What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-04 compared with 2025-03-10 · 105 added, 84 removed, 225 unchanged (46% of the section changed)

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General Matters

In this Annual Report on Form 10-K, unless the context otherwise requires, the terms the "Company," "we," "us" and "our" refer to Viemed Healthcare, Inc.

In this Annual Report on Form 10-K, unless the context otherwise requires, the terms "Company," "we," "us" and "our" refer to Viemed Healthcare, Inc.

and subsidiaries in which it has a controlling financial interest.

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We provide an array of home medical equipment, services and supplies, specializing in post-acute respiratory care services in the United States.

Our primary objective is to focus on the organic growth of the business and thereby solidify our position as one of the United States’ largest providers of in-home therapy for patients suffering from respiratory diseases.

Our respiratory care programs are designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care.

Our services include respiratory disease management (through the rental of various HME devices), neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, the sale of associated supplies, and healthcare staffing services.

We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 55.6% and 59.2% of our revenue for the years ended December 31, 2024 and 2023, respectively.

Viemed’s primary objective is to drive growth by increasing the number of patients served and the level of care provided through its technology-enabled, home-based clinical care and chronic disease management model.

Viemed's care programs are designed specifically to treat patients in the home for less total cost and with a superior quality of care.

Viemed's services include respiratory disease management (through the rental of various HME devices), neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, the sale of associated supplies, women’s health products and services, and healthcare staffing services.

We derive a significant portion of our revenue through the rental of non-invasive and invasive ventilators which represented 50.6% and 55.6% of our revenue for the years ended December 31, 2025 and 2024, respectively.

We combine the benefits of home ventilation support with licensed RTs to drive improved patient outcomes and reduce costly hospital readmissions.

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We currently serve patients in all 50 states.

Viemed anticipates expanding its workforce of RTs to support the Company's growth and ensure the high service model is maintained in the home.

Viemed expects to expand its workforce of licensed clinical practitioners, including RTs, to support the Company's growth and ensure the high service model is maintained in the home.

As of December 31, 2025, we employed 401 licensed RTs, representing approximately 29% of our company-wide employee count.

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The continued trend of servicing patients in the home rather than in hospitals is aligned with our business objective and we anticipate that this trend will continue to offer growth opportunities for us.

We expect to continue to be a solution to the rising health care costs in the United States by offering more cost-effective, home-based solutions while increasing the quality of life for patients fighting serious respiratory diseases.

For the year ended December 31, 2025, we generated revenues of $270.3 million and had net income of $15.4 million, compared to revenues of $224.3 million and net income of $11.4 million for the year ended December 31, 2024.

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Trends Affecting Our Business

Demographic and Market Trends

Home medical equipment markets are witnessing sustained expansion, with a notable focus on the complex respiratory and Obstructive Sleep Apnea ("OSA") device segments.

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These value-based contracts leverage data analytics to demonstrate the cost-effectiveness and quality of durable medical goods and provide evidence-based data to payors demonstrating the long-term benefits and cost savings associated with the use of certain medical goods.

Impact of Inflation

The Company faces current and potential future inflationary pressures driven by factors such as general cost increases, supply chain disruptions, and governmental policies.

The manufacturing and distribution costs of Viemed's patient equipment are affected by rising material, labor, and transportation expenses, including fuel costs.

Persistent inflation may impact overall demand, increase operating costs, and affect profit margins, potentially adversely affecting Viemed's business and financial performance.

In its 2025 DMEPOS Fee Schedule, CMS announced the fee schedule adjustment based on the annual change to the Consumer Pricing Index for all urban areas.

Items that were subject to the competitive bidding program in former competitive bidding areas will receive a 2.9% reimbursement rate increase.

Items that were subject to the competitive bidding program in non-competitive bidding areas received a 3.0% reimbursement rate increase.

Items not subject to the competitive bidding program received a 2.4% reimbursement rate increase.

Regulatory and Policy Developments

Regulatory and policy developments remain a key area of focus.

In particular, ventilator coverage has received renewed attention from the Centers for Medicare & Medicaid Services (“CMS”).

Although ventilators have historically been included under the NCD for the Durable Medical Equipment Reference List, there was previously no dedicated policy specifically addressing ventilator use.

On September 11, 2024, CMS initiated a national coverage analysis to evaluate noninvasive positive pressure ventilation in the home for the treatment of chronic respiratory failure associated with chronic obstructive pulmonary disease.

CMS issued a proposed decision memorandum on March 11, 2025, followed by a final NCD on June 9, 2025.

We actively participated in this process through formal comments and engagement with CMS, the U.S.

Department of Health and Human Services (“HHS”), and members of Congress.

The final NCD establishes specific medical necessity criteria for ventilator use that are expected to influence patient access, reimbursement, and utilization patterns.

In addition to affecting traditional Medicare, the NCD may also influence coverage determinations and reimbursement policies under commercial insurance and Medicare Advantage plans that reference or align with CMS coverage criteria.

These changes may have a material impact on our business.

In addition, CMS has proposed comprehensive reforms to the Medicare Competitive Bidding Program for DMEPOS, along with related updates to supplier accreditation standards and Medicare provider enrollment requirements.

The proposals are intended to modernize the program by refining payment methodologies, contract award processes, and supplier oversight.

Although the final scope and timing of these reforms remain subject to CMS rulemaking, providers with greater scale, infrastructure, and compliance capabilities are generally positioned to compete more effectively under a restructured Competitive Bidding Program.

Larger operators may benefit from economies of scale that support service obligations, enable pricing flexibility, and enhance administrative efficiency relative to smaller suppliers.

The federal budget reconciliation legislation, known as the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces a broad set of statutory and policy changes that may affect the healthcare industry and our operations.

Key provisions include revisions to Medicaid renewal and eligibility rules, adjustments to Medicaid state-directed payments and provider tax frameworks, new cost-sharing requirements, reduced home equity thresholds for long-term care eligibility, expanded telehealth coverage, and state waivers to support home and community-based services.

The OBBBA also establishes a Rural Health Transformation program aimed at improving access and care coordination in underserved communities.

Implementation of Pay-As-You-Go (“PAYGO”) rules could result in future adjustments to Medicare and Medicaid spending, including cost containment measures or payment reductions that may impact providers.

Most provisions are scheduled to take effect in 2027 and 2028, although some states may elect to implement certain measures as early as 2026.

We continue to monitor these regulatory developments closely.

Cost Pressures

Viemed operates in an environment of ongoing cost pressures from general cost increases, supply chain dynamics, and government policy.

Manufacturing and distribution expenses are influenced by factors such as rising material, labor, and transportation costs, including fuel.

As discussed in Part I, Item 1A of this Annual Report on Form 10-K, we are primarily exposed to trade policy and tariff developments indirectly, through supplier pricing and component sourcing rather than direct import activity.

While certain medical equipment and components have historically been excluded from tariff regimes or subject to exemptions, trade measures may be expanded, reclassified, or implemented with limited notice, and suppliers may increase prices to reflect higher input costs, compliance requirements, or logistics constraints.

These developments could increase our equipment and supply costs and reduce product availability.

To date, we have not experienced a material adverse impact on operating costs or supply availability attributable to tariffs.

However, the timing, scope, and duration of future actions remain uncertain, and we continue to monitor these developments and evaluate their potential operational and financial effects.

Future volatility in general price inflation and its impact on material availability, shipping, warehousing, and operational overhead could further impact financial results.

Viemed attempts to address these pressures through its inflation-linked reimbursement contracts, negotiation, leveraging its purchasing power and embracing technology, such as its proprietary clinical management platform.

Viemed attempts to manage these pressures through its inflation-linked reimbursement contracts, negotiation, leveraging its purchasing power, and embracing technology, such as its proprietary clinical management platform.

The below table highlights summary financial and operational metrics for the last eight quarters (expressed in thousands of U.S.

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1,485 0.5 % 1,483 0.6 % 2 0.1 %

Loss (gain) on disposal of property and equipment

Gain on disposal of property and equipment

(2,239) (0.8) % (1,905) (0.8) % (334) 17.5 %

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Non-operating income and expenses

Income (expense) from investments

Income (loss) from investments

— — % (954) (0.4) % 954 (100.0) %

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Net income $ 15,376 5.7 % $ 11,409 5.1 % $ 3,967 34.8 %

Net income attributable to noncontrolling interest 144 0.1 % — — % 144 NM

Net income attributable to noncontrolling interest 442 0.2 % 144 0.1 % 298 206.9 %

Net income attributable to Viemed Healthcare, Inc.

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For the year ended December 31, 2025, revenue totaled $270.3 million, an increase of $46.0 million (or 20.5%) from the comparable period in 2024.

The primary driver of this growth was our ventilator rental revenue, which increased by $16.3 million (or 15.1%) due to higher patient volumes associated with strong demand for ventilation services.

Additionally, rental revenue from other Home Medical Equipment (HME) increased by $10.3 million (or 27.0%) due to an expanding patient base, robust demand for Positive Airway Pressure (PAP) therapy, oxygen therapy, and percussion vest services.

Equipment and supply sales grew by $5.1 million (or 19.9%) largely attributable to the success of our sleep resupply program, which was further enhanced by the integration of resupply programs from acquisitions.

Furthermore, services revenue experienced an increase of $9.5 million (or 88.8%), primarily due to the growth of healthcare staffing offerings.

While ventilator rentals continue to make up the majority of our revenue, the growth of PAP and oxygen related sales, as well as our healthcare staffing offerings, is contributing to the diversity of our overall revenue mix.

As we continue to expand geographically into new territories and further expand our presence in our existing territories, we expect continued growth in our active ventilator patient base and other home medical offerings.

The primary driver of this growth was our equipment and supply sales revenue, which increased by $19.4 million (or 62.7%), largely due to the success of our sleep resupply program and the addition of maternal health offerings in connection with the Lehan Drugs, Inc ("Lehan") acquisition (as discussed in Note 3 – Business Combinations of the Notes to Consolidated Financial Statements).

Ventilator rental revenue increased by $12.2 million (or 9.8%), primarily as a result of higher patient volumes and sustained demand for ventilation services.

Rental revenue from other HME increased by $9.7 million (or 20.0%), reflecting an expanding patient base and strong demand for PAP, oxygen, and airway clearance therapies.

Services revenue increased by $4.8 million (or 23.6%) primarily due to the growth of healthcare staffing offerings.

Cost of Revenue and Gross Profit

For the year ended December 31, 2024, cost of revenue totaled $91.1 million, an increase of $20.8 million (or 29.7%) from the comparable period in 2023.

Gross profit percentage decreased from approximately 61.6% to approximately 59.4% from the year ended December 31, 2023 to the year ended December 31, 2024, respectively.

The decrease in gross profit percentage is primarily due to migration of the revenue mix associated with product and service diversification.

In 2025, gross profit in absolute dollars is expected to continue increasing, supported by overall revenue growth, subsiding inflationary cost pressures, and favorable reimbursement rate adjustments.

However, gross profit percentage is likely to be negatively impacted by the continued diversification of our product and service offerings.

Cost of revenue for the year ended December 31, 2025 was $114.8 million, an increase of $23.8 million (or 26.1%) compared to the same period in 2024.

This increase was primarily driven by higher patient volumes and the expansion of our service offerings, including higher personnel and product costs associated with servicing a larger patient base and supporting increased sales activity.

Gross profit margin decreased to approximately 57.5% for the year ended December 31, 2025, compared to 59.4% for the same period in 2024.

The change in gross profit margin was primarily attributable to changes in revenue mix, including a higher proportion of revenue from categories that carry higher direct costs relative to ventilator rentals.

We expect continued growth and scale to support improved operating efficiencies over time, including increased fixed cost leverage.

However, as revenue continues to shift toward a broader mix of products and services, including categories with different cost profiles, these efficiency gains may be partially offset.

Accordingly, gross margin may fluctuate in future periods based on changes in revenue mix and the extent to which additional volume translates into economies of scale.

Selling, General and Administrative Expense

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Selling, general and administrative expenses totaled $121.4 million for the year ended December 31, 2025, an increase of $15.2 million (or 14.3%) from the comparable period in 2024.

The improvement in selling, general, and administrative expenses as a percentage of revenue is attributable to economies of scale and improvements in operational efficiencies.

The overall increase in selling, general and administrative expense as compared to the prior period is primarily attributable to additional employee related expenses to accommodate the overall growth of the Company, which was partially due to the acquisition of Home Medical Products, Inc.

(“HMP”) on June 1, 2023.

Our full-time employee count increased from 996 on December 31, 2023 to 1,179 on December 31, 2024, an increase o f 18% .

Employee compensation expenses increased $13.3 million (or 21% ) as a result of the increase in our employee headcount and increases in incentive and volume-based compensation.

We expect that selling, general and administrative expenses as a percentage of revenue will continue to improve in 2025 due to increased efficiencies and costs optimization efforts.

The decrease in selling, general, and administrative expenses as a percentage of revenue reflects continued operating leverage and efficiency gains.

The overall increase in selling, general and administrative expense as compared to the prior period is primarily attributable to additional employee-related expenses to support the Company's overall growth and the inclusion of operating expenses from the Lehan acquisition completed on July 1, 2025.

Our full-time employee count increased from 1,179 as of December 31, 2024 to 1,382 as of December 31, 2025, an increase of 17%, reflecting both organic expansion and acquired operations.

As a result, employee compensation expense increased by $9.7 million, or 13%, during the year.

Based on our current cost structure and expected revenue growth, we believe selling, general and administrative expenses as a percentage of revenue may continue to trend downward over time as the business scales, although period-to-period results may vary depending on the timing of hiring, the extent of integration activities, and other growth initiatives.

Research and Development Costs

For the year ended December 31, 2024, research and development costs totaled $3.1 million, an increase of $0.3 million (or 10.3%) from the comparable period in 2023.

As we continue to invest in research and development related projects to support our technology initiatives, we expect that the associated costs will remain consistent in 2025 relative to 2024 costs.

For the year ended December 31, 2025, research and development costs totaled $3.0 million, a decrease of $0.1 million (or 1.7%) from the comparable period in 2024.

Based on our current project pipeline and planned investment levels, we expect that the associated costs will remain relatively consistent in 2026.

Stock-Based Compensation

For the year ended December 31, 2025, stock-based compensation totaled $9.1 million, an increase of $2.8 million (or 45.3%) from the comparable period in 2024.

We anticipate that as we expand our workforce, incorporating stock-based awards as a component of employee compensation, stock-based compensation expenses will rise correspondingly.

Historically, revenue growth has outpaced the growth in stock-based compensation.

As we transition more of our stock-based compensation from phantom stock liability awards to equity awards, we expect stock-based compensation expense to increase in 2025.

Loss (gain) on disposal of property and equipment

For the year ended December 31, 2024, gain on disposal of property and equipment totaled $1.9 million compared to loss on disposal of property and equipment of $0.6 million for the year ended December 31, 2023.

The gain primarily resulted from proceeds related to the sale of recalled ventilators back to the manufacturer.

We anticipate additional future gains from the disposal of eligible devices, as the proceeds from these disposals are expected to exceed their net book value.

Income (expense) from investments

For the year ended December 31, 2024, expense from investments totaled $1.0 million compared to income from investments of $0.5 million from the comparable period in 2023.

The change is primarily driven by a loss recognized on a debt investment during the current year.

The increase reflects our continued investment in employee retention and long-term incentive programs, including the broader integration of equity-based awards into our compensation structure.

In recent years, we have increased the use of equity-based awards as part of our overall compensation programs, and the higher expense recognized during the year ended December 31, 2025 reflects the cumulative impact of awards granted in both the current and prior years, as those awards continue to vest over their respective service periods.

Gain on disposal of property and equipment

For the year ended December 31, 2025, gain on disposal of property and equipment totaled $2.2 million compared to $1.9 million for the year ended December 31, 2024.

In both periods, the gains were primarily attributable to proceeds from the sale of recalled ventilators back to the manufacturer.

The ventilator buyback program was substantially completed as of December 31, 2025, and accordingly we do not expect additional material gains from these transactions in future periods.

We may, however, continue to recognize gains or losses from the disposal of equipment in the ordinary course of business, including losses related to damaged or destroyed equipment.

Income (loss) from investments

The $1.0 million loss from investments in the prior year ended December 31, 2024 primarily reflects a loss recognized on a debt investment.

No investment-related loss was recorded for the year ended December 31, 2025.

Interest Expense, Net

For the year ended December 31, 2024, net interest expense totaled $0.8 million, an increase of $0.4 million from the comparable period in 2023.

The increase in net interest expense is primarily due to outstanding borrowings as a result of debt issued to fund acquisitions.

We expect to utilize positive cash flow to further reduce outstanding debt which would result in a reduction in net interest expense in 2025 relative to 2024.

For the year ended December 31, 2025, net interest expense was $1.2 million, an increase of $0.4 million from the comparable period in 2024.

The increase in net interest expense is primarily due to outstanding borrowings as a result of debt issued to fund the Lehan acquisition.

Provision for Income Taxes

For the year ended December 31, 2025, the provision for income taxes was a $6.4 million expense, compared to a $4.8 million expense during the 2024 period.

Our annual estimated effective tax rate for 2024 is 29.4% .

The increase in income tax expense was primarily attributable to higher pre-tax income.

Our annual effective tax rate was 29.4% for both 2025 and 2024.

For the year ended December 31, 2025, net income was $15.4 million, an increase of $4.0 million (or 34.8%) from the comparable period in 2024.

The increase in net income was primarily a result of the organic growth of the business and expansion of the patient base.

Net income as a percentage of net revenue decreased from 5.6% for the year ended December 31, 2023 to 5.1% for the year ended December 31, 2024, primarily due to non-operating investment losses and an impairment of outstanding litigation funds receivable.

The increase was primarily driven by higher operating income resulting from strong revenue growth across multiple product and service categories and improved operating leverage, partially offset by a lower gross margin driven by changes in revenue mix, higher selling, general and administrative expenses associated with headcount growth and the Lehan acquisition, and increased net interest expense related to acquisition financing.

Net income as a percentage of net revenue increased from 5.1% for the year ended December 31, 2024 to 5.7% for the year ended December 31, 2025.

Non-GAAP Financial Measures

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and other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including depreciation and amortization of capitalized assets, net interest expense (income), stock based compensation, transaction costs, impairment of assets, and taxes.

The following table is a reconciliation of Net income, the most directly comparable GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated:

In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income attributable to Viemed Healthcare, Inc.

including depreciation and amortization of capitalized assets, net interest expense, stock based compensation, transaction costs, impairment of assets, and taxes.

The following table is a reconciliation of net income attributable to Viemed Healthcare, Inc., the most directly comparable GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated:

For the quarter ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024

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7,570 7,539 6,891 6,613 6,366 6,408 6,309 6,285

Interest expense (income)

Interest expense, net

364 507 132 179 147 225 254 150

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The Company has also historically utilized short term financing arrangements with suppliers that could be extended over a longer term if there was a need for additional liquidity.

The Company had historically utilized Change Healthcare, a subsidiary of UnitedHealth Group, to submit patient claims to certain non-Medicare payors for reimbursement.

UnitedHealth Group announced that on February 21, 2024, Change Healthcare’s information technology systems were impacted by a cybersecurity incident.

Although this incident did not impact our day-to-day operations or patient care delivery, it did cause delays in submitting patient claims to certain payors.

By the end of the second quarter of 2024, the Company had replaced Change Healthcare as its clearinghouse and resumed claims submissions using alternative platforms for all claims.

However, the delayed claims submissions resulted in a temporary reduction of our operating cash flow and an increase to our accounts receivable during the year ended December 31, 2024.

On June 6, 2025, the Company's Board of Directors authorized and approved a share repurchase program.

Under the terms of the 2025 Share Repurchase Program, the Company repurchased 1,976,441 of its common shares and the program was completed and terminated during the three months ended September 30, 2025.

On March 4, 2026, the Company's Board of Directors authorized and approved a share repurchase program.

Under the terms of the 2026 Share Repurchase Program, the Company may repurchase up to 1,930,131 of its common shares from time to time through open market purchases, block purchases or otherwise in accordance with applicable securities laws, including Rule 10b-18 of the Exchange Act.

The following table summarizes our cash flows for the periods indicated:

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Net cash provided by operating activities during the year ended December 31, 2025 was $51.9 million, resulting from net income of $15.4 million, increased by net income adjustments of $38.8 million and offset by an increase in non-cash working capital of $2.3 million.

The net income adjustments primarily consisted of $25.4 million of depreciation and amortization, $6.3 million of stock-based compensation, and an impairment loss on debt investment of $1.3 million, partially offset by a $3.8 million change in deferred tax asset and a $1.9 million gain on disposal of property and equipment.

The net income adjustments primarily consisted of $28.6 million of depreciation and amortization, $9.1 million of stock-based compensation, and a $3.1 million deferred income tax expense, partially offset by a $2.2 million gain on disposal of property and equipment.

The primary change in non-cash working capital was a decrease in net income tax payable of $4.1 million, partially offset by an increase in net accounts receivable of $1.2 million.

Net cash provided by operating activities during the year ended December 31, 2024 was $39.1 million, resulting from net income of $11.4 million, increased by net income adjustments of $27.3 million and offset by an increase in non-cash working capital of $0.4 million.

The net income adjustments primarily consisted of $25.4 million of depreciation and amortization, $6.3 million of stock-based compensation, and an impairment loss on debt investment of $1.3 million, partially offset by a $3.8 million deferred income tax benefit, and a $1.9 million gain on disposal of property and equipment.

The primary change in non-cash working capital was an increase in net accounts receivable of $6.1 million, partially offset by an increase in accrued liabilities of $2.9 million.

Net cash provided by operating activities during the year ended December 31, 2023 was $45.2 million, resulting from net income of $10.2 million, increased by net income adjustments of $27.2 million and a change in non-cash working capital of $7.8 million.

The net income adjustments primarily consisted of $21.9 million of depreciation and amortization, $5.8 million of stock-based compensation, and $1.0 million of distributions of earnings received from equity method investments, partially offset by a $1.4 million deferred income tax benefit.

The primary changes in working capital were an increase in accrued liabilities of $5.0 million, a decrease in prepaid expenses and other assets of $2.2 million, and a net increase in income taxes payable of $2.2 million, partially offset by an increase in net accounts receivable of $1.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities during the year ended December 31, 2024 was $30.7 million.

Net cash used in investing activities during the year ended December 31, 2025 was $50.2 million, primarily due to the net cash paid for the acquisition of Lehan of $26.3 million.

Net cash used for capital expenditures during the period was $23.8 million and consisted of $40.0 million of purchases of property and equipment, partially offset by $16.2 million of sales proceeds from the disposal of property and equipment.

Net cash used for capital expenditures represents a $3.9 million, or 17%, increase year over year.

Purchases of property and equipment were primarily related to medical equipment rented to our patients.

Net cash used in investing activities also included $3.0 million of net cash paid for the acquisition of East Alabama HomeMed, LLC ("HomeMed") and $1.0 million for an equity investment.

Net cash used in investing activities during the year ended December 31, 2023 was $52.1 million , primarily due to the net cash paid for the acquisition of HMP of $28.6 million .

Net cash used for capital expenditures represents a decrease of $3.6 million, or 13%, compared to 2024.

Purchases of property and equipment were primarily related to medical equipment placed with patients under our rental arrangements.

Net cash used in investing activities during the year ended December 31, 2024 was $30.7 million.

Net cash used for capital expenditures during the period was $27.5 million and consisted of $37.8 million of purchases of property and equipment, partially offset by $10.3 million of sales proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to medical equipment rented to our patients.

Net Cash Provided by (Used in) Financing Activities

Purchases of property and equipment were primarily related to medical equipment placed with patients under our rental arrangements.

Net cash used in investing activities also included $3.0 million of net cash paid for the acquisition of East Alabama HomeMed, LLC ("HomeMed") and $1.0 million related to an equity investment.

Net Cash Used in Financing Activities

Net cash used in financing activities during the year ended December 31, 2025 was $5.8 million.

Proceeds from the 2022 Revolving Credit Facility (as defined below) were $3.0 million, which was used to fund the HomeMed acquisition.

During the period, proceeds from the 2022 Term Loan Facility (as defined below) were $9.0 million and proceeds from the 2022 Revolving Credit Facility (as defined below) were $13.0 million, which were used to partially fund the cash acquisition of Lehan.

Subsequent to the Lehan acquisition, the Company made principal payments totaling $13.0 million on the 2022 Revolving Credit Facility, resulting in no outstanding borrowings under the 2022 Revolving Credit Facility as of December 31, 2025.

In addition, the Company repurchased and cancelled common shares totaling $13.2 million pursuant to the Share Repurchase Program authorized by the Board on June 6, 2025 (the "2025 Share Repurchase Program") and paid $1.7 million to satisfy employee income tax withholding obligations associated with the vesting of restricted stock units ("RSUs"), while proceeds from the exercise of options during the year ended December 31, 2025 were $1.4 million.

Net cash used in financing activities during the year ended December 31, 2024 was $3.7 million.

During the period, proceeds from the 2022 Revolving Credit Facility (as defined below) were $3.0 million, which were used to fund the HomeMed acquisition.

Subsequent to the HomeMed acquisition, principal payments on the 2022 Revolving Credit Facility were $5.0 million.

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Additionally, principal payments on acquired loans were $0.8 million during the year ended December 31, 2024.

The Company acquired and cancelled 142,985 common shares at a cost of $1.1 million to satisfy employee income tax withholding associated with RSUs vestings while proceeds from the exercise of options during the year ended December 31, 2024 were $1.0 million.

Net cash provided by financing activities during the year ended December 31, 2023 was $2.8 million.

Proceeds from the 2022 Term Loan Facility (as defined below) were $5.0 million and proceeds from the 2022 Revolving Credit Facility (as defined below) were $8.0 million, which were used to partially fund the cash acquisition of HMP.

During the year ended December 31, 2023, principal payments on the 2022 Senior Credit Facilities (as defined below) were $6.1 million.

Additionally, principal payments on acquired loans were $4.6 million during the year ended December 31, 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 vestings while proceeds from the exercise of options during the year ended December 31, 2023 were $1.3 million.

The Company acquired and cancelled 142,985 common shares at a cost of $1.1 million to satisfy employee income tax withholding obligations associated with the vesting of RSUs, while proceeds from the exercise of options during the year ended December 31, 2024 were $1.0 million.

Sources of Liquidity

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On November 29, 2022, the Company refinanced its existing borrowings under the prior Commercial Business Loan Agreement with Hancock Whitney Bank and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent and collateral agent, that provides for an up to $30.0 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $30.0 million delayed draw term loan facility (the "2022 Term Loan Facility"), both maturing in November 2027.

On May 28, 2024, the Company entered into a First Amendment to the 2022 Senior Credit Facilities that (a) extends the delayed draw term loan commitment expiration date to November 29, 2025, from its initial expiration date of May 29, 2024, and (b) provides for other technical amendments.

On May 28, 2024, the Company entered into a First Amendment to the 2022 Senior Credit Facilities that extends the delayed draw term loan commitment expiration date to November 29, 2025, from its initial expiration date of May 29, 2024, and provides for other technical amendments.

On June 6, 2025, the Company entered into a Second Amendment to the 2022 Senior Credit Facilities that, among other things, increased the permitted amount of restricted payments that may be made by the Company and its subsidiaries, subject to specified conditions, and made other conforming and administrative changes.

On November 7, 2025, the Company entered into a Third Amendment to the 2022 Senior Credit Facilities that, among other things, further extended the delayed draw term loan commitment expiration date from November 29, 2025 to November 29, 2026 and included other technical amendments.

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

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The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at December 31, 2025.

Our principal uses of cash are funding the purchase of rental assets and other capital purchases, the repayment of debt, funding of

acquisitions, operations, and other working capital requirements.

Our contractual obligations primarily relate to the repayment of existing debt and contractual obligations for operating and finance leases.

Our principal uses of cash are funding the purchase of rental assets and other capital purchases, the repayment of debt, the repurchase of shares of our common stock, the funding of acquisitions, operations, and other working capital requirements.

Our contractual obligations primarily relate to the repayment of existing debt and contractual obligations for operating leases.

The following table presents our material contractual obligations and commitments to make future payments as of December 31, 2025:

22 unchanged sentences

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What changed 10-K

Item 7. Management’s Discussion and Analysis