UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2019~~

March 31, 2022



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 001-38973

Viemed Healthcare, Inc.

(Exact name of registrant as specified in its charter)



British Columbia, Canada		N/A
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

	~~202 N. Luke St.~~625 E. Kaliste Saloom Rd. Lafayette, LA ~~70506~~70508
(Address of principal executive offices, including zip code)

	(337) 504-3802
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:




Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Shares, no par value	VMD	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No x☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐☒

Non-Accelerated filer ☐

Smaller reporting company x☐

Emerging growth company x☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of ~~August 8, 2019,~~April 25, 2022, there were ~~37,735,785~~38,918,067 common shares of the registrant outstanding.



VIEMED HEALTHCARE, INC. TABLE OF CONTENTS
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021



	Page
PART I - FINANCIAL INFORMATION			3
Item 1. Financial Statements			3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Income and Comprehensive Income	4
		Condensed Consolidated Statements of Changes in Shareholders' Equity	5
		~~Consolidated~~Condensed Consolidated Statements of Cash Flows	6
		Notes to the Condensed Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			23
		Forward-Looking Statements	23
		~~Business Overview~~General Matters	24
		Overview	24
		Trends Affecting Our Business	25
		Results of Operations	2527
		Non-GAAP Financial Measures	29
		Liquidity and Capital Resources	30
		Accounting and Disclosure Matters	33
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3635
Item 4. Controls and Procedures			3635
PART II - OTHER INFORMATION			3736
Item 1. Legal Proceedings			3736
Item 1A. Risk Factors			3736
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3736
Item 3. Defaults Upon Senior Securities			37
Item 4. Mine Safety Disclosures			3837
Item 5. Other Information			3837
Item 6. Exhibits			38

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


VIEMED HEALTHCARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars, except outstanding shares)
	Note	At March 31, 2022		At December 31, 2021
		(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents		$	29,248	$	28,408
Accounts receivable, net of allowance for doubtful accounts of $8,484 and $7,031 at March 31, 2022 and December 31, 2021, respectively	2	13,599		12,823
Inventory, net of inventory reserve of $0 and $1,418 at March 31, 2022 and December 31, 2021, respectively	2	2,503		2,457
Income tax receivable		676		1,893
Prepaid expenses and other assets	2	1,778		1,729
Total current assets		$	47,804	$	47,310
Long-term assets
Property and equipment, net	3	63,977		62,846
Equity investments	2	2,359		2,157
Deferred tax asset	9	3,985		4,787
Other long-term assets	6, 8	882		862
Total long-term assets		$	71,203	$	70,652
TOTAL ASSETS		$	119,007	$	117,962

LIABILITIES
Current liabilities
Trade payables		$	3,697	$	3,239
Deferred revenue		3,888		3,753

Accrued liabilities	4	8,739		8,875
Current portion of lease liabilities	5	361		464
Current portion of long-term debt	5	1,049		1,480

Total current liabilities		$	17,734	$	17,811
Long-term liabilities
Accrued liabilities	7	731		757
Long-term lease liabilities	5	232		268
Long-term debt	5	4,266		4,306
Total long-term liabilities		$	5,229	$	5,331
TOTAL LIABILITIES		$	22,963	$	23,142

Commitments and Contingencies	8	—		—

SHAREHOLDERS' EQUITY
Common stock - No par value: unlimited authorized; 39,293,778 and 39,640,388 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	7	$	14,348	$	14,014
Additional paid-in capital		8,720		7,749
Accumulated other comprehensive loss		(115)		(278)
Retained earnings		73,091		73,335
TOTAL SHAREHOLDERS' EQUITY		$	96,044	$	94,820

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	119,007	$	117,962

VIEMED HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars, except outstanding shares)
Note At
June 30, 2019 At
December 31, 2018
(Unaudited) Audited
ASSETS
Current assets
Cash and cash equivalents $ 7,691
$ 10,413
Accounts receivable, net of allowance for doubtful accounts of $6,874 and $4,266 at June 30, 2019 and December 31, 2018, respectively 2 12,797
8,839
Inventory, net 2 3,712
2,887
Prepaid expenses and other assets 861
824
Total current assets $ 25,061
$ 22,963
Long-term assets
Property and equipment 3 45,803
30,562
Other assets 22
—
Total long-term assets $ 45,825
$ 30,562
TOTAL ASSETS $ 70,886
$ 53,525

LIABILITIES
Current liabilities
Trade payables $ 7,818
$ 5,884
Income taxes payable —
152
Accrued liabilities 4 6,950
7,551
Current portion of lease liabilities 5 8,410
3,031
Current portion of long-term debt 133
—
Warrant conversion liability 6 800
363
Total current liabilities $ 24,111
$ 16,981
Long-term liabilities
Accrued liabilities 7 1,685
1,117
Long-term lease liabilities 5 1,098
394
Long-term debt 5 4,703
—
Total long-term liabilities $ 7,486
$ 1,511
TOTAL LIABILITIES $ 31,597
$ 18,492

Commitments and Contingencies (Note 8) —
—

SHAREHOLDERS' EQUITY
Common stock - No par value: unlimited authorized; 37,697,535 and 37,500,815 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively 7 2,350
71
Additional paid-in capital 5,063
5,390
Accumulated other comprehensive loss (148 ) —
Retained earnings 32,024
29,572
TOTAL SHAREHOLDERS' EQUITY $ 39,289
$ 35,033

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 70,886
$ 53,525

See accompanying notes to the condensed consolidated financial statements

Page



VIEMED HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Expressed in thousands of U.S. Dollars, except share and per share amounts) (Unaudited)


		Three Months Ended March 31,
	Note	2022		2021
Revenue	2	$	32,255	$	28,416

Cost of revenue		12,512		10,674

Gross profit		$	19,743	$	17,742

Operating expenses
Selling, general and administrative		15,776		14,509
Research and development		632		339
Stock-based compensation	7	1,305		1,307
Depreciation		237		200

Other (income) expense		(455)		55
Income from operations		$	2,248	$	1,332

Non-operating income and expenses

Income from equity method investments		(323)		(220)
Interest expense, net of interest income	5	64		91

Net income before taxes		2,507		1,461
Provision (benefit) for income taxes	9	745		(223)

Net income		$	1,762	$	1,684

Other comprehensive income
Change in unrealized gain/loss on derivative instruments, net of tax		163		106
Other comprehensive income		$	163	$	106

Comprehensive income		$	1,925	$	1,790

Net income per share
Basic	10	$	0.04	$	0.04
Diluted	10	$	0.04	$	0.04

Weighted average number of common shares outstanding:
Basic	10	39,621,741		39,129,407
Diluted	10	40,363,456		40,663,368

Three Months Ended June 30, Six Months Ended June 30,
Note 2019 2018 2019 2018
Revenue 2 $ 22,547
$ 15,508
$ 42,990
$ 29,619

Cost of revenue 5,686
4,185
10,727
7,744

Gross profit $ 16,861
$ 11,323
$ 32,263
$ 21,875

Operating Expenses
Selling, general and administrative 13,244
7,919
24,836
15,208
Research and development 203 —
437 —
Stock-based compensation 7 1,034
665
1,914
1,226
Depreciation 138
124
267
330
Loss on disposal of property and equipment 85
52
141
88
Other expense 25
7
49
7
Income from operations $ 2,132
$ 2,556
$ 4,619
$ 5,016

Non-operating expenses
Unrealized loss on warrant conversion liability 6 268 123 437
195
Interest expense, net of interest income 5 20
67
46
114

Net income before taxes 1,844
2,366
4,136
4,707
Provision for income taxes 9 24
—
162
—

Net income $ 1,820
$ 2,366
$ 3,974
$ 4,707

Other Comprehensive Income
Change in unrealized loss on derivative instruments, net of tax (148 ) —
(148 ) —
Other Comprehensive Loss (148 ) $ —
$ (148 ) $ —

Comprehensive Income 1,672
$ 2,366
$ 3,826
$ 4,707

Net income per share
Basic 11 $0.05 $0.06 $0.10 $0.12
Diluted 11 $0.05 $0.06 $0.10 $0.12

Weighted average number of common shares outstanding:
Basic 11 37,686,763
37,909,628
38,165,274
37,909,628
Diluted 11 39,975,307
39,335,011
40,166,855
39,099,186

See accompanying notes to the condensed consolidated financial statements

Page



VIEMED HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in thousands of U.S. Dollars, except share and per share amounts) (Unaudited)


	Common Stock			Additional paid-in capital		Accumulated other comprehensive loss				Total Shareholders' equity
	Shares	Amount						Retained earnings
Shareholders' equity, December 31, 2020	39,185,182	$	9,181	$	7,320	$	(451)	$	65,643	$	81,693
Stock-based compensation - options	—	—		1,078		—		—		1,078
Stock-based compensation - restricted stock	—	—		229		—		—		229
Exercise of options	16,586	65		—		—		—		65
Shares issued for vesting of restricted stock units	556,840	4,403		(4,403)		—		—		—
Shares redeemed to pay income tax	(181,320)	—		—		—		(1,434)		(1,434)
Change in accumulated other comprehensive loss, net of tax	—	—		—		106		—		106
Net income	—	—		—		—		1,684		1,684
Shareholders' equity, March 31, 2021	39,577,288	$	13,649	$	4,224	$	(345)	$	65,893	$	83,421








































	Common Stock			Additional paid-in capital		Accumulated other comprehensive loss				Total Shareholders' equity
	Shares	Amount						Retained earnings
Shareholders' equity, December 31, 2021	39,640,388	$	14,014	$	7,749	$	(278)	$	73,335	$	94,820
Stock-based compensation - options	—	—		820		—		—		820
Stock-based compensation - restricted stock	—	—		485		—		—		485


Shares issued for vesting of restricted stock units	67,010	334		(334)		—		—		—
Shares redeemed to pay income tax	(23,742)	—		—		—		(119)		(119)
Shares repurchased under the share repurchase program	(389,878)	—		—		—		(1,887)		(1,887)
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

Common Stock Additional paid-in capital Accumulated other comprehensive loss
Total Shareholders'
equity
Shares Amount
Retained
earnings

Shareholders' equity, December 31, 2017 37,909,628 $ 67
$ 2,688
$ —
$ 20,989
$ 23,744
Stock-based compensation - options 145
145
Stock-based compensation - restricted stock 416
416
Net Income 2,341
2,341
Shareholders' equity, March 31, 2018 37,909,628
$ 67
$ 3,249
$ —
$ 23,330
$ 26,646

Stock-based compensation - options 229
229
Stock-based compensation - restricted stock 436
436
Net Income 2,366
2,366
Shareholders' equity, June 30, 2018 37,909,628
$ 67
$ 3,914
$ —
$ 25,696
$ 29,677

Shareholders' equity, December 31, 2018 37,500,815
$ 71
$ 5,390
$ —
$ 29,572
$ 35,033
Stock-based compensation - options 578
578
Stock-based compensation - restricted stock 302
302
Exercise of options 2,418 4
4
Shares issued for vesting of restricted stock units 539,965 2,202
(2,202 ) —
Shares repurchased and canceled under the Normal Course Issuer Bid (365,100)
(1,522 ) (1,522 )
Net Income 2,154
2,154
Shareholders' equity, March 31, 2019 37,678,098

$ 2,277

$ 4,068

$ —

$ 30,204

$ 36,549

Stock-based compensation - options 705
705
Stock-based compensation - restricted stock 329
329
Exercise of warrants 8,280
16
16
Exercise of options 4,725
18
18
Shares issued for vesting of restricted stock units 6,432
39
(39 ) —
Change in unrealized loss on derivative instruments (148 ) (148 )
Net Income 1,820
1,820
Shareholders' equity, June 30, 2019 37,697,535

$ 2,350

$ 5,063

$ (148 )
$ 32,024

$ 39,289

See accompanying notes to the condensed consolidated financial statements

Page



VIEMED HEALTHCARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars) (Unaudited)


		Three Months Ended March 31,
	Note	2022		2021
Cash flows from operating activities
Net income		$	1,762	$	1,684
Adjustments for:
Depreciation		3,397		2,609
Change in allowance for doubtful accounts	2	3,445		1,819
Change in inventory reserve		(1,418)		(4)
Share-based compensation	7	1,305		1,307

Distributions of earnings received from equity method investments		221		—
Income from equity method investments		(323)		(220)
(Gain) Loss on disposal of property and equipment		(14)		76
Deferred income tax expense (benefit)		745		(222)
Net change in working capital
Increase in accounts receivable		(4,221)		(2,728)
Decrease in inventory		1,372		94
Increase in prepaid expenses and other assets		(68)		(161)
(Decrease) increase in trade payables		(467)		438
Increase in deferred revenue		135		13
Increase (decrease) in accrued liabilities		58		(77)
Change in income tax payable/receivable		1,217		—
Net cash provided by operating activities		$	7,146	$	4,628

Cash flows from investing activities
Purchase of property and equipment		(3,963)		(1,797)
Investment in equity investments		(100)		—
Proceeds from sale of property and equipment		256		99
Net cash used in investing activities		$	(3,807)	$	(1,698)

Cash flows from financing activities

Proceeds from exercise of options		—		65



Principal payments on notes payable	5	(39)		(37)
Principal payments on term note	5	(433)		(414)
Shares repurchased under the share repurchase program	7	(1,887)		—
Shares redeemed to pay income tax	7	(119)		(1,434)

Repayments of lease liabilities		(21)		(994)

Net cash used in financing activities		$	(2,499)	$	(2,814)

Net (decrease) increase in cash and cash equivalents		840		116
Cash and cash equivalents at beginning of year		28,408		30,981
Cash and cash equivalents at end of period		$	29,248	$	31,097

Supplemental disclosures of cash flow information
Cash paid during the period for interest		$	66	$	117
Refunds received during the period for income taxes		$	1,217	$	—
Supplemental disclosures of non-cash transactions
Net non-cash changes to finance leases		$	—	$	12
Net non-cash changes to operating leases		$	—	$	85

Six Months Ended June 30,
Note 2019 2018
Cash flows from operating activities
Net income $ 3,974
$ 4,707
Adjustments for:
Depreciation
2,739
1,634
Bad debt expense 2 3,859
2,685
Share-based compensation 7 1,914
1,226
Unrealized loss on warrant conversion liability 437
—
Loss on disposal of property and equipment 141
88
Net change in working capital
Increase in accounts receivable (7,818 ) (761 )
Increase in inventory (825 ) (302 )
Increase (decrease) in trade payables 1,934
(120 )
Decrease in accrued liabilities (181 ) (83 )
Decrease in income tax payable (153 ) (69 )
Increase in prepaid expenses and other current assets (58 ) (2 )
Net cash provided by operating activities $ 5,963
$ 9,003

Cash flows from investing activities
Purchase of property and equipment (7,700 ) (2,057 )
Proceeds from sale of property and equipment 213
277
Net cash used in investing activities $ (7,487 ) $ (1,780 )

Cash flows from financing activities
Proceeds from exercise of options 22
—
Proceeds from exercise of warrants 16
—
Proceeds from commercial long-term note for building 4,837
—
Shares repurchased and canceled under the Normal Course Issuer Bid (1,522 ) —
Repayments of lease liabilities (4,551 ) (3,770 )
Net cash used in financing activities $ (1,198 ) $ (3,770 )

Net (decrease) increase in cash and cash equivalents (2,722 ) 3,453
Cash and cash equivalents at beginning of year 10,413
5,098
Cash and cash equivalents at end of year $ 7,691
$ 8,551

Supplemental disclosures of cash flow information
Cash paid during the period for interest $ 52
$ 116
Cash paid during the period for income taxes, net of refunds received $ 317
$ 68
Supplemental disclosures of non-cash transactions
Property and equipment financed through capital leases and long-term debt $ 9,438
$ 4,586
Property and equipment financed through leases upon adoption of FASB ASC 842 $ 1,919
$ —
Change in unrealized (losses) on derivative instruments, net of tax $ (148 ) $ —

See accompanying notes to the condensed consolidated financial statements

Page



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

1. Nature of Business and Operations


1.	~~Nature of Business and Operations~~

~~On December 21, 2017,~~ Viemed Healthcare, Inc. (the "Company") consumated Asset and Share Purchase Agreements as well as an Arrangement Agreement ("the Arrangement") with Protech Home Medical Corp. ("PHM") (formerly Patient Home Monitoring Corp.) and was spun-out as a separate public company that owns a 100% interest in Home Sleep Delivered, L.L.C. ("HSD") and Sleep Management, L.L.C. dba Viemed ("Viemed") through the U.S. holding company Viemed Inc. Effective as of the spin-out date, the consolidated financial statements include all of the above referenced entities. The spin-out transaction was treated as a common control transaction and all assets and liabilities of the spun out business were transferred at the prior carrying values.

~~The Company,~~, through its subsidiaries, ~~provides~~is a provider of in-home durable medical equipment ("DME") and ~~health care solutions~~post-acute respiratory healthcare services in the United States. The Company’s service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients ~~across over 29~~in their homes using cutting edge technology. The Company currently serves patients in 48 states in the United States. Viemed offers customers requiring respiratory services and related equipment an appropriate selection of home medical products including non-invasive ventilators, positive airway pressure (“PAP”) machines and oxygen units, as well as the services of experienced respiratory therapists. HSD provides in-home sleep apnea testing, allowing a patient to determine the existence of sleep apnea at home at a fraction of the cost of the traditional sleep lab environment. The Company was incorporated under the Business Corporations Act (British Columbia) on December 14, 2016. The Company's registered and records office is located at Suite 2800, Park Place, 666 Burrard Street, Vancouver, British Columbia V6C 2Z7 and its corporate office is located at ~~202 N. Luke Street,~~625 E. Kaliste Saloom Road, Lafayette, Louisiana ~~70506.~~70508.

The Company no longer qualifies as a ~~"foreign private issuer," as defined in Rule 12b-2 of the Securities~~“smaller reporting company” and ~~Exchange Act of 1934, as amended (the "Exchange Act"), for the purposes of the informational requirements of the Exchange Act. Although, as a foreign private issuer, the Company would not be~~is required to ~~do so,~~comply with the ~~Company will file annual reports~~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-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the Securities and Exchange Commission (the "SEC"), instead of filing the reporting forms available to foreign private issuers.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 Canada on the Toronto Stock Exchange under the symbol VMD.TO, and as of August 9, 2019,~~ in the U.S. on the Nasdaq Capital Market under the symbol ~~VMD.~~"VMD" and in Canada on the Toronto Stock Exchange under the symbol "VMD.TO".

2. Summary of Significant Accounting Policies

Principles of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the ~~SEC.~~Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. ~~These~~The accompanying condensed consolidated financial statements are unaudited, but reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary to present fairly our ~~consolidated balance sheets, consolidated statements~~Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of ~~income~~Income and ~~comprehensive income, consolidated statements~~Comprehensive Income, Condensed Consolidated Statements of ~~changes~~Changes in ~~shareholders’ equity~~Shareholders’ Equity and ~~consolidated statements~~Condensed Consolidated Statements of ~~cash flows~~Cash Flows for the interim periods ~~and as of the dates~~ presented. Our fiscal year ends on December 31. The ~~condensed consolidated balance sheet~~Condensed Consolidated Balance Sheet as of December 31, ~~2018~~2021 was derived from audited consolidated financial statements but does not include all disclosures required by GAAP. These condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and the notes ~~thereto.~~thereto and the report of our independent registered public accounting firm included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The nature of our business is such that the results of any interim period may not be indicative of the results to be expected for the entire year.

~~Reporting currency~~

~~All values are in U.S. dollars ($ or "USD") unless specifically indicated otherwise. Canadian dollars are indicated as CAD$.~~

~~Functional currency~~

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




	~~Page~~	7

~~VIEMED HEALTHCARE, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts)~~

~~(Unaudited)~~

~~June 30, 2019 and 2018~~

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

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated.

Use of estimates

The preparation of consolidated financial statements in conformity with ~~U.S.~~ GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 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, ~~inventory,~~ accounts receivable ~~allowances~~and the related allowance for ~~bad debts, stock compensation expense, depreciation and amortization, legal provisions,~~doubtful accounts, income tax provisions, and fair value of financial instruments. Actual results could differ from these estimates.



Page 7


VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
March 31, 2022 and 2021

Accounts receivable

~~Net accounts receivable aging for each reporting period is as follows:~~

Current 30-60 60-90 Over 90 Total Accounts Receivable, net of Allowance
June 30, 2019 $ 6,896
$ 1,816
$ 1,435
$ 2,650
$ 12,797
December 31, 2018 $ 4,857
$ 1,124
$ 668
$ 2,190
$ 8,839

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 three months ended March 31, 2022, our evaluation takes into consideration such factors as historical bad debt 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 write-offs for the allowance for doubtful accounts for each reporting period were as follows:


	March 31, 2022		March 31, 2021
Balance, beginning of year	$	7,031	$	9,013
Change in allowance for doubtful accounts	3,445		1,819
Amounts written off	(1,992)		(2,833)
Balance, end of period	$	8,484	$	7,999

June 30, 2019 June 30, 2018
Balance, beginning of year $ 4,266
$ 3,060
Provision for bad debts 3,859
2,685
Amounts written off (1,251 ) (2,593 )
Balance, end of period $ 6,874
$ 3,152

~~As of June 30, 2019 and 2018, no one customer represented more than 10% of outstanding~~Included in accounts ~~receivable. The Company does have receivables~~receivable at ~~June 30, 2019~~March 31, 2022 are amounts due from Medicare and Medicaid, representing ~~42%~~38% and ~~13%~~12%, respectively, and ~~55%~~50% combined, of total outstanding receivables. As of December 31, 2021, 44% of total outstanding receivables ~~(December 31, 2018 - 60%). As these receivables are both~~were amounts due from ~~government programs, there is very little credit risk associated with these balances.~~Medicare and Medicaid.

Revenues from Medicare and Medicaid ~~accounted for 67% and 69%,~~as percentages of the ~~total revenues~~Company's traditional revenue streams, excluding COVID-19 response sales and services, for the three months ended ~~June 30, 2019~~March 31, 2022 and ~~2018,~~2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Medicare revenues	49	%	60	%
Medicaid revenues	9	%	8	%
Total Medicare and Medicaid	58	%	68	%

Inventory

Inventory represents non-serialized respiratory supplies that consist of equipment parts, consumables, and associated product supplies and is expensed at the time of sale or use. The Company values inventory at the lower of cost or net realizable value. Obsolete and unserviceable inventories are valued at estimated net realizable value. Inventory is presented net of a reserve balance of $0 and $1,418,000 at March 31, 2022 and December 31, 2021, respectively, ~~and 68% and 71% for the six~~that relates to COVID-19 response supplies. During three months ended ~~June 30, 2019 and 2018, respectively.~~March 31, 2022, these supplies were determined to be unavailable for sale due to expiration. Accordingly, the previously established reserves were eliminated through disposal.




	Page	8



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

Property and equipment

Property and equipment is presented on the ~~consolidated balances sheets~~Condensed Consolidated Balance Sheets at historic cost less accumulated depreciation. Major renewals and improvements that extend the useful life of assets are capitalized to the respective property accounts, while maintenance and repairs, which do not extend the useful life of the respective assets, are expensed as incurred. Management has estimated the useful lives of equipment leased to customers. 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.

~~The estimated useful lives of the property and equipment are as follows:~~



~~Description~~		~~Estimated Useful Lives~~
~~Medical Equipment~~		~~2 - 10 Years~~
~~Computer Equipment~~		~~5 Years~~
~~Office Furniture & Fixtures~~		~~5 - 10 Years~~
~~Leasehold Improvements~~		~~Shorter of Useful Life or Lease~~
~~Vehicles~~		~~5 Years~~
~~Building~~		~~15 - 39 Years~~
~~Land~~		~~Indefinite Life~~

Depreciation of medical equipment commences at the date of service, which represents the date that the asset has been ~~deployed~~delivered to a ~~patient’s address~~patient and is put in ~~use.~~use and continues through the useful life of the asset. Property and equipment ~~and other non-current assets~~ with definite useful lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

Equity investments

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

The following table details the Company’s equity investments:


	March 31, 2022		December 31, 2021
Equity method investments	$	1,061	$	959
Other equity investments	1,298		1,198
Balance, end of period	$	2,359	$	2,157

The Company's equity method investments include a 49% equity interest in Solvet Services, LLC. Investments accounted for under the equity method are investments in unconsolidated entities over whose operating and financial policies the Company has the ability to exercise significant influence but not control. Equity method investments are initially measured at cost in the Condensed Consolidated Balance Sheets with any subsequent adjustments made to the carrying amount of the investment for the Company’s proportionate share of income or loss. The Company has recognized its share of income or loss on the gain (loss) from equity method investments within non-operating expenses in the Condensed Consolidated Statements of Income. Equity method investments are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the investments may exceed the fair value. No events or changes have occurred as of March 31, 2022 that would affect the carrying value of equity method investments.

Other equity investments include an equity interest in VeruStat, Inc and an equity interest in DMEscripts, LLC. Other equity investments are investments without a readily determinable fair value which do not qualify for the practical expedient in ASC 820. For these investments, the Company has elected the measurement alternative which measures the investment at cost, less any impairment. ASU 2019-04 clarifies that if an entity identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, it must measure its equity investment at fair value in accordance with ASC 820 as of the date that the observable transaction occurred. The Company was not aware of any impairment or observable price change adjustments that needed to be made as of March 31, 2022 on its investments in equity securities without a readily determinable fair value.

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

As a result of the “backward tracing” prohibition in ASC 740, certain previously measured unrealized gains or losses have resulted in the existence of "dangling" amounts within other comprehensive income. The Company has elected the individual security approach to the release of these effects. Under the individual security approach, dangling amounts are tracked on a security-by-security basis and cleared out of the other comprehensive income balance upon sale of each individual security. During the periods presented, none of the individual securities associated with a dangling balance were sold.



Page 9


VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
March 31, 2022 and 2021

Revenue recognition

Revenue from a customer consists of any combination of the sale and rental of ~~durable medical equipment (“DME”)~~DME and/or patient medical services. Revenues are billed to and collections received from Medicare, Medicaid, third-party insurers, co-insurance and patient-pay. Revenue is recognized net of contractual adjustments and bad debt based on contractual arrangements with third-party payors, an evaluation of expected collections resulting from the analysis of current and past due accounts, past collection experience in relation to amounts billed and other relevant information. Contractual adjustments result from the differences between the rates charged for services and ~~reimbursements~~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. patient). 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, DME companies must negotiate in-network pricing separately, though in general, the Company’s payors tend to benchmark their contract rates and coverage policies closely to those of Medicare.

The Company considers performance obligations for sales and rentals to be met when the customer receives the equipment, and revenue for rentals is recognized over time, over the respective rental period. For revenue associated with DME rentals, the Company recognizes revenue in accordance with ~~FASB~~ ASC 842, “Leases,” (Topic 842). For any DME sales and services, the Company recognizes revenue under FASB ASU 2014-09, “Revenue from Contracts with Customers,” (Topic 606) and related amendments.

The Company recognizes equipment rental revenue over the non-cancelable lease term, which ~~is one month,~~varies based on the type of equipment rental, less estimated adjustments, in accordance with ~~ASC 842—Leases.~~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.




	~~Page~~	9

~~VIEMED HEALTHCARE, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts)~~

~~(Unaudited)~~

~~June 30, 2019 and 2018~~

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


	Three Months Ended March 31,
	2022		2021
Revenue from rentals
Ventilator rentals, non-invasive and invasive	$	21,518	$	20,351
Other durable medical equipment rentals	4,359		2,930
Revenue from sales and services
Equipment and supply sales	3,037		1,768
COVID-19 response sales and services	2,095		2,955
Service revenues	1,246		412
Total revenues	$	32,255	$	28,416

Three Months Ended Six Months Ended
June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018
Revenue from rentals under Topic 842
    Ventilator rentals, non-invasive and invasive $ 19,461
$ 13,852
$ 37,743
$ 26,676
    Other durable medical equipment rentals 1,425
532
2,343
984
Revenue from sales and services under Topic 606
    Equipment sales
1,164
895
2,032
1,502
    Service revenues
497
229
872
457
Total Revenues $ 22,547
$ 15,508
$ 42,990
$ 29,619

Revenue Accounting under Topic 842

The Company leases ~~durable medical equipment~~DME 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 for a subsequent month’s rental, and payments are generally billed in advance.~~period. The Company ~~considers~~accounts for these rentals ~~to be~~as operating leases.



Page 10


VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
March 31, 2022 and 2021

Under FASB ~~Accounting Standards Codification~~ASC Topic 842, “~~Leases”~~, 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, but generally ranges from 10 to 36 months.~~rental. The lease term begins on the date products are 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. ~~There were no material changes in estimates recorded in the three months ended June 30, 2019, relating to prior periods.~~

Revenue Accounting under Topic 606

The Company sells ~~durable medical equipment,~~DME, replacement parts and supplies to customers and recognizes revenue based on contractual payment rates as determined by the payors at the point in time where control of the good or service is transferred through delivery to the customer. Each piece of equipment, part, or supply is distinct, separately priced, and represents a single performance obligation. The revenue is allocated amongst the performance obligations based upon the relative standalone selling price method, however, items are typically all delivered or supplied together. 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.

The Company also provides sleep study services to customers and recognizes revenue when the ~~results of the~~ sleep study results are complete, ~~as that is when~~satisfying the performance ~~obligation is met.~~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 ~~both~~ equipment sales, ~~and~~ 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 ~~durable medical equipment~~DME 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 Company does not generally contract with uninsured customers. The payment terms and conditions of customer contracts vary by customer type and the products and services offered.




	~~Page~~	10

~~VIEMED HEALTHCARE, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts)~~

~~(Unaudited)~~

~~June 30, 2019 and 2018~~

The Company determines its estimates of contractual allowances and discounts based upon contractual agreements, ~~our~~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 customer.~~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.

Returns and refunds are not accepted on ~~either~~ equipment sales, or sleep study 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 ~~June 30, 2019.~~March 31, 2022.



Page 11


VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
March 31, 2022 and 2021

Stock-based compensation

The Company accounts for its stock-based compensation in accordance with ASC 718~~—Compensation—~~, "Compensation—Stock ~~Compensation~~Compensation", which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. Stock–based compensation ~~cost~~costs for stock options are determined at the grant date using the Black-Scholes option pricing model. Stock-based compensation costs for restricted stock units ("RSUs") are determined at the grant date based on the closing stock price. The expense of such stock-based compensation awards is recognized using the graded vesting attribution method over the vesting period and the offsetting credit is recorded as an increase in additional paid-in capital. Forfeitures are recorded as incurred. Any excess tax benefit or deficiency is recognized as a component of income taxes and within operating cash flows upon vesting of the share-based award.

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 equivalent Company's stock value at the end of each period and records a liability based on the percentage of requisite service.

Interest ~~Rate Swaps~~rate swaps

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

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 ~~includes unrealized gains~~presents a positive ending period fair value of the interest rate swap contract in ~~Other~~other long-term assets, as a component of ~~Long-term Assets,~~long-term assets, and ~~unrealized losses~~a negative ending period fair value of the interest rate swap contract in ~~Accrued~~accrued liabilities, as a component of ~~Long-term~~long-term liabilities on the Condensed Consolidated Balance Sheets.

The Company recognizes any differences between the variable interest rate payments and the fixed interest rate settlements from ~~our~~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~~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~~interest and other non-operating expenses, net ~~on our~~in its Condensed Consolidated Statements of Income.

Income taxes

The Company is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the provision for income taxes. The Company's income tax provisions reflect management’s interpretation of country and state tax laws. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business and may remain uncertain for several years after their occurrence. The Company recognizes assets and liabilities for taxation when it is probable that we will receive refunds from or pay taxes to the relevant tax authority. Where the final determination of tax assets and liabilities is different from the amounts that were initially recorded, such differences will impact the current and deferred income taxes provision in the period in which such a determination is made. Changes in tax law or changes in the way tax law is interpreted may also impact our effective tax rate as well as our business and operations.

Deferred income tax assets and liabilities are recognized for the future income tax consequences attributable to temporary differences between the financial statement carrying value of assets and liabilities and their respective income tax bases. Deferred income tax assets or liabilities are measured using enacted or substantively enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled. The calculation of current and deferred income taxes requires management to make estimates and assumptions and to exercise a certain amount of judgment concerning the carrying value of assets and liabilities. The current and deferred income tax assets and liabilities are also impacted by expectations about future operating results and the timing of reversal of temporary differences as well as possible audits of tax filings by regulatory agencies. 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.




	Page	11 12



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

~~Net Income per Share Attributable to Common Stockholders~~

The Company uses the two-class method to compute net income per common share attributable to common stockholders because the Company issued securities, other than common stock, that contractually entitled the holders to participate in the dividends and earnings prior to the initial listing after the Arrangement. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of the current period's earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

~~See Note 11 for earnings per share computations.~~

Recently adopted accounting pronouncements

In ~~August 2016,~~December 2019, the FASB issued ASU No. ~~2016-15, “Statement~~2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The new guidance also improves consistent application of ~~Cash Flows (Topic 230) - Classification of Certain Cash Receipts~~ and ~~Cash Payments,” to provide clarity on how certain cash receipt and cash payment transactions are presented and classified within the statement of cash flows. The ASU is effective~~simplifies GAAP for ~~annual periods beginning December 31, 2018, and its adoption did not impact these condensed consolidated financial statements.~~

~~In July 2018, the FASB issued ASU No. 2018-07~~ ~~“Improvements to Non-employee Share-Based Payment Accounting,” which expands the scope~~other areas of Topic ~~718 to include share-based payment transactions for acquiring goods~~740 by clarifying and ~~services from non-employees. The ASU is effective for interim periods as of January 1, 2019, and its adoption did not have any material impact on our consolidated financial statements.~~

~~In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (Topic 842) (“ASC 842”), which supersedes~~amending the existing ~~guidance for lease accounting, “Leases~~” (Topic 840) (“ASC 840”). ASC 842 requires lessees to recognize a lease liability and a right of use asset for all leases that extend beyond one year. This standard was adopted using the modified retrospective transition approach at the adoption date of January 1, 2019. This approach does not require the restatement of previous periods. The Company completed a qualitative and quantitative assessment of its leases from both a lessee and lessor perspective. As part of this process, the Company elected to utilize certain practical expedients that provided transition relief. Accordingly, the Company did not reassess expired or existing contracts, lease classifications or related initial direct costs as part of the assessment process for either lessee or lessor leases. The adoption of this standard, from a lessee perspective, resulted in the recording of Right of Use (“ROU”) operating lease assets as a component of property and equipment, net and liabilities as a component of current and non-current liabilities of approximately $1.5 million on the Condensed Consolidated Balance Sheet as of January 1, 2019, with no impact to retained earnings. In addition, the Company elected as an accounting policy, not to record leases with an initial term of less than 12 months. (See Note 5 – “Debt and lease liabilities” for additional information and required disclosures.)

~~In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging~~", which changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results, in order to better align an entity’s risk management activities and financial reporting for hedging relationships. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.guidance. The Company adopted this standard on ~~June~~January 1, ~~2019 and adoption of this standard~~2021, which did not have ~~a material~~any impact on the Company’s condensed consolidated financial ~~statement presentation or results.~~statements.

Recently issued accounting pronouncements

The Company is an “emerging growth company” as defined by the ~~Jumpstart Our Business Startups (“JOBS”) Act of 2012.~~JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, ~~(the “Securities Act”),~~ for complying with new or revised accounting standards. In other words, an emerging growth company can selectively delay the adoption of all accounting standards until those standards would otherwise apply to private companies. The Company has elected to utilize this exemption and, as a result, ~~these~~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




	~~Page~~	12

~~VIEMED HEALTHCARE, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts)~~

~~(Unaudited)~~

~~June 30, 2019 and 2018~~

the adoption of any accounting ~~standards.~~standards except as noted below. Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable.

In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. In June 2016, the FASB issued ASU ~~No.~~ 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments,” which is intended to ~~require~~improve financial reporting by requiring earlier recognition of credit losses on certain financial assets. The standard replaces the ~~measurement of~~current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Further, the FASB issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard. The standard is effective for ~~financial instruments held at the~~fiscal years beginning after December 15, 2022 for smaller reporting ~~date~~companies based on ~~historical experience, current conditions~~the Company's designation as of November 2019, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and ~~reasonable forecasts.~~related disclosures.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Specifically, the guidance permits an entity, when certain criteria are met, to consider amendments to contracts made to comply with reference rate reform to meet the definition of a modification under GAAP. It further allows hedge accounting to be maintained and a one-time transfer or sale of qualifying held-to-maturity securities. The expedients and exceptions provided by the amendments are permitted to be adopted any time through December 31, 2022 and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for certain optional expedients elected for certain hedging relationships existing as of December 31, 2022. The Company has a commercial term note that references LIBOR and the Company is currently evaluating how this standard may be applied to specific contract modifications through December 31, 2022.

In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance, which improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity's financial statements. This guidance will be effective for ~~interim and~~the annual periods beginning ~~January 1, 2020 for issuers and annual periods beginning January 1, 2021 for non-issuers. Therefore,~~after December 15, 2021. The Company is currently evaluating the ~~Company plans to further evaluate the anticipated~~ impact of the ~~adoption of this ASU~~new guidance on ~~the~~its consolidated financial statements ~~in future periods including considering whether to delay adoption of the standard.~~and related disclosures.



Page 13


VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
March 31, 2022 and 2021

3. Property and Equipment

The Company’s fixed assets consist of its medical equipment held for rental, furniture and ~~fixtures,~~equipment, real property and related improvements, and vehicles and other various small equipment. In May 2019, the Company purchased a 77,000 square foot commercial building located in Lafayette, Louisiana that it plans to utilize as its new corporate headquarters. The commercial term note used to finance this purchase is further discussed in Note 5.

The following table details the Company’s fixed assets:


	March 31, 2022		December 31, 2021
Medical equipment	$	80,322	$	76,864
Furniture and equipment	2,642		2,521
Land	2,566		2,566
Buildings	7,557		7,682
Leasehold improvements	296		296
Vehicles	1,003		972
Less: Accumulated depreciation	(30,409)		(28,055)
Property and equipment, net of accumulated depreciation and amortization	$	63,977	$	62,846

June 30, 2019 December 31, 2018
Medical equipment $ 45,470
$ 35,541
Furniture and equipment 2,052
1,174
Land 2,138
367
Buildings 5,034
264
Leasehold improvements 301
256
Vehicles 1,768
1,782
Less: Accumulated depreciation (10,960 ) (8,822 )
Property and equipment, net of accumulated depreciation $ 45,803
$ 30,562

Depreciation in the amount of ~~$1,306,000~~$3,160,000 and ~~$769,000~~$2,409,000 is included in cost of revenue for the three months ended ~~June 30, 2019~~March 31, 2022 and ~~June 30, 2018, respectively, and $2,472,000 and $1,304,000 for the six months ended June 30, 2019 and 2018,~~2021, respectively. Included in medical equipment above is equipment acquired under ~~capital~~finance lease obligations whose cost and accumulated depreciation at ~~June 30, 2019~~March 31, 2022 total ~~$7,872,000~~$39,000 and ~~$1,473,000,~~$6,000, respectively. At December 31, ~~2018,~~2021, cost and accumulated depreciation on equipment acquired under ~~capital~~finance lease obligations was ~~$7,943,000~~$47,000 and ~~$1,100,000,~~$5,000, respectively.


4.	~~Current Liabilities~~

4. Current Liabilities

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


	March 31, 2022		December 31, 2021
Accrued trade payables	$	2,682	$	2,011
Accrued commissions payable	493		452
Accrued bonuses payable	1,439		3,405
Accrued vacation and payroll	2,052		1,226
Current portion of phantom share liability	1,343		1,118
Accrued other liabilities	730		663
Total accrued liabilities	$	8,739	$	8,875

June 30, 2019 December 31, 2018
Accrued trade payables $ 694
$ 960
Accrued commissions payable 425 315
Accrued bonuses payable 2,440 3,788
Accrued vacation and payroll 1,119 1,012
Current portion of phantom share liability 2,272 1,476
Total accrued liabilities $ 6,950
$ 7,551
5. Debt and Lease Liabilities

Senior Credit Facility

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

Line of Credit

The Company maintains a line of credit in the amount of $10.0 million that expires May 1, 2023 under the Commercial Business Loan Agreement. Any amounts advanced on this line will be subject to an interest rate equal to the WSJ prime rate plus a margin of 0.50%, with a 3.50% interest rate floor and will be secured by substantially all of the Company's assets. There were no borrowings against this line of credit at March 31, 2022 or December 31, 2021.




	Page	13 14



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

~~5. Debt and lease liabilities~~

~~Senior Credit Facility~~

On February 20, 2018, we entered into a two year commercial business loan agreement with Hancock Whitney Bank for lines of credit for up to $5.0 million (with a letter of credit sub-limit of $0.5 million), expiring on February 21, 2020. Any amounts advanced will be secured by substantially all our assets and carry an interest rate of one month ICE libor plus 3.00%, with a 4.00% interest rate floor. Advances of the line of credit initially were subject to a borrowing base as determined in accordance with the loan agreement, which was based on the value of our accounts receivable balance.

On March 19, 2019, the Company entered into an amendment to the loan agreement increasing the available line of credit from $5.0 million to $10.0 million and extending the expiration date to March 19, 2021. In addition, the borrowing base restriction was removed from the loan agreement and all current financial covenants were replaced with the following covenants:



~~Financial Covenant~~		~~Required Ratio~~
~~Total Debt to Adjusted EBITDA (Quarterly)~~		~~not more than 1.50:1.00~~
~~Minimum Working Capital (Quarterly)~~⁽¹⁾		~~at least $2,500,000~~
~~Fixed Charge Coverage Ratio (Quarterly)~~		~~not less than 1.35:1.00~~

⁽¹⁾~~This covenant will be in effect and tested quarterly beginning September 30, 2019.~~

~~The Company was in compliance with all covenants in effect at June 30, 2019. There were no borrowings against this facility at June 30, 2019 and December 31, 2018.~~

Commercial Term ~~Note~~Notes

On May 30, 2019, the Company entered into ~~an amendment to the loan agreement providing for~~ a ~~commercial~~ term note (the ~~“Term~~“Building Term Note”) ~~in favor of Hancock Whitney Bank~~under the Commercial Business Loan Agreement in the principal amount of ~~$4,845,000.~~$4.8 million. The proceeds of the Building Term Note were used to purchase ~~a building that~~ the ~~Company plans to utilize as its new~~Company's corporate headquarters. Beginning July 1, 2019, the Company ~~makes~~began making monthly payments towards the outstanding balance. The Building Term Note matures on May 30, 2026 and is secured by substantially all of the assets of the borrower, including the real property acquired with the proceeds of the Building Term Note. The Building Term Note bears interest at a variable rate equal to the one month ICE ~~libor~~LIBOR index plus a margin of 2.45% per annum. The Company is required to maintain a loan to value ratio of 85% with respect to the appraised value of the real property. In connection with the Building Term Note, the Company entered into an interest rate swap transaction (the "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 “Term Note") under the Commercial Business Loan Agreement in the principal amount of $5.0 million. The proceeds of the Term Note were utilized for general corporate purposes. Beginning October 19, 2019, the Company started making monthly principal payments of $139,000 towards the outstanding balance. The Term Note matures on September 19, 2022 and is secured by substantially all of the assets of the borrower. The Term Note bears interest at the rate of 4.60% per annum.

The Company incurred immaterial ~~deferred~~ financing costs related to the ~~real property acquired with the proceeds of the Term Note.~~above term notes. These deferred financing costs are ~~recorded as a reduction to long-term debt in the consolidated balance sheets and will be~~ amortized over the term of the ~~loan.~~loans using the effective interest method.

The recorded balances associated with these term notes are as follows:


	March 31, 2022		December 31, 2021
Notes payable	$	5,315	$	5,786
Less:
Current portion of notes payable	(1,049)		(1,480)
Net long-term notes payable	$	4,266	$	4,306

Under the Commercial Business Loan Agreement, the Company is subject to several restrictive covenants that, among other things, impose operating and financial restrictions on the Company. Financial covenants include a Total Debt to Adjusted EBITDA, a Loan-to-Value Ratio and a Fixed Charged Coverage Ratio, as defined in the Credit Agreement. The Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder and failure to observe or perform certain covenants. The Company ~~has recorded $0~~was in ~~amortization of deferred financing costs related to~~compliance with all covenants under the ~~note for the period ended June 30, 2019.~~Commercial Business Term Loan Agreement in effect at March 31, 2022.

~~The Company has recognized the note payable, which has a term greater than twelve months, as follows:~~

June 30, 2019 December 31, 2018
Note payable $ 4,836
$ —
Less:

Current portion of note payable (133 ) —
Net long-term note payable $ 4,703
$ —




	~~Page~~	14

~~VIEMED HEALTHCARE, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts)~~

~~(Unaudited)~~

~~June 30, 2019 and 2018~~

~~The table below represents the future minimum principal and interest obligations for the Term Note as of June 30, 2019:~~

Principal Payments
Interest Payments⁽¹⁾
Less than one year (current portion) $ 133
$ 273
Between one and two years 148
226
Between two and five years 491
632
Five years or more 4,064
348
Total $ 4,836
$ 1,479

⁽¹⁾ ~~Interest payments under effective interest rate of 4.68%.~~

Leases

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


	March 31, 2022		December 31, 2021
Lease liabilities	$	593	$	732
Less:
Current portion of lease liabilities	(361)		(464)
Net long-term lease liabilities	$	232	$	268

June 30, 2019 December 31, 2018
Lease liabilities $ 9,508
$ 3,425
Less:
Current portion of lease liabilities (8,410 ) (3,031 )
Net long-term lease liabilities $ 1,098
$ 394

~~Finance~~ Included in lease liabilities

~~The Company has various finance leases for equipment with an implied interest rate~~ at ~~fixed rates up to 12.85%, secured by equipment, due between 2019 and 2023. The Company's weighted average interest rate was 0.47% and 1.54% for all~~March 31, 2022 are finance lease liabilities ~~outstanding as~~for medical equipment in the amount of ~~June 30, 2019~~$39,000 due between 2022 and ~~2018, respectively. At June 30, 2019, the weighted average lease term was approximately 0.76 years.~~2024.

~~Minimum payments and interest for finance lease obligations required over the next five years as of June 30, 2019, are as follows:~~

Principal Payments Interest Payments
Less than one year (current portion) $ 8,173
$ 39
Between one and two years 90
8
Between two and five years 49
2
Total $ 8,312
$ 49

Interest expense related to these finance lease obligations for the three and six months ended June 30, 2019 amounted to $20,000 and $46,000, respectively. Interest expense related to these finance lease obligations for the three and six months ended June 30, 2018 amounted to $67,000 and $114,000, respectively.

Operating lease liabilities

The Company has recognized operating lease liabilities that relate primarily to the lease of land and buildings. These leases contain renewal options that we have not included as part of ~~our~~the Company's assessment of the lease term as it is not reasonably certain that we will exercise these options. These lease liabilities are recorded at present value based on a discount rate of 5.50%, which was based on the Company's incremental borrowing rate at the time of assessment. At ~~June 30, 2019,~~March 31, 2022, the weighted ~~average lease term was approximately 5.51 years.~~




	Page	15



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

Included in operating lease liabilities are real property leases for real estate from a related party. Rental payments under these lease agreements are $18,000 per month, plus taxes, utilities and maintenance. Total rental payments for the use of these properties were $61,000 and $121,000 for the three and six months ended June 30, 2019, respectively, and $56,000 and $114,000 for the three and six months ended June 30, 2018, respectively. The expense for these related party rents hashave been included ~~within general~~with property and ~~administrative expenses.~~equipment on the Condensed Consolidated Balance Sheets.

6. Fair Value Measurement

Under ASC Topic 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). ASC Topic 820 establishes a hierarchy for inputs to valuation techniques used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that reflect assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. There are three levels to the hierarchy based on the reliability of inputs, as follows:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or

indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or

similar assets and liabilities in markets that are not active.

Level 3 - Unobservable inputs for the asset or liability. The degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The ~~Company’s cash~~Company measures certain assets and ~~cash equivalents are measured using level 1 inputs.~~

Pursuant to the Arrangement with PHM effective December 21, 2017, PHM common share purchase warrant holders each received one tenth (1/10) of one warrant to purchase one Viemed share. The warrants conversion feature is denominated in Canadian dollars which is different from the functional currency of the Company (U.S. dollars). The conversion feature is treated as a derivative financial liability and theliabilities at fair value ~~movement~~on a recurring basis. There were no transfers between fair value measurement levels during the period is recognized in the Consolidated Statement of Income and Comprehensive Income. The change in the value of warrants has been recorded as an unrealized loss on derivative financial liability in the Condensed Consolidated Statements of Income and Comprehensive Income.any presented period.

The ~~warrant derivative financial liability has been valued using level 3 inputs from~~following tables summarize the Company's assets and liabilities measured at fair value ~~hierarchy. Changes to these assumptions could result in~~on a ~~higher or lower fair value measurement. The fair value~~recurring basis as of ~~the warrants at June 30, 2019 was calculated using the Black-Scholes option pricing model with the following assumptions:~~March 31, 2022 and December 31, 2021:


	At March 31, 2022
(In thousands)	Level 1		Level 2		Level 3		Total
Recurring Fair Value Measurements:
Money market mutual funds	$	16,457	$	—	$	—	$	16,457
Interest rate swap	—		20		—		20
Total	$	16,457	$	20	$	—	$	16,477


	At December 31, 2021
(In thousands)	Level 1		Level 2		Level 3		Total
Recurring Fair Value Measurements:
Money market mutual funds	$	16,456	$	—	$	—	$	16,456
Interest rate swap	—		(200)		—		(200)
Total	$	16,456	$	(200)	$	—	$	16,256



~~Risk-free interest rate~~		~~1.52%~~
~~Expected volatility~~	~~48.92%~~
~~Expected life of warrants~~	~~0.17 years~~
~~Expected dividend yield~~	~~Nil~~Page 16




	~~Page~~	16



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

~~There were no warrants issued during the three and six month periods ended June 30, 2019. There were 8,280 warrants exercised during the six months ended June 30, 2019.~~

Warrant Conversion Liability
Balance December 31, 2018 363
Warrants issued —
Unrealized loss on warrant conversion liability 437
Balance June 30, 2019 $ 800

Derivative instruments and hedging activities

~~We currently have one~~The Company recognizes its interest rate swaps as either assets or liabilities in the accompanying Condensed Consolidated Balance Sheets at fair value. The valuation of these derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. As of March 31, 2022, the Company holds 1 interest rate swap contract ~~in place,~~ which ~~became effective~~matures on May ~~31, 2019~~30, 2026 and has ~~been~~a notional amount of $4.4 million. This contract is designated as a cash flow hedge. ~~This swap contract matures on May 30, 2026. This swap contract converts~~In the ~~variable interest rate to a fixed interest rate on borrowings under the Term Note. As~~first three months of ~~June 30, 2019, the notional amount~~2022, ineffective portions of the ~~interest rate swap was $4.8 million and will be amortized over the term of the swap.~~hedge were immaterial. The fair value was ~~$0.1~~$0.02 million (determined based on Level 2 inputs) and is included in ~~Accrued liabilities, as a component of Long-term liabilities~~other long-term assets as of ~~June 30, 2019.~~March 31, 2022.

InAssets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company measures certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities include equity method investments and other equity investments. Equity method investments are evaluated for impairment whenever events or changes in circumstances indicate that the ~~first six months~~carrying value of ~~2019, losses recognized as~~the investments may exceed the fair value. The Company's other equity investments are holdings in a ~~result~~privately-held company without a readily determinable market value. The Company remeasures equity securities without readily determinable fair value at fair value when an orderly transaction is identified for an identical or similar investment of ~~ineffectiveness~~the same issuer in accordance with Topic 820. ASU 2019-04 states that the measurement alternative is a nonrecurring fair value measurement. Accordingly, other equity investments without readily determinable fair value are classified within Level 3 in the fair value hierarchy because the Company estimates the value using a combination of observable and unobservable inputs, including valuation ascribed to the issuing company in subsequent financing rounds, volatility in the results of operations of the issuers and rights and obligations of the holdings the Company owns.

The Company had no material adjustments of assets and liabilities measured at fair value on a nonrecurring basis during any of the periods presented. There were ~~immaterial.~~no transfers between fair value measurement levels during any presented period.


7.	~~Shareholders' Equity~~

7. Shareholders' Equity

Authorized share capital

The Company’s authorized share capital consists of an unlimited number of common shares.

Issued and outstanding share capital

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 ~~37,697,535~~39,293,778 and ~~37,500,815~~39,640,388 shares were issued and outstanding as of ~~June 30, 2019~~March 31, 2022 and December 31, ~~2018,~~2021, respectively.

For the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2022, the Company ~~re-purchased~~repurchased and canceled ~~365,100~~389,878 common shares at a cost of ~~$1,522,000~~$1.9 million pursuant to the ~~Normal Course Issuer Bid~~Share Repurchase Program authorized by the Board of Directors on March 7, 2022 (the ~~"NCIB"~~"2022 Share Repurchase Program") ~~that went into effect on November 29, 2018. Total~~. The Company also acquired and cancelled 23,742 common shares ~~repurchased under~~at a cost of $0.1 million to satisfy employee income tax withholding associated with RSUs vesting during the ~~NCIB were 775,803 as of June 30, 2019.~~three months ended March 31, 2022. The Company’s retained earnings ~~was~~were reduced by the amount paid for the shares repurchased ~~for cancellation.~~and cancelled.

~~Warrants~~Stock-based compensation

~~Warrants outstanding~~Effective June 11, 2020 (the "Effective Date"), the Company’s shareholders approved the Company's 2020 Long Term Incentive Plan (the "Omnibus Plan"). Upon approval of the Omnibus Plan, no future awards are available to be made under the Company's previous RSU and ~~exercisable~~Option Plans (collectively, the "Former Plan"), and the common shares that were not settled or awarded under the Former Plan as of ~~June 30, 2019:~~the Effective Date are available for awards under the Omnibus Plan. The maximum number of common shares that are available for awards under the Omnibus Plan and under any other security-based compensation arrangements adopted by the Company, including the Former Plan, may not exceed 7,758,211 shares (equal to 20% of the issued and outstanding common shares of the Company on the Effective Date). The maximum amount of the foregoing common shares that may be awarded under the Omnibus Plan as “incentive stock options” is 2,600,000 common shares. As of March 31, 2022, the Company had outstanding options of 4,505,000 and RSUs of 580,000 associated with common shares under the Omnibus Plan.

Year issued Date of expiry Type Number of warrants (000's) Weighted average exercise price (CAD$)
2017 August 27, 2019 Warrant 169
$ 2.60
Total 169
$ 2.60

~~The following table summarizes warrant activity for the period ended June 30, 2019:~~

Number of warrants (000's) Weighted average exercise price (CAD$)
Balance December 31, 2018 177
$ 2.60
Issued —
$ —
Exercised (8 ) $ 2.60
Expired —
$ —
Balance June 30, 2019 169
$ 2.60




	Page	17



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

~~There were no warrants issued and 8,280 warrants exercised during the six months ended June 30, 2019.~~

~~Stock-based compensation~~

At the Company's annual and special meeting of shareholders held on July 17, 2018, shareholders of the Company passed a resolution approving the RSU and Option Plans (collectively, the “Plan”). The purpose of the Plan is to provide incentive to employees, directors, officers, management companies, and consultants who provide services to the Company or any of its subsidiaries. The Plan is a “fixed” stock plan, whereby the maximum number of the Company's shares reserved for issuance, combined with any equity securities granted under all other compensation arrangements adopted by the Company, may not exceed 7,582,000 shares (equal to 20% of the issued and outstanding shares of the Company as of the date of the Arrangement). As of June 30, 2019, the Company had outstanding issuances of options of 2,766,000 and restricted stock units of 1,196,000 under the Plan.

The following table summarizes stock-based compensation expense for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2022 and ~~2018~~2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Stock-based compensation - options	$	820	$	1,078
Stock-based compensation - restricted stock units	485		229
Total	$	1,305	$	1,307

Three Months Ended Six Months Ended
June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018
Stock-based compensation - options $ 705 $ 229 $ 1,283 $ 374
Stock-based compensation - restricted stock 329 436 631 852
Total $ 1,034 $ 665 $ 1,914 $ 1,226

At ~~June 30, 2019,~~March 31, 2022, there was approximately ~~$3,496,000~~$3,597,000 of total unrecognized pre-tax stock option expense under ~~our~~the Company's equity compensation plans, which is expected to be recognized over a weighted-average period of ~~2.49~~2.17 years. As of ~~June 30, 2019,~~March 31, 2022, there was approximately ~~$942,000~~$2,404,000 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 ~~1.05~~1.53 years.

Options

The following table summarizes stock option activity for the ~~six~~three months ended ~~June 30, 2019:~~March 31, 2022:


	Number of options (000's)	Weighted average exercise price(1)		Weighted average remaining contractual life	Aggregate intrinsic value(2)
Balance December 31, 2021	3,822	$	5.22	7.5 years	$	3,722
Issued	683	5.21
Exercised	—	—
Expired / Forfeited	—	—
Balance March 31, 2022	4,505	$	5.22	7.6 years	$	3,269

Number of options
(000's)
Weighted average exercise price (CAD$) Weighted average remaining contractual life
Aggregate Intrinsic Value⁽¹⁾
Balance December 31, 2018 1,545
$ 3.39
5.8 years $ 1,605
Issued 1,236
5.66

Exercised (7 ) 3.99

Expired / Forfeited (8 ) 3.26

Balance June 30, 2019 2,766
4.40
7.2 years $ 6,698
Includes NIL shares netted for tax.
(1)For presentation purposes, stock options issued with a CAD exercise price have been translated to USD based on the prevailing exchange rate on the date of grant.

⁽¹⁾(2)The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of ~~our~~the Company's common stock on the last trading day of the ~~period.~~period ($4.98).

The aggregate intrinsic value of options outstanding was $3,269,313 and options exercisable were $3,269,213 at March 31, 2022. For the ~~six~~three months ended ~~June 30, 2019, 7,143~~March 31, 2022, 0 shares of common stock were issued pursuant to the exercise of stock options.

At ~~June 30, 2019,~~March 31, 2022, the Company had ~~1,076,000~~2,856,000 exercisable stock options outstanding with a weighted average exercise price of ~~CAD $3.86~~$4.41 and a weighted average remaining contractual life of ~~3.9~~6.7 years. At December 31, ~~2018,~~2021, the Company had ~~851,000~~1,905,744 exercisable stock options outstanding with a weighted average exercise price of ~~CAD $4.30~~$3.70 and a weighted average remaining contractual life of ~~3.2~~6.5 years.

The Company accounts for its stock-based compensation in accordance with ASC 718 — Compensation—Stock Compensation, which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. Stock–based compensation cost for stock options are determined at the grant date using the Black-Scholes option pricing model. The assumptions used to determine the grant date fair value of the stock options granted during three months ended March 31, 2022 were as follows:

Exercise price

$5.21

Risk-free interest rate

1.41%

Expected volatility

57.95%

Expected term

5.58 years

Expected dividend yield

Nil

Fair value on date of grant

$2.74




	Page	18



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

The Company also grants RSUs to directors, officers, and employees. The Company accounts for RSUs using fair value as of the date of issuance. The fair value of the ~~stock options~~RSUs has been charged to the ~~statement~~Condensed Consolidated Statements of ~~income~~Income and ~~comprehensive income~~Comprehensive Income and credited to additional paid-in capital over the ~~proper~~ vesting period, ~~using~~based on the ~~Black-Scholes option pricing model calculated using~~stock price on the ~~following assumptions for issuances during the six months ended June 30, 2019:~~



~~Exercise price ($CAD)~~		~~$5.49 - $9.26 ($CAD)~~
~~Risk-free interest rate~~		~~1.59 - 1.96%~~
~~Expected volatility~~		~~73 - 81%~~
~~Expected life of options~~		~~10 Years~~
~~Expected dividend yield~~		~~Nil~~
~~Fair value on date of grant ($USD)~~		~~$3.40 - $5.45 ($USD)~~

~~Restricted stock units~~

~~The Company has a restricted stock unit plan, which it uses for grants to directors, officers, and employees. Restricted stock units~~date of grant. 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 ~~restricted stock unit~~RSU activity for the ~~six~~three months ended ~~June 30, 2019:~~March 31, 2022:


	Number of RSUs (000's)	Weighted average grant price(1)		Weighted average remaining contractual life	Aggregate intrinsic value(2)
Balance December 31, 2021	206	$	6.61	0.68 years	$	1,074
Issued	441	5.21
Vested	(67)	6.12
Expired / Forfeited	—	0
Balance March 31, 2022	580	$	5.60	1.53 years	$	2,946

Number of Restricted Stock Units (000's) Weighted average grant price (CAD$) Weighted average remaining contractual life
Aggregate Intrinsic Value⁽¹⁾
Balance December 31, 2018 1,715
$ 2.41
1.01 years $6,575
Issued 60
$ 5.49

Vested (546 ) $ 2.25

Expired / Forfeited (33 ) $ 2.25

Balance June 30, 2019 1,196
$ 2.65
1.05 years $8,159
(1)All future equity grants will be awarded in USD, therefore, RSUs issued with a CAD grant price have been translated to USD based on the prevailing exchange rate on the date of grant for presentation purposes.

⁽¹⁾(2)The aggregate intrinsic value of time-based ~~restricted stock units~~RSUs outstanding was based on ~~our~~the Company's closing stock price on the last trading day of the ~~period.~~period ($4.98).

During the three months ended March 31, 2022, the Company issued 441,169 RSUs with a vesting term of three years and a fair value of $5.21 per share.

The Company has a phantom share unit plan, which it uses for grants to directors, officers, and employees. Phantom share units granted under the plan are non-assignable and are settled in cash at ~~vesting.~~vesting based on the fair value of the Company's common stock on the vesting date. Phantom share units vest annually over a three-year period. 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 ~~six~~three months ended ~~June 30, 2019:~~March 31, 2022:


	Number of phantom share units (000's)	Value of share equivalents(1)
Balance December 31, 2021	573	$	2,991
Issued	227	$	1,156
Vested	(3)	$	(13)
Expired / Forfeited	(20)	$	(263)
Balance March 31, 2022	777	$	3,871

(1)The value of outstanding share equivalents at the beginning of the period is based on the market price of the Company’s stock at that time, the value of issued share equivalents is based on the market price of the Company’s stock at issuance, the value of vested share equivalents is based on the cash paid at the time of vesting, the values of expired/forfeited share equivalents and outstanding share equivalents at the end of the period and are based on the market price of the Company's stock at the end of the period. The market price of the Company's stock was $4.98 on March 31, 2022.



	~~Number of Phantom Share Units (000's)~~
~~Balance December 31, 2018~~	~~1,692~~
~~Issued~~	~~351~~
~~Vested~~	~~(550~~	)
~~Expired / Forfeited~~	~~(72~~	)
~~Balance June 30, 2019~~	~~1,421~~



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

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, using a valuation method with the following assumptions:~~

June 30, 2019
Share price $ 8.93 (CAD$)
Remaining life of phantom share units 0.86 - 2.86 Years
Calculated fair value of phantom share units $ 3,809,000

liabilities. The total liability associated with phantom share units at ~~June 30, 2019~~March 31, 2022 is ~~$3,809,000,~~$2,074,000, with ~~$1,537,000~~$1,343,000 of this ~~balance~~amount included in ~~long-term~~current accrued liabilities and the remaining portion of ~~$2,272,000~~$731,000 included in ~~current~~long-term accrued liabilities. ~~Accrued liability and related expense is determined at each reporting period based on the stock price at period end.~~

The ~~Company maintains a 401(k) retirement plan for employees to which eligible employees can contribute a percentage~~impact associated with the fair value re-measurement of ~~their pre-tax compensation. Matching employer contributions to~~phantom share units is recorded in selling, general and administrative expenses within the ~~401(k) plan totaled $166,000~~unaudited Condensed Consolidated Statements of Income and ~~$115,000~~Comprehensive Income. The following table summarizes expense associated with the phantom share units for the three months ended ~~June 30, 2019~~March 31, 2022 and ~~2018, respectively,~~2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Selling, general, and administrative	$	411	$	2,465

The Company paid cash settlements of $13,000 and ~~$335,000~~$0 during the three months ended March 31, 2022 and ~~$225,000~~2021, pertaining to vestings of cash-settled phantom share units.

8. Commitments and Contingencies

The Company accrues estimates for resolution of any legal and other contingencies when losses are probable and reasonably estimable in accordance with ASC 450, Contingencies (“ASC 450”). No less than quarterly, the Company reviews the status of each significant matter underlying a legal proceeding or claim and assess our potential financial exposure. The Company accrues a liability for an estimated loss if the potential loss from any legal proceeding or claim is considered probable and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable, and accruals are based only on the information available to the Company at the time the judgment is made, which may prove to be incomplete or inaccurate or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Furthermore, the outcome of legal proceedings is inherently uncertain, and we may incur substantial defense costs and expenses defending any of these matters.

As previously disclosed, the Company (through its subsidiary Sleep Management LLC) submitted a purchase order (the “Purchase Order”) in March 2020 to Vyaire Medical, Inc. d/b/a CareFusion Respiratory Technologies (“Vyaire”) for respiratory equipment. The Company ultimately prepaid $1.4 million towards the delivery of such respiratory equipment. 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 ~~six months ended June 30, 2019~~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 ~~2018, respectively.~~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 are currently engaged in discovery.

The Company continues to believe that it has valid legal and equitable grounds to recover our outstanding prepayment as a result of Vyaire’s failure to deliver the vast majority of the respiratory equipment referenced in the Purchase Order. The Company has determined that a loss related to the Reconventional Demand is not probable, and thus has not accrued a liability related to this claim. Although a loss may be reasonably possible, the Company does not have sufficient information to determine the amount or range of reasonably possible loss with respect to the Reconventional Demand given that the dispute is in the early stages of the legal process. As of March 31, 2022, outstanding funds in the amount of $0.9 million related to undelivered respiratory equipment are included within other long-term assets.


9.			~~Income Taxes~~
Page 20


VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
March 31, 2022 and 2021

Governmental and Regulatory Matters

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

In May of 2021, a final report and recommendation (“Report”) was issued by the OIG regarding an audit by OIG of claims relating to 100 of the Company’s non-invasive ventilation at home (“NIVH”) patients. The OIG asserted that most of the sampled Medicare claims submitted for the monthly rental of non-invasive ventilators did not comply with Medicare requirements. The Company firmly believes that the Report ignores each patient’s diagnosis and supporting documentation of that diagnosis from treating and prescribing physicians and applies clinical guidelines that are contrary to CMS’s accepted standard of care. In late June of 2021, the Company received initial request letters from DME Medicare Administrative Contractors ("MACs") referencing the Report and requesting repayment of purported overpayments. The Company responded to each initial request by submitting a rebuttal and by filing a redetermination appeal as prescribed by the initial request letters and by statute. In September 2021, the MACs informed the Company of unfavorable decisions with respect to the redetermination appeals. In November 2021, the Company filed Reconsideration Appeals and intends to continue to defend itself vigorously through the remaining appeals processes which include, in successive order, Reconsideration decision, Administrative Law Judge appeals, Medicare Appeals Council review, and ultimately through Federal Court, if necessary. The timing of additional appeals beyond reconsideration are subject to workload constraints of the reviewing body. Based on initial discussions with CMS, a review of the current facts and circumstances as the Company understands them, and the nature of the requests, the Company has determined that a loss is not probable but may be reasonably possible. Accordingly, no related accrual has been recorded. The extrapolated value of the 39 associated claims within the 4-year reopening period limited by statute is approximately $9 million. The Company estimates that a possible loss, if any, will not exceed this amount. It is possible that the ultimate resolution of this matter, if unfavorable, could materially and adversely affect the Company’s consolidated financial position, consolidated results of operations, or consolidated cash flows.

For the three months ended March 31, 2022, the Company recorded an income tax expense of $0.7 million, which includes a discrete tax expense of $0.1 million associated with stock-based compensation arrangements. Excluding the impact of the discrete tax benefit, the effective rate for the three months ended March 31, 2022 is 28.9%. 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. Our effective tax rate is based on forecasted annual results which may fluctuate significantly through the rest of the year, in particular due to the uncertainty in our annual forecasts resulting from the unpredictable impact of the COVID-19 pandemic on our operating results.

At ~~June 30, 2019~~March 31, 2022 and ~~2018,~~2021, 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.

The Company is subject to U.S. federal income tax as well as income tax in various states. The Company is generally not subject to examination by taxing authorities for years prior to ~~2015. Our annual estimated effective~~2018.

The Company recognizes deferred tax ~~rate for 2019 is 1.53%, consistent with the effective tax rate for the year ended December 31, 2018. The primary component of the annual effective tax rate relates~~assets to the ~~Company's current state income taxes, as~~extent that the Company ~~continues~~believes that these assets are more likely than not to ~~generate taxable losses for U.S. federal income tax purposes.~~

~~10. Financial Risk Factors~~

be realized. In ~~the normal course of business,~~making such a determination, the Company ~~is exposed to a number~~considers all available positive and negative evidence, including future reversals of ~~risks that can affect its operating performance. ASC 820—Fair Value Measurements~~existing taxable temporary differences, projected future taxable income, tax-planning strategies, and ~~Disclosures creates a single definition~~results of fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and states that a fair value measurement is to estimate the price at which an orderly transaction to sell an asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Assets and liabilities adjusted to fair value in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value.recent operations.

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk are primarily cash and accounts receivable. ~~Each subsidiary places its cash with one major financial institution~~. ~~At times~~, ~~the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation. Substantially all accounts receivable are due under fee~~-~~for~~-~~service contracts from third party payors~~, ~~such as insurance companies and government~~-~~sponsored healthcare programs~~, ~~directly from patients or for rebates due from manufacturers. Receivables generally are collected within industry norms for third~~-~~party payors and from manufacturers. The Company continuously monitors collections from its clients and maintains an allowance for bad debts based upon lifetime expected credit losses.~~



VIEMED HEALTHCARE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts) (Unaudited)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

~~Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due~~. ~~The Company’s approach in managing liquidity is to ensure~~, ~~to the extent possible~~, ~~that it will have sufficient liquidity to meet its liabilities when due by continuously monitoring actual and budgeted cash flows, and monitoring financial market conditions for signs of weakness.~~

As of June 30, 2019, the Company faced no material liquidity risk and is able to meet all of its current financial obligations as they become due and payable. The Company had $24,111,000 and $16,981,000 of current liabilities that are due within one year as of June 30, 2019 and December 31, 2018, respectively. The Company had $25,061,000 and $22,963,000 of current assets as of June 30, 2019 and December 31, 2018, respectively in addition to positive cash flow from operations. The Company utilizes short term leases with a major supplier that could be extended over a longer term if there was a need for additional liquidity. Additionally, the Company maintains a $10.0 million line of credit with Hancock Whitney Bank which was fully available as of June 30, 2019, subject to compliance with certain covenants.

~~Interest rate risk~~

~~Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates~~. ~~Interest rate risk is limited to potential decreases on the interest rate offered on cash and cash equivalents held with registered US financial institutions~~. ~~The Company considers this risk to be immaterial. The interest on finance leases is not subject to cash flow interest rate risk as these instruments bear interest at fixed rates~~. In connection with the Term Note, the Company entered into an Interest Rate Swap Transaction with Hancock Whitney Bank for a fixed rate of 4.68%, thereby transforming the variable interest rate exposure into a fixed rate obligation.

~~11.~~10. Earnings Per Share

Income per common share is calculated using ~~the combined~~ earnings for the year divided by the weighted average number of shares outstanding during the year. ~~Diluted~~ 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 ~~warrants~~the vesting of RSUs are used to purchase common shares at the prevailing market rate.

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


	Three Months Ended March 31,
	2022		2021
Numerator - basic and diluted:
Net income attributable to shareholders	$	1,762	$	1,684

Denominator:
Basic weighted-average number of common shares	39,621,741		39,129,407
Diluted weighted-average number of shares	40,363,456		40,663,368

Basic earnings per share	$	0.04	$	0.04
Diluted earnings per share	$	0.04	$	0.04

Denominator calculation from basic to diluted:
Basic weighted-average number of common shares	39,621,741		39,129,407
Stock options and other dilutive securities	741,715		1,533,961
Diluted weighted-average number of shares	40,363,456		40,663,368

Three Months Ended Six Months Ended
June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018
Numerator - basic and diluted:
Net income attributable to shareholders $ 1,820
$ 2,366
$ 3,974
$ 4,707

Denominator:
Basic weighted-average number of common shares 37,686,763
37,909,628
38,165,274
37,909,628
Diluted weighted-average number of shares 39,975,307
39,335,011
40,166,855
39,099,186

Basic earnings per share $0.05 $0.06 $0.10 $0.12
Diluted earnings per share $0.05 $0.06 $0.10 $0.12

Denominator calculation from basic to diluted:
Basic weighted-average number of common shares 37,686,763
37,909,628
38,165,274
37,909,628
Stock options and other dilutive securities 2,288,544
1,425,383
2,001,581
1,189,558
Diluted weighted-average number of shares 39,975,307
39,335,011
40,166,855
39,099,186

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

~~VIEMED HEALTHCARE, INC.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular dollar amounts expressed in thousands of U.S. Dollars, except per share amounts)~~

~~(Unaudited)~~

~~June 30, 2019 and 2018~~

~~Conversion of Accounts Payable into Short-term Capital Lease~~

~~Subsequent to June 30, 2019, the Company entered into a capital lease agreement with a third party and as a result $1,563,000 of accounts payable was converted to a short-term lease payable.~~



VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified entirely by, our condensed consolidated financial statements (including Notes to the Condensed Consolidated Financial Statements) and the other consolidated financial information under Item 1 of this Quarterly Report on Form 10-Q. Some of the information in this discussion and analysis includes forward-looking statements that involve risk and uncertainties. Actual results and timing of events could differ from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

On March 11, 2020, the World Health Organization declared the outbreak of the novel coronavirus ("COVID-19") a pandemic. Based on the duration and severity of the impacts of the COVID-19 pandemic, including but not limited to any negative economic conditions arising from the pandemic, our ability to assess potential patients in hospitals and set up and treat patients in the home, and the impacts of government actions and administrative regulations on the healthcare industry and broader economy, including through existing and any future stimulus efforts, we are uncertain of the ultimate impact COVID-19 could have on our business, financial condition and results of operations.

Forward-Looking Statements

Certain statements and information in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 or "forward-looking information" as such term is defined in applicable Canadian securities legislation (collectively, "forward-looking statements"). Any statements other than statements of historical information, including those that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. These forward-looking statements are made as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by applicable law.

Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management regarding future events, and include, but are not limited to, statements with respect to: operating results; profitability; financial condition and resources; anticipated needs for working capital; liquidity; capital resources; capital expenditures; milestones; licensing milestones; information with respect to future growth and growth strategies; anticipated trends in our industry; our future financing plans; timelines; currency fluctuations; government regulation; unanticipated expenses; commercial or governmental disputes or claims; limitations on insurance ~~coverage;~~coverage or other reimbursement; and availability of cash flow to fund capital requirements.

Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “potential”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, “projects”, or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “will”, “should”, “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology.

Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. We believe that the assumptions and expectations reflected in such forward-looking statements are reasonable. We cannot assure you, however, that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.


VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
March 31, 2022 and 2021

By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, including those identified under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and the other documents we file with the SEC, including under “Item 1A. Risk Factors” of our Annual Report on Form ~~10 filed with~~10-K for the ~~SEC on August 1, 2019,~~year ended December 31, 2021, and with the securities regulatory authorities in certain provinces of Canada, which contribute to the possibility that the predicted outcomes may not occur or may be delayed. The risks, uncertainties and other factors, many of which are beyond our control, that could influence actual results include, but are not limited to: ~~We may be subject~~the general business, market and economic conditions in the regions in which the we operate; the impact of the COVID-19 pandemic and of the actions taken by governmental authorities, individuals and companies in response to the pandemic on our business, financial condition and results of operations, including on our patient base, revenues, employees, and equipment and supplies; significant capital requirements and operating ~~risks; the~~risks that we may be subject to; our ability to implement business strategies and pursue business opportunities; volatility in the market price of ~~the shares in the capital;~~our common shares; our novel business model; the risk that the clinical application of treatments that demonstrate positive results in a study may not be positively replicated or that such test results may not be predictive of actual treatment results or may not result in the adoption of such treatments by providers; the state of the capital markets; the availability of funds and resources to pursue operations; ~~decline~~reductions in reimbursement rates and audits of reimbursement ~~rates;~~claims by various govermental and private payor entities; dependence on few payors; possible new drug discoveries; dependence on key ~~suppliers;~~suppliers and the recall of certain Royal Philips BiPAP and CPAP devices and ventilators that we distribute and sell; granting of permits and licenses in a highly regulated business; competition; low profit market segments; ~~risks relating to the deterioration of global economic conditions;~~ disruptions in or attacks (including cyber-attacks) on our information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal ~~behavior;~~behavior to which we are exposed; the failure of third parties to comply with their obligations; difficulty integrating newly acquired businesses; the impact of new and changes to, or application of, current laws and regulations; the overall difficult litigation and regulatory environment; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; critical accounting estimates and changes to accounting standards, policies, and ~~methods;~~methods used by us; our status as an emerging growth ~~company and a foreign private issuer;~~company; and the occurrence of natural and unnatural catastrophic events or health epidemics or concerns, such as the COVID-19 pandemic, and claims resulting from such events or concerns, as well as other general economic, market and business conditions; and other factors beyond our control.



~~VIEMED HEALTHCARE, INC.~~ ~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~(Tabular amounts expressed in thousands of US Dollars, except per share amounts)~~
~~June 30, 2019 and 2018~~

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms the "Company," "we," "us" and "our" refer to Viemed Healthcare, Inc. and its wholly-owned ~~subsidiaries, Viemed Inc., Home Sleep Delivered, L.L.C. ("HSD"), and Sleep Management, L.L.C. dba Viemed ("Viemed").~~subsidiaries.

We were incorporated on December 14, 2016 pursuant to the Business Corporations Act (British Columbia)~~, and~~. As of June 30, 2020, we determined that we no longer qualify as a "foreign private issuer," as defined in Rule ~~12b-2~~3b-4 of the Exchange Act, for the purposes of the informational requirements of the Exchange Act. ~~Although, as~~As a ~~foreign private issuer,~~result, effective January 1, 2021, we ~~would not be required~~became subject to ~~do so, we~~the proxy solicitation rules under Section 14 of the Exchange Act and Regulation FD, and our officers, directors, and principal shareholders became subject to the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. We will continue to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC ~~instead of filing~~and with the relevant Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval (SEDAR).

The Company no longer qualifies as a “smaller reporting ~~forms available~~company” and is required to ~~foreign private issuers.~~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.

We are an "emerging growth company," as defined in the ~~Jumpstart Our Business Startups~~JOBS Act, ~~(the "JOBS Act"),~~ and as such, we have elected to comply with certain reduced U.S. public company reporting requirements.

Unless otherwise noted herein, all references to "$" or "USD" are to the currency of the United States and references to "CAD$" or "Canadian dollars" are to the currency of Canada.

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~~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 ~~durable medical equipment~~DME devices), in-home sleep testing and sleep apnea treatment, oxygen therapy, and the sale of associated supplies.


VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
March 31, 2022 and 2021

We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented ~~86.3% and 87.8%~~71.3% of our traditional revenue, excluding COVID-19 response sales and services, and 79.9% of our traditional revenue, excluding the COVID-19 response sales and services, for the three ~~and six~~ months ended ~~June 30, 2019.~~March 31, 2022 and 2021, respectively. We combine the benefits of home ventilation support with licensed Respiratory Therapists ("RTs") to drive improved patient outcomes and reduce costly hospital readmissions.

We expect to ~~use an organic growth model whereby~~grow through expansion ~~is accomplished through~~of existing service areas as well as in new ~~regions~~territories through a cost efficient launch that reduces location expenses. Our licensed RTs currently serve patients in 2948 states. We expect to continue to employ more RTs in order to assure our high service model is accomplished in the home. As of ~~June 30, 2019,~~March 31, 2022, we employed ~~more than 210~~278 licensed RTs, representing more than ~~55%~~42% of our company-wide employee count. By focusing overhead costs toon personnel that service the patient rather than physical location costs, we anticipate that we will efficiently ~~scaling~~scale our business in regions that are currently not being effectively serviced.

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 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.

Trends Affecting our Business

On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic. Various policies and initiatives have been implemented to reduce the transmission of COVID-19, including travel bans and restrictions, the postponement of non-essential medical surgeries, limiting access to medical facilities, and adoption of social distancing and remote working policies. Local, state and national governments continue to emphasize the importance of essential medical personnel and we remain open to meet the needs of our communities. Employee and patient safety is our first priority, and as a result, we put preparedness plans in place for our employees, especially our clinical personnel, and modified our clinical protocols to limit unnecessary patient encounters. These measures do not appear to be negatively impacting our patient attrition rate at this time, but we cannot assure you that future governmental policies and initiatives will not significantly disrupt our operations or adversely affect our ability to provide services to our patients in the future. In addition, our ability to assess potential patients in hospitals varies by hospital and city, but overall our business of setting up new patients in the home is continuing although at lower levels than in recent periods. While governmental and other restrictions have not had a material impact on our consolidated operating results for the three months ended March 31, 2022, it is possible that more significant disruptions could occur if the COVID-19 pandemic continues for a prolonged period of time and we cannot assure you that demand for our products and services will continue or that we will be able to maintain operations necessary to satisfy such demand, including sufficient personnel, supply chains and distributions channels.

The COVID-19 pandemic has led to significant disruptions and volatility in capital and financial markets. Broad economic factors resulting from the current COVID-19 pandemic, including high unemployment and underemployment levels and reduced consumer spending and confidence, could also affect our service mix, revenue mix, payor mix and patient base, as well as our ability to collect outstanding receivables. Business closures and layoffs in the geographic areas in which we operate may lead to increases in the uninsured and under-insured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services rendered. Any increase in the amount or deterioration in the collectability of patient accounts receivable will adversely affect our financial results and require an increased level of working capital. In addition, we may experience supply chain disruptions, including delays and price increases in equipment and supplies. Staffing, equipment and supplies shortages may also impact our ability to assess potential patients in hospitals and set up and treat patients in the home.

We believe we presently have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times. The CARES Act, which was signed into law on March 27, 2020, provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The legislation provides for relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response to support healthcare-related expenses or lost revenue attributable to COVID-19 and to ensure uninsured Americans can get testing and treatment for COVID-19. As a result, we 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 of 2022. Payments from the Provider Relief Fund are intended to compensate healthcare providers for lost revenues and incremental expenses incurred in response to the COVID-19 pandemic. The Department of Health and Human Services 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. To the extent that reporting requirements and terms and conditions



VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

are modified, it may affect our ability to comply and may require the return of funds. In accordance with the terms of acceptance for the grant, we believe we have utilized these funds to prevent, prepare for, and respond to the COVID-19 pandemic.

The CARES Act also provides for a temporary suspension of the 2% payment sequestration adjustment currently applied to all Medicare fee-for-service claims. In December 2021, President Biden signed into law legislation that extended the suspension on the 2 percent payment sequestration through March 31, 2022. The payment sequestration adjustment was fixed at 1 percent from April 1, 2022 to June 30, 2022 and it returns to 2 percent on July 1, 2022.

We are continuing to monitor any effects or requirements that may result from the CARES Act as many of the provisions in the CARES Act are temporary and may require us to modify our operations and compliance procedures. CMS and other federal agencies have and are likely to issue rules and regulations to implement the CARES Act. The impact of these rules and regulations are unknown and may affect us. To the extent these provisions will expire as stated in the CARES Act, we may experience adverse effects.

In 2019, CMS announced the inclusion of noninvasive ventilator products on the list of products subject to the competitive bidding program for Round 2021, which covers the period of January 1, 2021 through December 31, 2023. Rental revenue from ventilator products represents a significant portion of our revenues (approximately 71.3% of total traditional revenue, excluding COVID-19 response sales and services, during the three months ended March 31, 2022 ). On March 9, 2020, CMS announced that due to the COVID-19 pandemic, the United States President's exercise of the Defense Production Act, public concern regarding access to ventilators, and the non-invasive ventilators product category being new to the competitive bidding program, non-invasive ventilators were removed as a product category from Round 2021. On October 27, 2020, CMS announced that it had removed 13 of the 15 remaining product categories from Round 2021, including oxygen and PAP devices, because the payment amounts did not achieve expected savings. The next competitive bidding round is anticipated to begin no sooner than January 1, 2024. As a result of these announcements, we retain the ability to continue to furnish non-invasive ventilators and oxygen and PAP devices for all of our Medicare accredited areas, however, we are uncertain if non-invasive ventilators and oxygen and PAP devices will be included in future competitive bidding programs.

The below table highlights summary financial and operational metrics for the last eight ~~quarters (in thousands):~~quarters.


(Tabular amounts expressed in thousands of U.S. Dollars, except vent patients)
For the quarter ended	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020
Financial Information:
Revenue	$	32,255		$	31,962		$	29,285		$	27,399		$	28,416		$	31,202		$	33,447		$	42,854
Gross Profit	19,743			19,662			18,381			17,625			17,742			19,178			19,453			25,927
Gross Profit %	61		%	62		%	63		%	64		%	62		%	61		%	58		%	61		%
Net Income	1,762			4,087			1,789			1,566			1,684			5,071			2,804			19,412
Cash (As of)	29,248			28,408			26,867			31,151			31,097			30,981			32,396			29,707
Total Assets (As of)	119,007			117,962			115,486			111,014			113,001			112,560			113,969			112,178
Adjusted EBITDA(1)	7,273			9,549			7,419			6,847			5,468			9,458			7,720			16,287
Operational Information:

Vent Patients(2)	8,434			8,405			8,200			8,103			7,733			7,892			7,788			7,705

(Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts and vent patients)
For the quarter ended June 30,
2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017
Financial Information:
Revenue $ 22,547
$ 20,443
$ 18,489
$ 17,163
$ 15,508
$ 14,111
$ 13,548
$ 12,451
Gross Profit $ 16,861
$ 15,402
$ 13,645
$ 13,062
$ 11,323
$ 10,552
$ 10,186
$ 9,312
Gross Profit % 75 % 75 % 74 % 76 % 73 % 75 % 75 % 75 %
Net Income (Loss) $ 1,820
$ 2,154
$ 3,046
$ 2,424
$ 2,366
$ 2,341
$ (26 ) $ 4,018
Adjusted EBITDA⁽¹⁾
$ 4,610
$ 4,662
$ 4,974
$ 4,360
$ 4,114
$ 3,762
$ 1,877⁽³⁾
$ 4,690
Cash (As of) $ 7,691
$ 7,410
$ 10,413
$ 10,174
$ 8,551
$ 4,634
$ 5,098
$ 7,273
Total Assets (As of) $ 70,886
$ 58,583
$ 53,525
$ 49,147
$ 44,168
$ 40,566
$ 37,691
$ 32,740
Operational Information:
Vent Patients⁽²⁾
7,130
6,393
5,905
5,444
5,078
4,685
4,385
4,044

⁽¹⁾Refer to "Non-GAAP Financial Measures" section below for definition of Adjusted EBITDA.

⁽²⁾Vent Patients represents the number of active ventilator patients on recurring billing service at the end of each calendar quarter.

⁽³⁾ Fourth quarter 2017 Adjusted EBITDA was negatively impacted by our annual performance incentive compensation program which was recorded in full during the quarter due to the effective date of the Arrangement. During the year ended December 31, 2018 and subsequent periods, our accrual for these types of costs was recorded throughout the year. Adjusted EBITDA for the fourth quarter 2017 would have been $4,308,000 had this compensation been accrued throughout the year.

Three Months Ended June 30,
2019 % of Total Revenue 2018 % of Total Revenue $
Change %
Change
Revenue $ 22,547
100.0 % $ 15,508
100.0 % $ 7,039
45.4 %
Cost of revenue 5,686
25.2 % 4,185
27.0 % 1,501
35.9 %
Gross profit 16,861
74.8 % 11,323
73.0 % 5,538
48.9 %
Selling, general and administrative 13,244
58.7 % 7,919
51.1 % 5,325
67.2 %
Research and development 203
0.9 % —
— % 203
100.0 %
Stock-based compensation 1,034
4.6 % 665
4.3 % 369
55.5 %
Depreciation 138
0.6 % 124
0.8 % 14
11.3 %
Loss on disposal of property and equipment 85
0.4 % 52
0.3 % 33
63.5 %
Other expense 25
0.1 % 7
— % 18
257.1 %
Income from operations 2,132
9.5 % 2,556
16.5 % (424 ) (16.6 )%
Non-operating expenses
Unrealized Loss on warrant conversion liability 268
1.2 % 123
0.8 % 145
117.9 %
Interest expense, net 20
0.1 % 67
0.4 % (47 ) (70.1 )%
Net income before taxes 1,844
8.2 % 2,366
15.3 % (522 ) (22.1 )%
Provision for income taxes 24
0.1 % —
— % 24
100.0 %
Net income $ 1,820
8.1 % $ 2,366
15.3 % $ (546 ) (23.1 )%



VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021:

The following table summarizes our results of operations for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
	2022		% of Total Revenue		2021		% of Total Revenue		$ Change		% Change
Revenue	$	32,255	100.0	%	$	28,416	100.0	%	$	3,839	13.5	%
Cost of revenue	12,512		38.8	%	10,674		37.6	%	1,838		17.2	%
Gross profit	19,743		61.2	%	17,742		62.4	%	2,001		11.3	%
Selling, general and administrative	15,776		48.9	%	14,509		51.1	%	1,267		8.7	%
Research and development	632		2.0	%	339		1.2	%	293		86.4	%
Stock-based compensation	1,305		4.0	%	1,307		4.6	%	(2)		(0.2)	%
Depreciation	237		0.7	%	200		0.7	%	37		18.5	%
Other income	(455)		(1.4)	%	55		0.2	%	(510)		NM
Income from operations	2,248		7.0	%	1,332		4.7	%	916		68.8	%
Non-operating income and expenses

Income from equity method investments	(323)		(1.0)	%	(220)		(0.8)	%	(103)		NM
Interest expense, net	64		0.2	%	91		0.3	%	(27)		(29.7)	%
Net income before taxes	2,507		7.8	%	1,461		5.1	%	1,046		71.6	%
Provision (benefit) for income taxes	745		2.3	%	(223)		(0.8)	%	968		NM
Net income	$	1,762	5.5	%	$	1,684	5.9	%	$	78	4.6	%

The following table summarizes our revenue for the three months ended ~~June 30, 2019~~March 31, 2022 and ~~2018 (in thousands of U.S. Dollars, except percentages):~~2021:


	Three Months Ended March 31,
	2022		% of Total Revenue		2021		% of Total Revenue		$ Change		% Change
Net revenue from rentals
Ventilator rentals, non-invasive and invasive	$	21,518	66.7	%	$	20,351	71.6	%	$	1,167	5.7	%
Other durable medical equipment rentals	4,359		13.5	%	2,930		10.3	%	1,429		48.8	%
Net revenue from sales and services
Equipment and supply sales	3,037		9.4	%	1,768		6.2	%	1,269		71.8	%
COVID-19 response sales and services	2,095		6.5	%	2,955		10.4	%	(860)		(29.1)	%
Service revenues	1,246		3.9	%	412		1.4	%	834		202.4	%
Total net revenue	$	32,255	100.0	%	$	28,416	100.0	%	$	3,839	13.5	%

Three Months Ended June 30,
2019 % of Total Revenue 2018 % of Total Revenue $
Change %
Change
Revenue from rentals
Ventilator rentals, non-invasive and invasive $ 19,461
86.3 % $ 13,852
89.3 % $ 5,609
40.5 %
Other durable medical equipment rentals 1,425
6.3 % 532
3.4 % 893
167.9 %
Revenue from sales and services
Equipment sales 1,164
5.2 % 895
5.8 % 269
30.1 %
Service revenues 497
2.2 % 229
1.5 % 268
117.0 %
$ 22,547
100.0 % $ 15,508
100.0 % $ 7,039
45.4 %

For the three months ended ~~June 30, 2019,~~March 31, 2022, revenue totaled ~~$22.5~~$32.3 million,, an increase of ~~$7.0~~$3.8 million (or ~~45.4%~~13.5%) from the ~~second quarter of 2018.~~comparable period in 2021. Excluding COVID-19 response sales and services revenue, net revenue increased $4.7 million (or 18.5%) from the comparable period in 2021. The net revenue growth was ~~primarily~~ driven by ~~a $5.6 million (or 40.5%)~~an increase in ventilator rental ~~revenue. This increase is attributable to our organic growth in active ventilator patient base. Our active ventilator patient base grew from 5,078 as~~revenue of ~~June 30, 2018 to 7,130 as of June 30, 2019, an increase of 40%. In addition to the ventilator rental revenue growth,~~$1.2 million (or 5.7%), rental revenue from other DME of $1.4 million (or 48.8%), equipment and supply sales of $1.3 million (or 71.8%), and service revenues of $0.8 million (or 202.4%). The growth in other durable medical equipment ~~grew~~rentals and equipment and supply sales has been primarily driven by PAP and oxygen related sales and services. The increase in service revenue is primarily due to the addition of our healthcare staffing offerings. While ventilator rentals continue to make up the majority of our revenue, the growth of PAP and oxygen related sales and services over the comparable period in 2021 is contributing significantly to the diversity of overall revenue mix.


VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
March 31, 2022 and 2021

During the three months ended March 31, 2022, net revenue from COVID-19 response sales and services totaled $2.1 million, consisting primarily of contact and vaccine tracing services. Compared to the three months ended March 31, 2021, COVID-19 response sales and services declined by $0.9 million (or ~~167.9%~~29.1%) ~~quarter over quarter. This growth was distributed throughout our many other respiratory-related products (PAPs, oxygen concentrators, nebulizers, percussion vests)~~. ~~Many of our patients need multiple respiratory related durable medical equipment devices and supplies over time and~~While we expect ~~as our total patient base continues to grow, so too will these complimentary devices and supplies. However, we expect our ventilator rental~~some further COVID-19 response related revenue during the remainder of 2022, the quantity is expected to be lower and impact of such revenue remains uncertain and dependent on the ~~primary driver~~length and intensity of ~~future revenue growth.~~ the COVID-19 pandemic and the availability of such equipment, supplies, and services from other suppliers.

As we continue to expand geographically into new states and further expand our presence in our existing territories, we expect ~~continued~~ growth in our active ventilator patient base and ~~ventilator rental~~our other respiratory offerings, and additional revenue ~~accordingly.~~from our new staffing and recruitment division. While we expect growth for the remainder of the current year to exceed growth in pandemic periods, we anticipate that the rate of growth may be impacted by residual effects of the pandemic.

Cost of revenue and gross profit

For the three months ended ~~June 30, 2019,~~March 31, 2022, cost of revenue totaled ~~$5.7~~$12.5 million, an increase of ~~$1.5~~$1.8 million (or ~~35.9%~~17.2%) from the comparable period in ~~2018.~~2021. For the three months ended ~~June 30, 2019~~March 31, 2022, COVID-19 response sales and ~~2018,~~services accounted for $1.0 million (or 7.7%) of these costs, compared to $1.9 million (or 17.7%) of these costs from the comparable period in 2021. Excluding COVID-19 response sales and services, gross profit percentage ~~increased from approximately 73.0% to approximately 74.8%. The expanded margins are primarily~~for the ~~result of scale reached through our increased patient base. We expect~~three months ended March 31, 2022 and 2021 was 61.7% and 65.5%, respectively. Overall gross profit percentage decreased from approximately 62.4% in the three months ended March 31, 2021 to ~~remain consistent~~approximately 61.2% in the three months ended March 31, 2022. The decrease in gross profit percentage is due to migration of the revenue mix associated with product and service diversification. Excluding COVID-19 response sales and services, gross profit percentage for the ~~remainder~~three months ended March 31, 2022 and 2021 was 61.7% and 65.5%, respectively. We expect our gross profit percentage for our normal operations (non-COVID-19 related) to increase slightly through the end of ~~the year.~~2022 as a result of growth in lower margin product sales partially offset by growth in higher margin services.

Selling, general &and administrative expense

For the three months ended ~~June 30, 2019,~~March 31, 2022, selling, general and administrative expenses totaled ~~$13.2~~$15.8 million, an increase of ~~$5.3~~$1.3 million (or ~~67.2%~~8.7%) from the comparable prior period. The increase was primarily the result of an increase in employee costs which includes the impact of our phantom stock plan. Our phantom stock plan is measured at fair value as of the reporting period and is driven primarily by our stock price. During the three months ended June 30, 2019, our stock price increased 36%, driving higher expenses related to these awards.

Additionally, we incurred higher absolute bad debt expense as a result of higher revenue. As a result, selling, general, and administrative expenses as a percentage of revenue increased to 58.7% for the three months ended June 30, 2019 compared to 51.1% for the three months ended June 30, 2018. As noted, the primary driver of our selling, general, and administrative expenses is employee associated cost. As we continue to grow into new markets and increase our employee count, we expect selling, general, and administrative expenses will trend accordingly. We expect that selling, general and administrative expenses as a percentage of revenue will trend lower towards historical percentages toward the end of 2019.

~~Stock-based compensation~~

For the three months ended June 30, 2019, stock-based compensation totaled $1.0 million, an increase of $0.4 million (or 55.5%) from the comparable period in 2018. We expect that as we continue to increase our employee count and utilize stock-based awards as an aspect of employee compensation, stock-based compensation expense will increase accordingly.



~~VIEMED HEALTHCARE, INC.~~ ~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~(Tabular amounts expressed in thousands of US Dollars, except per share amounts)~~
~~June 30, 2019 and 2018~~

~~Interest expense, net~~

For the three months ended June 30, 2019, net interest expense totaled $19.8 thousand, a decrease of $47.2 thousand (or 70.1%) from the comparable period in 2018. We expect net interest expense to increase as a result of the Term Note described below; however, we expect net interest expense will continue to be relatively inconsequential as a result of our favorable lease terms and ability to purchase equipment through cash generated from operations.

~~Provision for income taxes~~

For the three months ended June 30, 2019, the provision for income taxes was $24.1 thousand, compared to nil during the 2018 period. The current period provision is related to state income tax liabilities for which our federal tax net operating losses could not be fully utilized. We expect to continue to benefit from the federal tax environment in the United States. Recent tax changes allow for accelerated deductions for capital expenditures and lower corporate tax rates. As we continue to incur substantial capital expenditures to acquire medical equipment to accommodate our rapid patient base growth, combined with the deferred tax assets mentioned above, we expect most near-term tax payments will continue to result from state tax liabilities.

For the three months ended June 30, 2019, net income was $1.8 million, a decrease of $0.5 million (or 23.1%) from the comparable period in 2018. Net income as a percentage of revenue decreased from 15.3% for the three months ended June 30, 2018 to 8.1% for the three months ended June 30, 2019, primarily driven by increased employee costs, absolute bad debt expense, and stock-based compensation as described above.

Six Months Ended June 30,
2019 % of Total Revenue 2018 % of Total Revenue $
Change %
Change
Revenue $ 42,990
100.0 % $ 29,619
100.0 % $ 13,371
45.1 %
Cost of revenue 10,727
25.0 % 7,744
26.1 % 2,983
38.5 %
Gross profit $ 32,263
75.0 % $ 21,875
73.9 % $ 10,388
47.5 %
Selling, general and administrative 24,836
57.8 % 15,208
51.3 % 9,628
63.3 %
Research and development 437
1.0 % —
— % 437
100.0 %
Stock-based compensation 1,914
4.5 % 1,226
4.1 % 688
56.1 %
Depreciation 267
0.6 % 330
1.1 % (63 ) (19.1 )%
Loss on disposal of property and equipment 141
0.3 % 88
0.3 % 53
60.2 %
Other expense $ 49
0.1 % $ 7
— % $ 42
600.0 %
Income from operations $ 4,619
10.7 % $ 5,016
16.9 % $ (397 ) (7.9 )%
Non-operating expenses
Unrealized Loss on warrant conversion liability 437
1.0 % 195
0.7 % 242
124.1 %
Interest expense, net 46
0.1 % 114
0.4 % (68 ) (59.6 )%
Net income before taxes $ 4,136
9.6 % $ 4,707
15.9 % $ (571 ) (12.1 )%
Provision for income taxes 162
0.4 % —
— % 162
100.0 %
Net income $ 3,974
9.2 % $ 4,707
15.9 % $ (733 ) (15.6 )%



~~VIEMED HEALTHCARE, INC.~~ ~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~(Tabular amounts expressed in thousands of US Dollars, except per share amounts)~~
~~June 30, 2019 and 2018~~

~~The following table summarizes our revenue for the six months ended June 30, 2019 and 2018 (in thousands of U.S. Dollars, except percentages):~~

Six Months Ended June 30,
2019 % of Total Revenue 2018 % of Total Revenue $
Change %
Change
Revenue from rentals
Ventilator rentals, non-invasive and invasive $ 37,743
87.8 % $ 26,676
90.1 % $ 11,067
41.5 %
Other durable medical equipment rentals 2,343
5.5 % 984
3.3 % $ 1,359
138.1 %
Revenue from sales and services

Equipment sales 2,032
4.7 % 1,502
5.1 % $ 530
35.3 %
Service revenues 872
2.0 % 457
1.5 % $ 415
90.8 %
$ 42,990
100.0 % $ 29,619
100.0 % $ 13,371
45.1 %

For the six months ended June 30, 2019, revenue totaled $43.0 million, an increase of $13.4 million (or 45.1%) from the comparable period in 2018. The revenue growth was primarily driven by a $11.1 million (or 41.5%) increase in ventilator rental revenue. This increase is attributable to our organic growth in active ventilator patient base. Our active ventilator patient base grew from 5,078 as of June 30, 2018 to 7,130 as of June 30, 2019, an increase of 40%. In addition to the ventilator rental revenue growth, rental revenue from other durable medical equipment grew $1.4 million (or 138.1%).

~~Cost of revenue and gross profit~~

For the six months ended June 30, 2019, cost of revenue totaled $10.7 million, an increase of $3.0 million (or 38.5%) from the comparable period in 2018. For the six months ended June 30, 2019 and 2018, gross profit percentage increased from approximately 73.9% to approximately 75.0%. The expanded margins are primarily the result of scale reached through our increased patient base. We expect gross profit percentage to remain consistent for the remainder of the year.

~~Selling, general & administrative expense~~

For the six months ended June 30, 2019, selling, general and administrative expenses totaled $24.8 million, an increase of $9.6 million (or 63.3%) from the comparable period in 2018. The increase was primarily the result of an increase in employee costs which includes the impact of our phantom stock plan. Our phantom stock plan is measured at fair value as of the reporting period and is driven primarily by our stock price. During the six months ended June 30, 2019, our stock price increased 71%, driving higher expenses related to these awards.

~~Additionally, we incurred higher absolute bad debt expense as a result of higher revenue.~~ Selling, general, and administrative expenses as a percentage of revenue ~~increased~~decreased to ~~57.8%~~48.9% for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2022 compared to ~~51.3% and~~51.1% for the ~~six~~three months ended ~~June 30, 2018. As noted, the primary driver of our~~March 31, 2021.

The increase in overall selling, general and administrative expense as compared to the prior period is primarily due to additional employee related expenses isto accommodate the overall growth of the Company. Our full time employee count increased from 528 on March 31, 2021 to 662 on March 31, 2022, an increase of 25.4%. Employee compensation expenses increased $0.8 million (or 8.4%) as a result of higher compensation expense associated ~~cost. As we continue to grow into new markets and~~with an overall increase in our employee ~~count, we~~headcount, offset by a decrease related to the impact of our phantom stock plan. The remaining increase in selling, general, and administrative expense over the prior year period is largely due to an increase in auto and travel related expenses associated with increases in travel and in-person activities combined with increasing costs for fuel. We expect that current year selling, general and administrative expenses will ~~trend accordingly. We expect that selling, general and administrative expenses~~remain materially consistent with the current quarter as a percentage of revenue ~~will trend lower towards historical percentages toward~~through the end of ~~2019.~~2022.

~~Stock-based compensation~~Research and development

For the ~~six~~three months ended ~~June 30, 2019, stock-based compensation~~March 31, 2022, research and development expense totaled ~~$1.9~~$0.6 million, an increase of ~~$0.7~~$0.3 million (or ~~56.1%~~86.4%) from the comparable period in ~~2018.~~2021. As we continue to invest in research and development related projects to support our technology initiatives, we expect that associated costs will continue to increase in 2022 relative to 2021 costs.

Stock-based compensation

For the three months ended March 31, 2022, stock-based compensation totaled $1.3 million, remaining relatively unchanged from the comparable period in 2021. We expect that as we continue to increase our employee count and utilize stock-based awards as an aspect of employee compensation, stock-based compensation expense will increase accordingly. Stock-based compensation as a percentage of revenue has historically remained ~~under~~near or below 5%.

Interest expense, net

For the three months ended March 31, 2022 and during the comparable period in 2021, net interest expense totaled $0.1 million. As a result of low levels of interest bearing debt, we expect net interest expense to remain relatively consistent with the current quarter through the end of 2022.



VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

~~Interest expense, net~~Provision (benefit) for income taxes

For the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2022, the provision for income taxes was $0.7 million, compared to a $0.2 million benefit during the 2021 period. The increase in income tax expense was primarily due to a discrete tax benefit associated with share based compensation during the 2021 period. Excluding discrete items, our annual estimated effective tax rate for 2022 is 28.9%.

For the three months ended March 31, 2022, net ~~interest expense totaled $45.6 thousand,~~income was $1.8 million, a ~~decrease~~increase of ~~$68.4 thousand~~$0.1 million (or ~~60.0%~~4.6%) from the comparable period in 2018. We expect net interest expense to increase as a result of the Term Note described below; however, we expect net interest expense will continue to be relatively inconsequential as a result of our favorable lease terms and ability to purchase equipment through cash generated from operations.

For the six months ended June 30, 2019, the provision for income taxes was $162.1 thousand, compared to nil during the 2018 period. The current period provision is related to state income tax liabilities for which our federal tax net operating losses could not be fully utilized. We expect to continue to benefit from the federal tax environment in the United States. Recent tax changes allow for accelerated deductions for capital expenditures and lower corporate tax rates. As we continue to incur substantial capital expenditures to acquire medical equipment to accommodate our rapid patient base growth, combined with the deferred tax assets mentioned above, we expect most near-term tax payments will continue to result from state tax liabilities.

~~For the six months ended June 30, 2019, net income was $4.0 million, a decrease of $0.7 million from the comparable period in 2018.~~2021. Net income as a percentage of net revenue decreased from ~~15.9%~~5.9% for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2021 to ~~9.2%~~5.5% for the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2022, primarily ~~driven by~~due to the increased ~~employee costs, absolute bad debt~~income tax expense, ~~and stock-based compensation~~ as described above.

Non-GAAP Financial Measures

Our management regularly monitors certain financial measures to track the progress of our business against internal goals and targets. We believe that one of the most important measures for our company is Adjusted EBITDA.The Company uses Adjusted EBITDA, which is a ~~non-GAAP~~ financial ~~measure. We believe~~measure that is not prepared in accordance with generally accepted accounting principles in the United States ("GAAP") to analyze its financial results and believes that it is useful to investors, as a supplement to U.S. GAAP measures. Management believes Adjusted EBITDA provides helpful information with respect to ~~our~~the Company’s operating performance as viewed by management, including a view of ~~our~~the Company’s business that is not dependent on the impact of ~~our~~the Company’s capitalization structure and items that are not part of ~~our~~the Company’s day-to-day operations. Management uses Adjusted EBITDA (i) to compare ~~our~~the Company’s operating performance on a consistent basis, (ii) to calculate incentive compensation for ~~our~~the Company’s employees, (iii) for planning purposes, including the preparation of ~~our~~the Company’s internal annual operating budget, and (iv) to evaluate the performance and effectiveness of ~~our~~the Company’s operational strategies. Accordingly, ~~we believe~~management believes that Adjusted EBITDA provides useful information in understanding and evaluating ~~our~~the Company’s operating performance in the same manner as management.

In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including interest, taxes, stock based compensation, and depreciation of property and equipment. Set forth below are descriptions of the financial items that have been excluded from net income to calculate Adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to net income.

–Depreciation may be useful for investors to consider because it generally represents the wear and tear on the property and equipment used in our operations. However, we do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating costs.

–The amount of interest expense we incur or interest income we generate may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense or interest income to be a representative component of the day-to-day operating performance of our business.

–Stock-based compensation may be useful for investors to consider because it is an estimate of the non-cash component of compensation received by the Company’s directors, officers, employees and consultants. However, stock-based compensation is being excluded from our operating expenses because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but were made for the Company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue stock-based awards are made to further our long-term strategic objectives and do impact our earnings under GAAP, these items affect multiple periods and management is not able to change or affect these items within any period.

–Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes and may reduce or increase the amount of funds otherwise available for use. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business.


–	Depreciation may be useful for investors to consider because it generally represents the wear and tear on the property and equipment used in our operations. However, we do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating costs.


–	The amount of interest expense we incur or interest income we generate may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense or interest income to be a representative component of the day-to-day operating performance of our business.

–

Unrealized loss on warrant conversion liability may be useful for investors to consider as it represents changes in the fair value of warrants and exchangeable shares of subsidiaries, driven predominantly by changes in our share price and exchange rates. These changes are non-cash, as is the settlement of the underlying derivative liability, which occurs upon the conversion of the derivative instrument into common shares of the Company.

–

Stock-based compensation may be useful for investors to consider because it is an estimate of the non-cash component of compensation received by the Company’s directors, officers, employees and consultants. However, stock-based compensation is being excluded from our operating expenses because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but were made for the Company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue stock-based awards are made to further our long-term strategic objectives and do impact the our earnings under U.S. generally accepted accounting principles ("GAAP"), these items affect multiple periods and management is not able to change or affect these items within any period.




	Page	29



VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

–

Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes and may reduce or increase the amount of funds otherwise available for use. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business.

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 thousands of U.S. Dollars):~~indicated:


For the quarter ended	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020
Net Income	$	1,762	$	4,087	$	1,789	$	1,566	$	1,684	$	5,071	$	2,804	$	19,412
Add back:
Depreciation	3,397		3,120		2,867		2,716		$	2,609	$	2,835	$	2,425	$	2,190
Interest expense	64		69		75		83		$	91	$	100	$	116	$	135
Stock-based compensation	1,305		1,305		1,302		1,236		$	1,307	$	1,301	$	1,234	$	1,196
Income tax expense (benefit)	745		968		1,386		1,246		$	(223)	$	151	$	1,141	$	(6,646)
Adjusted EBITDA	$	7,273	$	9,549	$	7,419	$	6,847	$	5,468	$	9,458	$	7,720	$	16,287

For the quarter ended June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017
Net Income (Loss) 1,820 2,154 3,046 2,424 2,366 2,341 (26) 4,018
Add back:
Depreciation 1,444 1,295 1,177 972 893 741 738 662
Interest expense 20 26 30 37 67 47 49 67
Unrealized (gain) loss on warrant conversion liability 268 169 (210) 220 123 72 158 —
Stock-based compensation 1,034 880 804 672 665 561 828 —
Income tax expense (benefit) 24 138 127 35 — — 130 (57)
Adjusted EBITDA $4,610 $4,662 $4,974 $4,360 $4,114 $3,762 $1,877 $4,690

Use of Non-GAAP Financial Measures

Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of our financial performance under GAAP and should not be considered as ~~alternatives~~an alternative to revenue or net income, ~~(loss),~~ as applicable, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of the Company's liquidity, and may not be comparable to other similarly titled measures of other businesses. Adjusted EBITDA has limitations as an analytical tool and ~~you~~ should not ~~consider it~~be considered in isolation or as a substitute for analysis of our operating results as reported under GAAP. Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of ongoing operations; and other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting ~~their~~its usefulness as a comparative ~~measures.~~measure.



Page 30


VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
March 31, 2022 and 2021

Liquidity and Capital Resources

Cash and cash equivalents at ~~June 30, 2019~~March 31, 2022 was ~~$7.7~~$29.2 million, compared to ~~$10.4~~$28.4 million at December 31, ~~2018.~~2021. Based on our current plan of operations, ~~including potential acquisitions,~~ we believe this amount, when combined with expected cash flows from operations and amounts available under our line of credit will be sufficient to fund our growth strategy and to meet our anticipated operating expenses, capital expenditures, and debt service obligations for at least the next 12 ~~months.~~months from the date of this filing. The Company utilizes short term leases with a major supplier that could be extended over a longer term if there was a need for additional liquidity. Additionally, the Company maintains a $10.0 million line of credit with Hancock Whitney Bank which was fully undrawn as of ~~June 30, 2019.~~March 31, 2022.

Cash Flows

The following table summarizes our cash flows for the periods ~~indicated (in thousands of U.S. Dollars):~~indicated:


	Three Months Ended March 31,
	2022		2021
Net Cash provided by (used in):
Operating activities	$	7,146	$	4,628
Investing activities	(3,807)		(1,698)
Financing activities	(2,499)		(2,814)
Net increase in cash and cash equivalents	$	840	$	116

Six Months Ended June 30,
2019 2018
Net Cash provided by (used in):
Operating activities $5,963 $9,003
Investing activities (7,487) (1,780)
Financing activities (1,198) (3,770)
Net (decrease) increase in cash and cash equivalents $(2,722) $3,453




	~~Page~~	30



~~VIEMED HEALTHCARE, INC.~~ ~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~(Tabular amounts expressed in thousands of US Dollars, except per share amounts)~~
~~June 30, 2019 and 2018~~

Net Cash Provided by Operating Activities

Net cash provided by operating activities during the ~~six~~three months ended ~~June 30, 2019~~March 31, 2022 was ~~$6.0~~$7.1 million, resulting from net income of ~~$4.0~~$1.8 million and non-cash net income adjustments of ~~$9.1~~$7.4 million and an increase in net operating liabilities of $1.6 million, and an increase in net operating assets of $8.7 million. The non-cash net income adjustments primarily consisted of $3.9 million of bad debt expense, $2.7 million of depreciation and $1.9 million of stock-based compensation. The uses of cash related to changes in operating assets primarily consisted of increases in accounts receivable of $7.8 million and inventory of $0.8 million. The changes in operating liabilities primarily consisted of an increase in accounts payable of $1.9 million and a decrease in accrued liabilities of $0.2 million. The increase in our operating assets and liabilities were primarily driven by our increased business volume period-over-period and higher compensation and personnel-related costs.

Net cash provided by operating activities during the six months ended June 30, 2018 was $9.0 million, resulting from net income of $4.7 million, non-cash net income adjustments of $5.6 million and a decrease in net operating liabilities of $0.3$0.9 million, which ~~were~~was partially offset by an increase in net operating assets of ~~$1.1~~$2.9 million. The non-cash net income adjustments primarily consisted of ~~$2.7~~$3.4 million in change of ~~bad debt expense, $1.6~~allowance for doubtful accounts, $3.4 million of depreciation, $0.7 million in change in deferred tax asset, and ~~$1.2~~$1.3 million of stock-based compensation. The primary changes in working capital were an increase in gross accounts receivable of $4.2 million, offset by an increase in income taxes payable of $1.2 million and a decrease in inventory of $1.4 million. Included in our operating cash flows for the period is the receipt of $0.4 million in Provider Relief Funds

Net cash provided by operating activities during the three months ended March 31, 2021 was $4.6 million, resulting from net income of $1.7 million and non-cash net income adjustments of $5.4 million and an increase in net operating liabilities of $0.4 million, which was partially offset by an increase in net operating assets of $2.8 million. The non-cash net income adjustments primarily consisted of $1.8 million in change of allowance for doubtful accounts, $2.6 million of depreciation, $0.1 million of loss on disposal of property and equipment, $1.3 million of stock-based compensation, $0.2 million gain on equity investments and $0.2 million change in deferred tax asset. The uses of cash related to changes in operating assets primarily consisted of an increase in accounts receivable of ~~$0.8~~$2.7 million, asan increase in prepaid expenses and other current assets of $0.2 million, partially offset by a ~~result~~decrease in inventory of ~~increased revenue growth.~~$0.1 million. The changes in operating liabilities primarily consisted of ~~decreases~~an increase in accounts payable of ~~$0.1~~$0.4 million, ~~and~~partially offset by a decrease in accrued liabilities of $0.1 million. ~~These decreases in accounts payable and accrued liabilities can be primarily attributed to higher expenses incurred relating to the corporate spin-out at the end of 2017.~~

Net Cash Used in Investing Activities

Net cash ~~provided by~~used in investing activities during the ~~six~~three months ended ~~June 30, 2019~~March 31, 2022 was ~~$7.5~~$3.8 million, consisting of ~~$7.7~~$4.0 million of purchases of property and equipment, partially offset by ~~$0.2~~$0.3 million of sales proceeds from the disposal of property and equipment. Purchases of property and equipment were primarily related to ~~the purchase of our new corporate headquarters in addition to~~ medical equipment rented to our patients. ~~Combining cash~~Cash purchases of property and equipment ~~of $7.7 million and equipment financed through leases and long term debt of $9.4 million, our total capital expenditures for the six months ended June 30, 2019 was $17.1 million. This~~ represents a ~~$10.5~~$2.2 million, or ~~158.0%~~119.1%, increase year over ~~year, driven by our revenue growth of 45.1% during the same periods combined with the purchase of our new corporate headquarters.~~year.

Net cash ~~provided by~~used in investing activities during the ~~six~~three months ended ~~June 30, 2018~~March 31, 2021 was ~~$1.8~~$1.7 million, consisting of ~~$2.1~~$1.8 million of purchases of property and equipment, partially offset by ~~$0.3~~$0.1 million of sales proceeds from the disposal of property and equipment. Purchases of property and equipment were primarily related to ~~the~~ medical equipment ~~we rent~~rented to ~~patients. Combining cash purchases of property and equipment of $2.1 million and equipment financed through finance leases and long term debt of $4.6 million,~~ our ~~total capital expenditures for the six months ended June 30, 2018 was $6.6 million.~~

~~Net Cash Used in Financing Activities~~

Net cash used in financing activities during the six months ended June 30, 2019 was $1.2 million, consisting of $4.8 million in proceeds to finance the purchase of our corporate headquarters, $4.6 million in repayments of finance lease liabilities and $1.5 million of shares repurchased and canceled under our normal course issuer bid described below.

~~Net cash used in financing activities during the six months ended June 30, 2018 was $3.8 million, consisting of $3.8 million in repayments of finance lease liabilities.~~

~~Credit Agreement~~

patients.




	Page	31



VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
~~June 30, 2019~~March 31, 2022 and ~~2018~~2021

OnNet Cash Used in Financing Activities

Net cash used in financing activities during the three months ended March ~~19, 2019, we entered into an amendment~~31, 2022 was $2.5 million. For the three months ended March 31, 2022, the Company repurchased and canceled 389,878 common shares at a cost of $1.9 million pursuant to the ~~loan agreement increasing~~Share Repurchase Program authorized by the ~~available~~Board of Directors on March 7, 2022 (the "2022 Share Repurchase Program"). The Company also acquired and cancelled 23,742 common shares at a cost of $0.1 million to satisfy employee income tax withholding associated with RSUs vesting during the three months ended March 31, 2022. Net cash used in financing activities during the three months ended March 31, 2022 also consisted of $0.4 million in principal payments on the Term Note (as defined below).

Net cash used in financing activities during the three months ended March 31, 2021 was $2.8 million, consisting of $0.4 million in proceeds from the Term Note, partially offset by $1.0 million in repayments of finance lease liabilities, and $1.4 million for shares redeemed and canceled for tax withholding in connection with RSUs vested in the period..

The Company maintains a line of credit ~~from $5.0 million to~~in the amount of $10.0 million ~~and extending~~that expires May 1, 2023 under the ~~expiration date to March 19, 2021. In addition, the borrowing base restriction was removed from the loan agreement and all current financial covenants were replaced with the following covenants:~~

~~Minimum Working Capital (Quarterly)~~⁽¹⁾

~~The Company was in compliance with~~will be secured by substantially all ~~covenants in effect at June 30, 2019.~~of the Company's assets. There were no borrowings against this ~~facility~~line of credit at ~~June 30, 2019 and~~March 31, 2022 or December 31, ~~2018.~~

2021. While we currently have no immediate plans to draw on this ~~facility,~~line of credit, the line of credit allows flexibility in funding our future operations subject to compliance with the covenants described above.

Under the Commercial Business Loan Agreement, the Company is subject to several restrictive covenants that, among other things, impose operating and financial restrictions on the Company. Financial covenants include a Total Debt to Adjusted EBITDA, a Loan-to-Value Ratio and a Fixed Charged Coverage Ratio, as defined in the ~~table above.~~Credit Agreement. The Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder and failure to observe or perform certain covenants. The Company was in compliance with all covenants under the Commercial Business Term Loan Agreement in effect at March 31, 2022.

Commercial Term ~~Note~~Notes

On May 30, 2019, the Company entered into an amendment to the loan agreement providing for a ~~commercial~~ term note (the ~~“Term~~“Building Term Note”) in favor of Hancock Whitney Bank in the principal amount of $4.8 million. The proceeds of the Building Term Note were used to purchase a building ~~that the Company plans~~ to utilize as ~~its~~a new corporate ~~headquarters.~~headquarters for the Company. Beginning July 1, 2019, the Company makes monthly payments towards the outstanding balance. The Building Term Note matures on May 30, 2026 and is secured by substantially all of ~~the~~our assets, ~~of the borrower,~~ including the real property acquired with the proceeds of the Building Term Note. The Building Term Note bears interest at a variable rate equal to the one month ICE ~~libor~~LIBOR index plus a margin of 2.45% per annum. The Company is required to maintain a loan to value ratio of 85% with respect to the appraised value of the real property. In connection with the Building Term Note, the Company entered into an interest rate swap transaction (the "Interest Rate Swap Transaction") with Hancock Whitney Bank effectively fixing the interest rate for the Building Term Note at 4.68%.

~~Sources~~On September 19, 2019, the Company entered into a third amendment to the loan agreement providing for a term note (the “Term Note") in favor of ~~funds~~

~~Our cash provided by operating activities~~Hancock Whitney Bank in the ~~six months ended June 30,~~principal amount of $5.0 million. The proceeds of the Term Note were used for general corporate purposes. Beginning October 19, 2019, ~~was $6.0 million compared to $9.0 million in~~ the ~~six months ended June 30, 2018. As~~Company makes monthly payments towards the outstanding balance. The Term Note matures on September 19, 2022 and is secured by substantially all of ~~June 30, 2019, we had cash and cash equivalents~~our assets. The Term Note bears interest at the rate of ~~$7.7 million.~~4.60% per annum.


VIEMED HEALTHCARE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS
(Tabular amounts expressed in thousands of US Dollars, except per share amounts)
March 31, 2022 and 2021

Use of ~~funds~~Funds

Our principal uses of cash are funding our new rental assets and other capital purchases, operations, and other working capital requirements. ~~Over~~The following table presents our material contractual obligations and commitments to make future payments as of March 31, 2022:


	Within 12 Months		Beyond 12 Months
Debt Obligations, including interest	$	1,268	$	4,893
Lease Obligations	$	346	$	283
Total	$1,614		$5,176

We anticipate that our operating cash flows will satisfy our material cash requirements for the ~~past two years,~~12 months after March 31, 2022. In addition to our ~~revenue has increased significantly from year-to-year and, as a result, our~~operating cash ~~provided by operating activities has increased over time and now is a significant source of capital to the business, which~~flows, we ~~expect to continue in the future.~~

We may need to raise additional funds to support our contractual obligations and investing ~~operations,~~activities beyond such 12 month period, and such funding may not be available to us on acceptable terms, or at all. If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing may be dilutive to our stockholders.



~~VIEMED HEALTHCARE, INC.~~ ~~MANAGEMENT'S DISCUSSION AND ANALYSIS~~
~~(Tabular amounts expressed in thousands of US Dollars, except per share amounts)~~
~~June 30, 2019 and 2018~~

Leases under which we assume substantially all the risks and rewards of ownership are classified as capital leases. Upon initial recognition, the leased asset is measured at an amount equal to the lesser of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to the asset. The associated lease liability is drawn down over the life of the lease by allocating a portion of each lease payment to the liability with the remainder being recognized as finance charges. Leases that do not transfer the risks and rewards of ownership to the Company are treated as operating leases and are expensed as incurred.

The Company maintains a 401(k) retirement plan for employees to which eligible employees can contribute a percentage of their pre-tax compensation. Matching employer contributions to the 401(k) plan totaled ~~$166,000~~$271,000 and ~~$115,000~~$174,000 for the three months ended ~~June 30, 2019~~March 31, 2022 and ~~2018, respectively, and $335,000 and $225,000 for the six months ended June 30, 2019 and 2018,~~2021, respectively.

Off balance sheet arrangements

The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its results of operations or financial condition.

Accounting and Disclosure Matters

~~Segment Information~~

We have determined that we predominantly operate in a single operating segment, which is the sleep and respiratory disorders sector of the durable medical equipment industry. While we do provide some services and products outside of this operating segment, these operations, both in terms of revenue and profit, are not material to our operations and therefore have not been separately reported as a segment.

Critical Accounting Principles and Estimates

~~The preparation~~We are required to disclose “critical accounting estimates” which are estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and that have had or are reasonably likely to have a material impact on our financial ~~statements~~condition or results of operations.

We follow financial accounting and reporting policies that are in ~~conformity~~accordance with accounting principles generally accepted in the United ~~States requires us~~States. The more significant of these policies are summarized in Note 2 to our consolidated financial statements included in Part II, Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Not all significant accounting policies require management to make difficult, subjective or complex judgments. However, the policy noted below could be deemed to meet the SEC’s definition of a critical accounting estimate.

Allowance for Doubtful Accounts

The Company estimates that a certain portion of receivables from customers may not be collected and ~~judgments that affect our reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. We evaluate our estimates on~~maintains an ~~ongoing basis, including those estimates related to~~ allowance for doubtful accounts. The Company evaluates the net realizable value of accounts ~~inventory adjustments, impaired assets, income taxes, deferred tax valuation allowances and stock-based compensation costs.~~

~~We state these accounting policies in the notes to the consolidated financial statements and at relevant sections in the Management's Discussion and Analysis~~receivable as of Financial Condition and Results of Operations. The estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions.

~~We believe that the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements:~~

~~Revenue recognition~~



		Three Months Ended June 30,					Six Months Ended June 30,
	Note	2019			2018		2019			2018
Revenue	2	$	22,547		$	15,508	$	42,990		$	29,619

Cost of revenue		5,686			4,185		10,727			7,744

Gross profit		$	16,861		$	11,323	$	32,263		$	21,875

Operating Expenses
Selling, general and administrative		13,244			7,919		24,836			15,208
Research and development		203			—		437			—
Stock-based compensation	7	1,034			665		1,914			1,226
Depreciation		138			124		267			330
Loss on disposal of property and equipment		85			52		141			88
Other expense		25			7		49			7
Income from operations		$	2,132		$	2,556	$	4,619		$	5,016

Non-operating expenses
Unrealized loss on warrant conversion liability	6	268			123		437			195
Interest expense, net of interest income	5	20			67		46			114

Net income before taxes		1,844			2,366		4,136			4,707
Provision for income taxes	9	24			—		162			—

Net income		$	1,820		$	2,366	$	3,974		$	4,707

Other Comprehensive Income
Change in unrealized loss on derivative instruments, net of tax		(148		)	—		(148		)	—
Other Comprehensive Loss		(148		)	$	—	$	(148	)	$	—

Comprehensive Income		1,672			$	2,366	$	3,826		$	4,707

Net income per share
Basic	11	$0.05			$0.06		$0.10			$0.12
Diluted	11	$0.05			$0.06		$0.10			$0.12

Weighted average number of common shares outstanding:
Basic	11	37,686,763			37,909,628		38,165,274			37,909,628
Diluted	11	39,975,307			39,335,011		40,166,855			39,099,186



	Current		30-60		60-90		Over 90		Total Accounts Receivable, net of Allowance
June 30, 2019	$	6,896	$	1,816	$	1,435	$	2,650	$	12,797
December 31, 2018	$	4,857	$	1,124	$	668	$	2,190	$	8,839



	June 30, 2019			June 30, 2018
Balance, beginning of year	$	4,266		$	3,060
Provision for bad debts	3,859			2,685
Amounts written off	(1,251		)	(2,593		)
Balance, end of period	$	6,874		$	3,152



	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Revenue from rentals under Topic 842
Ventilator rentals, non-invasive and invasive	$	19,461	$	13,852	$	37,743	$	26,676
Other durable medical equipment rentals	1,425		532		2,343		984
Revenue from sales and services under Topic 606
Equipment sales	1,164		895		2,032		1,502
Service revenues	497		229		872		457
Total Revenues	$	22,547	$	15,508	$	42,990	$	29,619



	June 30, 2019			December 31, 2018
Note payable	$	4,836		$	—
Less:
Current portion of note payable	(133		)	—
Net long-term note payable	$	4,703		$	—



	Principal Payments		Interest Payments⁽¹⁾
Less than one year (current portion)	$	133	$	273
Between one and two years	148		226
Between two and five years	491		632
Five years or more	4,064		348
Total	$	4,836	$	1,479



	Principal Payments		Interest Payments
Less than one year (current portion)	$	8,173	$	39
Between one and two years	90		8
Between two and five years	49		2
Total	$	8,312	$	49



Warrant Conversion Liability
Balance December 31, 2018	363
Warrants issued	—
Unrealized loss on warrant conversion liability	437
Balance June 30, 2019	$	800



Year issued	Date of expiry	Type	Number of warrants (000's)	Weighted average exercise price (CAD$)
2017	August 27, 2019	Warrant	169	$	2.60
Total			169	$	2.60



	Number of Restricted Stock Units (000's)		Weighted average grant price (CAD$)		Weighted average remaining contractual life	Aggregate Intrinsic Value⁽¹⁾
Balance December 31, 2018	1,715		$	2.41	1.01 years	$6,575
Issued	60		$	5.49
Vested	(546	)	$	2.25
Expired / Forfeited	(33	)	$	2.25
Balance June 30, 2019	1,196		$	2.65	1.05 years	$8,159



	June 30, 2019
Share price	$ 8.93 (CAD$)
Remaining life of phantom share units	0.86 - 2.86 Years
Calculated fair value of phantom share units	$	3,809,000



(Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts and vent patients)
For the quarter ended	June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
Financial Information:
Revenue	$	22,547		$	20,443		$	18,489		$	17,163		$	15,508		$	14,111		$	13,548		$	12,451
Gross Profit	$	16,861		$	15,402		$	13,645		$	13,062		$	11,323		$	10,552		$	10,186		$	9,312
Gross Profit %	75		%	75		%	74		%	76		%	73		%	75		%	75		%	75		%
Net Income (Loss)	$	1,820		$	2,154		$	3,046		$	2,424		$	2,366		$	2,341		$	(26	)	$	4,018
Adjusted EBITDA⁽¹⁾	$	4,610		$	4,662		$	4,974		$	4,360		$	4,114		$	3,762		$ 1,877⁽³⁾			$	4,690
Cash (As of)	$	7,691		$	7,410		$	10,413		$	10,174		$	8,551		$	4,634		$	5,098		$	7,273
Total Assets (As of)	$	70,886		$	58,583		$	53,525		$	49,147		$	44,168		$	40,566		$	37,691		$	32,740
Operational Information:
Vent Patients⁽²⁾	7,130			6,393			5,905			5,444			5,078			4,685			4,385			4,044



~~Financial Covenant~~	~~Require Ratio~~
~~Total Debt to Adjusted EBITDA (Quarterly)~~	~~not more than 1.50:1.00~~
~~Minimum Working Capital (Quarterly)~~⁽¹⁾	~~at least $2,500,000~~
~~Fixed Charge Coverage Ratio (Quarterly)~~	~~not less than 1.35:1.00~~


~~ii.~~	~~that the Company's disclosure controls and procedures are effective.~~


Period	Total number of shares (or units) purchased (1)	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs (2)	Maximum number of shares that may yet be purchased under the plans or programs
Jan 1- Jan 31, 2022	21,955	$5.03	—	—
Feb 1- Feb 28, 2022	1,787	$4.42	—	—
Mar 1- Mar 31, 2022	389,878	$4.84	389,878	1,594,136
Total	413,620	$4.85	389,878	1,594,136


Exhibit Number		Exhibit Title

~~Exhibit Number~~#2.1		~~Exhibit Title~~

~~#2.1~~	Share Purchase Agreement dated as of January 11, 2017 between PHM Logistics Corporation and Viemed, Inc. Incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

#2.2		Asset Purchase Agreement dated as of January 11, 2017 between Patient Home Monitoring Corp. and Viemed Healthcare, Inc. Incorporated by reference to Exhibit 2.2 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

#2.3		Arrangement Agreement dated as of January 11, 2017 between Patient Home Monitoring Corp. and Viemed Healthcare, Inc. Incorporated by reference to Exhibit 2.3 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

#2.4		Arrangement Agreement Amendment dated as of October 31, 2017 between Patient Home Monitoring Corp. and Viemed Healthcare, Inc. Incorporated by reference to Exhibit 2.4 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

3.1		Notice of Articles of Business Corporation Act of Viemed Healthcare, Inc. Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

3.2		Amended and Restated Business Corporation Act Articles of Viemed Healthcare, Inc. Incorporated by reference to Exhibit ~~3.2~~3.1 to the Company’s ~~Registration Statement~~Current Report on Form 108-K filed on ~~July~~June 10, ~~2019.~~2021.

~~4.1~~	Amended and Restated Warrant Indenture dated effective January 9, 2018 between Viemed Healthcare, Inc. and Computershare Trust Company of Canada (amending and restating a warrant indenture dated as of August 27, 2014) and the Form of Warrant included as Schedule A therein. Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

~~4.2~~	Amended and Restated Warrant Indenture dated effective January 9, 2018 between Viemed Healthcare, Inc. and Computershare Trust Company of Canada (amending and restating a warrant indenture dated as of May 4, 2015) and the Form of Warrant included as Schedule A therein. Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

~~10.1~~	Second Amendment to Commercial Business Loan Agreement for Term Loans and Lines of Credit dated May 30, 2019 among Viemed, Inc., Sleep Management, LLC, Home Sleep Delivered, LLC and Hancock Whitney Bank. Incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

~~10.2~~	Commercial Term Note made by Viemed, Inc., Sleep Management, LLC, Home Sleep Delivered, LLC to Hancock Whitney Bank, dated as of May 30, 2019. Incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.



~~10.3~~	Executive Employment Agreement dated effective June 3, 2019 by and between Casey Hoyt and Sleep Management, LLC. Incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

~~10.4~~	Executive Employment Agreement dated effective June 3, 2019 by and between Michael B. Moore and Sleep Management, LLC. Incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

~~10.5~~	Executive Employment Agreement dated effective June 3, 2019 by and between William T. Zehnder and Sleep Management, LLC. Incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form 10 filed on July 10, 2019.

*31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

**32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

**32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

*101.INS		Inline XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*101.SCH		Inline XBRL Taxonomy Extension Schema Document.

*101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

*101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

*101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

*101.DEF		Inline XBRL Taxonomy Extension Definition Document.

*104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Filed ~~herewithin.~~herewith.
** Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.
# Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.


			VIEMED HEALTHCARE, INC.
			(Registrant)

			By:			/s/ Casey Hoyt
						Casey Hoyt
						Chief Executive Officer

			By:			/s/ Trae Fitzgerald
						Trae Fitzgerald
						Chief Financial Officer



		~~VIEMED HEALTHCARE, INC.~~
~~(Registrant)~~

~~By:~~	~~/s/ Casey Hoyt~~
	~~Casey Hoyt~~
	~~Chief Executive Officer~~

~~By:~~	~~/s/ Trae Fitzgerald~~
	~~Trae Fitzgerald~~
	~~Chief Financial Officer~~Page 39