure to comply with such data confidentiality, security and breach notification laws may result in substantial monetary penalties.

HIPAA and HITECH also include standards for common healthcare electronic transactions and code sets, such as claims information, plan eligibility and payment information. Covered entities such as the Company and each of our centers are required to conform to such transaction set standards.

Legal Proceedings

From time to time, we are a party to various legal proceedings arising in the ordinary course of business. In addition, we may in the future be subject to investigations by governmental and regulatory authorities which exposes us to greater risks associated with litigation, regulatory or other proceedings, as a result of which we could be required to pay significant fines or penalties. The outcome of litigation, regulatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to us. In addition, intellectual property disputes often have a risk of injunctive relief which, if imposed against us, could materially and adversely affect our financial condition or results of operations.

We were named as a defendant in a lawsuit filed April 21, 2015 in the U.S. District Court for the Northern District of Alabama by American Family Care, Inc. and Irwin Holdings, LLC. The complaint alleged, among other things, that our use of the trade name “American CareSource” infringed upon their trademark, “American Family Care.” Effective November 3, 2015, we agreed to discontinue use of such trade name in the performance, management and marketing of our services (but not in our corporate name) and the parties have settled the dispute and have asked the court to dismiss the case.

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Employees

As of September 30, 2015, we had 99 full-time employees and 35 part-time employees. None of our employees work directly in our ancillary network business or is represented by a union. We believe our relationship with our employees to be good.

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MANAGEMENT

Directors and Executive Officers

The table below sets forth the names, ages and positions, of the individuals who serve as our executive officers and directors as of the date of this prospectus.

Name		Age		Position with the Company
John Pappajohn		87		Chairman of the Board of Directors and acting Chief Executive Officer
Norman Winland		55		President and Chief Operating Officer
James A. Honn		49		Chief Information Officer
Adam S. Winger		34		Interim Chief Financial Officer, Vice President of Acquisitions, Secretary and General Counsel
Edward B. Berger(1)(2)		86		Director
Geoffrey E. Harris(3)		53		Director
Matthew P. Kinley(1)(2)(3)		47		Director
Mark C. Oman(1)(2)(3)		61		Director