What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-02 compared with 2022-03-07 · 201 added, 189 removed, 713 unchanged (35% of the section changed)

7 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Viemed Healthcare, Inc.

To the Shareholders and the Board of Directors of Viemed Healthcare, Inc.

Opinion on the Financial Statements

39 unchanged sentences

Equity investments 2 2,155 2,157

Debt investment 2 2,000 —

Deferred tax asset 10 3,119 4,787

5 unchanged sentences

Deferred revenue 4,624 3,753

Income taxes payable — 340

Accrued liabilities 4 11,092 8,875

34 unchanged sentences

Depreciation 1,012 851

Loss (gain) on disposal of property and equipment 448 ( 2,328 )

Loss on disposal of property and equipment 346 448

Other expense (income) 9 ( 989 ) ( 1,622 )

4 unchanged sentences

Net income before taxes 8,990 12,503

Provision (benefit) for income taxes 10 3,377 ( 5,167 )

Provision for income taxes 10 2,768 3,377

Net income $ 6,222 $ 9,126

Other comprehensive income (loss)

Other comprehensive income

Change in unrealized gain/loss on derivative instruments, net of tax 278 173

Other comprehensive income (loss) $ 173 $ ( 294 )

Other comprehensive income $ 278 $ 173

Comprehensive income $ 6,500 $ 9,299

17 unchanged sentences

Shares issued for vesting of restricted stock units 608,929 4,721 ( 4,721 ) — — —

Shares redeemed to pay income tax ( 181,320 ) — — — ( 1,434 ) ( 1,434 )

Change in accumulated other comprehensive loss, net of tax — — — 173 — 173

6 unchanged sentences

Shares redeemed to pay income tax ( 27,712 ) — — — ( 143 ) ( 143 )

Shares repurchased under the share repurchase program ( 1,794,163 ) ( 9,568 ) ( 9,568 )

Change in accumulated other comprehensive loss, net of tax — — — 278 — 278

11 unchanged sentences

Depreciation 15,630 11,312

Change in allowance for doubtful accounts 2 6,895 9,116

Provision for uncollectible accounts 2 10,011 6,895

Change in inventory reserve ( 1,418 ) 65

Share-based compensation 7 5,150 4,882

Share-based compensation expense 7 5,202 5,150

Distributions of earnings received from equity method investments 1,079 416

Income from equity method investments ( 935 ) ( 1,241 )

Loss (gain) on disposal of property and equipment 448 ( 2,328 )

Deferred income tax expense (benefit) 3,884 ( 8,733 )

Loss on disposal of property and equipment 346 448

Deferred income tax expense 1,746 3,884

Net change in working capital

Increase in accounts receivable ( 12,567 ) ( 7,345 )

Increase in inventory ( 212 ) ( 2,303 )

Decrease (increase) in inventory 301 ( 212 )

Increase in prepaid expenses and other assets ( 2,838 ) ( 226 )

Increase in trade payables 133 213

(Decrease) increase in trade payables ( 318 ) 133

Increase in deferred revenue 871 344

(Decrease) increase in accrued liabilities ( 4,022 ) 2,308

Increase (decrease) in accrued liabilities 2,549 ( 4,022 )

Change in income tax payable/receivable 1,867 ( 2,233 )

3 unchanged sentences

Investment in equity investments 2 ( 141 ) ( 599 )

Investment in debt security 2 ( 2,000 ) —

Proceeds from sale of property and equipment 3 1,063 596

5 unchanged sentences

Shares redeemed to pay income tax 7 ( 143 ) ( 1,434 )

Shares repurchased under the share repurchase program ( 9,568 ) —

Repayments of lease liabilities ( 42 ) ( 2,164 )

Net cash used in financing activities $ ( 15,266 ) $ ( 5,321 )

Net (decrease) increase in cash and cash equivalents ( 2,573 ) 17,626

Net decrease in cash and cash equivalents ( 11,494 ) ( 2,573 )

Cash and cash equivalents at beginning of year 28,408 30,981

2 unchanged sentences

Cash paid during the period for interest $ 231 $ 351

Cash paid during the period for income taxes, net of refunds received $ 1,768 $ 3,311

Cash (received) paid during the period for income taxes, net of refunds $ ( 846 ) $ 1,768

Supplemental disclosures of non-cash transactions

Net non-cash changes to finance leases balances $ 48 $ 3,002

Net non-cash changes to operating lease balances $ 712 $ 57

Net non-cash changes to finance leases $ — $ 48

Net non-cash changes to operating lease $ 530 $ 712

See accompanying notes to the consolidated financial statements

6 unchanged sentences

Viemed Healthcare, Inc.

(the "Company"), through its subsidiaries, is a provider of in-home DME and post-acute respiratory healthcare services in the United States.

(the "Company"), through its subsidiaries, is a provider of home medical equipment and post-acute respiratory healthcare services in the United States.

The Company’s service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients in their homes using cutting edge technology.

The Company currently serves patients in 47 states in the United States.

The Company currently serves patients in all 50 states of the United States.

The Company was incorporated under the Business Corporations Act (British Columbia) on December 14, 2016.

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Kaliste Saloom Road, Lafayette, Louisiana 70508.

As of June 30, 2020, the Company determined that it no longer qualifies as a "foreign private issuer," as defined in Rule 3b-4 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), for the purposes of the informational requirements of the Exchange Act.

As a result, effective January 1, 2021, the Company became subject to the proxy solicitation rules under Section 14 of the Exchange Act and Regulation FD, and the Company's officers, directors, and principal shareholders became subject to the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

The Company will continue to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the Securities and Exchange Commission (the "SEC").

As of June 30, 2021, the Company determined that it no longer qualifies as a “smaller reporting company,” but the Company is not required to comply with the larger company disclosure obligations (subject to certain exemptions and relief from various reporting requirements that are applicable to emerging growth companies) until our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022.

As a result, this Annual Report on Form 10-K is only required to comply with the smaller company disclosure obligations.

Based on the annual assessment performed on June 30, 2022, the Company met the re-entry thresholds to qualify as a "smaller reporting company" under Rule 12b-2 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and, as such, has elected to comply with certain reduced U.S.

public company reporting requirements.

The Company is an "emerging growth company," as defined in the JOBS Act, and as such, has elected to comply with certain reduced U.S.

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The Company’s common shares are traded in the U.S.

on the Nasdaq Capital Market under the symbol "VMD" and in Canada on the TSX under the symbol "VMD.TO".

on the Nasdaq Capital Market under the symbol "VMD" and in Canada on the Toronto Stock Exchange under the symbol "VMD.TO".

Summary of Significant Accounting Policies

6 unchanged sentences

dollars ($ or "USD") unless specifically indicated otherwise.

Canadian dollars are indicated as CAD$.

Functional Currency

Management has exercised judgment in selecting the functional currency of each of the entities that it consolidates based on the primary economic environment in which the entity operates and in reference to the various indicators including the currency that primarily influences or determines the selling prices of goods and services and the cost of those services, including labor, material and other costs and the currency whose competitive forces and regulations mainly determine selling prices.

The Company's functional currency was determined to be the U.S.

dollar, which was determined using management’s assumption that the primary economic environment from which it will derive its revenues and incur expenses to generate those revenues, is the United States.

Basis of Consolidation

1 unchanged sentence

All intercompany transactions have been eliminated.

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2021 and 2020

Use of Estimates

4 unchanged sentences

Actual results could differ from these estimates.

As of December 31, 2021, the COVID-19 pandemic is ongoing and the impacts of the pandemic on our business, financial condition and results of operations continue to evolve as of the date of this report.

As a result, the impacts remain uncertain and difficult to predict and will depend on, among other factors, the duration and severity of the pandemic, as well as any negative economic conditions arising from the pandemic, our ability to assess potential patients in hospitals and set up and treat patients in the home, and the impacts of government actions and administrative regulations on the healthcare industry and broader economy, including through existing and any future stimulus efforts .

As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

Segment Reporting

The Company’s chief operating decision-makers ("CODMs") are its Chief Executive Officer and Chief Operating Officer, who make resource allocation decisions and assess performance based on financial information presented on an aggregate basis.

There are no segment managers who are held accountable by the chief operating decision-makers, or anyone else, for any planning, strategy and key decision-making regarding operations.

The corporate office is responsible for contract negotiation with vendors and payors, corporate compliance with healthcare laws and regulations, and revenue cycle management, among other corporate supporting functions.

Accordingly, the Company has a single reportable segment and operating segment structure based on ASC 280, Segment Reporting .

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2022 and 2021

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and temporary investments with an original maturity of three months or less that are readily convertible to known amounts of cash that are subject to insignificant risk or change.

At December 31, 2021 and 2020, our cash was held primarily in checking and money market accounts.

At December 31, 2022 and 2021, the Company's cash was held primarily in checking and money market accounts.

Cash and cash equivalents consist of the following at December 31, 2022 and 2021:

9 unchanged sentences

The write-offs are charged against the allowance for doubtful accounts.

For the year ended December 31, 2021, our assessment considered business and market disruptions caused by the COVID-19 pandemic and estimates of expected emerging credit and collectability trends.

The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a material impact on our allowance for doubtful accounts in future periods.

The estimates and write-offs for the allowance for doubtful accounts for each reporting period were as follows:

For the year ended December 31, 2022, the Company's evaluation takes into consideration such factors as historical bad debt and billing modification experience, national and local economic trends and conditions, industry and regulatory conditions, other collection indicators and information about disaggregated receivables.

The complexity of many third-party billing arrangements, patient qualification for medical necessity of equipment and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded.

The estimates and charge-offs for the allowance for doubtful accounts for each reporting period were as follows:

December 31, 2022 December 31, 2021

Balance, beginning of year $ 7,031 $ 9,013

Change in allowance for doubtful accounts 6,895 9,116

Provision for uncollectible accounts 10,011 6,895

Amounts written off ( 8,559 ) ( 8,877 )

Balance, end of period $ 8,483 $ 7,031

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2021 and 2020

As of December 31, 2021 and 2020, no one customer represented more than 10% of outstanding accounts receivable.

The Company does have receivables at December 31, 2021 from Medicare and Medicaid, representing 35 % and 9 %, respectively, and 44 % combined, of total outstanding receivables (December 31, 2020 - 46 %).

As these receivables are both from government programs, there is little credit risk associated with these balances;

however, these receivables are subject to billing modifications and other adjustments and estimates of the amounts of such adjustments are included in the allowance for doubtful accounts.

Included in accounts receivable at December 31, 2022 are amounts due from Medicare and Medicaid representing 38 % and 10 %, respectively, and 48 % combined, of total outstanding receivables.

As of December 31, 2021, 44 % of total outstanding receivables were amounts due from Medicare and Medicaid.

Revenues from Medicare and Medicaid as percentages of the Company's traditional revenue streams, excluding COVID-19 response sales and services, for the years ended December 31, 2022 and 2021 were as follows:

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Obsolete and unserviceable inventories are valued at estimated net realizable value.

Inventory is presented net of a reserve balance of $ 1,418,000 and $ 1,353,000 at December 31, 2021 and 2020, respectively, that relates to COVID-19 response supplies.

Inventory is presented net of a reserve balance of nil and $ 1,418,000 at December 31, 2022 and 2021, respectively, that relates to COVID-19 response supplies.

During the year ended

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2022 and 2021

December 31, 2022, these supplies were determined to be unavailable for sale due to expiration.

Accordingly, the previously established inventory reserves were eliminated upon disposal.

Property and Equipment

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Prepaid Expenses and Other Assets

Prepaid expenses and other current assets consists primarily of prepaid expenses such as insurance and rent.

Prepaid expenses and other current assets includes amounts due from Medicare Administrative Contractors ("MACs") as a result of successful appeals and prepaid expenses such as insurance and rent.

Equity Investments

Equity investments on the Consolidated Balance Sheets are comprised of an investment accounted for under the equity method and an equity investment without a readily determinable fair value which is accounted for under the measurement alternative described in ASC 321-10-35-2.

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2021 and 2020

Equity investments on the Consolidated Balance Sheets are comprised of an investment accounted for under the equity method and equity investments without readily determinable fair values accounted for under the measurement alternative described in ASC 321-10-35-2.

The following table details the Company’s equity investments:

3 unchanged sentences

Balance, end of period $ 2,155 $ 2,157

Our equity method investments include a 49 % equity interest in Solvet Services, LLC.

The Company's equity method investments include a 49 % equity interest in Solvet Services, LLC, an entity which provides health care support services to state and federal governments.

Investments accounted for under the equity method are investments in unconsolidated entities over whose operating and financial policies the Company has the ability to exercise significant influence but not control.

3 unchanged sentences

No events or changes have occurred as of December 31, 2022 that would impair the carrying value of equity method investments.

Other equity investments include a 5 % equity interest in VeruStat, Inc.

Other equity investments include an equity interest in VeruStat, Inc, a remote patient monitoring entity, and an equity interest in DMEscripts, LLC, an e-prescribing platform.

Other equity investments are investments without a readily determinable fair value which do not qualify for the practical expedient in ASC 820.

For these investments, the Company has elected the measurement alternative which measures the investment at cost, less any impairment.

ASU 2019-04 clarifies that if an entity identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, it must measure its equity investment at fair value in accordance with ASC 820 as of the date that the observable transaction occurred.

ASU 2019-04 clarifies that if an entity identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, it must measure its equity

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2022 and 2021

investment at fair value in accordance with ASC 820 as of the date that the observable transaction occurred.

The Company was not aware of any impairment or observable price change adjustments that needed to be made as of December 31, 2022 on its investments in equity securities without a readily determinable fair value.

Debt Investment

The Company's debt investment is a variable rate secured convertible note issued by Healthcare DX, Inc.

(d/b/a ModoHealth) on December 21, 2022, classified as an available-for-sale debt instrument.

Accrued interest is due upon the 18 month maturity of the note and is included in the amortized cost basis at each reporting period.

At each financial statement date until a conversion event, the debt instrument is required to be remeasured at fair value.

Changes in unrealized gains and losses are included in accumulated other comprehensive income, net of tax effect, until realized.

Comprehensive Income

Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Our comprehensive income represents net income adjusted for unrealized gains and losses on derivative instruments, net of tax.

The Company's comprehensive income represents net income adjusted for unrealized gains and losses on derivative instruments, net of tax.

Accumulated other comprehensive loss is presented on the accompanying Consolidated Balance Sheets as a component of shareholders' equity.

2 unchanged sentences

Under the individual security approach, dangling amounts are tracked on a security-by-security basis and cleared out of the other comprehensive income balance upon sale of each individual security.

During the periods presented, none of the individual securities associated with a dangling balance were sold.

During the year ended December 31, 2022, the underlying securities associated with a dangling balance were settled and the associated balances were recognized as a current tax expense.

Revenue Recognition

Revenue from a customer consists of any combination of the sale and rental of DME and/or patient medical services.

Revenues are billed to and collections received from Medicare, Medicaid, third-party insurers, co-insurance and patient-pay.

Revenue is recognized net of contractual adjustments and bad debt based on contractual arrangements with third-party payors, an evaluation of expected collections resulting from the analysis of current and past due accounts, past collection experience in relation to amounts billed and other relevant information.

Revenue from a customer consists of sales and rentals of home medical equipment and medical services.

Patient revenues are billed to and collections received from Medicare, Medicaid, third-party insurers, co-insurance and patient-pay.

Patient revenue is recognized net of contractual adjustments and bad debt based on contractual arrangements with third-party payors, an evaluation of expected collections resulting from the analysis of current and past due accounts, past collection experience in relation to amounts billed and other relevant information.

Contractual adjustments result from the differences between the rates charged for services and reimbursement rates paid by government-sponsored healthcare programs and insurance companies for such services.

5 unchanged sentences

For commercial payors, DME companies must negotiate in-network pricing separately, though in general, the Company’s payors tend to benchmark their contract rates and coverage policies closely to those of Medicare.

The Company considers performance obligations for sales and rentals to be met when the customer receives the equipment, and revenue for rentals is recognized over time, over the respective rental period.

For revenue associated with HME rentals, the Company recognizes revenue in accordance with FASB ASC 842, “Leases,” (Topic 842).

For any HME sales and services, the Company recognizes revenue under FASB ASU 2014-09, “Revenue from Contracts with Customers,” (Topic 606) and related amendments.

The Company recognizes equipment rental revenue over the non-cancelable lease term, which varies based on the type of equipment rental, less estimated adjustments, in accordance with Topic 842.

The Company has separate contracts with each patient that are not subject to a master lease agreement with any third-party payor.

The Company would first consider the lease classification issue (sales-type lease or operating lease) and then appropriately recognize or defer rental revenue over the lease term .

Revenues associated with external staffing services are accrued on an hourly basis and are recorded based on the determination of whether the Company is acting as a principal or an agent.

In arrangements in which the Company manages customers'

VIEMED HEALTHCARE, INC.

2 unchanged sentences

December 31, 2022 and 2021

For revenue associated with DME rentals, the Company recognizes revenue in accordance with FASB ASC 842, “Leases,” (Topic 842).

For any DME sales and services, the Company recognizes revenue under FASB ASU 2014-09, “Revenue from Contracts with Customers,” (Topic 606) and related amendments.

The Company recognizes equipment rental revenue over the non-cancelable lease term, which is one month , less estimated adjustments, in accordance with Topic 842.

The Company has separate contracts with each patient that are not subject to a master lease agreement with any third-party payor.

The Company would first consider the lease classification issue (sales-type lease or operating lease) and then appropriately recognize or defer rental revenue over the lease term .

supplemental workforce needs utilizing its own network of healthcare professionals, the Company is determined to be a principal and includes the contractual gross billings in revenues with a corresponding increase to cost of revenues for worksite employee payroll costs associated with these services.

Alternatively, when the Company acts as agent in the performance of workforce management, revenue is recorded based on contractually agreed upon fees or commissions with no associated cost of revenues.

The revenues from each major source are summarized in the following table:

9 unchanged sentences

Revenue Accounting under Topic 842

The Company leases DME such as non-invasive and invasive ventilators, PAP machines, percussion vests, oxygen concentrator units and other small respiratory equipment to customers for a fixed monthly amount on a month-to-month basis.

The Company leases HME such as non-invasive and invasive ventilators, PAP machines, percussion vests, oxygen concentrator units and other small respiratory equipment to customers for a fixed monthly amount on a month-to-month basis.

The customer generally has the right to cancel the lease at any time during the rental period.

8 unchanged sentences

Revenue Accounting under Topic 606

The Company sells DME, replacement parts and supplies to customers and recognizes revenue based on contractual payment rates as determined by the payors at the point in time where control of the good or service is transferred through delivery to the customer.

The Company sells HME, replacement parts and supplies to customers and recognizes revenue based on contractual payment rates as determined by the payors at the point in time where control of the good or service is transferred through delivery to the customer.

The customer and, if applicable, the payors are generally charged at the time that the product is sold.

3 unchanged sentences

The transaction price on equipment sales, sleep studies, and contact tracing is the amount that the Company expects to receive in exchange for the goods and services provided.

Due to the nature of the DME business, gross charges are retail charges and generally do not reflect what the Company is ultimately paid.

Due to the nature of the HME business, gross charges are retail charges and generally do not reflect what the Company is ultimately paid.

As such, the transaction price is constrained for the difference between the gross charge and what is estimated to be collected from payors and from patients.

The transaction price therefore is predominantly based on contractual

The transaction price therefore is predominantly based on contractual payment rates as determined by the payors.

The payment terms and conditions of customer contracts vary by customer type and the products and services offered.

For staffing services, performance obligations in the staffing agreements are satisfied over time when the customer simultaneously receives and consumes the benefits provided.

Accordingly, revenues from staffing services are recognized on an hourly basis as services are rendered by the job site employee in both principal and agent arrangements.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

December 31, 2022 and 2021

payment rates as determined by the payors.

The Company does not generally contract with uninsured customers.

The payment terms and conditions of customer contracts vary by customer type and the products and services offered.

The Company determines its estimates of contractual allowances and discounts based upon contractual agreements, its policies and historical experience.

6 unchanged sentences

Such adjustments are typically identified and recorded at the point of cash application or claim denial.

Returns and refunds are not accepted on equipment sales, sleep study services or contact tracing services.

Returns and refunds are not accepted on equipment sales, sleep study services, staffing services, or contact tracing services.

The Company does not offer warranties to customers in excess of the manufacturer’s warranty.

10 unchanged sentences

Interest Rate Swaps

The Company utilizes an interest rate swap contract to reduce exposure to fluctuations in variable interest rates for future interest payments on the Term Note (as defined below).

The Company utilized an interest rate swap contract to reduce exposure to fluctuations in variable interest rates for future interest payments on the 2019 Term Note (as defined below).

For determining the fair value of the interest rate swap contract, the Company uses significant other observable market data or assumptions (Level 2 inputs) that market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk.

1 unchanged sentence

The Company presents a positive ending period fair value of the interest rate swap contract in other long-term assets, as a component of long-term assets, and a negative ending period fair value of the interest rate swap contract in accrued liabilities, as a component of long-term liabilities on the Consolidated Balance Sheets.

The Company recognizes any differences between the variable interest rate payments and the fixed interest rate settlements from its swap counterparty as an adjustment to interest expense over the life of the swap.

The Company recognized any differences between the variable interest rate payments and the fixed interest rate settlements from its swap counterparty as an adjustment to interest expense over the life of the swap.

If determined to be an effective cash flow hedge, the Company will record the changes in the estimated fair value of the swaps to accumulated other comprehensive income or loss on the Consolidated Balance Sheets.

To the extent that interest rate swaps are determined to be ineffective, the Company would recognize the changes in the estimated fair value of swaps in interest and other non-operating expenses, net in its Consolidated Statements of Income.

During the year ended December 31, 2022, the Company settled its interest rate swap in connection with the refinancing of its credit facilities and recognized the realized gain of $ 0.2 million in Other Income.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

December 31, 2022 and 2021

The Company is subject to income taxes in numerous jurisdictions.

The Company is subject to income taxes in numerous U.S.

jurisdictions.

Significant judgment is required in determining the provision for income taxes.

35 unchanged sentences

December 31, 2022 and 2021

On January 1, 2021, we adopted Accounting Standards Update (ASU) No.

On January 1, 2021, the Company adopted Accounting Standards Update (ASU) No.

2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815.

The adoption of this new standard did not have a material impact on our consolidated financial statements.

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments, The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased.

Further, the FASB issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard.

While the adoption of ASC 326 could result in a higher allowance for credit losses on receivables within the scope of the standard due to the prescribed measurement principles, the Company does not expect the impact of the adoption on the consolidated financials statements to be material.

In November 2021, the FASB issued ASU No.

2021-10, Government Assistance (Topic 832):

Disclosure by Business Entities about Government Assistance (ASU 2021-10), which improves the transparency of government assistance received by most business entities by requiring the disclosure of:

(1) the types of government assistance received;

(2) the accounting for such assistance;

and (3) the effect of the assistance on a business entity's financial statements.

The standard became effective for annual periods beginning after December 15, 2021 and the Company has satisfied the disclosure related requirements in the footnotes of these consolidated financial statements for the year ended December 31, 2022.

Recently Issued Accounting Pronouncements

2 unchanged sentences

In other words, an emerging growth company can selectively delay the adoption of all accounting standards until those standards would otherwise apply to private companies.

The Company has elected to utilize this exemption and, as a result, our consolidated financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies.

The Company has elected to utilize this exemption and, as a result, the consolidated financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies.

To date, however, the Company has not delayed the adoption of any accounting standards except as noted below.

Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable.

In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments, which is intended to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets.

The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased.

Further, the FASB issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard.

The standard will be effective for fiscal years beginning after December 15, 2022 , including interim periods within those annual periods, with early adoption permitted.

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No.

3 unchanged sentences

The expedients and exceptions provided by the amendments are permitted to be adopted any time through December 31, 2022 and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for certain optional expedients elected for certain hedging relationships existing as of December 31, 2022.

The Company has a commercial term note that references LIBOR and is evaluating how this standard may be applied to specific contract modifications through December 31, 2022.

In November 2021, the FASB issued ASU No.

2021-10, Government Assistance (Topic 832):

Disclosure by Business Entities about Government Assistance (ASU 2021-10), which improves the transparency of government assistance received by most business entities by requiring the disclosure of:

(1) the types of government assistance received;

(2) the accounting for such assistance;

and (3) the effect of the assistance on a business entity's financial statements.

This guidance will be effective for us in the year ended December 31, 2022, with early adoption permitted.

We are currently evaluating the impact of the new guidance on our consolidated financial statements.

During the year ended December 31, 2022, the Company terminated its 2019 Term Note (as defined below) that references LIBOR in connection with the refinancing of its credit facilities.

Accordingly, the Company no longer expects to be impacted by the pronouncement.

In September 2022, the FASB issued ASU No.

2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations, which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about their obligations that are outstanding at the end of the reporting period.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023.

The Company does not expect the update to affect the recognition, measurement, or financial statement presentation of supplier finance program obligations, but is evaluating the impact of the update on related disclosures upon adoption.

VIEMED HEALTHCARE, INC.

15 unchanged sentences

Depreciation in the amount of $ 14,619,000 and $ 10,461,000 is included in cost of revenue for the years ended December 31, 2022 and 2021, respectively.

Included in medical equipment above is equipment acquired under finance lease obligations whose cost and accumulated depreciation at December 31, 2021 total $ 47,000 and $ 5,000 , respectively.

At December 31, 2021, cost and accumulated depreciation on equipment acquired under finance lease obligations was $ 47,000 and $ 5,000 , respectively.

At December 31, 2022, there were no outstanding finance lease obligations.

Medical equipment purchases with a cost of $ 738,000 and $ 1,010,000 were included in accounts payable at December 31, 2022 and 2021, respectively.

11 unchanged sentences

2018 Senior Credit Facility

On February 20, 2018, the Company entered a Commercial Business Loan Agreement that provides for Term Loans and Lines of Credit with Hancock Whitney Bank.

Line of Credit

The Company maintains a line of credit in the amount of $ 10.0 million that expires May 1, 2023 under the Commercial Business Loan Agreement.

Any amounts advanced on this line will be subject to an interest rate equal to the WSJ prime rate plus a margin of 0.50 %, with a 3.50 % interest rate floor and will be secured by substantially all of the Company's assets.

There were no borrowings against this line of credit at December 31, 2021 or 2020.

On February 20, 2018, the Company entered a Commercial Business Loan Agreement (the "2018 Senior Credit Facility") that provided for Term Loans and Lines of Credit with Hancock Whitney Bank.

Until November 29, 2022, the Company maintained a line of credit in the amount of $ 30.0 million under the 2018 Senior Credit Facility.

There were no borrowings against this line of credit during the years ended December 31, 2022 or 2021.

On May 30, 2019, the Company entered into a term note (“Building Term Note”) under the 2018 Senior Credit Facility in the principal amount of $ 4.8 million.

The proceeds of the Building Term Note were used to purchase the Company's corporate headquarters.

In connection with the Building Term Note, the Company entered into an interest rate swap transaction ("Interest Rate Swap Transaction") with Hancock Whitney Bank effectively fixing the interest rate for the Building Term Note at 4.68 %.

On September 19, 2019, the Company entered into an additional loan agreement providing for a term note (the “2019 Term Note") under the 2018 Senior Credit Facility in the principal amount of $ 5.0 million and bearing an annual interest rate of 4.60 %.

The proceeds of the 2019 Term Note were utilized for general corporate purposes.

The 2019 Term Note matured on September 19, 2022 at which time the entire unpaid balance of principal and interest was repaid in full.

In connection with the entry in to the 2022 Senior Credit Facilities on November 29, 2022, the Company retired the 2018 Senior Credit Facility, and repaid all outstanding interest and principal in full.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

December 31, 2022 and 2021

Commercial Term Notes

On May 30, 2019, the Company entered into a term note (“Building Term Note”) under the Commercial Business Loan Agreement in the principal amount of $ 4.8 million.

The proceeds of the Building Term Note were used to purchase the Company's corporate headquarters.

Beginning July 1, 2019, the Company began making monthly payments towards the outstanding balance.

The Building Term Note matures on May 30, 2026 and is secured by substantially all of the assets of the borrower, including the real property acquired with the proceeds of the Building Term Note.

The Building Term Note bears interest at a variable rate equal to the one month ICE LIBOR index plus a margin of 2.45 % per annum.

The Company is required to maintain a loan to value ratio of 85 % with respect to the appraised value of the real property.

On September 19, 2019, the Company entered into an additional loan agreement providing for a term note (“Term Note") under the Commercial Business Loan Agreement in the principal amount of $ 5.0 million.

The proceeds of the Term Note were utilized for general corporate purposes.

Beginning October 19, 2019, the Company began making monthly principal payments of $ 139,000 towards the outstanding balance.

The Term Note matures on September 19, 2022 and is secured by substantially all of the assets of the borrower.

The Term Note bears interest at the rate of 4.60 % per annum.

The Company incurred immaterial financing costs related to the above term notes.

These deferred financing costs are amortized over the term of the loans using the effective interest method.

The Company has recognized these term notes, which have terms greater than twelve months, as follows:

2022 Senior Credit Facilities

On November 29, 2022, the Company refinanced its existing borrowings under the 2018 Senior Credit Facility and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent (the "Administrative Agent") and collateral agent, that provides for an up to $ 30 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $ 30 million delayed draw term loan (the "2022 Term Loan Facility"), both maturing in November 2027.

The proceeds of the 2022 Revolving Credit Facility may be used to refinance existing indebtedness, for working capital purposes, capital expenditures and other general corporate purposes (including permitted acquisitions), and to pay transaction fees, costs and expenses related to the Senior Credit Facilities.

The proceeds of the 2022 Term Loan Facility and any additional term loans established in accordance with the 2022 Senior Credit Facilities may be used to finance permitted acquisitions and to pay transaction fees, costs and expenses related to such acquisitions.

At December 31, 2022, there were no borrowings outstanding under the 2022 Senior Credit Facilities.

The interest rates per annum applicable to the 2022 Senior Credit Facilities are Term SOFR (as defined in the 2022 Senior Credit Facilities) plus an applicable margin, which ranges from 2.625 % to 3.375 %, or, at the option of the Company, a Base Rate (as defined in the 2022 Senior Credit Facilities) plus an applicable margin, which ranges from 1.625 % to 2.375 %.

The 2022 Senior Credit Facilities require the Company to comply with certain affirmative, as well as certain negative covenants that, among other things, will restrict, subject to certain exceptions, the ability of the Company to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers or consolidations and pay dividends and other restricted payments.

The 2022 Senior Credit Facilities also include certain financial covenants, which generally include, but are not limited to the following :

• Consolidated Total Leverage Ratio ( defined generally as total indebtedness to adjusted EBITDA) of not greater than (i) for any fiscal quarter ending during the period from the Closing Date to and including December 31, 2024, 2.75 to 1.0 and (ii) for any fiscal quarter ending on and after March 31, 2025, 2.50 to 1.0, subject to certain adjustments following a material acquisition.

• Consolidated Fixed Charge Coverage Ratio ( defined generally as (a) adjusted EBITDA minus capital expenditures minus cash taxes to (b) the sum of scheduled principal payments plus cash interest expense plus restricted payments) of not less than 1.25 :1.0.

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at December 31, 2022.

The 2022 Senior Credit Facilities includes provisions permitting the Company from time to time to, subject to certain terms and conditions, increase the aggregate amount of commitments under the 2022 Revolving Credit Facility and/or establish one or more additional term loans under the 2022 Term Loan Facility, in each case, with additional commitments from existing lenders or new commitments from financial institutions acceptable to the Administrative Agent in its reasonable discretion;

provided, that, (a) the aggregate principal amount of any increases in the 2022 Revolving Credit Facility, and (b) the aggregate principal amount of all additional term loans under the 2022 Term Loan Facility established after the closing date will not exceed $ 30 million.

Current and long-term balances associated with the Company's borrowings at each balance sheet date are as follows:

December 31, 2022 December 31, 2021

2 unchanged sentences

Net long-term notes payable $ — $ 4,306

Future minimum principal and interest obligations for the term notes required over the next five years as of December 31, 2021, as follows:

Principal Payments Interest Payments (1)

2022 $ 1,480 $ 234

2026 3,776 89

Thereafter — —

Total $ 5,786 $ 902

(1) Interest payments under the term notes have effective interest rates of 4.68 % and 4.60 % per annum.

Under the terms of the Commercial Business Loan Agreement, the Company is subject to the following financial covenants:

Financial Covenant Required Ratio Ratio at December 31, 2021

Total Debt to Adjusted EBITDA (Quarterly) not more than 1.50:1.00 0.22

Fixed Charge Coverage Ratio (Quarterly) not less than 1.35:1.00 4.95

Loan-to-Value Ratio (Quarterly) not more than 0.85 0.68

The Company was in compliance with all covenants under the Commercial Business Term Loan Agreement in effect at December 31, 2021.

VIEMED HEALTHCARE, INC.

7 unchanged sentences

Net long-term lease liabilities $ 199 $ 268

Included in lease liabilities at December 31, 2021 are finance lease liabilities for medical equipment in the amount of $ 42,000 due between 2022 and 2024.

There are no finance lease liabilities associated with supplier finance program obligations at December 31, 2022.

Operating Lease Liabilities

The Company has recognized operating lease liabilities that relate primarily to the lease of land and buildings.

These leases contain renewal options that we have not included as part of the Company's assessment of the lease term as it is not reasonably certain that we will exercise these options.

These leases contain renewal options that the Company has not included as part of its assessment of the lease term as it is not reasonably certain that the Company will exercise these options.

These lease liabilities are recorded at present value based on a discount rate of 5.50 %, which was based on the Company's incremental borrowing rate at the time of assessment.

7 unchanged sentences

The related assets for operating lease liabilities have been included with property and equipment on the Consolidated Balance Sheets.

Included within these operating lease liabilities are real property leases for real estate from a related party.

Included within these operating lease liabilities are real property leases for real estate from a related party during the year ended December 31, 2021.

On August 1, 2015, the Company entered a ten-year triple net lease agreement for office and warehouse space with a company owned by the Company’s CEO, Casey Hoyt, and President, Michael Moore.

Rental payments under these related party lease agreements were $ 20,000 per month, plus taxes, utilities and maintenance.

Total rental payments for the use of these properties were $ 201,000 and $ 237,000 for the years ended December 31, 2021 and 2020, respectively.

Total rental payments for the use of these properties were $ 201,000 during the year ended December 31, 2021.

The expense for these related party rents has been included within selling, general and administrative expenses.

1 unchanged sentence

The acquisition of these previously leased properties was funded by cash on hand and resulted in no incremental debt.

At December 31, 2021, these properties are recorded in property and equipment, net of related depreciation.

At December 31, 2022 and 2021, these properties are recorded in property and equipment, net of related depreciation.

VIEMED HEALTHCARE, INC.

19 unchanged sentences

Money market mutual funds $ 11,005 $ — $ — $ 11,005

Interest rate swap — ( 200 ) — ( 200 )

Available for sale debt instrument — — 2,000 2,000

Total $ 11,005 $ — $ 2,000 $ 13,005

9 unchanged sentences

This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

As of December 31, 2021, the Company holds one interest rate swap contract which matures on May 30, 2026 and has a notional amount of $ 4.5 million.

This contract is designated as a cash flow hedge.

During 2021, ineffective portions of the hedge were immaterial.

The fair value was $( 0.2 ) million (determined based on Level 2 inputs) and is included in accrued liabilities, as a component of long-term liabilities as of December 31, 2021.

During the year ended December 31, 2022, the Company settled its interest rate swap in connection with the refinancing of its credit facilities and recognized the realized gain in Other Income.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

December 31, 2022 and 2021

Available for Sale Debt Instrument

The fair value of the Company’s available for sale debt instrument approximates its amortized cost basis due to the short maturity and indexed interest rate terms.

The fair value is classified within Level 3 in the fair value hierarchy as the Company evaluates adjustments using a combination of observable and unobservable inputs, such as operating results of the counterparty as well observable prices in transactions of debt and equity instruments of the issuing counterparty when available.

As of December 31, 2022, the analysis resulted in no adjustments to the carrying value impacting unrealized gains or losses.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

We measure certain assets and liabilities at fair value on a nonrecurring basis.

The Company measures certain assets and liabilities at fair value on a nonrecurring basis.

These assets and liabilities include equity method investments and other equity investments.

Equity method investments are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the investments may exceed the fair value.

The Company's other equity investments are holdings in a privately-held company without a readily determinable market value.

The Company remeasures equity securities without readily determinable fair value at fair value when an orderly transaction is identified for an identical or similar investment of the same issuer in accordance with Topic 820.

The Company's other equity investments are holdings in privately-held companies without a readily determinable market value.

ASU 2019-04 states that the measurement alternative is a nonrecurring fair value measurement.

Accordingly, other equity investments without readily determinable fair value are classified within Level 3 in the fair value hierarchy because the Company estimates the value using a combination of observable and unobservable inputs, including valuation ascribed to the issuing company in subsequent financing rounds, volatility in the results of operations of the issuers and rights and obligations of the holdings we own.

The Company had no material adjustments of assets and liabilities measured at fair value on a nonrecurring basis during any of the periods presented.

6 unchanged sentences

The authorized stock consists of an unlimited number of common shares with no stated par value, of which 38,049,739 and 39,640,388 shares were issued and outstanding as of December 31, 2022 and 2021, respectively.

During the year ended December 31, 2021, the Company repurchased and cancelled 181,320 common shares at a cost of $ 1.4 million due to tax withholding for RSUs vesting.

For the year ended December 31, 2022, the Company repurchased and canceled 1,794,163 common shares at a cost of $ 9.6 million pursuant to the share repurchase program authorized by the Board of Directors on March 7, 2022 (the "2022 Share Repurchase Program").

The Company also acquired and cancelled 27,712 common shares at a cost of $ 0.1 million to satisfy employee income tax withholding associated with RSUs vesting during the year ended December 31, 2022.

The Company’s retained earnings were reduced by the amount paid for the shares repurchased and cancelled.

Stock-Based Compensation

6 unchanged sentences

As of December 31, 2022, the Company had outstanding issuances of options of 4,497,000 and RSUs of 629,000 under the Omnibus Plan.

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2022 and 2021

The following table summarizes stock-based compensation for the years ended December 31, 2022 and 2021:

3 unchanged sentences

Total $ 5,202 $ 5,150

At December 31, 2021, there was approximately $ 2,594,000 of total unrecognized pre-tax stock option expense under our equity compensation plans, which is expected to be recognized over a weighted average period of 1.88 years.

At December 31, 2022, there was approximately $ 1,616,905 of total unrecognized pre-tax stock option expense under the Company's equity compensation plans, which is expected to be recognized over a weighted average period of 1.72 years.

As of December 31, 2022, there was approximately $ 1,588,000 of total unrecognized pre-tax compensation expense related to outstanding time-based RSUs that is expected to be recognized over a weighted average period of 0.88 years.

VIEMED HEALTHCARE, INC.

(Tabular dollar amounts expressed in thousands of U.S.

Dollars, except per share amounts)

December 31, 2021 and 2020

The following table summarizes stock option activity for the years ended December 31, 2022 and 2021:

11 unchanged sentences

Balance December 31, 2022 4,497 $ 5.26 6.9 years $ 11,356

(1) For presentation purposes, stock options issued with a CAD exercise price have been translated to USD based on the prevailing exchange rate on the date of grant.

(1) For presentation purposes, stock options issued with a Canadian dollar denominated exercise price have been translated to USD based on the prevailing exchange rate on the date of grant.

(2) The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period.

9 unchanged sentences

Expected volatility 57.6 % - 58.0 %

Expected term 5.65 - 5.76

5.63 - 10 years

59.5 % - 67.6 %

Expected term (in years) 5.49 - 5.58

Expected dividend yield Nil Nil

5 unchanged sentences

December 31, 2022 and 2021

The risk-free interest rate is based on the rates available at the time of the grant for zero-coupon U.S.

government issues with a remaining term equal to the option’s expected life.

The average life of an option is based on both historical and projected exercise and lapsing data.

Expected volatility is based on implied volatilities from traded options on the Company's common shares and historical volatility of the Company's common shares over the expected life of the option.

Restricted Stock Units

3 unchanged sentences

The following table summarizes restricted stock unit activity for the years ended December 31, 2022 and 2021:

Number of RSUs (000's) Weighted average grant price (1)

Weighted average remaining contractual life Aggregate intrinsic value (2)

Number of RSUs (000's) Weighted average grant price Weighted average remaining contractual life Aggregate intrinsic value (1)

Balance December 31, 2020 684 $ 3.04 0.22 years $ 5,308

7 unchanged sentences

Balance December 31, 2022 629 $ 5.62 0.88 years $ 4,755

(1) All future equity grants will be awarded in USD, therefore, RSUs issued with a CAD grant price have been translated to USD based on the prevailing exchange rate on the date of grant for presentation purposes.

(1) The aggregate intrinsic value of time-based RSUs outstanding was based on our closing stock price on the last trading day of the period.

27 unchanged sentences

The total liability associated with phantom share units at December 31, 2022 is $ 2,593,000 , with $ 1,704,000 of this amount included in current accrued liabilities and the remaining portion of $ 889,000 included in long-term accrued liabilities.

At December 31, 2021, the total liability associated with phantom share units was $ 1,676,000 , with $ 1,118,000 of this amount included in current accrued liabilities and the remaining portion of $ 558,000 included in long-term accrued liabilities.

The impact associated with the fair value remeasurement of phantom share units is recorded in selling, general and administrative expenses within the Consolidated Statements of Income.

The following table summarizes expenses associated with the phantom share units for the years ended December 31, 2021 and 2020:

The following table summarizes expense associated with the phantom share units for the years ended December 31, 2022 and 2021:

Year Ended December 31,

20 unchanged sentences

The Company filed its Answer to the Reconventional Demand on February 12, 2021 and the parties are currently engaged in discovery.

We continue to believe that we have valid legal and equitable grounds to recover our outstanding prepayment as a result of Vyaire’s failure to deliver the vast majority of the respiratory equipment referenced in the Purchase Order.

We have determined that a loss related to the Reconventional Demand is not probable, and thus have not accrued a liability related to this claim.

Although a loss may be reasonably possible, we do not have sufficient information to determine the amount or range of reasonably possible loss with respect to the Reconventional Demand given that the dispute is in the early stages of the legal process.

The Company continues to believe that it has valid legal and equitable grounds to recover its outstanding prepayment as a result of Vyaire’s failure to deliver the vast majority of the respiratory equipment referenced in the Purchase Order.

The Company has determined that a loss related to the Reconventional Demand is not probable, and thus has not accrued a liability related to this claim.

Although a loss may be reasonably possible, the Company does not have sufficient information to determine the amount or range of reasonably possible loss with respect to the Reconventional Demand given that the dispute is in the early stages of the legal process.

At December 31, 2022, outstanding funds in the amount of $ 0.9 million related to undelivered respiratory equipment are included within other long-term assets.

Governmental and Regulatory Matters

From time to time we are involved in various external governmental investigations, audits and reviews.

Reviews, audits and investigations of this sort can lead to government actions, which can result in the assessment of recoupment of reimbursement, civil or criminal fines or penalties, or other sanctions, including restrictions or changes in the way we conduct business, loss of licensure or exclusion from participation in government healthcare programs.

From time to time the Company is involved in various external governmental investigations, audits and reviews.

Reviews, audits and investigations of this sort can lead to government actions, which can result in the assessment of recoupment of reimbursement, civil or criminal fines or penalties, or other sanctions, including restrictions or changes in the way the Company conducts business, loss of licensure or exclusion from participation in government healthcare programs.

In May of 2021, a final report and recommendation (“Report”) was issued by the OIG regarding an audit by OIG of claims relating to 100 of the Company’s non-invasive ventilation at home (“NIVH”) patients.

The OIG asserted that most of the sampled Medicare claims submitted for the monthly rental of non-invasive ventilators did not comply with Medicare requirements.

The Company firmly believes that the Report ignores each patient’s diagnosis and supporting documentation of that diagnosis from treating and prescribing physicians and applies clinical guidelines that are contrary to CMS’s accepted standard of care.

In late June of 2021, the Company received initial request letters from DME Medicare Administrative Contractors ("MACs") referencing the Report and requesting repayment of purported overpayments.

The Company firmly believed that the Report ignored each patient’s diagnosis and supporting documentation of that diagnosis from treating and prescribing physicians and applied clinical guidelines that were contrary to CMS’s accepted standard of care.

In late June of 2021, the Company received initial request letters from DME MACs referencing the Report and requesting repayment of purported overpayments.

The Company responded to each initial request by submitting a rebuttal and by filing a redetermination appeal as prescribed by the initial request letters and by statute.

In September 2021, the MACs informed the Company of unfavorable decisions with respect to the redetermination appeals.

In November 2021, the Company filed Reconsideration Appeals and intends to continue to defend itself vigorously through the remaining appeals processes which include, in successive order, Reconsideration decision, Administrative Law Judge appeals, Medicare Appeals Council review, and ultimately through Federal Court, if necess ary.

The timing of additional appeals beyond reconsideration are subject to workload constraints of the reviewing body.

Based on initial discussions with CMS, a review of the current facts and circumstances as we understand them, and the nature of the requests, we have determined that a loss is not probable but may be reasonably possible.

Accordingly, no related accrual has been recorded.

The extrapolated value of the 39 associated claims within the 4-year reopening period limited by statute is approximately $ 9 million.

Man agement estimates that a possible loss, if any, will not exceed this amount.

It is possible that the ultimate resolution of this matter, if unfavorable, could materially and adversely affect the Company’s consolidated financial position, consolidated results of operations, or consolidated cash flows.

In November 2021, the Company filed Reconsideration Appeals with CMS's designated Qualified Independent Contractor ("QIC").

Based on its review, the QIC determined that approximately 77 % of the claims it reviewed were medically necessary and properly payable under Medicare rules and regulations, overturning OIG’s and the MACs' initial recommendations and determinations.

As a result of the QIC's reconsideration findings, reduced and recalculated principal overpayment requests totaling $ 1.1 million were issued by the MACs.

In order to limit the assessment of interest during the appeals period, the Company remitted the associated funds to the MACs.

In December 2022, an Administrative Law Judge overturned all of the remaining appealed claims and instructed the MACs to refund all funds previously remitted by the Company.

Accordingly, the funds remitted to the MACs are recorded in Prepaid expenses and other assets at December 31, 2022 and were received in full subsequent to year end.

Retirement Plan

6 unchanged sentences

CARES Act Funds Received

The Company received a general distribution payment from the Provider Relief Fund of $ 3.5 million in April 2020 and a targeted distribution payment of $ 1.5 million in November 2021.

The Company received a general distribution payment from the Provider Relief Fund of $ 3.5 million in April 2020, a targeted distribution payment of $ 1.5 million in November 2021, and a general distribution payment of $ 0.4 million in January 2022.

The HHS has stated that Provider Relief Fund payments are not loans and will not need to be repaid.

6 unchanged sentences

To the extent that reporting requirements and terms and conditions are modified, it may affect the Company's ability to comply and may require the return of funds.

Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a liability approach to calculating deferred income taxes.

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its consolidated financial statements or tax returns.

Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

We are not aware of any such modifications as of December 31, 2022.

Income taxes are computed in accordance with the provisions of ASC Topic 740, which requires, among other things, a balance sheet approach to calculating deferred income taxes.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its consolidated financial statements or tax returns.

Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in the years in which the differences are expected to reverse.

The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters.

16 unchanged sentences

Changes in valuation allowance for deferred tax assets 17 ( 306 )

Provision for (recovery of) income taxes $ 3,377 $ ( 5,167 )

Provision for income taxes $ 2,768 $ 3,377

VIEMED HEALTHCARE, INC.

10 unchanged sentences

Federal $ 1,660 $ 3,181

State 703 ( 2,034 )

Total deferred taxes 1,746 3,884

Provision for (recovery of) income taxes $ 3,377 $ ( 5,167 )

Provision for income taxes $ 2,768 $ 3,377

Deferred Income Taxes

The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

Pursuant to ASC 740, any change in judgment relating to the beginning of the year valuation allowance balance should be recognized discretely in continuing operations in the interim period in which the change occurs.

At June 30, 2020, the Company determined that it was more likely than not that the deferred tax asset would be realized and released the valuation allowance placed on its deferred tax assets of $ 11.1 million.

This release of the valuation allowance was treated partially as a discrete item of $ 7.8 million and partially as part of the effective tax rate for the current year movement of the deferred prior to release in the amount of $ 3.3 million in the Company's June 30, 2020 effective tax rate computation.

Deferred income taxes are determined based on the temporary differences between the financial statement book basis and the tax basis of assets and liabilities using enacted tax rates in the years in which the differences are expected to reverse.

In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that all, or some portion, of the deferred income tax assets will not be realized.

The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred income tax liabilities and projected future taxable income in making this assessment.

Management evaluates the need for valuation allowances on the deferred income tax assets according to the provisions of FASB ASC 740, Income Taxes.

In making this determination, management assesses all available evidence, both positive and negative, available at the balance sheet date.

This includes, but is not limited to, recent earnings, internally prepared income projections, and historical financial performance.

VIEMED HEALTHCARE, INC.

12 unchanged sentences

Stock-based compensation 3,401 2,745

Capitalized costs 628 —

Lease liability 180 179

29 unchanged sentences

Diluted weighted average number of shares 39,807,434 40,680,947

Anti-dilutive shares excluded from the calculation consisted of dilutive employee stock options and RSUs that were de minimis in all periods presented.

Subsequent Events

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data