What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-06 compared with 2023-11-01 · 272 added, 363 removed, 453 unchanged (58% of the section changed)

4 unchanged sentences

Dollars, except outstanding shares)

September 30, 2023 At

March 31, 2024 At

December 31, 2023

3 unchanged sentences

Accounts receivable, net

2 24,477 18,451

Inventory 2 4,349 4,628

Income tax receivable 10 — 26

Prepaid expenses and other assets 2,483 2,449

8 unchanged sentences

Identifiable intangibles, net

Goodwill 3 29,704 —

3 29,765 29,765

Other long-term assets 9 887 887

6 unchanged sentences

Accrued liabilities 5

14,057 17,578

Finance lease liabilities, current portion

Operating lease liabilities, current portion

Current debt 6 1,834 —

Current portion of long-term debt

Total current liabilities $ 30,117 $ 32,124

4 unchanged sentences

Long-term debt

5 5,906 6,002

Total long-term liabilities $ 8,485 $ 8,876

4 unchanged sentences

unlimited authorized;

38,489,001 and 38,049,739 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

38,816,766 and 38,506,161 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

$ 21,842 $ 18,702

8 unchanged sentences

Dollars, except share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Note 2024 2023

6 unchanged sentences

Stock-based compensation 8 1,432 1,391

Depreciation 419 291 957 771

Loss on disposal of property and equipment

Depreciation and amortization

Loss (gain) on disposal of property and equipment

Other income, net

( 26 ) ( 81 )

Other (income) expense, net ( 41 ) ( 57 ) ( 124 ) ( 721 )

Income from operations $ 2,204 $ 1,934

1 unchanged sentence

Income from equity method investments ( 67 ) ( 35 )

Interest expense, net

6 ( 237 ) ( 42 ) ( 168 ) ( 165 )

Interest expense (income), net

Net income before taxes 2,121 2,018

1 unchanged sentence

Net income $ 1,603 $ 1,517

Other comprehensive income (loss)

Change in unrealized gain/loss on derivative instruments, net of tax — 112 — 334

Other comprehensive income (loss) $ — $ 112 $ — $ 334

Other comprehensive income $ — $ —

Comprehensive income $ 1,603 $ 1,517

Net income per share

Basic 11 $ 0.08 $ 0.03 $ 0.18 $ 0.10

Diluted 11 $ 0.07 $ 0.03 $ 0.17 $ 0.09

$ 0.04 $ 0.04

Weighted average number of common shares outstanding:

Basic 11 38,438,058 38,232,788 38,307,343 38,870,949

Diluted 11 40,420,615 39,583,438 40,391,729 39,852,297

38,717,123 38,156,777

40,580,634 40,016,693

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

Dollars, except share and per share amounts)

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

Common Stock Additional paid-in capital Total Shareholders'

Shares Amount Retained

1 unchanged sentence

Stock-based compensation - options — — 348 — 348

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 share repurchase program ( 389,878 ) — — — ( 1,887 ) ( 1,887 )

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

Net income — — — — 1,762 1,762

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

Stock-based compensation - options — — 767 — — 767

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

2 unchanged sentences

Shares redeemed to pay income tax ( 64,756 ) — — ( 505 ) ( 505 )

Shares repurchased under the share repurchase program ( 323,053 ) — — — ( 1,857 ) ( 1,857 )

Change in accumulated other comprehensive loss — — — 112 — 112

Net income — — — 1,517 1,517

Shareholders' equity, September 30, 2022 38,102,547 $ 14,927 $ 10,808 $ 56 $ 68,118 $ 93,909

See accompanying notes to the condensed consolidated financial statements

VIEMED HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Expressed in thousands of U.S.

Dollars, except share and per share amounts)

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

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

Common Stock Additional paid-in capital Total Shareholders'

Shares Amount Retained

1 unchanged sentence

Stock-based compensation - options — — 111 — 111

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

Exercise of options 108,370 544 — — — 544

Shares issued for vesting of restricted stock units 183,036 1,429 ( 1429 ) — — —

Shares redeemed to pay income tax ( 64,756 ) — — — ( 505 ) ( 505 )

Net income — — — — 1,517 1,517

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

Stock-based compensation - options — — 263 — — 263

Stock-based compensation - restricted stock — — 1,321 — 1,321

3 unchanged sentences

Net income — — — 1,603 1,603

Shareholders' equity, September 30, 2023 38,489,001 $ 18,633 $ 14,164 $ — $ 76,017 $ 108,814

Shareholders' equity, March 31, 2024 38,816,766 $ 21,842 $ 14,294 $ 80,137 $ 116,273

See accompanying notes to the condensed consolidated financial statements

2 unchanged sentences

(Expressed in thousands of U.S.

Nine Months Ended September 30,

Three Months Ended March 31,

Note 2024 2023

2 unchanged sentences

Adjustments for:

Depreciation 15,943 11,257

Change in inventory reserve — ( 1,418 )

Depreciation and amortization

Stock-based compensation expense 8 1,432 1,391

2 unchanged sentences

Income from debt investment ( 55 ) ( 57 )

Loss on disposal of property and equipment

Deferred income tax (benefit) expense ( 791 ) 745

Changes in working capital, net of effects from acquisitions:

Loss (gain) on disposal of property and equipment

Deferred income tax benefit

Changes in working capital:

Accounts receivable, net

Inventory ( 514 ) 697

( 6,026 ) ( 941 )

Prepaid expenses and other assets

2 unchanged sentences

Accrued liabilities

( 3,632 ) 1,846

Income tax payable/receivable

2 unchanged sentences

Purchase of property and equipment ( 6,006 ) ( 4,681 )

Investment in equity investments ( 7 ) ( 141 )

Cash paid for acquisition of HMP, net of cash acquired 3 ( 28,580 ) —

Proceeds from sale of property and equipment 4 641 776

2 unchanged sentences

Proceeds from exercise of options 8 304 544

Proceeds from term notes 6 5,000 —

Principal payments on term notes

Proceeds from revolving credit facilities 6 8,000 —

Payments on revolving credit facilities ( 5,005 ) —

Shares redeemed to pay income tax 8 ( 961 ) ( 505 )

Shares repurchased under the share repurchase program 8 — ( 8,858 )

Repayments of lease liabilities ( 32 ) ( 42 )

Repayments of finance lease liabilities

Net cash provided by (used in) financing activities $ ( 1,340 ) $ 39

Net decrease in cash and cash equivalents ( 6,836 ) ( 6,930 )

Net increase (decrease) in cash and cash equivalents

( 5,530 ) 6,630

Cash and cash equivalents at beginning of year 12,839 16,914

2 unchanged sentences

Cash paid during the period for interest $ 224 $ 42

Cash paid (received) during the period for income taxes, net of refunds $ 3,218 $ ( 920 )

Supplemental disclosures of non-cash transactions

Non-cash change in debt from the reclassification of debt issuance costs ( 714 ) —

Cash received during the period for income tax refunds

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

March 31, 2024 and 2023

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 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.

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 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 no longer qualifies as a “smaller reporting company” and is 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) beginning in this Quarterly Report on Form 10-Q.

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.

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 Toronto Stock Exchange under the symbol "VMD.TO".

The Company’s common shares are traded on the Nasdaq Capital Market under the symbol "VMD".

Summary of Significant Accounting Policies

13 unchanged sentences

Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable.

Significant areas requiring the use of management estimates relate to revenue recognition, accounts receivable and the related allowance for doubtful accounts, income tax provisions, and fair value of financial instruments.

Significant areas requiring the use of management estimates relate to revenue recognition, accounts receivable, income tax provisions, the fair value of financial instruments, and goodwill.

Actual results could differ from these estimates.

3 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

March 31, 2024 and 2023

Segment Reporting

4 unchanged sentences

Accounts Receivable

Accounts receivable are regularly reviewed for collectability and an allowance is recorded to cover the estimated bad debts and billing modifications.

The accounts receivable are presented on the Condensed Consolidated Balance Sheets net of the allowance for doubtful accounts.

It is possible that the estimates of the allowance for doubtful accounts could change, which could have a material impact on our operations and cash flows.

The Company writes off receivables when the likelihood for collection is remote, and when the Company believes collection efforts have been fully exhausted and it does not intend to devote additional resources in attempting to collect.

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

For the nine months ended September 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:

September 30, 2023 September 30, 2022

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

Provision for uncollectible accounts 10,800 7,811

Amounts charged off ( 7,722 ) ( 6,326 )

Balance, end of period $ 11,561 $ 8,516

Included in accounts receivable at September 30, 2023 are amounts due from Medicare and Medicaid representing 31 % and 5 %, respectively, and 36 % combined, of total outstanding net receivables.

Accounts receivable and net revenues are based on contractually agreed-upon rates for services provided, reduced by estimated adjustments, including variable consideration for implicit price concessions for sales revenue.

Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available.

The complexity of third-party billing arrangements and laws and regulations governing Medicare and Medicaid may result in adjustments to amounts originally recorded.

The Company performs a periodic analysis to review the valuation of accounts receivable and collectability of outstanding balances.

These estimates are determined utilizing historical realization data under a portfolio approach, which is then assessed by management to evaluate whether adjustments should be made based on accounts receivable aging trends, other operating trends, and relevant business conditions such as governmental and managed care payor claims processing procedures.

The Company records a reserve for estimated probable losses as part of net rental revenue adjustments in order to report rental revenue at an expected collectable amount based on the total portfolio of operating lease receivables for which collectability has been deemed probable.

The accounts receivable are presented on the Condensed Consolidated Balance Sheets net of the adjustments.

Receivables are considered past due when not collected by established due dates.

Specific patient balances are written off after collection efforts have been followed and the account has been determined to be uncollectible.

Revisions in reserve estimates are recorded as an adjustment to net revenue in the period of revision.

The estimates of the allowance for uncollectible accounts was $ 14.4 million and $ 11.1 million as of March 31, 2024 and December 31, 2023, respectively.

Included in accounts receivable at March 31, 2024 are amounts due from Medicare and Medicaid, representing 25 % and 2 % , respectively, and 27 % combined, of total outstanding receivables.

As of December 31, 2023, 32 % 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 and nine months ended September 30, 2023 and 2022 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Medicare revenues 46 % 46 % 45 % 47 %

Medicaid revenues 8 % 8 % 9 % 9 %

Total Medicare and Medicaid 54 % 54 % 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.

1 unchanged sentence

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

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

September 30, 2023 and 2022

Property and Equipment

3 unchanged sentences

Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets.

Property and equipment are amortized on a straight-line basis over their estimated useful lives.

Property and equipment are depreciated on a straight-line basis over their estimated useful lives.

Depreciation of medical equipment commences at the date of service, which represents the date that the asset has been delivered to a patient and is put in use and continues through the useful life of the asset.

Property and equipment with definite useful lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

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, 2024 and 2023

Equity Investments

1 unchanged sentence

The following table details the Company’s equity investments:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Equity method investments $ 338 $ 320

5 unchanged sentences

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.

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 and Comprehensive 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 September 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.

No events or changes have occurred as of March 31, 2024 that would impair the carrying value of equity method investments.

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

1 unchanged sentence

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 September 30, 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 March 31, 2024 on its investments in equity securities without a readily determinable fair value.

Debt Investment

4 unchanged sentences

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

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

September 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 September 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.

Intangible Assets

Intangible assets include trade names and other identifiable intangible assets, which are amortized on a straight-line basis over a period of their expected useful lives, generally five years .

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.

The Company's 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, net of tax.

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

Revenue recognition

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

The Company's contracts with customers often include multiple products and services, and the Company evaluates these arrangements to determine the unit of accounting for revenue recognition purposes based on whether the product or service is distinct from other products or services in the arrangement and should be accounted for as a separate performance obligation.

A product or service is distinct if the customer can benefit from it on its own or together with other readily available resources and the Company's ability to transfer the goods or services is separately identifiable from other promises in the contractual arrangement with the customer (e.g.

Revenue is then allocated to each separately identifiable good or service based on the standalone price of the items underlying the performance obligations.

Most of the Company’s products fall in the Medicare Fee-for-Service (“FFS”) program which is a payment model where services are unbundled and paid for separately.

These services are paid based on a Medicare determined price that is publicly available on the website for the Centers for Medicare & Medicaid Services (“CMS”).

For commercial payors, HME 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 .

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

March 31, 2024 and 2023

Revenue Recognition

Revenues are principally derived from the rental and sale of HME products and services to patients.

Rental revenues

Revenue generated from equipment that is rented to patients is recognized over the non-cancellable rental period (typically one month) and commences on delivery of the equipment to the patients.

The lease agreements are evaluated at lease commencement and the start of each monthly renewal period to determine if it is reasonably certain that the monthly renewal or purchase options would be exercised.

The exercise of monthly renewal or purchase options by a patient has historically not been reasonably certain to occur at lease commencement or subsequent monthly renewal.

Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients.

Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the non-cancellable lease term.

Rental of patient equipment is billed on a monthly basis beginning on the date the equipment is delivered.

Since deliveries can occur on any day during a month, the amount of billings that apply to the next month are deferred.

The Company's lease agreements generally contain lease components and non-lease components, which primarily relate to supplies.

The Company has made the accounting policy election to account for a lease component of an agreement and its associated non-lease components as a single lease component based on the Company's assessment of classification of the lease based on the consideration in the contract for the combined component.

Sales and Services revenues

Revenue related to sales of equipment and supplies is recognized on the date of delivery as this is when control of the promised goods is transferred to patients and is presented net of applicable sales taxes.

Revenues are recorded only to the extent it is probable that a significant reversal will not occur in the future as amounts may include implicit price concessions under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients.

The sales transaction price is determined based on contractually agreed-upon rates, adjusted for estimates of variable consideration.

The expected value method is used in determining the variable consideration as part of determining the sales transaction price using historical reimbursement experience, historical sales returns, and other operating trends.

Payment terms and conditions vary by contract.

The timing of revenue recognition, billing, and cash collection generally results in billed and unbilled accounts receivable.

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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Revenue from rentals under Topic 842

Three Months Ended March 31,

Revenue from rentals

Ventilator rentals, non-invasive and invasive $ 29,187 $ 25,147

Other durable medical equipment rentals 11,119 5,882 26,441 15,153

Revenue from sales and services under Topic 606

Other home medical equipment rentals

Revenue from sales and services

Equipment and supply sales

7,742 3,649 19,287 9,931

COVID-19 response sales and services

Service revenues

2,219 2,359 7,360 5,839

Total revenues $ 50,593 $ 39,556

Revenue Accounting under Topic 842

The Company leases HME such as non-invasive and invasive ventilators, positive airway pressure ("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.

The Company accounts for these rentals as operating leases.

Under FASB ASC Topic 842, the Company recognizes rental revenue on operating leases on a straight-line basis over the contractual lease term which varies based on the type of equipment rental.

The lease term begins on the date equipment is delivered to patients, and revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private commercial payors, and Medicaid.

Certain customer co-payments are included in revenue when considered probable of payment, which is generally when paid.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable at their net realizable values.

Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available.

Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded.

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

Revenue Accounting under Topic 606

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.

For sales of equipment previously placed in service, proceeds associated with these sales are recorded to gain (loss) on disposal of property and equipment.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

The Company also provides sleep study services to customers and recognizes revenue when the sleep study results are complete, satisfying the performance obligation.

In response to the COVID-19 pandemic, the Company began offering contact and vaccine tracing services, which revenues are recognized in the period in which the service has been provided.

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

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 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.

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

While the rates are fixed for the product or service with the customer and the payors, such amounts typically include co-payments, co-insurance and deductibles, which vary in amounts, and are due from the patient.

The Company includes in the transaction price only the amount that the Company expects to be entitled, which is substantially all of the payor billings at contractual rates.

The transaction price is initially constrained by the amount of customer co-payments, which are included in the transaction price when considered probable of payment and included in revenue if the product or service has already been provided to the customer.

Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available.

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, staffing services, or contact and vaccine tracing services.

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

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 September 30, 2023.

March 31, 2024 and 2023

Revenues from Medicare as percentages of the Company's total revenue for the three months ended March 31, 2024 and 2023 were 43 % and 45 %, respectively.

Stock-Based Compensation

6 unchanged sentences

For the Company’s phantom share units settled in cash, the Company computes the fair value of the phantom share units using the closing price of the Company's stock at the end of each period and records a liability based on the percentage of requisite service.

Interest rate swaps

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).

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

September 30, 2023 and 2022

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.

These fair value estimates reflect an income approach based on the terms of the interest rate swap contract and inputs corroborated by observable market data including interest rate curves.

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 Condensed Consolidated Balance Sheets.

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 Condensed 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 Condensed 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.

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

11 unchanged sentences

Changes or differences in these estimates or assumptions may result in changes to the current and deferred tax assets and liabilities on the Condensed Consolidated Balance Sheets and a charge to or recovery of income tax expense.

Deferred tax is recognized on any temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable earnings.

The effect of a change in the enacted tax rates is recognized in net earnings and comprehensive income or in equity depending on the item to which the adjustment relates.

At each reporting period end, deferred tax assets are evaluated for recoverability based on whether it is more likely than not that sufficient taxable earnings will be available to allow all or part of the asset to be recovered.

Business Combinations

The Company applies the acquisition method of accounting for business acquisitions.

The results of operations of the business acquired by the Company are included as of the respective acquisition date.

The acquisition-date fair value of the consideration transferred, including the fair value of any contingent consideration, is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.

To the extent the acquisition-date fair value of the consideration transferred exceeds the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill.

Patient relationships, medical records and patient lists are not reported as separate intangible assets due to the regulatory requirements and lack of contractual agreements but are part of goodwill.

Customer related relationships are not reported as separate intangible assets but are part of goodwill as authorizing physicians are under no obligation to refer the Company’s services to their patients, who are free to change physicians and service providers at any time.

The Company may adjust the preliminary purchase price allocation, as necessary, as it obtains more information regarding asset valuations and liabilities assumed that existed but were not available at the acquisition date, which is generally up to one year after

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

CARES Act Funds Received

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.

Department of Health and Human Services ("HHS") has stated that Provider Relief Fund payments are not loans and will not need to be repaid.

However, as a condition to the receipt of funds, the Company and any other providers must agree to a detailed set of terms and conditions.

CMS has indicated that the terms and conditions may be subject to ongoing changes and reporting.

There is no US GAAP guidance for for-profit health care entities that receive government grants that are not in the form of an income tax credit, revenue from a contract with a customer or a loan.

As such, for-profit entities must determine the appropriate accounting treatment by analogy to other guidance such as International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, in International Financial Reporting Standards.

Under IAS 20, the Company determined that upon receipt of funds, it fully complied with the conditions attached to the grant.

The Company recognized the distributions received from the Provider Relief Fund in the income statement in full during the period of receipt.

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 September 30, 2023

March 31, 2024 and 2023

the acquisition closing date.

Acquisition related costs are recognized separately from the business combination and are expensed as incurred.

Impairment of Goodwill and Long-Lived Assets

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.

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.

For the year ended December 31, 2023, the Company performed an assessment of qualitative factors and determined that no events or circumstances existed that would lead to a determination that it is more likely than not that the fair value of indefinite-lived assets were less than the carrying amount.

As such, a quantitative analysis was not required to be performed and the Company did not record any goodwill impairment charges.

The Company follows ASC Topic 360, which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the asset group’s carrying amounts may not be recoverable.

In performing the review for recoverability, if future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets are less than their carrying values, an impairment loss represented by the difference between its fair value and carrying value, is recognized.

When properties are classified as held for sale, they are recorded at the lower of the carrying amount or the expected sales price less costs to sell.

There were no impairment charges recognized during the three months ended March 31, 2024 and March 31, 2023.

Net Income per Share Attributable to Common Stockholders

Basic net income per common share is computed based on the weighted average number of shares of common stock outstanding during the period.

Diluted net income per common share is computed based on the weighted average number of shares of common stock plus the effect of dilutive stock-based awards outstanding during the period using the treasury stock method.

Dilutive stock-based awards include outstanding common stock options and time-based RSUs.

See Note 11 for earnings per share computations.

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, 2024 and 2023

Recently adopted accounting pronouncements

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 recorded in the future for credit losses on receivables within the scope of the standard due to the prescribed measurement principles, the impact of the adoption on the Company's consolidated financials statements was not material.

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 adopted this standard during the year ended December 31, 2023, which did not have a material impact on its consolidated financial statements and related disclosures.

Recently issued accounting pronouncements

3 unchanged sentences

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 standards except as noted below.

To date, however, the Company has not delayed the adoption of any accounting standards.

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 September 2022, the FASB issued ASU No.

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

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.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid by jurisdiction.

The ASU is effective for public business entities' annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

March 31, 2024 and 2023

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.

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 million in cash or cash payable, subject to customary post-closing net working capital and other adjustments.

Approximately $ 16 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 $ 477,000 of acquisition costs in conjunction with the acquisition for the nine months ended September 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 results of HMP’s operations have been included in the condensed consolidated financial statements since the date of acquisition.

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

Purchase Price

Cash paid or payable $ 29,417

Identifiable Assets

3 unchanged sentences

Prepaid expenses and other assets 498

Property and equipment, net 4,358

Property and equipment

Lease assets 743

13 unchanged sentences

Resulting goodwill $ 29,765

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.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

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.

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 a material change.

After the Company's June 30, 2023 financial statements were issued, management identified and recorded immaterial measurement period adjustments to the provisional balances pertaining to the acquired cash and cash equivalents, prepaid expenses other assets, trade payables, and long-term lease liability accounts.

As a result of these adjustments, there was a reduction in the provisional goodwill balance, which resulted in no impact on the current period's income or expenses.

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.

March 31, 2024 and 2023

Property and Equipment

1 unchanged sentence

The following table details the Company’s fixed assets:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Medical equipment $ 113,867 $ 110,920

6 unchanged sentences

Property and equipment, net of accumulated depreciation and amortization $ 73,511 $ 73,579

Depreciation in the amount of $ 5,556,000 and $ 3,829,000 is included in cost of revenue for the three months ended September 30, 2023 and 2022, respectively, and in the amount of $ 14,987,000 and $ 10,486,000 for the nine months ended September 30, 2023 and 2022, respectively.

Medical equipment purchases with a cost of $ 2,598,000 and $ 738,000 were included in accounts payable at September 30, 2023 and December 31, 2022, respectively.

Depreciation in the amount of $ 5.9 million and $ 4.5 million is included in cost of revenue for the three months ended March 31, 2024 and 2023, respectively.

Medical equipment purchases with a cost of $ 2.4 million and $ 1.4 million were included in accounts payable at March 31, 2024 and December 31, 2023, respectively.

Current Liabilities

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Accrued trade payables $ 2,994 $ 3,230

5 unchanged sentences

Total accrued liabilities $ 14,057 $ 17,578

Debt and Lease Liabilities

The following table summarizes the Company’s debt as of March 31, 2024 and December 31, 2023:

March 31, 2024 December 31, 2023

2022 Senior Credit Facilities

$ 6,813 $ 6,875

Medical equipment financing

Financing costs and commitment fees

( 578 ) ( 594 )

Current portion

( 596 ) ( 1,072 )

Long-term portion

$ 5,906 $ 6,002

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

2018 Senior Credit Facility

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 $ 10.0 million under the 2018 Senior Credit Facility.

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.

March 31, 2024 and 2023

2022 Senior Credit Facilities

2 unchanged sentences

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.

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 interest rates per annum applicable to the 2022 Senior Credit Facilities are a forward looking term rate based on a secured overnight financing rate ("Term SOFR") plus an applicable margin ranging 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, 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.

2 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 September 30, 2023.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

September 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;

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at March 31, 2024.

The 2022 Senior Credit Facilities include 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 $ 30.0 million.

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

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

September 30, 2023 December 31, 2022

Outstanding balance $ 8,938 $ —

Financing costs and commitment fees ( 715 ) —

Current portion of notes payable ( 188 ) —

Net long-term notes payable $ 8,035 $ —

Upon the initial draw of debt under the 2022 Senior Credit Facilities during the year ended December 31, 2023, the Company reclassified the deferred financing fees previously recorded in other long-term assets to long-term debt in the condensed consolidated balance sheets.

Medical Equipment Financing

1 unchanged sentence

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

As of September 30, 2023, $ 1.6 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.

As of March 31, 2024 , $ 0.3 million of the outstanding medical equipment financing obligations is presented on the condensed consolidated balance sheets as short term debt based on the scheduled repayment dates.

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, 2024 and 2023

The Company has recognized finance lease liabilities for vehicles and operating leases for land and buildings that have terms greater than twelve months, as follows:

March 31, 2024 December 31, 2023

Lease liabilities $ 3,029 $ 3,250

Current portion of lease liabilities ( 897 ) ( 934 )

Net long-term lease liabilities $ 2,132 $ 2,316

Operating Lease Liabilities

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

The exercise of lease renewal options is at the Company's sole discretion and is included in the lease term for calculations of its right-of-use assets and liabilities when it is reasonably certain that the Company plans to renew these leases.

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.

At March 31, 2024, the weighted average lease term was approximately 4.36 years.

Future maturities of the Company's operating lease liabilities as of March 31, 2024 are summarized as follows:

Lease Liability

Total lease payments $ 3,244

imputed interest 509

Present value of lease liabilities $ 2,735

Operating rental expenses for the three months ended March 31, 2024 amounted to $ 355,000 .

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, 2024 and 2023

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.

VIEMED HEALTHCARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Dollars, except per share amounts)

September 30, 2023 and 2022

Assets Measured at Fair Value on a Recurring Basis

1 unchanged sentence

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 September 30, 2023 and December 31, 2022:

At September 30, 2023

The following tables summarize the Company's assets measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:

At March 31, 2024

(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 September 30, 2023, the analysis resulted in no adjustments to the carrying value impacting unrealized gains or losses.

As of March 31, 2024, 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 Measured at Fair Value on a Nonrecurring Basis

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, 2024 and 2023

Assets and Liabilities 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.

These assets include equity method investments, other equity investments, and the fair value allocation related to the Company’s acquisitions.

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 measured at fair value on a nonrecurring basis during any of the periods presented.

The Company had no material adjustments of equity method investments or other equity investments measured at fair value on a nonrecurring basis during any of the periods presented.

The fair value allocation related to the Company’s acquisitions are determined using a discounted cash flow approach, or a replacement cost approach, which are based on significant unobservable inputs (Level 3).

These valuation methods required management to make various assumptions, including, but not limited to, future profitability, cash flows, replacement costs, and discount rates.

The Company’s estimates are based upon historical trends, management’s knowledge and experience and overall economic factors, including projections of future earnings potential.

Developing discounted future cash flows in applying the income approach requires the Company to evaluate its intermediate to longer-term strategies, including, but not limited to, estimates of revenue growth, operating margins, capital requirements, inflation and working capital management.

The development of appropriate rates to discount the estimated future cash flows requires the selection of risk premiums, which can materially impact the present value of future cash flows.

The Company estimated the fair value of acquired identifiable intangible assets using discounted cash flow techniques that included an estimate of future cash flows, consistent with overall cash flow projections used to determine the purchase price paid to acquire the business, discounted at a rate of return that reflects the relative risk of the cash flows.

The Company estimated the fair value of certain acquired identifiable intangible assets based on the cost approach using estimated costs consistent with historical experience.

The Company believes the estimates and assumptions used in the valuation methods are reasonable.

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

3 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

March 31, 2024 and 2023

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 38,489,001 and 38,049,739 shares were issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

For the nine months ended September 30, 2023, the Company acquired and cancelled 75,235 common shares at a cost of $ 0.6 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 38,816,766 and 38,506,161 shares were issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

The Company acquired and cancelled 128,362 common shares at a cost of $ 1.0 million to satisfy employee income tax withholding associated with RSUs vesting during the three months ended March 31, 2024.

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

Stock-Based Compensation

Effective June 11, 2020 (the "Effective Date"), the Company’s shareholders approved the Company's 2020 Long Term Incentive Plan (the "Omnibus Plan").

On June 11, 2020 (the "Effective Date"), the Company’s shareholders approved the Company's 2020 Long Term Incentive Plan (the "Omnibus Plan") to provide an incentive to attract, retain and reward directors, officers, employees, and consultants who provide services to the Company or any of its subsidiaries.

Upon approval of the Omnibus Plan, no future awards are available to be made under the Company's previous RSU and Option Plans (collectively, the "Former Plan"), and the common shares that were not settled or awarded under the Former Plan as of the Effective Date are available for awards under the Omnibus Plan.

1 unchanged sentence

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 September 30, 2023, the Company had outstanding options of 4,236,000 and RSUs of 1,230,000 associated with common shares under the Omnibus Plan.

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

As of March 31, 2024, the Company had outstanding options of 4,152,000 and RSUs of 1,524,000 associated with common shares under the Omnibus Plan.

The following table summarizes stock-based compensation expense for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Stock-based compensation - options $ 111 $ 348

1 unchanged sentence

Total $ 1,432 $ 1,391

At September 30, 2023, there was approximately $ 597,000 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 1.15 years.

As of September 30, 2023, there was approximately $ 5,200,000 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 1.10 years.

At March 31, 2024, there was approximately $ 220,000 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 0.91 years .

As of March 31, 2024, there was approximately $ 8,232,000 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 0.95 years .

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

The following table summarizes stock option activity for the nine months ended September 30, 2023:

March 31, 2024 and 2023

The following table summarizes stock option activity for the three months ended March 31, 2024:

Number of options

4 unchanged sentences

Expired / Forfeited ( 2 ) 5.21

Balance September 30, 2023 4,236 $ 5.24 6.1 years $ 7,975

Balance March 31, 2024 4,152 $ 5.25 5.6 years $ 17,423

(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 share price of the Company's common stock on the last trading day of the period ($ 6.73 ).

The aggregate intrinsic value of options outstanding was $ 7,974,846 and options exercisable were $ 7,247,301 at September 30, 2023.

For the nine months ended September 30, 2023, 229,000 common shares were issued pursuant to the exercise of stock options.

At September 30, 2023, the Company had 3,451,000 exercisable stock options outstanding with a weighted average exercise price of $ 4.97 and a weighted average remaining contractual life of 5.7 years.

(2) The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing price of the Company's common shares on the last trading day of the perio d ($ 9.43 and $ 7.85 on March 31, 2024 and December 31, 2023, respectively).

The aggregate intrinsic value of options outstanding was $ 17,423,000 and options exercisable was $ 16,278,000 at March 31, 2024.

For the three months ended March 31, 2024, 60,130 common shares were issued pursuant to the exercise of stock options.

At March 31, 2024, the Company had 3,861,000 exercisable stock options outstanding with a weighted average exercise price of $ 5.23 and a weighted average remaining contractual life of 5.5 years .

At December 31, 2023, the Company had 3,461,000 exercisable stock options outstanding with a weighted average exercise price of $ 4.99 and a weighted average remaining contractual life of 5.5 years.

The fair value of the stock options has been charged to the Consolidated Statements of Income and Comprehensive Income and credited to additional paid-in capital over the vesting period, using the grant date fair value based on the Black-Scholes option pricing model.

The fair value of the stock options has been charged to the Condensed Consolidated Statements of Income and Comprehensive Income and credited to additional paid-in capital over the vesting period, using the grant date fair value based on the Black-Scholes option pricing model.

The assumptions used to determine the grant date fair value of stock options include exercise price, risk-free interest rates, expected volatility, and average life of an option.

3 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 the nine months ended September 30, 2023.

There were no issuances of options during the three months ended March 31, 2024.

Restricted Stock Units

2 unchanged sentences

RSUs vest generally over a one or three-year period.

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 nine months ended September 30, 2023:

The Company accounts for forfeitures of 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, 2024:

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

2 unchanged sentences

Vested ( 379 ) 6.92

Expired / Forfeited ( 29 ) 6.92

Balance September 30, 2023 1,230 $ 7.23 1.10 years $ 8,274

(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 ($ 6.73 ).

Balance March 31, 2024 1,524 $ 7.84 0.95 years $ 14,371

(1) The aggregate intrinsic value of time-based RSUs outstanding was based on the closing price of the Company's common shares on the last trading day of the p eriod ($ 9.43 and $ 7.85 on March 31, 2024 and December 31, 2023, respectively ) .

VIEMED HEALTHCARE, INC.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

During the three months ended September 30, 2023, the Company issued 213,369 RSUs with a vesting term of one year and a fair value of $ 1.7 million.

During the nine months ended September 30, 2023, the Company issued 916,000 RSUs with a vesting term of one or three years and a fair value of $ 7.3 million.

March 31, 2024 and 2023

During the three months ended March 31, 2024, the Company issued 749,900 RSUs with equal annual vestings over a three year period and a fair value of $ 8.39 per share.

Phantom Share Units

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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 nine months ended September 30, 2023:

The following table summarizes phantom share unit activity for the three months ended March 31, 2024:

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

2 unchanged sentences

Vested ( 128 ) ( 962 )

Expired / Forfeited ( 26 ) ( 175 )

Balance September 30, 2023 423 $ 2,847

(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 $ 6.73 on September 30, 2023.

Balance March 31, 2024

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

The market price of the Company's common shares wa s $ 9.43 and $ 7.85 on March 31, 2024 and December 31, 2023, respectively.

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 September 30, 2023 is $ 1,739,000 , with $ 1,196,000 of this amount included in current accrued liabilities and the remaining portion of $ 543,000 included in long-term accrued liabilities.

The total liability associated with phantom share units at March 31, 2024 is $ 2,301,000 , with $ 1,854,000 of this amount included in current accrued liabilities and the remaining portion of $ 447,000 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 (benefit) associated with the phantom share units for the three and nine months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following table summarizes expense associated with the phantom share units for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Selling, general, and administrative $ 840 $ 1,149

The Company paid cash settlements of $ 2,358,000 and $ 1,383,000 during the nine months ended September 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)

September 30, 2023 and 2022

The Company paid cash settlements of $ 1.0 million and $ 0.6 million during the three months ended March 31, 2024 and 2023, respectively, pertaining to vestings of cash-settled phantom share units.

Commitments and Contingencies

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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, 2024 and 2023

Legal Proceedings

3 unchanged sentences

Vyaire was unable or unwilling to deliver the vast majority of the respiratory equipment referenced in the Purchase Order, and also refused to refund the prepayment amount (less the amounts paid for equipment actually received).

On July 29, 2020, the Company (through its subsidiary Sleep Management LLC) filed a lawsuit against Vyaire in the United States District Court for the Western District of Louisiana (the “Court”).

This lawsuit was dismissed on December 8, 2020 in connection with the commencement of the lawsuit filed by the Company (through its subsidiary Sleep Management) on November 5, 2020, against Vyaire in the 15th Judicial District Court for the Parish of Lafayette, Louisiana (the “State Court”) seeking damages for breach of contract and seeking a declaratory judgment that the Company is not required to pay any further funds to Vyaire.

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 completed discovery on July 17, 2023.

On November 5, 2020, the Company (through its subsidiary Sleep Management LLC) filed a lawsuit against Vyaire in the 15th Judicial District Court for the Parish of Lafayette, Louisiana (the “State Court”) seeking damages for breach of contract and seeking a declaratory judgment that the Company is not required to pay any further funds to Vyaire.

Vyaire filed a 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 State Court issued an order on September 5, 2023 granting the Company Partial Summary Judgment finding that Vyaire breached the contract.

The remaining issue of the damages suffered by the Company as a result of the breach will be determined at a non-jury trial pending Vyaire’s interlocutory appeal of the State Court’s partial summary judgment ruling.

However, the determination of damages resulting from Vyaire's breach was reserved for a non-jury trial.

Vyaire has appealed the State Court's Partial Summary Judgment and has filed its opening brief, to which the Company has responded by filing its opposition brief.

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 September 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)

September 30, 2023 and 2022

As of March 31, 2024, 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

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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 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 Medicare Administrative Contractors ("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 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 during the nine months ended September 30, 2023.

For the nine months ended September 30, 2023, the Company recorded income tax expense of $ 2.5 million, which includes a discrete tax benefit of $ 0.3 million associated with stock-based compensation arrangements.

Excluding the impact of the discrete taxes, the effective rate for the nine months ended September 30, 2023 is 29.4 %.

For the three months ended March 31, 2024, the Company recorded income tax expe nse 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 taxes, the effective rate for the three months ended March 31, 2024 is 29.2 % .

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.

At September 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.

At March 31, 2024 and 2023, 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.

4 unchanged sentences

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.

Earnings Per Share

Income per common share is calculated using earnings for the year divided by the weighted average number of shares outstanding during the year .

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.

2 unchanged sentences

Dollars, except per share amounts)

September 30, 2023 and 2022

March 31, 2024 and 2023

Earnings Per Share

Income per common share is calculated using earnings for the year divided by the weighted average number of shares outstanding during the year .

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Numerator - basic and diluted:

1 unchanged sentence

Basic weighted average number of common shares

38,717,123 38,156,777

Diluted weighted average number of shares

40,580,634 40,016,693

Basic earnings per share $ 0.04 $ 0.04

2 unchanged sentences

Basic weighted average number of common shares

38,717,123 38,156,777

Stock options and other dilutive securities 1,863,511 1,859,916

Diluted weighted average number of shares

40,580,634 40,016,693

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

2 unchanged sentences

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

September 30, 2023 and 2022

March 31, 2024 and 2023

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