SBC Medical Group (SBC) reported 2Q:25 revenue of $43.4 million, down 18% year over year, but above our estimate of $42.5 million. The revenue decline was driven by franchise fee revisions and termination of the staffing services, which together had an estimated negative revenue impact of $7.4 million. EPS were $0.02, versus $0.20 in the year ago period. We note that absent an extraordinarily high tax rate, EPS would have been $0.11 by our calculation. We revise our estimates lower to reflect the changes in the business model. In July, SBC Medical acquired MB Career Lounge, Inc., an operational company providing management services to medical clinics adding multi-location provider JUN CLINIC to its network. As of June 2025, the company held $152 million in cash and cash equivalents, with long-term debt of $7 million. Our high-risk rating reflects competitive nature of the aesthetic medical industry and the need for continuous technological upgrades, coupled with ongoing operational risks. In addition, SBC faces challenges entering new geographies and integrating acquisitions.