What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-08 · 233 added, 131 removed, 560 unchanged (39% of the section changed)

4 unchanged sentences

Dollars, except outstanding shares)

March 31, 2023 At

June 30, 2023 At

December 31, 2022

2 unchanged sentences

Cash and cash equivalents $ 10,224 $ 16,914

Accounts receivable, net of allowance for doubtful accounts of $ 11,040 and $ 8,483 at March 31, 2023 and December 31, 2022, respectively

2 16,320 15,379

Accounts receivable, net 2 17,893 15,379

Inventory 2 4,476 3,574

4 unchanged sentences

Property and equipment, net 4 72,884 67,743

Finance lease right-of-use assets 6 538 —

Operating lease right-of-use assets 6 516 694

Equity investments 2 1,942 2,155

1 unchanged sentence

Deferred tax asset 10 3,844 3,119

Identifiable intangibles, net 3 688 —

Goodwill 3 29,759 —

Other long-term assets 9 887 1,590

4 unchanged sentences

Deferred revenue 5,960 4,624

Income taxes payable 1,247 —

Accrued liabilities 5 15,509 11,092

Current portion of lease liabilities 5 397 495

Finance lease liabilities, current portion 6 375 —

Operating lease liabilities, current portion 6 395 495

Current debt 6 3,169 —

Total current liabilities $ 31,575 $ 18,861

1 unchanged sentence

Accrued liabilities 8 637 889

Long-term lease liabilities 5 162 199

Finance lease liabilities, less current portion 6 143 —

Operating lease liabilities, less current portion 6 143 199

Long-term debt 6 12,114 —

Total long-term liabilities $ 13,037 $ 1,088

4 unchanged sentences

unlimited authorized;

38,276,389 and 38,049,739 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

38,400,422 and 38,049,739 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

8 $ 17,850 $ 15,123

8 unchanged sentences

Dollars, except share and per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Note 2023 2022 2023 2022

7 unchanged sentences

Depreciation 298 243 538 480

Gain on disposal of property and equipment ( 22 ) ( 14 )

Loss (gain) on disposal of property and equipment 117 ( 110 ) 95 ( 124 )

Other (income) expense, net ( 2 ) ( 223 ) ( 83 ) ( 664 )

6 unchanged sentences

Net income $ 2,330 $ 967 $ 3,847 $ 2,729

Other comprehensive income

Other comprehensive income (loss)

Change in unrealized gain/loss on derivative instruments, net of tax — 59 — 222

Other comprehensive income $ — $ 163

Other comprehensive income (loss) $ — $ 59 $ — $ 222

Comprehensive income $ 2,330 $ 1,026 $ 3,847 $ 2,951

14 unchanged sentences

Stock-based compensation - options — — 820 — — 820

Stock-based compensation - restricted stock — — 485 — — 485

Stock-based compensation - restricted stock units — — 485 — — 485

Shares issued for vesting of restricted stock units 67,010 334 ( 334 ) — — —

Shares redeemed to pay income tax ( 23,742 ) — — — ( 119 ) ( 119 )

Shares repurchased under the share repurchase program ( 389,878 ) — — — ( 1,887 ) ( 1,887 )

Shares repurchased under share repurchase program ( 389,878 ) — — — ( 1,887 ) ( 1,887 )

Change in accumulated other comprehensive loss, net of tax — — — 163 — 163

1 unchanged sentence

Shareholders' equity, March 31, 2022 39,293,778 $ 14,348 $ 8,720 $ ( 115 ) $ 73,091 $ 96,044

Stock-based compensation - options — — 757 — — 757

Share-based compensation - restricted stock units — — 514 — — 514

Shares repurchased under share repurchase program ( 960,689 ) — — — ( 5,114 ) ( 5,114 )

Change in accumulated other comprehensive loss, net of tax — — — 59 — 59

Net income — — — — 967 967

Shareholders' equity, June 30, 2022 38,333,089 $ 14,348 $ 9,991 $ ( 56 ) $ 68,944 $ 93,227

Common Stock Additional paid-in capital Accumulated other comprehensive loss Total Shareholders'

2 unchanged sentences

Stock-based compensation - options — — 348 — — 348

Stock-based compensation - restricted stock — — 1,043 — — 1,043

Stock-based compensation - restricted stock units — — 1,043 — — 1,043

Exercise of options 108,370 544 — — — 544

3 unchanged sentences

Shareholders' equity, March 31, 2023 38,276,389 $ 17,096 $ 12,087 $ — $ 70,858 $ 100,041

Stock-based compensation - options — — 301 — — 301

Stock-based compensation - restricted stock units — — 1,170 — — 1,170

Exercise of options 119,356 684 — — — 684

Shares issued for vesting of restricted stock units 6,655 70 ( 70 ) — — —

Shares redeemed to pay income tax ( 1,978 ) — — — ( 21 ) ( 21 )

Net income — — — — 2,330 2,330

Shareholders' equity, June 30, 2023 38,400,422 $ 17,850 $ 13,488 $ — $ 73,167 $ 104,505

See accompanying notes to the condensed consolidated financial statements

2 unchanged sentences

(Expressed in thousands of U.S.

Three Months Ended March 31,

Six Months Ended June 30,

Note 2023 2022

3 unchanged sentences

Depreciation 9,968 7,136

Provision for uncollectible accounts 2 4,131 3,445

Change in inventory reserve — ( 1,418 )

3 unchanged sentences

Income from debt investment ( 110 ) —

Gain on disposal of property and equipment ( 22 ) ( 14 )

Loss (gain) on disposal of property and equipment 95 ( 124 )

Deferred income tax (benefit) expense ( 725 ) 745

Net change in working capital

Increase in accounts receivable ( 5,072 ) ( 4,221 )

Decrease in inventory 127 1,372

Decrease (increase) in prepaid expenses and other assets 449 ( 68 )

Increase (decrease) in trade payables 641 ( 467 )

Increase in deferred revenue 74 135

Increase in accrued liabilities 1,846 58

Change in income tax payable/receivable 1,273 1,217

Changes in working capital, net of effects from acquisitions:

Accounts receivable, net ( 500 ) ( 1,464 )

Inventory ( 320 ) 1,022

Prepaid expenses and other assets 2,076 ( 634 )

Trade payables ( 488 ) ( 243 )

Deferred revenue 604 649

Accrued liabilities 1,593 ( 87 )

Income tax payable/receivable ( 1,003 ) 1,362

Net cash provided by operating activities $ 18,119 $ 12,092

2 unchanged sentences

Investment in equity investments ( 7 ) ( 121 )

Cash paid for acquisition of HMP, net of cash acquired 3 ( 27,121 ) —

Proceeds from sale of property and equipment 4 1,775 615

2 unchanged sentences

Proceeds from exercise of options 8 1,228 —

Principal payments on notes payable 5 — ( 39 )

Principal payments on term note 5 — ( 433 )

Shares repurchased under the share repurchase program 7 — ( 1,887 )

Proceeds from term notes 6 5,000 —

Principal payments on term notes 6 ( 1,357 ) ( 78 )

Proceeds from revolving credit facilities 6 8,000 —

Payments on revolving credit facilities ( 1,005 ) ( 872 )

Shares redeemed to pay income tax 8 ( 526 ) ( 119 )

Shares repurchased under the share repurchase program 8 — ( 7,001 )

Repayments of lease liabilities ( 37 ) ( 13 )

Net cash provided by (used in) financing activities $ 11,303 $ ( 8,083 )

Net increase in cash and cash equivalents 6,630 840

Net decrease in cash and cash equivalents ( 6,690 ) ( 6,486 )

Cash and cash equivalents at beginning of year 16,914 28,408

2 unchanged sentences

Cash paid during the period for interest $ 169 $ 128

Cash (received) paid during the period for income taxes, net of refunds $ ( 40 ) $ 1,217

Cash paid (received) during the period for income taxes, net of refunds $ 3,093 $ ( 940 )

Supplemental disclosures of non-cash transactions

Non-cash change in debt from the reclassification of debt issuance costs ( 748 ) —

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

Nature of Business and Operations

2 unchanged sentences

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 all 50 states of the United States.

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

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

1 unchanged sentence

Kaliste Saloom Road, Lafayette, Louisiana 70508.

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

public company reporting requirements.

Based on the annual assessment performed on June 30, 2022, the Company meets 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.

The Company is an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the "JOBS Act") and 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.

22 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

Segment Reporting

9 unchanged sentences

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

For the three months ended March 31, 2023, our 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.

For the six months ended June 30, 2023, 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:

March 31, 2023 March 31, 2022

June 30, 2023 June 30, 2022

Balance, beginning of year $ 8,483 $ 7,031

2 unchanged sentences

Balance, end of period $ 11,007 $ 9,383

Included in accounts receivable at March 31, 2023 are amounts due from Medicare and Medicaid, representing 35 % and 10 %, respectively, and 45 % combined, of total outstanding receivables.

Included in accounts receivable at June 30, 2023 are amounts due from Medicare and Medicaid representing 35 % and 6 %, respectively, and 41 % combined, of total outstanding receivables.

As of December 31, 2022, 48 % 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 three months ended March 31, 2023 and 2022 were as follows:

Three Months Ended March 31,

Revenues from Medicare and Medicaid as percentages of the Company's traditional revenue streams, excluding COVID-19 response sales and services, for the three and six months ended June 30, 2023 and 2022 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Medicare revenues 44 % 46 % 45 % 47 %

Medicaid revenues 9 % 9 % 9 % 9 %

Total Medicare and Medicaid revenues 54 % 58 %

Total Medicare and Medicaid 53 % 55 % 54 % 56 %

Inventory represents non-serialized supplies that consist of equipment parts, consumables, and associated product supplies and is expensed at the time of sale or use.

5 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

Property and equipment

9 unchanged sentences

The following table details the Company’s equity investments:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Equity method investments $ 595 $ 816

4 unchanged sentences

Equity method investments are initially measured at cost in the Condensed Consolidated Balance Sheets with any subsequent adjustments made to the carrying amount of the investment for the Company’s proportionate share of income or loss.

Distributions received from the investee reduce the Company’s carrying value of the investment.

The Company has recognized its share of income or loss on the gain (loss) from equity method investments within non-operating expenses in the Condensed Consolidated Statements of Income.

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.

No events or changes have occurred as of March 31, 2023 that would impair the carrying value of equity method investments.

No events or changes have occurred as of June 30, 2023 that would impair the carrying value of equity method investments.

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.

2 unchanged sentences

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.

The Company was not aware of any impairment or observable price change adjustments that needed to be made as of March 31, 2023 on its investments in equity securities without a readily determinable fair value.

The Company was not aware of any impairment or observable price change adjustments that needed to be made as of June 30, 2023 on its investments in equity securities without a readily determinable fair value.

Debt Investment

8 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

Valuation of Goodwill

Goodwill resulting from business combinations is not amortized, rather, it is assessed for impairment annually and upon the occurrence of a triggering event or change in circumstances indicating a possible impairment.

Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained decreases in the Company’s stock price or market capitalization.

Such changes in circumstance can include, among others, changes in the legal environment, reimbursement environment, operating performance, and/or future prospects.

The Company performs its annual impairment assessment of goodwill during the fourth quarter of each year.

The impairment assessment can be performed on either a quantitative or qualitative basis.

The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment analysis.

If determined necessary, the Company applies the quantitative impairment test to identify and measure the amount of impairment, if any.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors, such as estimates of a reporting unit's fair value and judgment about impairment triggering events.

As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment test will prove to be accurate predictions of the future.

During the three months ended June 30, 2023 the Company evaluated the events and changes that could indicate that goodwill might be impaired and concluded that an interim test was not necessary.

Comprehensive income

23 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

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.

2 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Revenue from rentals under Topic 842

3 unchanged sentences

Equipment and supply sales

6,778 3,245 11,542 6,282

COVID-19 response sales and services

— 183 — 2,278

Service revenues

2,402 2,234 5,141 3,480

Total revenues $ 43,311 $ 33,310 $ 82,867 $ 65,565

19 unchanged sentences

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

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.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

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.

June 30, 2023 and 2022

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

11 unchanged sentences

Any taxes due upon sale of the products or services are not recognized as revenue.

The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities as of March 31, 2023.

The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities as of June 30, 2023.

Stock-based compensation

13 unchanged sentences

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 Condensed Consolidated Balance Sheets.

To the extent that interest rate swaps are determined to be ineffective, the

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 Condensed Consolidated Statements of Income.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

Company would recognize the changes in the estimated fair value of swaps in interest and other non-operating expenses, net in its Condensed Consolidated Statements of Income.

June 30, 2023 and 2022

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.

22 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.

The Company is not aware of any such modifications as of March 31, 2023.

The Company is not aware of any such modifications as of June 30, 2023

Recently adopted accounting pronouncements

8 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, the Company's condensed 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

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

has elected to utilize this exemption and, as a result, the Company's condensed 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.

June 30, 2023 and 2022

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.

4 unchanged sentences

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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

June 30, 2023 and 2022

Business Combinations

On June 1, 2023, Viemed, Inc., a wholly-owned subsidiary of the Company, completed the acquisition of Home Medical Products, Inc., (“HMP”), which operates in Tennessee, Alabama, and Mississippi.

The Company acquired 100 % of the equity ownership of HMP in exchange for approximately $ 29.4 million in cash or cash payable, subject to customary post-closing net working capital and other adjustments.

Approximately $ 15 million of the purchase consideration was funded by cash on hand, $ 8 million was funded by a borrowing on the 2022 Revolving Credit Facility, and $ 5 million was funded by a borrowing on the 2022 Term Loan Facility.

The results of HMP’s operations have been included in the consolidated financial statements since the date of acquisition.

The Company expensed $ 254,000 of acquisition costs in conjunction with the acquisition for the six months ended June 30, 2023.

These costs include system conversion and integrating operations charges, as well as legal and consulting expenses, and are included in selling, general, and administrative expense in the accompanying consolidated statements of income and comprehensive income.

The following table summarizes the consideration paid and estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

The Company is in the process of obtaining third-party valuations of certain fixed assets and identifiable intangible assets;

thus, the provisional measurements of property plant and equipment, trade names, non-compete agreements, and goodwill are subject to change.

The fair value of accounts receivables acquired is $ 2.0 million, with the gross contractual amount being $ 2.9 million.

The Company expects $ 0.9 million to be uncollectible.

Purchase Price

Cash paid or payable $ 29,417

Identifiable Assets

Cash and cash equivalents 921

Accounts receivable 2,014

Inventory 582

Prepaid expenses and other assets 535

Property and equipment, net 4,358

Lease assets 743

Identifiable intangibles 688

Other long-term assets 25

TOTAL ASSETS 9,866

Identifiable Liabilities

Trade payables 2,144

Deferred revenue 732

Accrued liabilities 1,195

Current portion of lease liabilities 536

Current debt 4,558

Long-term lease liabilities 207

Long-term debt 836

TOTAL LIABILITIES 10,208

Net assets (liabilities) acquired ( 342 )

Resulting goodwill $ 29,759

Goodwill resulted from a combination of synergies and cost savings, and further expansion into Tennessee, Alabama, and Mississippi.

All of the goodwill is deductible for income tax purposes.

There are no contingent consideration arrangements included in the transaction.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

June 30, 2023 and 2022

Property and Equipment

1 unchanged sentence

The following table details the Company’s fixed assets:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Medical equipment $ 103,571 $ 93,893

6 unchanged sentences

Property and equipment, net of accumulated depreciation and amortization $ 72,884 $ 67,743

Depreciation in the amount of $ 4,522,000 and $ 3,160,000 is included in cost of revenue for the three months ended March 31, 2023 and 2022, respectively.

At March 31, 2023 and December 31, 2022, there were no outstanding finance lease obligations.

Medical equipment purchases with a cost of $ 1,709,000 and $ 738,000 were included in accounts payable at March 31, 2023 and December 31, 2022, respectively.

Depreciation in the amount of $ 4,908,000 and $ 3,497,000 is included in cost of revenue for the three months ended June 30, 2023 and 2022, respectively, and in the amount of $ 9,430,000 and $ 6,656,000 for the six months ended June 30, 2023 and 2022, respectively.

Medical equipment purchases with a cost of $ 2,526,000 and $ 738,000 were included in accounts payable at June 30, 2023 and December 31, 2022, respectively.

Current Liabilities

The Company’s short-term accrued liabilities are included within current liabilities and consist of the following:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Accrued trade payables $ 2,735 $ 2,254

3 unchanged sentences

Current portion of phantom share liability 1,483 1,704

Purchase price payable 1,376 —

Accrued other liabilities 2,399 1,334

4 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

2018 Senior Credit Facility

17 unchanged sentences

• 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 March 31, 2023.

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at June 30, 2023.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 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;

1 unchanged sentence

Financing costs and commitment fees related to the 2022 Senior Credit Facilities are capitalized and amortized over the term of the loans using the effective interest method.

There were no outstanding borrowings under the 2022 Senior Credit Facilities at March 31, 2023 or December 31, 2022.

The recorded balances associated with the 2022 Senior Credit Facilities are as follows:

June 30, 2023 December 31, 2022

Outstanding balance $ 13,000 $ —

Financing costs and commitment fees ( 748 ) —

Current portion of notes payable ( 250 ) —

Net long-term notes payable $ 12,002 $ —

Medical Equipment Financing

As a result of the acquisition of HMP, the Company assumed equipment financing obligations consisting of installment payments for medical equipment which secure the financing.

The financing obligations are payable in monthly installments through 2026 and include interest at rates ranging from 0 % to 7.99 %.

As of June 30, 2023, $ 3 million of the outstanding medical equipment financing obligations is presented on the condensed consolidated balance sheets as short term debt and $ 0.1 million is presented as long term debt, based on the scheduled repayment dates.

Fair Value Measurement

7 unchanged sentences

The degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

There were no transfers between fair value measurement levels during any presented period.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

The following tables summarize the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022:

At March 31, 2023

June 30, 2023 and 2022

Assets Measured at Fair Value on a Recurring Basis

The Company measures certain assets at fair value on a recurring basis.

There were no transfers between fair value measurement levels during any presented period.

The following tables summarize the Company's assets measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:

At June 30, 2023

(In thousands) Level 1 Level 2 Level 3 Total

12 unchanged sentences

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 March 31, 2023, the analysis resulted in no adjustments to the carrying value impacting unrealized gains or losses.

As of June 30, 2023, the analysis resulted in no adjustments to the carrying value impacting unrealized gains or losses.

All changes to measured fair value during the period were the result of accrued interest.

Assets and Liabilities Measured 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.

Assets Measured at Fair Value on a Nonrecurring Basis

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

These assets 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.

3 unchanged sentences

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 the Company owns.

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

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

There were no transfers between fair value measurement levels during any presented period.

3 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

Shareholders' Equity

3 unchanged sentences

The Company has only one class of stock outstanding, common shares.

The authorized stock consists of an unlimited number of common shares with no stated par value, of which 38,276,389 and 38,049,739 shares were issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.

For the three months ended March 31, 2023, the Company acquired and cancelled 64,756 common shares at a cost of $ 0.5 million to satisfy employee income tax withholding associated with RSUs vesting.

The authorized stock consists of an unlimited number of common shares with no stated par value, of which 38,400,422 and 38,049,739 shares were issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

For the six months ended June 30, 2023, the Company acquired and cancelled 66,734 common shares at a cost of $ 0.5 million to satisfy employee income tax withholding associated with RSUs vesting.

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

4 unchanged sentences

The maximum amount of the foregoing common shares that may be awarded under the Omnibus Plan as “incentive stock options” is 2,600,000 common shares.

As of March 31, 2023, the Company had outstanding options of 4,368,000 and RSUs of 1,130,000 associated with common shares under the Omnibus Plan.

The following table summarizes stock-based compensation expense for the three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended March 31,

As of June 30, 2023, the Company had outstanding options of 4,244,000 and RSUs of 1,123,000 associated with common shares under the Omnibus Plan.

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Stock-based compensation - options $ 301 $ 757 $ 649 $ 1,577

1 unchanged sentence

Total $ 1,471 $ 1,271 $ 2,862 $ 2,576

At March 31, 2023, there was approximately $ 1,189,000 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 1.53 years.

As of March 31, 2023, there was approximately $ 5,922,000 of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 1.48 years.

At June 30, 2023, there was approximately $ 889,000 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 1.32 years.

As of June 30, 2023, there was approximately $ 4,780,000 of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 1.26 years.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

The following table summarizes stock option activity for the three months ended March 31, 2023:

June 30, 2023 and 2022

The following table summarizes stock option activity for the six months ended June 30, 2023:

Number of options

4 unchanged sentences

Expired / Forfeited ( 25 ) 6.47

Balance March 31, 2023 4,368 $ 5.26 6.7 years $ 19,264

Balance June 30, 2023 4,244 $ 5.24 6.4 years $ 19,290

(1) For presentation purposes, stock options issued with a Canadian dollar exercise price have been translated to U.S.

dollars 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 the Company's common shares on the last trading day of the period ($ 9.66 ).

The aggregate intrinsic value of options outstanding was $ 19,263,947 and options exercisable was $ 16,609,299 at March 31, 2023.

For the three months ended March 31, 2023, 108,370 common shares were issued pursuant to the exercise of stock options.

At March 31, 2023, the Company had 3,521,000 exercisable stock options outstanding with a weighted average exercise price of $ 4.95 and a weighted average remaining contractual life of 6.2 years.

(2) The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing share price of the Company's common stock on the last trading day of the period ($ 9.78 ).

The aggregate intrinsic value of options outstanding was $ 19,290,197 and options exercisable were $ 16,579,787 at June 30, 2023.

For the six months ended June 30, 2023, 228,000 common shares were issued pursuant to the exercise of stock options.

At June 30, 2023, the Company had 3,415,000 exercisable stock options outstanding with a weighted average exercise price of $ 4.93 and a weighted average remaining contractual life of 6.0 years.

At December 31, 2022, the Company had 2,841,000 exercisable stock options outstanding with a weighted average exercise price of $ 4.53 and a weighted average remaining contractual life of 6.1 years.

5 unchanged sentences

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.

There were no issuances of options during three months ended March 31, 2023.

There were no issuances of options during the six months ended June 30, 2023.

Restricted stock units

3 unchanged sentences

The Company accounts for forfeitures on RSUs under ASU 2016-09 and recognizes forfeitures in the period in which they occur.

The following table summarizes RSU activity for the three months ended March 31, 2023:

The following table summarizes RSU activity for the six months ended June 30, 2023:

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

3 unchanged sentences

Expired / Forfeited ( 18 ) 6.70

Balance March 31, 2023 1,130 $ 7.01 1.48 years $ 10,915

Balance June 30, 2023 1,123 $ 7.02 1.26 years $ 10,986

(1) The aggregate intrinsic value of time-based RSUs outstanding was based on the Company's closing stock price on the last trading day of the period ($ 9.78 ).

During the six months ended June 30, 2023, the Company issued 702,206 RSUs with a vesting term of three years and a fair value of $ 5.6 million.

During the three months ended June 30, 2023, the Company issued no RSUs.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

March 31, 2023 and 2022

During the three months ended March 31, 2023, the Company issued 702,206 RSUs with a vesting term of three years and a fair value of $ 7.87 per share.

June 30, 2023 and 2022

Phantom share units

3 unchanged sentences

The cash-settled phantom share units are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with accrued liability and related expense being recognized over the requisite service period.

The following table summarizes phantom share unit activity for the three months ended March 31, 2023:

The following table summarizes phantom share unit activity for the six months ended June 30, 2023:

Number of phantom share units (000's) Value of share equivalents (1)

3 unchanged sentences

Expired / Forfeited ( 20 ) ( 196 )

Balance March 31, 2023

(1) The value of outstanding share equivalents at the beginning of the period is based on the market price of the Company’s stock at that time, the value of issued share equivalents is based on the market price of the Company’s stock at issuance, the value of vested share equivalents is based on the cash paid at the time of vesting, the values of expired/forfeited share equivalents and outstanding share equivalents at the end of the period and are based on the market price of the Company's stock at the end of the period.

The market price of the Company's stock was $ 9.66 on March 31, 2023.

Balance June 30, 2023 430 $ 4,200

(1) The value of outstanding share equivalents at the beginning of the period is based on the market price of the Company’s stock at that time, the value of issued share equivalents is based on the market price of the Company’s stock at issuance, the value of vested share equivalents is based on the cash paid at the time of vesting, and the values of expired/forfeited share equivalents and outstanding share equivalents at the end of the period are based on the market price of the Company's stock at the end of the period.

The market price of the Company's stock was $ 9.78 on June 30, 2023.

The change in fair value of the phantom share units has been charged to the Condensed Consolidated Statements of Income and Comprehensive Income and recorded as a liability included in accrued liabilities and long-term accrued liabilities.

The total liability associated with phantom share units at March 31, 2023 is $ 3,158,126 , with $ 2,147,652 of this amount included in current accrued liabilities and the remaining portion of $ 1,010,474 included in long-term accrued liabilities.

The total liability associated with phantom share units at June 30, 2023 is $ 2,120,000 , with $ 1,483,000 of this amount included in current accrued liabilities and the remaining portion of $ 637,000 included in long-term accrued liabilities.

The impact associated with the fair value re-measurement of phantom share units is recorded in selling, general and administrative expenses within the unaudited Condensed Consolidated Statements of Income and Comprehensive Income.

The following table summarizes expense associated with the phantom share units for the three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended March 31,

The following table summarizes expense (benefit) associated with the phantom share units for the three and six months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Selling, general, and administrative $ 687 $ 538 $ 1,837 $ 949

The Company paid cash settlements of $ 578,000 and $ 13,000 during the three months ended March 31, 2023 and 2022, pertaining to vestings of cash-settled phantom share units.

The Company paid cash settlements of $ 2,309,000 and $ 1,389,000 during the six months ended June 30, 2023 and 2022, respectively, pertaining to vestings of cash-settled phantom share units.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

June 30, 2023 and 2022

Commitments and Contingencies

4 unchanged sentences

Furthermore, the outcome of legal proceedings is inherently uncertain, and we may incur substantial defense costs and expenses defending any of these matters.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

March 31, 2023 and 2022

Legal Proceedings

6 unchanged sentences

On December 28, 2020, Vyaire filed its Answer, Affirmative Defenses, and Reconventional Demand (“Reconventional Demand”) with the State Court alleging breach of contract and seeking damages of $ 4.7 million, purportedly for the improper cancellation of the Purchase Order.

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

The Court has set a deadline to complete discovery of July 17, 2023, and has set a date for a non-jury trial on October 30, 2023.

The Company filed its Answer to the Reconventional Demand on February 12, 2021 and the parties completed discovery on July 17, 2023.

The Company filed a Motion for Summary Judgment on June 9, 2023.

The Court has set an August 28, 2023 hearing on that motion and has set a date for a non-jury trial on October 30, 2023.

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.

1 unchanged sentence

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.

As of March 31, 2023, outstanding funds in the amount of $ 0.9 million related to undelivered respiratory equipment are included within other long-term assets.

As of June 30, 2023, outstanding funds in the amount of $ 0.9 million related to undelivered respiratory equipment are included within other long-term assets.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

June 30, 2023 and 2022

Governmental and Regulatory Matters

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 recoupment of reimbursements, 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.

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.

9 unchanged sentences

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 during the three months ended March 31, 2023.

For the three months ended March 31, 2023, the Company recorded an income tax expense of $ 0.5 million, which includes a discrete tax benefit of $ 0.1 million associated with stock-based compensation arrangements.

Excluding the impact of the discrete tax benefit, the effective rate for the three months ended March 31, 2023 is 28.4 %.

Accordingly, the funds remitted to the MACs are recorded in Prepaid expenses and other assets at December 31, 2022 and were received during the six months ended June 30, 2023.

For the six months ended June 30, 2023, the Company recorded income tax expense of $ 1.2 million, which includes a discrete tax benefit of $ 0.1 million associated with stock-based compensation arrangements.

Excluding the impact of the discrete taxes, the effective rate for the six months ended June 30, 2023 is 28.6 %.

The effective rate differs from the amount computed by applying the statutory federal and state income tax rates to ordinary income before the provision for income taxes due to permanent non-deductible differences.

The Company's effective tax rate is based on forecasted annual results which may fluctuate significantly through the rest of the year.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

March 31, 2023 and 2022

At March 31, 2023 and 2022, the Company had no amounts recorded for uncertain tax positions and does not expect any material changes in uncertain tax benefits during the next 12 months.

At June 30, 2023 and 2022, the Company had no amounts recorded for uncertain tax positions and does not expect any material changes in uncertain tax benefits during the next 12 months.

The Company recognizes interest and penalties related to income tax matters in income tax expense.

7 unchanged sentences

Using the treasury stock method, diluted income per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares by assuming the proceeds received from the exercise of stock options and the vesting of RSUs are used to purchase common shares at the prevailing market rate.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

June 30, 2023 and 2022

The following reflects the earnings and share data used in the basic and diluted earnings per share computations:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Numerator - basic and diluted:

9 unchanged sentences

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

On April 18, 2023, the Company entered into a definitive stock purchase agreement (the "Purchase Agreement") to acquire 100% of the equity interests of Home Medical Products, Inc., a home medical equipment provider which operates throughout Tennessee and in Alabama and Mississippi.

VIEMED HEALTHCARE, INC.

1 unchanged sentence

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2023 and 2022

June 30, 2023 and 2022

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-Q

Item 1. Financial Statements