Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 06, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | CRH MEDICAL CORPORATION | |
Entity Central Index Key | 0001461119 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | CRHM | |
Entity Common Stock, Shares Outstanding | 71,520,559 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-37542 | |
Entity Address Address Line One | World Trade Center | |
Entity Address, Address Line Two | Suite 578 – 999 Canada Place | |
Entity Address, City or Town | Vancouver | |
Entity Address, State or Province | BC | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | V6C 3E1 | |
City Area Code | 604 | |
Local Phone Number | 633-1440 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | A1 | |
Entity Interactive Data Current | Yes | |
Title of each class | Common Shares, no par value | |
Name of each exchange on which registered | NYSEAMER |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 5,215,044 | $ 9,946,945 |
Trade and other receivables, net | 19,570,536 | 19,467,803 |
Income tax receivable | 2,424,940 | 2,243,319 |
Prepaid expenses and deposits | 515,821 | 822,119 |
Inventories, finished goods | 357,235 | 402,544 |
Total current assets | 28,083,576 | 32,882,730 |
Non-current assets: | ||
Property and equipment, net | 266,740 | 303,291 |
Right of use asset | 282,075 | |
Intangible assets, net | 157,806,356 | 179,384,263 |
Deferred asset acquisition costs | 440 | 116,025 |
Equity accounted investment | 324,184 | |
Deferred tax assets | 9,669,798 | 6,301,687 |
Total non-current assets | 168,349,593 | 186,105,266 |
Total assets | 196,433,169 | 218,987,996 |
Current liabilities: | ||
Trade and other payables | 6,477,425 | 5,763,222 |
Employee benefits | 1,061,555 | 827,436 |
Income tax payable | 27,147 | |
Current obligation related to right of use assets | 178,590 | |
Notes payable and bank indebtedness | 2,239,637 | |
Deferred consideration | 1,172,948 | 1,043,645 |
Earn-out obligation | 973,094 | 2,920,583 |
Short-term advances | 26,783 | |
Member loan | 30,625 | 49,000 |
Total current liabilities | 9,921,384 | 12,870,306 |
Non-current liabilities: | ||
Deferred consideration | 1,183,092 | |
Long-term obligation related to right of use assets | 67,231 | |
Notes payable and bank indebtedness | 68,145,464 | 67,621,470 |
Deferred tax liabilities | 21,962 | 21,951 |
Total non-current liabilities | 68,234,657 | 68,826,513 |
Equity | ||
Common stock, no par value; 71,696,559 and 72,055,688 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 55,598,273 | 55,372,884 |
Additional paid-in capital | 7,064,783 | 9,329,335 |
Accumulated other comprehensive income (loss) | (66,772) | (66,772) |
Retained earnings | 12,506,661 | 12,916,565 |
Total equity attributable to shareholders of the Company | 75,102,945 | 77,552,012 |
Non-controlling interest | 43,174,183 | 59,739,165 |
Total equity | 118,277,128 | 137,291,177 |
Total liabilities and equity | $ 196,433,169 | $ 218,987,996 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares issued | 71,696,559 | 72,055,688 |
Common stock, shares outstanding | 71,696,559 | 72,055,688 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 30,414,803 | $ 28,731,593 | $ 90,016,052 | $ 80,727,612 |
Expenses: | ||||
Total expenses | 26,702,177 | 24,232,260 | 77,891,445 | 67,360,680 |
Operating income | 3,712,626 | 4,499,333 | 12,124,607 | 13,366,932 |
Finance expense | 1,125,410 | 1,624,875 | 5,696,343 | 2,846,822 |
Equity income | (77,278) | (416,584) | ||
Income before tax | 2,664,494 | 2,874,458 | 6,844,848 | 10,520,110 |
Income tax expense | 565,165 | 390,042 | 736,052 | 1,652,444 |
Net and comprehensive income | 2,099,329 | 2,484,416 | 6,108,796 | 8,867,666 |
Attributable to: | ||||
Shareholders of the Company | 982,368 | 266,831 | 2,552,084 | 2,968,777 |
Non-controlling interest | 1,116,961 | 2,217,585 | 3,556,712 | 5,898,889 |
Net and comprehensive income | $ 2,099,329 | $ 2,484,416 | $ 6,108,796 | $ 8,867,666 |
Earnings per share attributable to shareholders | ||||
Basic | $ 0.014 | $ 0.004 | $ 0.036 | $ 0.041 |
Diluted | $ 0.013 | $ 0.004 | $ 0.035 | $ 0.040 |
Weighted average shares outstanding: | ||||
Basic | 71,831,356 | 71,831,356 | 71,845,812 | 71,831,356 |
Diluted | 72,799,142 | 73,469,373 | 73,023,144 | 73,305,400 |
Anesthesia Services [Member] | ||||
Revenue: | ||||
Total revenue | $ 27,966,629 | $ 26,073,462 | $ 82,685,905 | $ 72,858,705 |
Expenses: | ||||
Total expenses | 23,774,049 | 21,405,928 | 69,804,891 | 59,105,405 |
Product [Member] | ||||
Revenue: | ||||
Total revenue | 2,448,174 | 2,658,131 | 7,330,147 | 7,868,907 |
Expenses: | ||||
Total expenses | 1,089,316 | 1,181,976 | 3,441,207 | 3,757,518 |
Corporate Expense [Member] | ||||
Expenses: | ||||
Total expenses | $ 1,838,812 | $ 1,644,356 | $ 4,645,347 | $ 4,497,757 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Non-Controlling Interest [Member] |
Beginning Balance at Dec. 31, 2017 | $ 131,298,045 | $ 54,614,601 | $ 8,219,760 | $ (66,772) | $ 11,078,608 | $ 57,451,848 |
Beginning Balance , shares at Dec. 31, 2017 | 73,018,588 | |||||
Total net and comprehensive income (loss) for the period | 3,157,431 | 1,410,998 | 1,746,433 | |||
Stock-based compensation | 737,621 | 737,621 | ||||
Common shares issued on vesting of share units | $ 176,317 | (176,317) | ||||
Common shares issued on vesting of share units, shares | 60,000 | |||||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e)) | (252,565) | $ (72,458) | (180,107) | |||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares | (98,900) | |||||
Common shares repurchased in connection with normal course issuer bid and held as treasury shares | (275,548) | $ (79,052) | (196,496) | |||
Cancellation of treasury shares, shares | (72,400) | |||||
Distributions to members | (6,774,450) | (6,774,450) | ||||
Ending Balance at Mar. 31, 2018 | 127,890,534 | $ 54,639,408 | 8,781,064 | (66,772) | 12,113,003 | 52,423,831 |
Ending Balance , shares at Mar. 31, 2018 | 72,907,288 | |||||
Total net and comprehensive income (loss) for the period | 3,225,818 | 1,290,949 | 1,934,869 | |||
Stock-based compensation | 718,812 | 718,812 | ||||
Common shares issued on vesting of share units | $ 368,112 | (368,112) | ||||
Common shares issued on vesting of share units, shares | 64,000 | |||||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e)) | (511,205) | $ (139,009) | (372,196) | |||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares | (189,800) | |||||
Cancellation of treasury shares, shares | (107,900) | |||||
Distributions to members | (3,694,810) | (3,694,810) | ||||
Acquisition of non-controlling interest | 6,229,435 | 6,229,435 | ||||
Ending Balance at Jun. 30, 2018 | 133,858,584 | $ 54,868,511 | 9,131,764 | (66,772) | 13,031,756 | 56,893,325 |
Ending Balance , shares at Jun. 30, 2018 | 72,673,588 | |||||
Total net and comprehensive income (loss) for the period | 2,484,416 | 266,831 | 2,217,585 | |||
Stock-based compensation | 744,531 | 744,531 | ||||
Common shares issued on vesting of share units | $ 275,160 | (275,160) | ||||
Common shares issued on vesting of share units, shares | 73,750 | |||||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e)) | (564,340) | $ (134,159) | (430,181) | |||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares | (183,300) | |||||
Distributions to members | (4,149,200) | (4,149,200) | ||||
Acquisition of non-controlling interest | 4,844,216 | 4,844,216 | ||||
Ending Balance at Sep. 30, 2018 | 137,218,207 | $ 55,009,512 | 9,601,135 | (66,772) | 12,868,406 | 59,805,926 |
Ending Balance , shares at Sep. 30, 2018 | 72,564,038 | |||||
Beginning Balance at Dec. 31, 2018 | 137,291,177 | $ 55,372,884 | 9,329,335 | (66,772) | 12,916,565 | 59,739,165 |
Beginning Balance , shares at Dec. 31, 2018 | 72,055,688 | |||||
Total net and comprehensive income (loss) for the period | 1,390,790 | (76,968) | 1,467,758 | |||
Stock-based compensation | 564,251 | 564,251 | ||||
Common shares issued on vesting of share units | $ 8,235 | (8,235) | ||||
Common shares issued on vesting of share units, shares | 2,500 | |||||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e)) | (1,410,823) | $ (347,300) | (1,063,523) | |||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares | (461,600) | |||||
Common shares repurchased in connection with normal course issuer bid and held as treasury shares | (82,496) | $ (20,291) | (62,205) | |||
Cancellation of treasury shares, shares | (10,400) | |||||
Distributions to members | (4,034,800) | (4,034,800) | ||||
Ending Balance at Mar. 31, 2019 | 133,718,099 | $ 55,013,528 | 9,885,351 | (66,772) | 11,713,869 | 57,172,123 |
Ending Balance , shares at Mar. 31, 2019 | 71,586,188 | |||||
Beginning Balance at Dec. 31, 2018 | $ 137,291,177 | $ 55,372,884 | 9,329,335 | (66,772) | 12,916,565 | 59,739,165 |
Beginning Balance , shares at Dec. 31, 2018 | 72,055,688 | |||||
Common shares issued on exercise of stock options, shares | 840,000 | |||||
Ending Balance at Sep. 30, 2019 | $ 118,277,128 | $ 55,598,273 | 7,064,783 | (66,772) | 12,506,661 | 43,174,183 |
Ending Balance , shares at Sep. 30, 2019 | 71,696,559 | |||||
Beginning Balance at Mar. 31, 2019 | 133,718,099 | $ 55,013,528 | 9,885,351 | (66,772) | 11,713,869 | 57,172,123 |
Beginning Balance , shares at Mar. 31, 2019 | 71,586,188 | |||||
Total net and comprehensive income (loss) for the period | 2,618,675 | 1,646,683 | 971,992 | |||
Stock-based compensation | (990,382) | (990,382) | ||||
Common shares issued on exercise of stock options | 419,612 | $ 721,415 | (301,803) | |||
Common shares issued on exercise of stock options, shares | 825,000 | |||||
Common shares issued on vesting of share units | $ 371,870 | (371,870) | ||||
Common shares issued on vesting of share units, shares | 111,500 | |||||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e)) | (1,314,933) | $ (347,065) | (967,868) | |||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares | (461,830) | |||||
Common shares repurchased in connection with normal course issuer bid and held as treasury shares | (65,492) | $ (17,284) | (48,208) | |||
Cancellation of treasury shares, shares | (27,000) | |||||
Distributions to members | (4,153,860) | (4,153,860) | ||||
Purchase of equity interest from non-controlling interest | (2,415,349) | (728,279) | (1,687,070) | |||
Acquisition of non-controlling interest | 1,465,715 | 1,465,715 | ||||
Ending Balance at Jun. 30, 2019 | 129,282,085 | $ 55,742,464 | 7,493,017 | (66,772) | 12,344,476 | 53,768,900 |
Ending Balance , shares at Jun. 30, 2019 | 72,033,858 | |||||
Total net and comprehensive income (loss) for the period | 2,099,329 | 982,368 | 1,116,961 | |||
Stock-based compensation | 706,479 | 706,479 | ||||
Common shares issued on exercise of stock options | 6,752 | $ 11,749 | (4,997) | |||
Common shares issued on exercise of stock options, shares | 15,000 | |||||
Common shares issued on vesting of share units | $ 133,047 | (133,047) | ||||
Common shares issued on vesting of share units, shares | 36,250 | |||||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e)) | (1,054,368) | $ (274,708) | (779,660) | |||
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares | (365,549) | |||||
Common shares repurchased in connection with normal course issuer bid and held as treasury shares | (54,802) | $ (14,279) | (40,523) | |||
Cancellation of treasury shares, shares | (23,000) | |||||
Distributions to members | (3,615,819) | (3,615,819) | ||||
Purchase of equity interest from non-controlling interest | (6,986,491) | (996,669) | (5,989,822) | |||
Acquisition of non-controlling interest | (2,106,037) | (2,106,037) | ||||
Ending Balance at Sep. 30, 2019 | $ 118,277,128 | $ 55,598,273 | $ 7,064,783 | $ (66,772) | $ 12,506,661 | $ 43,174,183 |
Ending Balance , shares at Sep. 30, 2019 | 71,696,559 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - shares | 3 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Common Stock [Member] | ||||
Shares repurchased in connection with normal course issuer bid and held as treasury shares | 19,000 | 23,000 | 27,000 | 107,900 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities: | ||||
Net income | $ 2,099,329 | $ 2,484,416 | $ 6,108,796 | $ 8,867,666 |
Adjustments for: | ||||
Depreciation of property, equipment and intangibles | 8,555,909 | 8,208,760 | 25,974,283 | 23,147,980 |
Stock-based compensation | 706,479 | 744,532 | 280,348 | 2,200,964 |
Unrealized foreign exchange | (50) | (45,742) | 726 | (40,420) |
Deferred income tax recovery | (776,300) | (617,700) | (2,749,616) | (2,184,213) |
Change in fair value of contingent consideration | 181,805 | 673,125 | 2,771,238 | 236,275 |
Accretion on contingent consideration and deferred consideration | 10,145 | 35,549 | 123,305 | 123,411 |
Amortization of deferred financing fees | 65,091 | 65,091 | 195,273 | 195,272 |
Equity income | (77,278) | (416,584) | ||
Change in current tax receivable | (17,826) | (673,685) | (154,474) | (2,265,791) |
Change in trade and other receivables | (182,433) | (1,157,352) | (102,733) | (1,780,965) |
Change in prepaid expenses | (59,218) | 57,544 | 268,162 | 319,879 |
Change in inventories | 153,837 | (176,683) | 45,309 | (147,266) |
Change in trade and other payables | (83,936) | 2,088,802 | 91,726 | 845,886 |
Change in employee benefits | 135,609 | 225,542 | 234,120 | 329,807 |
Net cash provided by operating activities | 10,711,163 | 11,912,199 | 32,669,879 | 29,848,485 |
Financing activities | ||||
Repayment of member loans | (14,375) | (186,200) | (18,375) | (435,000) |
Proceeds (repayment) on short-term advances | 110,767 | (26,783) | 110,767 | |
Payment of deferred consideration | (1,100,000) | (1,000,000) | ||
Payment of contingent consideration | (4,795,822) | |||
Repayment of notes payable and bank indebtedness | (5,625,000) | (13,175,000) | (11,000,000) | |
Proceeds on bank indebtedness | 7,000,000 | 4,500,000 | 11,300,000 | 18,300,000 |
Proceeds from exercise of stock options | 6,753 | 426,366 | ||
Distributions to non-controlling interest | (3,615,819) | (4,149,200) | (11,804,480) | (14,618,460) |
Repurchase of shares for cancellation | (1,109,170) | (564,342) | (3,982,914) | (1,603,658) |
Net cash used in financing activities | (3,357,611) | (288,975) | (23,177,008) | (10,246,351) |
Investing activities | ||||
Acquisition of property and equipment | (4,834) | (2,946) | (45,681) | (9,353) |
Deferred asset acquisition costs | 38,437 | (440) | ||
Acquisition of equity interest from non-controlling interest | (7,018,658) | (9,434,009) | ||
Acquisition of anesthesia services providers | (2,174,003) | (9,275,054) | (9,204,437) | (25,253,936) |
Distribution received from equity investment | 92,400 | 92,400 | ||
Purchase adjustment relating to anesthesia service providers acquired in prior periods | 4,366,000 | 4,366,000 | ||
Net cash used in investing activities | (4,700,658) | (9,278,000) | (14,226,167) | (25,263,289) |
Effects of foreign exchange on cash and cash equivalents | (270) | 17,719 | 1,395 | 6,831 |
Increase (decrease) in cash and cash equivalents | 2,652,624 | 2,362,943 | (4,731,901) | (5,654,324) |
Cash and cash equivalents, beginning of period | 2,562,420 | 4,469,617 | 9,946,945 | 12,486,884 |
Cash and cash equivalents, end of period | 5,215,044 | 6,832,560 | 5,215,044 | 6,832,560 |
Supplemental disclosures: | ||||
Cash interest paid | (772,680) | (600,510) | (2,532,084) | (2,041,263) |
Taxes paid | (1,359,634) | (1,681,427) | (3,640,248) | (6,102,449) |
Operating lease payments | (90,669) | $ (73,651) | (278,339) | $ (212,510) |
Non-cash acquisition costs | $ (586,561) | $ (702,586) |
Nature of operations
Nature of operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of operations | 1. Nature of operations CRH Medical Corporation (“CRH” or “the Company”) was incorporated on April 21, 2001 and is incorporated under the Business Corporations Act (British Columbia). The Company provides anesthesiology services to gastroenterologists in the United States through its subsidiaries and sells its patented proprietary technology for the treatment of hemorrhoids directly to physicians in the United States and Canada. CRH principally operates in the United States and is headquartered from its registered offices located at Unit 578, 999 Canada Place, Vancouver, British Columbia, Canada. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies (a) Basis of presentation: As a non-U.S. company listed on the NYSE, the United States Securities and Exchange Commission (“SEC”) requires us to perform a test on the last business day of the second quarter of each fiscal year to determine whether we continue to meet the definition of a foreign private issuer (“FPI”). Historically, we met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with IFRS, reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs. On June 30, 2018, we performed the test and determined that we no longer met the definition of a FPI. As such, from January 1, 2019, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers. These condensed consolidated interim financial statements have been prepared in accordance with US GAAP beginning December 31, 2018 on a retrospective basis. The Company’s historical financial statements were previously presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) up to and including the Company’s September 30, 2018 interim report. These interim financial statements do not include all note disclosures required on an annual basis, and therefore, should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2018, filed with the appropriate securities regulatory authorities. In the opinion of management, all adjustments, which include reclassifications and normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statement of operations and comprehensive income, condensed consolidated statements of changes in equity and condensed consolidated statements cash flows as at September 30, 2019 and for all periods presented, have been recorded. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the Company's full year results. (b) Basis of consolidation: These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company through voting control and for the anesthesia business, control over the assets and business operations of the subsidiary through operating agreements. Control exists when the Company has the continuing power to govern the financial and operating polices of the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. Minority interests, if any, are valued at fair value at inception. All significant intercompany transactions and balances have been eliminated on consolidation. (c) U s s t at u m s The p p ti t o y’ c ns t f an c s t t nt i e n e t n s s t t ff c t p t m t s s t n t s c o s u c t en ss t t t t t f c i s t t t a t te t v e x n s e i t o t p i 2. Summary of significant accounting policies (continued) Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ from those estimates. (d) Equity method investment: The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Results of equity investments are presented on a one-line basis. Investments in, and advances to, equity investments are presented on a one-line basis in the Company's consolidated balance sheets, net of allowance for losses, which represents the Company's best estimate of probable losses inherent in such assets. The Company's proportionate share of any equity investment net income or loss is presented on a one-line basis in the Company's consolidated statement of operations. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company's ownership interest. |
Recent accounting pronouncement
Recent accounting pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles Abstract | |
Recent accounting pronouncements | 3. Recent accounting pronouncements: (a) Initial adoption of new accounting standards: In February 2016, FASB issued ASU No. 2016-02 “ Leases (b) Recent accounting pronouncements not yet adopted: In June 2016, FASB issued ASU No. 2016-13, “ Financial Instruments- Credit Losses (Topic 326)” |
Asset acquisitions
Asset acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Asset acquisitions | 4. Asset acquisitions: During the nine months ended September 30, 2019, the Company completed three asset acquisitions. The asset acquisitions have been included in the anesthesia segment of the Company and represent the following: Acquired Operation Date Acquired Consideration Anesthesia Care Associates LLC (“ACA”) January 2019 $ 5,355,028 South Metro Anesthesia Associates LLC ("SMAA") May 2019 $ 1,791,431 Crystal River Anesthesia Associates LLC ("CRAA") July 2019 $ 2,174,003 The results of operations of the acquired entities have been included in the Company’s consolidated financial statements from the respective date of acquisition as the Company has obtained control over the entities. 4. Asset acquisitions (continued): The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition dates. ACA SMAA CRAA Total Cash $ 5,239,003 $ 1,752,465 $ 2,130,000 $ 9,121,468 Acquisition costs 116,025 38,966 44,003 198,994 Purchase consideration $ 5,355,028 $ 1,791,431 $ 2,174,003 $ 9,320,462 Non-controlling interest — 1,465,716 2,088,748 3,554,464 $ 5,355,028 $ 3,257,147 $ 4,262,751 12,874,926 Assets and liabilities acquired: Exclusive professional services agreements $ 5,355,028 $ 3,257,147 $ 4,262,751 $ 12,874,926 Pre-close accounts receivable 50,000 — — 50,000 Pre-close accounts payable (50,000 ) — — (50,000 ) Fair value of net identifiable assets and liabilities acquired $ 5,355,028 $ 3,257,147 $ 4,262,751 $ 12,874,926 Exclusive professional services agreements – amortization term 6 years 5 years 5 years CRH ownership interest acquired 100 % 55 % 51 % The value of the acquired intangible assets, being exclusive professional services agreements, relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements and professional services agreements. In addition to the above asset acquisition, on April 3, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Arapahoe Gastroenterology Anesthesia Associates LLC (“Arapahoe”); prior to the purchase the Company held a 51% interest in the Arapahoe entity. The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $2,300,000 plus 49% of Arapahoe’s working capital as at March 31, 2019. Additionally, the Company incurred deferred acquisition costs of $26,086. On August 31, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Central Colorado Anesthesia Associates LLC (“CCAA”); prior to the purchase the Company held a 51% interest in the CCAA entity. The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $7,000,000 plus 49% of CCAA’s working capital as at August 31, 2019. Additionally, the Company incurred deferred acquisition costs of $18,658. During the quarter ended September 30, 2019, the Company also received a payment of $4,366,000 in respect of the LWA acquisition which was a reduction in the purchase price. This payment served to reduce the value of the related LWA professional services contract intangible and did not modify ownership interest or the term of the LWA agreement. During the year ended December 31, 2018, the Company completed five asset acquisitions. These asset acquisitions have been included in the anesthesia segment of the Company and represents the following: Acquired Operation Date Acquired Consideration Shreveport Sedation Associates LLC (“SSA”) March 2018 $ 9,495,184 Western Ohio Sedation Associates LLC (“WOSA”) May 2018 $ 6,483,698 Lake Washington Anesthesia LLC (“LWA”) July 2018 $ 5,041,939 Lake Erie Sedation Associates LLC (“LESA”) September 2018 $ 4,233,115 Tennessee Valley Anesthesia Associates LLC (“TVAA”) December 2018 $ 2,255,875 The results of operations of the acquired entities have been included in the Company’s consolidated financial statements from the date of acquisition as the Company has control over these entities. 4. Asset acquisitions (continued): The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition date. SSA WOSA LWA LESA TVAA Total Cash $ 9,404,148 $ 6,409,000 $ 5,000,000 $ 4,180,000 $ 2,200,000 $ 27,193,148 Acquisition costs 91,036 74,698 41,939 53,115 55,875 316,663 Purchase consideration $ 9,495,184 $ 6,483,698 $ 5,041,939 $ 4,233,115 $ 2,255,875 $ 27,509,811 Non-controlling interest $ — $ 6,229,435 $ 4,844,217 $ — $ 2,167,409 $ 13,241,061 $ 9,495,184 $ 12,713,133 $ 9,886,156 $ 4,233,115 $ 4,423,284 $ 40,750,872 Assets and liabilities acquired: Exclusive professional services agreements $ 9,391,036 $ 12,713,133 $ 9,886,156 $ 4,233,115 $ 4,423,284 $ 40,646,723 Prepaid expenses and deposits 104,148 — — — 104,149 Pre-close accounts receivable — — 652,506 — 652,506 Pre-close accounts payable — — (652,506 ) — (652,506 ) Fair value of net identifiable assets and liabilities acquired $ 9,495,184 $ 12,713,133 $ 9,886,156 $ 4,233,115 $ 4,423,284 $ 40,750,872 Exclusive professional services agreements – amortization term 7 years 10 years 7 years 10 years 7 years CRH ownership interest 100 % 51 % 51 % 100 % 51 % The value of the acquired intangible assets, being exclusive professional services agreements, relate to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization term for the agreements is based upon contractual terms within the acquisition agreement and professional services agreement. The non-controlling interest was determined with reference to the non-controlling interest shareholder’s share of the fair value of the net identifiable assets as estimated by the Company. |
Trade and other receivables
Trade and other receivables | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Trade and other receivables | 5. Trade a n t i v l September 30, 2019 December 31, 2018 Trade receivables, gross $ 19,559,565 $ 19,373,260 Other receivables 54,177 141,141 Less: allowance for doubtful accounts (43,206 ) (46,598 ) $ 19,570,536 $ 19,467,803 Anesthesia segment – trade receivables, gross 18,641,926 18,199,847 Product segment – trade receivables, gross 917,639 1,173,413 $ 19,559,565 $ 19,373,260 |
Trade and other payables
Trade and other payables | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Trade and other payables | 6. Trade and other payables: September 30, 2019 December 31, 2018 Trade payables $ 969,657 $ 1,316,821 Payable to CCAA vendor $ 586,561 $ — Accruals and other payables 4,921,207 4,446,401 $ 6,477,425 $ 5,763,222 |
Right of use assets and related
Right of use assets and related obligations | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Right of use assets and related obligations | 7. Right of use assets and related obligations: On adoption of ASU No. 2016-02 “Leases”, and subsequently ASU No. 2017-13, the Company recognized $332,512 and $295,188 as right of use assets and obligations, respectively at January 1, 2019. These amounts relate to two operating leases for premises existing as at January 1, 2019, with a further premises operating lease added in March 2019. The Company has applied the exemption to treat short-term leases as executory contracts as well as applied the practical expedient to choose not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. During the three and nine months ended September 30, 2019, the Company incurred total operating lease expenses of $90,670 and $278,339, respectively, For the three months ended September 30, 2019, this included lease expenses associated with fixed lease payments of $69,572 and variable lease payments of $21,098. For the nine months ended September 30, 2019, this included lease expenses associated with fixed lease payments of $216,261 and variable lease payments of $62,078. Lease expense is allocated to operating segments based on the location of the leases, as follows: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Anesthesia services expense $ 28,106 $ 16,205 $ 90,839 $ 48,062 Product sales expense 31,282 28,723 93,750 82,225 Corporate expense 31,282 28,723 93,750 82,225 $ 90,670 $ 73,651 $ 278,339 $ 212,512 The weighted average lease term of the Company’s three premises leases is 1.37 years. The weighted average discount rate used by the Company in calculating the obligation relating to right of use assets is based on the Company’s Credit Facility, which is disclosed in note 10. The following table presents a maturity analysis of the Company’s undiscounted lease obligations for each of the next five years, reconciled to the obligation as recorded on the balance sheet. Undiscounted lease payments Remainder of 2019 $ 68,920 2020 129,119 2021 55,498 $ 253,537 Accretion related to outstanding lease obligations (7,716 ) Total $ 245,821 Current obligation relating to right of use assets $ 178,590 Long-term obligation relating to right of use assets $ 67,231 Total $ 245,821 |
Intangible assets
Intangible assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible assets | 8. Intangible assets: Intangible assets, consisting of acquired exclusive professional service agreements to provide anesthesia services and the cost of acquiring patents, are recorded at historical cost. For patents, costs also include legal costs involved in expanding the countries in which the patents are recognized to the extent expected cash flows from those countries exceed these costs over the amortization period and costs related to new patents. The amortization term for professional services agreements are based on the contractual terms of the agreements. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are measured at cost less accumulated amortization and accumulated impairment losses. Intangible assets with finite lives are amortized over the following periods: Asset Basis Rate Intellectual property rights to the CRH O’Regan System Straight-line 15 years Intellectual property new technology Straight-line 20 years Exclusive professional services agreements Straight-line 4.5 to 15 years Professional Services Agreements Patents Total Cost Balance as at December 31, 2018 $ 256,491,260 $ 532,598 $ 257,023,858 Additions through asset acquisitions and adjustments (note 4) 4,314,142 — 4,314,142 Balance as at September 30, 2019 $ 260,805,402 $ 532,598 $ 261,338,000 Professional Services Agreements Patents Total Accumulated depreciation Balance as at December 31, 2018 $ 77,139,732 $ 499,863 $ 77,639,595 Amortization expense 25,890,540 1,509 25,892,049 Balance as at September 30, 2019 $ 103,030,272 $ 501,372 $ 103,531,644 Professional Services Agreements Patents Total Net book value September 30, 2019 $ 157,775,130 $ 31,226 $ 157,806,356 December 31, 2018 $ 179,351,528 $ 32,735 $ 179,384,263 The Company identified indicators of impairment in respect of one professional services agreement as at September 30, 2019. Upon performing undiscounted cash flow models for the asset to assess its recoverability, the Company did not identify any impairment. As at December 31, 2018, the Company identified indicators of impairment in respect of four of its professional services agreements. Upon performing undiscounted cash flow models for these assets, the Company identified only two assets that required further review for impairment. The Company performed discounted cash flow modelling for these assets and compared the resultant discounted cash flows expected over the life of the assets to the carrying amounts as at December 31, 2018. The income approach was used for the quantitative assessment to estimate the fair value of the assets, which requires estimating future cash flows and risk-adjusted discount rates in the Company's discounted cash flow model. The overall market outlook and cash flow projections of the reporting unit involves the use of key assumptions, including anesthesia growth rates, discount rates and operating cost growth rates. Due to uncertainties in the estimates that are inherent to the Company's industry, actual results could differ significantly from the estimates made. Many key assumptions in the cash flow projections are interdependent on each other. A change in any one or combination of these assumptions could impact the estimated fair value of the reporting unit. 8. Intangible assets (continued): As a result of this test, no write-downs to the intangible assets were required. Various of the Company’s professional services agreements are subject to renewal terms. The weighted average period before the Company’s professional services agreements are up for renewal is 3.49 years. The weighted average remaining amortization period for the Company’s professional services agreements is 5.42 years. Based on the Company’s professional services agreements in place at September 30, 2019, the Company anticipates that the amortization expense to be incurred by the Company over the next five years is as follows: Amortization Expense For professional services agreements as at September 30, 2019: Remainder of 2019 $ 8,665,085 2020 34,577,141 2021 29,270,763 2022 22,549,476 2023 18,403,113 The first nine months of 2024 13,274,316 $ 126,739,894 |
Equity investment
Equity investment | 9 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Equity investment | 9. Equity investment: In October 2018, the Company entered into an agreement with Digestive Health Specialists (“DHS”), located in North Carolina, to assist DHS in the development and management of a monitored anesthesia care program. Under the terms of the agreement, CRH is a 15% equity owner in the anesthesia business, Triad Sedation Associates LLC, and receives compensation for its billing and collection services. Under the terms of the limited liability company agreement, CRH has the right, at CRH’s option, to acquire an additional 36% interest in the anesthesia business at a future date, but no sooner than November 2019. The Company assessed and concluded that, as TSA is an LLC, equity method accounting is required under ASC 970-323. To fund working capital needs, each equity owner of TSA has provided a working capital loan, repayable within 12 months. All working capital loans have been repaid as at September 30, 2019. The option agreement was determined to be an executory contract and both the equity interest and option agreement were determined to have only nominal value upon grant and as at September 30, 2019. The following table provides a summary of the Company’s investment in TSA as at September 30, 2019: Nine months ended September 30, 2019 Beginning balance $ — Share of net income 416,584 Member distributions (92,400 ) Ending balance $ 324,184 9. Equity investment (continued): The following table summarizes unaudited financial information for our equity method investee. Balance sheet: September 30, 2019 Current assets $ 2,176,239 Non-current assets — Total assets $ 2,176,239 Current liabilities $ 319,972 Non-current liabilities — Shareholders’ equity 1,856,267 Total liabilities and shareholders’ equity $ 2,176,239 Results of operations Nine months ended September 30, 2019 Anesthesia revenue $ 3,811,965 Anesthesia services expense 1,339,698 Net income $ 2,472,267 |
Notes payable
Notes payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes payable | 10. Notes payable: September 30, 2019 December 31, 2018 Current portion $ — $ 2,239,637 Non-current portion 68,145,464 67,621,470 Total loans and borrowings $ 68,145,464 $ 69,861,107 The Bank of Nova Scotia (“Scotia Facility”) As at September 30, 2019, the Company had drawn $68,375,000 on the amended facility (2018 - $70,250,000). The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin. At September 30, 2019, interest on the facility is calculated at LIBOR plus 2.25% on both the revolving and term portions of the facility. The Facility is secured by the assets of the Company. As at September 30, 2019, the Company is required to maintain the following financial covenants in respect of the Facility: Financial Covenant Required Ratio Total funded debt ratio 2.50:1.00 Fixed charge coverage ratio 1.15:1.00 The Company is in compliance with all covenants at September 30, 2019. The Company’s facility matures on August 15, 2020; however, the facility will be replaced by a syndicated facility held by JP Morgan. Refer to subsequent event note 17. The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows: Minimum Principal At September 30, 2019 Remainder of 2019 $ — 2022 68,375,000 $ 68,375,000 |
Share capital
Share capital | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Share capital | 11. Share capital: (a) Authorized: 100,000,000 common shares without par value. (b) Issued and outstanding – common shares: Other than in connection with shares issued in respect of the Company’s share unit and share option plans and in connection with the Company’s normal course issuer bid (note 11(e)), there were no share transactions in the three and nine months ended September 30, 2019 and 2018. (c) Share unit plan: In June 2017, the shareholders of the Company approved a Share Unit Plan. Employees, directors and eligible consultants of the Company and its designated subsidiaries are eligible to participate in the Share Unit Plan. In accordance with the terms of the plan, the Company will approve those employees, directors and eligible consultants who are entitled to receive share units and the number of share units to be awarded to each participant. Each share unit awarded conditionally entitles the participant to receive one common share of the Company upon attainment of the share unit vesting criteria. The vesting of share units is conditional upon the expiry of time-based vesting conditions or performance-based vesting conditions or a combination of the two. Once the share units vest, the participant is entitled to receive the equivalent number of underlying common shares; the Company issues new shares in satisfying its obligations under the plan. A summary of the status of the plan as of September 30, 2019 is as follows: Time based share units Performance based share units Outstanding, December 31, 2018 1,045,250 1,500,000 Issued 1,137,500 — Exercised (150,250 ) — Forfeited (115,000 ) (550,000 ) Expired — — Outstanding, September 30, 2019 1,917,500 950,000 Vested — — Expected to vest 1,917,500 550,000 During the nine months ended September 30, 2019, 150,250 time-based share units vested. Additionally, the Company granted 1,137,500 time-based share units. The weighted average fair value per unit for the time-based units was $2.70 per unit. The fair value per unit was based on the market value of the underlying shares at the date of issuance. During the nine months ended September 30, 2018, 197,750 time-based share units vested. The Company also issued 171,500 time-based share units and 150,000 performance-based share units. The weighted average fair value per unit for the time-based units was $3.10 per unit and the weighted average fair value for the performance-based share units granted in the period was $2.78 per unit. The fair value per unit was based on the market value of the underlying shares at the date of issuance. During the three and nine months ended September 30, 2019, the Company recognized $624,366 (2018 – $744,532) and $124,595 (2018 - $2,200,964), respectively, in compensation expense in relation to share units. (d) Stock-option plan: During the nine months ended September 30, 2019, 840,000 stock options were exercised. Additionally, the Company granted 500,000 options in the nine months ended September 30, 2019. The stock options vest evenly over 4 years. At the time of grant, the fair value of the options was $1.43 per option. The fair value per unit was derived using the Black-Scholes method of valuation with the key inputs in the model being a risk free rate of 1.61% and volatility of 63.05%. During the three and nine months ended September 30, 2019, the Company recognized $82,113 (2018 - $nil) and $155,753 (2018 - $nil), respectively, in compensation expense in relation to options. 11. Share cap i al (continued) ( e ) Normal Course Issuer Bid: During the three months ended September 30, 2019, the Company repurchased 384,549 (2018 – 183,300) of its shares under its Normal Course Issuer Bid for a total cost, including transaction fees, of $1,112,097 (CAD$1,466,297) (2018 - $565,831 (CAD$743,965)). In the nine months ended September 30, 2019, the Company repurchased 1,357,979 (2018 – 579,900) of its shares for a total cost, including transaction fees, of $3,992,728 (CAD$5,306,896) (2018 - $1,608,348 (CAD$2,070,503)). As at September 30, 2019, 1,338,979 of these shares had been cancelled with the remaining 19,000 shares cancelled on October 4, 2019. ( f ) Earni n p s a The calculation of basic earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows: For the three months ended September 30, 2019 2018 Net earnings Weighted average number of common shares outstanding Per share amount Net earnings Weighted average number of common shares outstanding Per share amount Net earnings attributable to shareholders: Earnings per common share: Basic $ 982,368 71,831,356 $ 0.014 $ 266,831 71,831,356 $ 0.004 Share options 422,043 1,153,177 Share units 545,743 484,840 Diluted $ 982,368 72,799,142 $ 0.013 $ 266,831 73,469,373 $ 0.004 For the nine months ended September 30, 2019 2018 Net earnings Weighted average number of common shares outstanding Per share amount Net earnings Weighted average number of common shares outstanding Per share amount Net earnings attributable to shareholders: Earnings per common share: Basic $ 2,552,084 71,845,812 $ 0.036 $ 2,968,777 71,831,356 $ 0.041 Share options 742,909 1,119,336 Share units 434,423 354,708 Diluted $ 2,552,084 73,023,144 $ 0.035 $ 2,968,777 73,305,400 $ 0.040 For the three months ended September 30, 2019, 590,144 options (2018 For the nine months ended September 30, 2019, 475,560 options (2018 The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. The treasury method is used to determine the calculation of dilutive shares. |
Net finance expense
Net finance expense | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Net finance expense | 12. Net finance expense Recognized in earnings in the three and nine months ended September 30: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Finance expense: Interest and accretion expense on borrowings $ 848,369 $ 851,110 2,556,527 2,291,864 Accretion expense on earn-out obligation and deferred consideration 10,145 35,549 123,305 123,411 Amortization of deferred financing fees 65,091 65,091 195,273 195,272 Net change in fair value of financial liabilities at fair value through earnings (note 13) 181,805 673,125 2,771,238 236,275 Other 20,000 — 50,000 — Total finance expense $ 1,125,410 $ 1,624,875 5,696,343 2,846,822 Net finance expense $ 1,125,410 $ 1,624,875 5,696,343 2,846,822 |
Financial instruments
Financial instruments | 9 Months Ended |
Sep. 30, 2019 | |
Investments All Other Investments [Abstract] | |
Financial instruments | 13. Financial instruments: The Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, trade and other payables, employee benefit obligations, short term advances, loans and loans to equity investments, notes payable and bank indebtedness, deferred consideration and the Company’s earn-out obligation. The fair values of these financial instruments, except the notes payable balances, the deferred consideration and the earn-out obligation, approximate carrying value because of their short-term nature. The earn-out obligation is recorded at fair value. The fair value of the notes payable and bank indebtedness, which is comprised of the Scotia Facility, approximates carrying value as it is a floating rate instrument. The Company’s deferred consideration was initially measured at fair value and is being accreted to its face value over a period of four years from the acquisition date. The amounts payable as deferred compensation are specified in the acquisition agreement for Austin Gastroenterology Anesthesia Associates LLC, which was acquired in 2016. An established fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value: • Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and • Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs). Liabilities September 30, 2019 Level 1 Level 2 Level 3 Earn-out obligation $ 973,094 $ — $ — $ 973,094 Total $ 973,094 $ — $ — $ 973,094 Liabilities December 31, 2018 Level 1 Level 2 Level 3 Earn-out obligation $ 2,920,583 $ — $ — $ 2,920,583 Total $ 2,920,583 $ — $ — $ 2,920,583 13. Financial instruments (continued): The Company’s earn-out obligation is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The earn-out obligation relates to the Company’s Gastroenterology Anesthesia Associates LLC acquisition, which was acquired in 2014. As part of the business combination, the Company is required to pay consideration contingent on the post-acquisition earnings of the acquired asset. In the nine months ended September 30, 2019, the Company paid $4,795,822 as partial payment of the amount owing under its earn-out obligation; the Company expects to pay the remaining obligation of $973,094 within one year. The Company measures the fair value of the earn-out obligation based on its best estimate of the cash outflows payable in respect of the earn-out obligation. This valuation technique includes inputs relating to estimated cash outflows under the arrangement and the use of a discount rate appropriate to the Company. The Company evaluates the inputs into the valuation technique at each reporting period. During the nine months ended September 30, 2019, the Company revised its estimate underlying the remaining amount to be paid under the earn-out obligation. The amendment of the cash outflow estimates underlying the earn-out resulted in an increase During the three months ended September 30, 2019, the Company recorded accretion expense of $nil (2018 - $15,938), in relation to this liability, reflecting the change in fair value of the liabilities that is attributable to credit risk. During the nine months ended September 30, 2019, the Company recorded accretion expense of $77,095 (2018 - $49,978). Reconciliation of level 3 fair values: Earn-out obligation Balance as at January 1, 2019 $ 2,920,583 Payment (4,795,822 ) Recorded in finance expense: Accretion expense 77,095 Fair value adjustment 2,771,238 Balance as at September 30, 2019 $ 973,094 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 14. Commitments and contingencies: The Company is a party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify third parties with respect to certain matters. These obligations include, but are not limited to, contracts entered into with physicians where the Company agrees, under certain circumstances, to indemnify a third party against losses arising from matters including but not limited to medical malpractice and product liability. The impact of any such future claims, if made, on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to final outcome of these potential claims. |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related party transactions | 15. Related party transactions: Balances and transactions between the Company and its wholly owned and controlled subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of the transactions between the Company and other related parties are disclosed below: (a) Related party transactions: During the three and nine months ended September 30, 2019, the Company made product sales totaling $14,095 and $28,095, respectively (2018 - $7,285 and $22,685, respectively) to one company owned or controlled by one of the Company’s Directors. The transaction terms with related parties may not be on the same price as those that would result from transactions among non-related parties. The amount owed by this related party as of September 30, 2019 was $7,000 (2018 - $nil). |
Segmented information
Segmented information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segmented information | 16. Segmented information: The Company operates in two industry segments: the sale of medical products and the provision of anesthesia services. The revenues relating to geographic segments based on customer location, in United States dollars, for the three and nine months ended September 30, 2019 and 2018 are as follows: Three months ended Nine months ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Revenue: Canada and other $ 51,489 $ 56,065 $ 175,747 $ 167,253 United States 30,363,314 28,675,528 89,840,305 80,560,359 Total $ 30,414,803 $ 28,731,593 $ 90,016,052 $ 80,727,612 The Company’s revenues are disaggregated below into categories which differ in terms of the economic factors which impact the amount, timing and uncertainty of revenue and cash flows. Three months ended Nine months ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Revenue: Commercial Insurers $ 22,801,819 $ 22,077,401 $ 67,830,007 $ 61,492,066 Federal Insurers 5,040,136 3,948,549 14,408,155 10,866,851 Physicians 2,448,174 2,658,131 7,330,147 7,868,907 Other 124,674 47,512 447,743 499,788 Total $ 30,414,803 $ 28,731,593 $ 90,016,052 $ 80,727,612 The Company’s property and equipment, intangibles, other assets and total assets are located in the following geographic regions as at September 30, 2019 and December 31, 2018: 2019 2018 Property and equipment: Canada $ 230,734 $ 276,621 United States $ 36,006 26,670 Total $ 266,740 $ 303,291 Intangible assets: Canada $ 31,226 $ 32,735 United States $ 157,775,130 179,351,528 Total $ 157,806,356 $ 179,384,263 Total assets: Canada $ 2,988,156 $ 9,293,796 United States $ 193,445,013 209,694,200 Total $ 196,433,169 $ 218,987,996 The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the three and nine months ended September 30, 2019 and 2018. The Company does not allocate expenses related to corporate activities. These expenses are presented within “Other” to allow for reconciliation to reported measures. Three months ended September 30, 2019 Anesthesia services Product sales Other Total Revenue $ 27,966,629 $ 2,448,174 $ — $ 30,414,803 Operating costs 23,774,049 1,089,316 1,838,812 26,702,177 Operating income (loss) $ 4,192,580 $ 1,358,858 $ (1,838,812 ) $ 3,712,626 16. Segmented information (continued): Three months ended September 30, 2018 Anesthesia services Product sales Other Total Revenue $ 26,073,462 $ 2,658,131 $ — $ 28,731,593 Operating costs 21,405,928 1,181,976 1,644,356 24,232,260 Operating income (loss) $ 4,667,534 $ 1,476,155 $ (1,644,356 ) $ 4,499,333 Nine months ended September 30, 2019 Anesthesia services Product sales Other Total Revenue $ 82,685,905 $ 7,330,147 $ — $ 90,016,052 Operating costs 69,804,891 3,441,207 4,645,347 77,891,445 Operating income (loss) $ 12,881,014 $ 3,888,940 $ (4,645,347 ) $ 12,124,607 Nine months ended September 30, 2018 Anesthesia services Product sales Other Total Revenue $ 72,858,705 $ 7,868,907 $ — $ 80,727,612 Operating costs 59,105,405 3,757,518 4,497,757 67,360,680 Operating income (loss) $ 13,753,300 $ 4,111,389 $ (4,497,757 ) $ 13,366,932 Additionally, the company incurs the following in each of its operating segments: Three months ended September 30, 2019 Anesthesia services Product sales Other Total Finance expense $ 191,950 $ — $ 933,460 $ 1,125,410 Depreciation and amortization expense $ 8,530,610 $ 5,383 $ 19,916 $ 8,555,909 Three months ended September 30, 2018 Anesthesia services Product sales Other Total Finance expense $ 708,674 $ — $ 916,201 $ 1,624,875 Depreciation and amortization expense $ 8,185,957 $ 17,055 $ 5,748 $ 8,208,760 Nine months ended September 30, 2019 Anesthesia services Product sales Other Total Finance expense $ 2,894,543 $ — $ 2,801,800 $ 5,696,343 Depreciation and amortization expense $ 25,899,621 $ 19,936 $ 54,726 $ 25,974,283 Nine months ended September 30, 2018 Anesthesia services Product sales Other Total Finance expense $ 359,686 $ — $ 2,487,136 $ 2,846,822 Depreciation and amortization expense $ 23,079,832 $ 51,088 $ 17,060 $ 23,147,980 |
Subsequent event
Subsequent event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent event | 17. Subsequent event: On October 22, 2019, the Company entered into a new, three year revolving credit line which provides up to $200 million in borrowing capacity and represents an increase from the Company’s previous $100 million facility. The new facility includes a committed $125 million facility and access to an accordion feature that increases the amount of the credit available to the Company by $75 million. Interest on the facility is calculated with reference to LIBOR plus 1.25% to 1.75%, dependent on the Company’s Debt to EBITDA ratio. The facility is secured by the assets of the Company and matures on October 22, 2022. The Company will be required to maintain a Debt to EBITDA ratio covenant of 3.0:1.0 and a Fixed Coverage ratio covenant of 3.0:1.0 under the terms of the facility. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | (a) Basis of presentation: As a non-U.S. company listed on the NYSE, the United States Securities and Exchange Commission (“SEC”) requires us to perform a test on the last business day of the second quarter of each fiscal year to determine whether we continue to meet the definition of a foreign private issuer (“FPI”). Historically, we met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with IFRS, reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs. On June 30, 2018, we performed the test and determined that we no longer met the definition of a FPI. As such, from January 1, 2019, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers. These condensed consolidated interim financial statements have been prepared in accordance with US GAAP beginning December 31, 2018 on a retrospective basis. The Company’s historical financial statements were previously presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) up to and including the Company’s September 30, 2018 interim report. These interim financial statements do not include all note disclosures required on an annual basis, and therefore, should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2018, filed with the appropriate securities regulatory authorities. In the opinion of management, all adjustments, which include reclassifications and normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statement of operations and comprehensive income, condensed consolidated statements of changes in equity and condensed consolidated statements cash flows as at September 30, 2019 and for all periods presented, have been recorded. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the Company's full year results. |
Basis of consolidation | (b) Basis of consolidation: These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company through voting control and for the anesthesia business, control over the assets and business operations of the subsidiary through operating agreements. Control exists when the Company has the continuing power to govern the financial and operating polices of the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. Minority interests, if any, are valued at fair value at inception. All significant intercompany transactions and balances have been eliminated on consolidation. |
Use of estimates, assumptions and judgments | (c) U s s t at u m s The p p ti t o y’ c ns t f an c s t t nt i e n e t n s s t t ff c t p t m t s s t n t s c o s u c t en ss t t t t t f c i s t t t a t te t v e x n s e i t o t p i Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ from those estimates. |
Equity method investment | (d) Equity method investment: The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Results of equity investments are presented on a one-line basis. Investments in, and advances to, equity investments are presented on a one-line basis in the Company's consolidated balance sheets, net of allowance for losses, which represents the Company's best estimate of probable losses inherent in such assets. The Company's proportionate share of any equity investment net income or loss is presented on a one-line basis in the Company's consolidated statement of operations. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company's ownership interest. |
Asset acquisitions (Tables)
Asset acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Summary of Asset Acquisitions | During the nine months ended September 30, 2019, the Company completed three asset acquisitions. The asset acquisitions have been included in the anesthesia segment of the Company and represent the following: Acquired Operation Date Acquired Consideration Anesthesia Care Associates LLC (“ACA”) January 2019 $ 5,355,028 South Metro Anesthesia Associates LLC ("SMAA") May 2019 $ 1,791,431 Crystal River Anesthesia Associates LLC ("CRAA") July 2019 $ 2,174,003 During the year ended December 31, 2018, the Company completed five asset acquisitions. These asset acquisitions have been included in the anesthesia segment of the Company and represents the following: Acquired Operation Date Acquired Consideration Shreveport Sedation Associates LLC (“SSA”) March 2018 $ 9,495,184 Western Ohio Sedation Associates LLC (“WOSA”) May 2018 $ 6,483,698 Lake Washington Anesthesia LLC (“LWA”) July 2018 $ 5,041,939 Lake Erie Sedation Associates LLC (“LESA”) September 2018 $ 4,233,115 Tennessee Valley Anesthesia Associates LLC (“TVAA”) December 2018 $ 2,255,875 |
Summary of Fair Value of Consideration Transferred and Allocated Costs of Assets and Liabilities Acquired at Acquisition Date | The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition dates. ACA SMAA CRAA Total Cash $ 5,239,003 $ 1,752,465 $ 2,130,000 $ 9,121,468 Acquisition costs 116,025 38,966 44,003 198,994 Purchase consideration $ 5,355,028 $ 1,791,431 $ 2,174,003 $ 9,320,462 Non-controlling interest — 1,465,716 2,088,748 3,554,464 $ 5,355,028 $ 3,257,147 $ 4,262,751 12,874,926 Assets and liabilities acquired: Exclusive professional services agreements $ 5,355,028 $ 3,257,147 $ 4,262,751 $ 12,874,926 Pre-close accounts receivable 50,000 — — 50,000 Pre-close accounts payable (50,000 ) — — (50,000 ) Fair value of net identifiable assets and liabilities acquired $ 5,355,028 $ 3,257,147 $ 4,262,751 $ 12,874,926 Exclusive professional services agreements – amortization term 6 years 5 years 5 years CRH ownership interest acquired 100 % 55 % 51 % The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition date. SSA WOSA LWA LESA TVAA Total Cash $ 9,404,148 $ 6,409,000 $ 5,000,000 $ 4,180,000 $ 2,200,000 $ 27,193,148 Acquisition costs 91,036 74,698 41,939 53,115 55,875 316,663 Purchase consideration $ 9,495,184 $ 6,483,698 $ 5,041,939 $ 4,233,115 $ 2,255,875 $ 27,509,811 Non-controlling interest $ — $ 6,229,435 $ 4,844,217 $ — $ 2,167,409 $ 13,241,061 $ 9,495,184 $ 12,713,133 $ 9,886,156 $ 4,233,115 $ 4,423,284 $ 40,750,872 Assets and liabilities acquired: Exclusive professional services agreements $ 9,391,036 $ 12,713,133 $ 9,886,156 $ 4,233,115 $ 4,423,284 $ 40,646,723 Prepaid expenses and deposits 104,148 — — — 104,149 Pre-close accounts receivable — — 652,506 — 652,506 Pre-close accounts payable — — (652,506 ) — (652,506 ) Fair value of net identifiable assets and liabilities acquired $ 9,495,184 $ 12,713,133 $ 9,886,156 $ 4,233,115 $ 4,423,284 $ 40,750,872 Exclusive professional services agreements – amortization term 7 years 10 years 7 years 10 years 7 years CRH ownership interest 100 % 51 % 51 % 100 % 51 % |
Trade and other receivables (Ta
Trade and other receivables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Summary of Trade Receivables and Other Receivable | September 30, 2019 December 31, 2018 Trade receivables, gross $ 19,559,565 $ 19,373,260 Other receivables 54,177 141,141 Less: allowance for doubtful accounts (43,206 ) (46,598 ) $ 19,570,536 $ 19,467,803 Anesthesia segment – trade receivables, gross 18,641,926 18,199,847 Product segment – trade receivables, gross 917,639 1,173,413 $ 19,559,565 $ 19,373,260 |
Trade and other payables (Table
Trade and other payables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Summary of Trade and Other Payables | September 30, 2019 December 31, 2018 Trade payables $ 969,657 $ 1,316,821 Payable to CCAA vendor $ 586,561 $ — Accruals and other payables 4,921,207 4,446,401 $ 6,477,425 $ 5,763,222 |
Right of use assets and relat_2
Right of use assets and related obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease Expense Allocated to Operating Segments | Lease expense is allocated to operating segments based on the location of the leases, as follows: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Anesthesia services expense $ 28,106 $ 16,205 $ 90,839 $ 48,062 Product sales expense 31,282 28,723 93,750 82,225 Corporate expense 31,282 28,723 93,750 82,225 $ 90,670 $ 73,651 $ 278,339 $ 212,512 |
Schedule of undiscounted lease obligations | The following table presents a maturity analysis of the Company’s undiscounted lease obligations for each of the next five years, reconciled to the obligation as recorded on the balance sheet. Undiscounted lease payments Remainder of 2019 $ 68,920 2020 129,119 2021 55,498 $ 253,537 Accretion related to outstanding lease obligations (7,716 ) Total $ 245,821 Current obligation relating to right of use assets $ 178,590 Long-term obligation relating to right of use assets $ 67,231 Total $ 245,821 |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets with finite lives are amortized over the following periods: Asset Basis Rate Intellectual property rights to the CRH O’Regan System Straight-line 15 years Intellectual property new technology Straight-line 20 years Exclusive professional services agreements Straight-line 4.5 to 15 years Professional Services Agreements Patents Total Cost Balance as at December 31, 2018 $ 256,491,260 $ 532,598 $ 257,023,858 Additions through asset acquisitions and adjustments (note 4) 4,314,142 — 4,314,142 Balance as at September 30, 2019 $ 260,805,402 $ 532,598 $ 261,338,000 Professional Services Agreements Patents Total Accumulated depreciation Balance as at December 31, 2018 $ 77,139,732 $ 499,863 $ 77,639,595 Amortization expense 25,890,540 1,509 25,892,049 Balance as at September 30, 2019 $ 103,030,272 $ 501,372 $ 103,531,644 Professional Services Agreements Patents Total Net book value September 30, 2019 $ 157,775,130 $ 31,226 $ 157,806,356 December 31, 2018 $ 179,351,528 $ 32,735 $ 179,384,263 |
Summary of Amortization Expense to be Incurred by Company Over Next Five Years | Based on the Company’s professional services agreements in place at September 30, 2019, the Company anticipates that the amortization expense to be incurred by the Company over the next five years is as follows: Amortization Expense For professional services agreements as at September 30, 2019: Remainder of 2019 $ 8,665,085 2020 34,577,141 2021 29,270,763 2022 22,549,476 2023 18,403,113 The first nine months of 2024 13,274,316 $ 126,739,894 |
Equity investment (Tables)
Equity investment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Company's investment in TSA | Nine months ended September 30, 2019 Beginning balance $ — Share of net income 416,584 Member distributions (92,400 ) Ending balance $ 324,184 |
Condensed Financial Statements | The following table summarizes unaudited financial information for our equity method investee. Balance sheet: September 30, 2019 Current assets $ 2,176,239 Non-current assets — Total assets $ 2,176,239 Current liabilities $ 319,972 Non-current liabilities — Shareholders’ equity 1,856,267 Total liabilities and shareholders’ equity $ 2,176,239 Results of operations Nine months ended September 30, 2019 Anesthesia revenue $ 3,811,965 Anesthesia services expense 1,339,698 Net income $ 2,472,267 |
Notes payable (Tables)
Notes payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | September 30, 2019 December 31, 2018 Current portion $ — $ 2,239,637 Non-current portion 68,145,464 67,621,470 Total loans and borrowings $ 68,145,464 $ 69,861,107 |
Summary of Detailed Information about Financial Covenants Ratios | As at September 30, 2019, the Company is required to maintain the following financial covenants in respect of the Facility: Financial Covenant Required Ratio Total funded debt ratio 2.50:1.00 Fixed charge coverage ratio 1.15:1.00 |
Summary of Consolidated Minimum Loans Payments | The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows: Minimum Principal At September 30, 2019 Remainder of 2019 $ — 2022 68,375,000 $ 68,375,000 |
Share capital (Tables)
Share capital (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Summary of Status of Plan for Other Equity Instruments | A summary of the status of the plan as of September 30, 2019 is as follows: Time based share units Performance based share units Outstanding, December 31, 2018 1,045,250 1,500,000 Issued 1,137,500 — Exercised (150,250 ) — Forfeited (115,000 ) (550,000 ) Expired — — Outstanding, September 30, 2019 1,917,500 950,000 Vested — — Expected to vest 1,917,500 550,000 |
Summary of Calculation of Basic Earnings Per Share | The calculation of basic earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows: For the three months ended September 30, 2019 2018 Net earnings Weighted average number of common shares outstanding Per share amount Net earnings Weighted average number of common shares outstanding Per share amount Net earnings attributable to shareholders: Earnings per common share: Basic $ 982,368 71,831,356 $ 0.014 $ 266,831 71,831,356 $ 0.004 Share options 422,043 1,153,177 Share units 545,743 484,840 Diluted $ 982,368 72,799,142 $ 0.013 $ 266,831 73,469,373 $ 0.004 For the nine months ended September 30, 2019 2018 Net earnings Weighted average number of common shares outstanding Per share amount Net earnings Weighted average number of common shares outstanding Per share amount Net earnings attributable to shareholders: Earnings per common share: Basic $ 2,552,084 71,845,812 $ 0.036 $ 2,968,777 71,831,356 $ 0.041 Share options 742,909 1,119,336 Share units 434,423 354,708 Diluted $ 2,552,084 73,023,144 $ 0.035 $ 2,968,777 73,305,400 $ 0.040 |
Net finance expense (Tables)
Net finance expense (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Summary of Net Finance Expense | Recognized in earnings in the three and nine months ended September 30: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Finance expense: Interest and accretion expense on borrowings $ 848,369 $ 851,110 2,556,527 2,291,864 Accretion expense on earn-out obligation and deferred consideration 10,145 35,549 123,305 123,411 Amortization of deferred financing fees 65,091 65,091 195,273 195,272 Net change in fair value of financial liabilities at fair value through earnings (note 13) 181,805 673,125 2,771,238 236,275 Other 20,000 — 50,000 — Total finance expense $ 1,125,410 $ 1,624,875 5,696,343 2,846,822 Net finance expense $ 1,125,410 $ 1,624,875 5,696,343 2,846,822 |
Financial instruments (Tables)
Financial instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments All Other Investments [Abstract] | |
Schedule of Fair Value of Financial Instruments | Liabilities September 30, 2019 Level 1 Level 2 Level 3 Earn-out obligation $ 973,094 $ — $ — $ 973,094 Total $ 973,094 $ — $ — $ 973,094 Liabilities December 31, 2018 Level 1 Level 2 Level 3 Earn-out obligation $ 2,920,583 $ — $ — $ 2,920,583 Total $ 2,920,583 $ — $ — $ 2,920,583 |
Summary of Reconciliation of Level 3 Fair Values | Earn-out obligation Balance as at January 1, 2019 $ 2,920,583 Payment (4,795,822 ) Recorded in finance expense: Accretion expense 77,095 Fair value adjustment 2,771,238 Balance as at September 30, 2019 $ 973,094 |
Segmented information (Tables)
Segmented information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Revenues Relating to Geographic Segments | The revenues relating to geographic segments based on customer location, in United States dollars, for the three and nine months ended September 30, 2019 and 2018 are as follows: Three months ended Nine months ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Revenue: Canada and other $ 51,489 $ 56,065 $ 175,747 $ 167,253 United States 30,363,314 28,675,528 89,840,305 80,560,359 Total $ 30,414,803 $ 28,731,593 $ 90,016,052 $ 80,727,612 |
Summary of Revenue from Contract with Customer | The Company’s revenues are disaggregated below into categories which differ in terms of the economic factors which impact the amount, timing and uncertainty of revenue and cash flows. Three months ended Nine months ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Revenue: Commercial Insurers $ 22,801,819 $ 22,077,401 $ 67,830,007 $ 61,492,066 Federal Insurers 5,040,136 3,948,549 14,408,155 10,866,851 Physicians 2,448,174 2,658,131 7,330,147 7,868,907 Other 124,674 47,512 447,743 499,788 Total $ 30,414,803 $ 28,731,593 $ 90,016,052 $ 80,727,612 |
Summary of Property and Equipment, Intangibles and Other Assets Located in Geographic Regions | The Company’s property and equipment, intangibles, other assets and total assets are located in the following geographic regions as at September 30, 2019 and December 31, 2018: 2019 2018 Property and equipment: Canada $ 230,734 $ 276,621 United States $ 36,006 26,670 Total $ 266,740 $ 303,291 Intangible assets: Canada $ 31,226 $ 32,735 United States $ 157,775,130 179,351,528 Total $ 157,806,356 $ 179,384,263 Total assets: Canada $ 2,988,156 $ 9,293,796 United States $ 193,445,013 209,694,200 Total $ 196,433,169 $ 218,987,996 |
Summary of Operating Segments | The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the three and nine months ended September 30, 2019 and 2018. The Company does not allocate expenses related to corporate activities. These expenses are presented within “Other” to allow for reconciliation to reported measures. Three months ended September 30, 2019 Anesthesia services Product sales Other Total Revenue $ 27,966,629 $ 2,448,174 $ — $ 30,414,803 Operating costs 23,774,049 1,089,316 1,838,812 26,702,177 Operating income (loss) $ 4,192,580 $ 1,358,858 $ (1,838,812 ) $ 3,712,626 Three months ended September 30, 2018 Anesthesia services Product sales Other Total Revenue $ 26,073,462 $ 2,658,131 $ — $ 28,731,593 Operating costs 21,405,928 1,181,976 1,644,356 24,232,260 Operating income (loss) $ 4,667,534 $ 1,476,155 $ (1,644,356 ) $ 4,499,333 Nine months ended September 30, 2019 Anesthesia services Product sales Other Total Revenue $ 82,685,905 $ 7,330,147 $ — $ 90,016,052 Operating costs 69,804,891 3,441,207 4,645,347 77,891,445 Operating income (loss) $ 12,881,014 $ 3,888,940 $ (4,645,347 ) $ 12,124,607 Nine months ended September 30, 2018 Anesthesia services Product sales Other Total Revenue $ 72,858,705 $ 7,868,907 $ — $ 80,727,612 Operating costs 59,105,405 3,757,518 4,497,757 67,360,680 Operating income (loss) $ 13,753,300 $ 4,111,389 $ (4,497,757 ) $ 13,366,932 Additionally, the company incurs the following in each of its operating segments: Three months ended September 30, 2019 Anesthesia services Product sales Other Total Finance expense $ 191,950 $ — $ 933,460 $ 1,125,410 Depreciation and amortization expense $ 8,530,610 $ 5,383 $ 19,916 $ 8,555,909 Three months ended September 30, 2018 Anesthesia services Product sales Other Total Finance expense $ 708,674 $ — $ 916,201 $ 1,624,875 Depreciation and amortization expense $ 8,185,957 $ 17,055 $ 5,748 $ 8,208,760 Nine months ended September 30, 2019 Anesthesia services Product sales Other Total Finance expense $ 2,894,543 $ — $ 2,801,800 $ 5,696,343 Depreciation and amortization expense $ 25,899,621 $ 19,936 $ 54,726 $ 25,974,283 Nine months ended September 30, 2018 Anesthesia services Product sales Other Total Finance expense $ 359,686 $ — $ 2,487,136 $ 2,846,822 Depreciation and amortization expense $ 23,079,832 $ 51,088 $ 17,060 $ 23,147,980 |
Recent accounting pronounceme_2
Recent accounting pronouncements - Additional Information (Detail) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 |
Disclosure Of Recent Accounting Pronouncements [Abstract] | ||
Right of use asset | $ 282,075 | $ 332,512 |
Operating Lease, Liability | $ 245,821 | $ 295,188 |
Asset acquisitions - Additional
Asset acquisitions - Additional Information - 2017 Acquisitions (Detail) | Aug. 31, 2019USD ($) | Apr. 03, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Acquisition | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)Acquisition | Aug. 30, 2019 | Apr. 02, 2019 |
Business Acquisition [Line Items] | |||||||||
Number of asset acquisitions completed | Acquisition | 3 | 5 | |||||||
Total cash consideration | $ 2,174,003 | $ 9,275,054 | $ 9,204,437 | $ 25,253,936 | |||||
Deferred asset acquisition costs | 440 | 440 | $ 116,025 | ||||||
Payment received from acquisition due to reduction in purchase price | 4,366,000 | $ 4,366,000 | |||||||
Arapahoe [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership interest acquired | 49.00% | 51.00% | |||||||
Total cash consideration | $ 2,300,000 | ||||||||
Percentage of working capital paid for acquisition of remaining ownership interest | 49.00% | ||||||||
Deferred asset acquisition costs | $ 26,086 | ||||||||
CCAA [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership interest acquired | 49.00% | 51.00% | |||||||
Total cash consideration | $ 7,000,000 | ||||||||
Percentage of working capital paid for acquisition of remaining ownership interest | 49.00% | ||||||||
Deferred asset acquisition costs | $ 18,658 | ||||||||
Lake Washington Anesthesia LLC [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Payment received from acquisition due to reduction in purchase price | $ 4,366,000 |
Asset acquisitions - Summary of
Asset acquisitions - Summary of Asset Acquisitions (Detail) - Anesthesia Services [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Consideration | $ 9,320,462 | $ 27,509,811 |
Anesthesia Care Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2019-01 | |
Consideration | $ 5,355,028 | |
South Metro Anesthesia Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2019-05 | |
Consideration | $ 1,791,431 | |
Crystal River Anesthesia Associates, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2019-07 | |
Consideration | $ 2,174,003 | |
Shreveport Sedation Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2018-03 | |
Consideration | $ 9,495,184 | |
Western Ohio Sedation Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2018-05 | |
Consideration | $ 6,483,698 | |
Lake Washington Anesthesia LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2018-07 | |
Consideration | $ 5,041,939 | |
Lake Erie Sedation Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2018-09 | |
Consideration | $ 4,233,115 | |
Tennessee Valley Anesthesia Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Date Acquired | 2018-12 | |
Consideration | $ 2,255,875 |
Asset acquisitions - Summary _2
Asset acquisitions - Summary of Fair Value of Consideration Transferred and Allocated Costs of Assets and Liabilities Acquired at Acquisition Date (Detail) - Anesthesia Services [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Cash | $ 9,121,468 | $ 27,193,148 |
Acquisition costs | 198,994 | 316,663 |
Purchase consideration | 9,320,462 | 27,509,811 |
Non-controlling interest | 3,554,464 | 13,241,061 |
Fair value of net identifiable assets and liabilities acquired | 12,874,926 | 40,750,872 |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 12,874,926 | 40,646,723 |
Prepaid expenses and deposits | 104,149 | |
Pre-close accounts receivable | 50,000 | 652,506 |
Pre-close accounts payable | (50,000) | (652,506) |
Fair value of net identifiable assets and liabilities acquired | 12,874,926 | 40,750,872 |
ACA [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 5,239,003 | |
Acquisition costs | 116,025 | |
Purchase consideration | 5,355,028 | |
Fair value of net identifiable assets and liabilities acquired | 5,355,028 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 5,355,028 | |
Pre-close accounts receivable | 50,000 | |
Pre-close accounts payable | (50,000) | |
Fair value of net identifiable assets and liabilities acquired | $ 5,355,028 | |
Exclusive professional services agreements – amortization term | 6 years | |
CRH ownership interest acquired | 100.00% | |
SMAA [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 1,752,465 | |
Acquisition costs | 38,966 | |
Purchase consideration | 1,791,431 | |
Non-controlling interest | 1,465,716 | |
Fair value of net identifiable assets and liabilities acquired | 3,257,147 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 3,257,147 | |
Fair value of net identifiable assets and liabilities acquired | $ 3,257,147 | |
Exclusive professional services agreements – amortization term | 5 years | |
CRH ownership interest acquired | 55.00% | |
CRAA [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 2,130,000 | |
Acquisition costs | 44,003 | |
Purchase consideration | 2,174,003 | |
Non-controlling interest | 2,088,748 | |
Fair value of net identifiable assets and liabilities acquired | 4,262,751 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 4,262,751 | |
Fair value of net identifiable assets and liabilities acquired | $ 4,262,751 | |
Exclusive professional services agreements – amortization term | 5 years | |
CRH ownership interest acquired | 51.00% | |
Shreveport Sedation Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Cash | 9,404,148 | |
Acquisition costs | 91,036 | |
Purchase consideration | 9,495,184 | |
Non-controlling interest | 0 | |
Fair value of net identifiable assets and liabilities acquired | 9,495,184 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 9,391,036 | |
Prepaid expenses and deposits | 104,148 | |
Pre-close accounts receivable | 0 | |
Pre-close accounts payable | 0 | |
Fair value of net identifiable assets and liabilities acquired | $ 9,495,184 | |
Exclusive professional services agreements – amortization term | 7 years | |
CRH ownership interest acquired | 100.00% | |
Western Ohio Sedation Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 6,409,000 | |
Acquisition costs | 74,698 | |
Purchase consideration | 6,483,698 | |
Non-controlling interest | 6,229,435 | |
Fair value of net identifiable assets and liabilities acquired | 12,713,133 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 12,713,133 | |
Prepaid expenses and deposits | 0 | |
Pre-close accounts receivable | 0 | |
Pre-close accounts payable | 0 | |
Fair value of net identifiable assets and liabilities acquired | $ 12,713,133 | |
Exclusive professional services agreements – amortization term | 10 years | |
CRH ownership interest acquired | 51.00% | |
Lake Washington Anesthesia LLC [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 5,000,000 | |
Acquisition costs | 41,939 | |
Purchase consideration | 5,041,939 | |
Non-controlling interest | 4,844,217 | |
Fair value of net identifiable assets and liabilities acquired | 9,886,156 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 9,886,156 | |
Prepaid expenses and deposits | 0 | |
Pre-close accounts receivable | 652,506 | |
Pre-close accounts payable | (652,506) | |
Fair value of net identifiable assets and liabilities acquired | $ 9,886,156 | |
Exclusive professional services agreements – amortization term | 7 years | |
CRH ownership interest acquired | 51.00% | |
Lake Erie Sedation Associates LLC [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 4,180,000 | |
Acquisition costs | 53,115 | |
Purchase consideration | 4,233,115 | |
Non-controlling interest | 0 | |
Fair value of net identifiable assets and liabilities acquired | 4,233,115 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 4,233,115 | |
Prepaid expenses and deposits | 0 | |
Pre-close accounts receivable | 0 | |
Pre-close accounts payable | 0 | |
Fair value of net identifiable assets and liabilities acquired | $ 4,233,115 | |
Exclusive professional services agreements – amortization term | 10 years | |
CRH ownership interest acquired | 100.00% | |
Tennessee Valley Anesthesia LLC [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 2,200,000 | |
Acquisition costs | 55,875 | |
Purchase consideration | 2,255,875 | |
Non-controlling interest | 2,167,409 | |
Fair value of net identifiable assets and liabilities acquired | 4,423,284 | |
Assets and liabilities acquired: | ||
Exclusive professional services agreements | 4,423,284 | |
Fair value of net identifiable assets and liabilities acquired | $ 4,423,284 | |
Exclusive professional services agreements – amortization term | 7 years | |
CRH ownership interest acquired | 51.00% |
Trade and Other Receivables - S
Trade and Other Receivables - Summary of Trade Receivables and Other Receivable (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Line Items] | ||
Trade receivables, gross | $ 19,559,565 | $ 19,373,260 |
Other receivables | 54,177 | 141,141 |
Less: allowance for doubtful accounts | (43,206) | (46,598) |
Receivables net current | 19,570,536 | 19,467,803 |
Anesthesia Services [Member] | ||
Balance Sheet Related Disclosures [Line Items] | ||
Trade receivables, gross | 18,641,926 | 18,199,847 |
Product Sales [Member] | ||
Balance Sheet Related Disclosures [Line Items] | ||
Trade receivables, gross | $ 917,639 | $ 1,173,413 |
Trade and Other Payables - Summ
Trade and Other Payables - Summary of Trade and Other Payables (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instruments [Abstract] | ||
Trade payables | $ 969,657 | $ 1,316,821 |
Payable to CCAA vendor | 586,561 | |
Accruals and other payables | 4,921,207 | 4,446,401 |
Total | $ 6,477,425 | $ 5,763,222 |
Right of use assets and relat_3
Right of use assets and related obligations - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Right of use asset | $ 282,075 | $ 282,075 | $ 332,512 | ||
Operating Lease obligations | 245,821 | 245,821 | 295,188 | ||
Lease cost | 90,670 | $ 73,651 | 278,339 | $ 212,512 | |
Fixed lease payments | 69,572 | 216,261 | |||
Variable lease cost | $ 21,098 | $ 62,078 | |||
Weighted average lease term | 1 year 4 months 13 days | 1 year 4 months 13 days | |||
Accounting Standards Update 2016-02 [Member] | |||||
Right of use asset | 332,512 | ||||
Operating Lease obligations | $ 295,188 |
Right of use assets and relat_4
Right of use assets and related obligations - Lease expense (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lease, Cost | $ 90,670 | $ 73,651 | $ 278,339 | $ 212,512 |
Anesthesia Services [Member] | ||||
Lease, Cost | 28,106 | 16,205 | 90,839 | 48,062 |
Product Sales [Member] | ||||
Lease, Cost | 31,282 | 28,723 | 93,750 | 82,225 |
Corporate Segment [Member] | ||||
Lease, Cost | $ 31,282 | $ 28,723 | $ 93,750 | $ 82,225 |
Right of use assets and relat_5
Right of use assets and related obligations (Detail) - USD ($) | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Remainder of 2019 | $ 68,920 | |
2020 | 129,119 | |
2021 | 55,498 | |
Total | 253,537 | |
Accretion related to outstanding lease obligations | (7,716) | |
Operating Lease, Liability | 245,821 | $ 295,188 |
Current obligation relating to right of use assets | 178,590 | |
Long-term obligation relating to right of use assets | 67,231 | |
Total | $ 245,821 | $ 295,188 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets Finite Lives Amortized Over Period (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Intellectual Property Rights to the CRH O'Regan System [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Basis | Straight-line |
Rate | 15 years |
Intellectual Property New Technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Basis | Straight-line |
Rate | 20 years |
Exclusive Professional Services Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Basis | Straight-line |
Minimum [Member] | Exclusive Professional Services Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Rate | 4 years 6 months |
Maximum [Member] | Exclusive Professional Services Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Rate | 15 years |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | $ 257,023,858 | |
Additions through asset acquisitions and adjustments (note 4) | 4,314,142 | |
Ending balance | 261,338,000 | |
Beginning balance | 77,639,595 | |
Amortization expense | 25,892,049 | |
Ending balance | 103,531,644 | |
Net balance | 157,806,356 | $ 179,384,263 |
Professional Services Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | 256,491,260 | |
Additions through asset acquisitions and adjustments (note 4) | 4,314,142 | |
Ending balance | 260,805,402 | |
Beginning balance | 77,139,732 | |
Amortization expense | 25,890,540 | |
Ending balance | 103,030,272 | |
Net balance | 157,775,130 | 179,351,528 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | 532,598 | |
Ending balance | 532,598 | |
Beginning balance | 499,863 | |
Amortization expense | 1,509 | |
Ending balance | 501,372 | |
Net balance | $ 31,226 | $ 32,735 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - Service | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Intangible Assets Net Excluding Goodwill [Abstract] | ||
Number of professional services agreements identified with impairment indicators | 1 | 4 |
Number of professional services agreements identified for impairment upon undiscounted cash flow models | 0 | 2 |
Renewal term of professional services agreements | 3 years 5 months 26 days | |
Weighted average amortization period | 5 years 5 months 1 day |
Intangible Assets - Summary o_2
Intangible Assets - Summary of Amortization Expense to be Incurred by Company Over Next Five Years (Detail) - Professional Services Agreements [Member] | Sep. 30, 2019USD ($) |
Finite Lived Intangible Assets, Future Amortization Expense [Line Items] | |
Remainder of 2019 | $ 8,665,085 |
2020 | 34,577,141 |
2021 | 29,270,763 |
2022 | 22,549,476 |
2023 | 18,403,113 |
The first nine months of 2024 | 13,274,316 |
Amortization Expense | $ 126,739,894 |
Equity investment - Additional
Equity investment - Additional Information (Detail) - Triad Sedation Associates LLC [Member] - Anesthesia Services Segment [Member] | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | |
Percentage of equity interest | 15.00% | |
Options To Acquire Additional Interest Percent | 36.00% |
Equity investment - Summary of
Equity investment - Summary of the Company's investment in TSA (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | ||
Beginning balance | ||
Share of net income | $ 77,278 | 416,584 |
Member distributions | (92,400) | |
Ending balance | $ 324,184 | $ 324,184 |
Equity investment - Financial I
Equity investment - Financial Information (Detail) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Balance sheet: | |
Current assets | $ 2,176,239 |
Non-current assets | |
Total assets | 2,176,239 |
Current liabilities | 319,972 |
Non-current liabilities | |
Shareholders’ equity | 1,856,267 |
Total liabilities and shareholders’ equity | 2,176,239 |
Results of operations | |
Anesthesia revenue | 3,811,965 |
Anesthesia services expense | 1,339,698 |
Net income | $ 2,472,267 |
Notes Payable - Summary Of Note
Notes Payable - Summary Of Notes Payable (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Notes Payable [Line Items] | ||
Total loans and borrowings | $ 68,375,000 | |
Scotia Facility [Member] | ||
Notes Payable [Line Items] | ||
Current portion | $ 2,239,637 | |
Non-current portion | 68,145,464 | 67,621,470 |
Total loans and borrowings | $ 68,145,464 | $ 69,861,107 |
Notes Payable - Additional Info
Notes Payable - Additional Information (Detail) - Scotia Facility [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Notes Payable [Line Items] | ||
Credit facility drawn amount | $ 68,375,000 | $ 70,250,000 |
Borrowings, adjustment to interest rate basis | 2.25% | |
Borrowing interest rate | LIBOR plus 2.25% | |
Credit facility maturity date | Aug. 15, 2020 |
Notes Payable - Summary of Deta
Notes Payable - Summary of Detailed Information about Financial Covenants Ratios (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Total funded debt ratio | 2.5 |
Fixed charge coverage ratio | 1.15 |
Notes Payable - Summary Of Cons
Notes Payable - Summary Of Consolidated Minimum Loan Payments (Detail) | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 68,375,000 |
Total loans and borrowings | $ 68,375,000 |
Share Capital - Additional Info
Share Capital - Additional Information (Detail) | Oct. 04, 2019shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2019CAD ($)shares | Jun. 30, 2019shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2018CAD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019CAD ($)shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2018CAD ($)shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Share based payment awards issued | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Compensation expense related to granting and vesting of share unit | $ | $ 624,366 | $ 744,532 | $ 124,595 | $ 2,200,964 | ||||||
Stock options exercised | 840,000 | 840,000 | ||||||||
Stock options granted | 500,000 | 500,000 | ||||||||
Fair value of options at the time of grant | $ / shares | $ 1.43 | |||||||||
Risk free rate | 1.61% | 1.61% | ||||||||
Volatility rate | 63.05% | 63.05% | ||||||||
Repurchase of shares | 384,549 | 384,549 | 183,300 | 183,300 | 1,357,979 | 1,357,979 | 579,900 | 579,900 | ||
Total cost, including transaction fee | $ 1,112,097 | $ 1,466,297 | $ 565,831 | $ 743,965 | $ 3,992,728 | $ 5,306,896 | $ 1,608,348 | $ 2,070,503 | ||
Options [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Shares excluded from diluted weighted average number of common shares calculation | 590,144 | 590,144 | 191,510 | 191,510 | 475,560 | 475,560 | 225,351 | 225,351 | ||
Share units [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Shares excluded from diluted weighted average number of common shares calculation | 1,935,399 | 1,935,399 | 2,045,074 | 2,045,074 | 1,936,849 | 1,936,849 | 2,129,239 | 2,129,239 | ||
Common Stock [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock options exercised | 15,000 | 15,000 | 825,000 | |||||||
Shares cancelled under normal course issuer bid | 1,338,979 | 1,338,979 | ||||||||
Common Stock [Member] | Subsequent Event [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Shares cancelled under normal course issuer bid | 19,000 | |||||||||
Time Based Share Units [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of other equity instruments vested | 150,250 | 150,250 | 197,750 | 197,750 | ||||||
Number of other equity instruments issued | 1,137,500 | 1,137,500 | 171,500 | 171,500 | ||||||
Weighted average exercise price of other equity instruments issued | $ / shares | $ 2.70 | $ 3.10 | ||||||||
Performance Based Share Units [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of other equity instruments issued | 150,000 | 150,000 | ||||||||
Weighted average exercise price of other equity instruments issued | $ / shares | $ 2.78 | |||||||||
Options [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock options vesting period | 4 years | 4 years | ||||||||
Compensation expense | $ | $ 82,113 | $ 155,753 |
Share Capital - Summary of Stat
Share Capital - Summary of Status of Plan for Other Equity Instruments (Detail) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Time Based Share Units [Member] | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Beginning balance | 1,045,250 | |
Issued | 1,137,500 | 171,500 |
Exercised | (150,250) | |
Forfeited | (115,000) | |
Expired | ||
Ending balance | 1,917,500 | |
Vested | ||
Expected to vest | 1,917,500 | |
Performance Based Share Units [Member] | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Beginning balance | 1,500,000 | |
Issued | 150,000 | |
Exercised | ||
Forfeited | (550,000) | |
Expired | ||
Ending balance | 950,000 | |
Vested | ||
Expected to vest | 550,000 |
Share Capital - Summary of Calc
Share Capital - Summary of Calculation of Basic Earnings (loss) Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net earnings, Basic | $ 982,368 | $ 266,831 | $ 2,552,084 | $ 2,968,777 |
Net earnings, Diluted | $ 982,368 | $ 266,831 | $ 2,552,084 | $ 2,968,777 |
Weighted average number of common shares outstanding, Basic | 71,831,356 | 71,831,356 | 71,845,812 | 71,831,356 |
Weighted average number of common shares outstanding, Diluted | 72,799,142 | 73,469,373 | 73,023,144 | 73,305,400 |
Earnings per common share, Basic | $ 0.014 | $ 0.004 | $ 0.036 | $ 0.041 |
Earnings per common share, Diluted | $ 0.013 | $ 0.004 | $ 0.035 | $ 0.040 |
Options [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average number of common shares outstanding, Basic | 422,043 | 1,153,177 | 742,909 | 1,119,336 |
Share units [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average number of common shares outstanding, Basic | 545,743 | 484,840 | 434,423 | 354,708 |
Net Finance Expense - Summary o
Net Finance Expense - Summary of Net Finance Expense (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finance expense: | ||||
Interest and accretion expense on borrowings | $ 848,369 | $ 851,110 | $ 2,556,527 | $ 2,291,864 |
Accretion expense on earn-out obligation and deferred consideration | 10,145 | 35,549 | 123,305 | 123,411 |
Amortization of deferred financing fees | 65,091 | 65,091 | 195,273 | 195,272 |
Net change in fair value of financial liabilities at fair value through earnings (note 13) | 181,805 | 673,125 | 2,771,238 | 236,275 |
Other | 20,000 | 50,000 | ||
Total finance expense | 1,125,410 | 1,624,875 | 5,696,343 | 2,846,822 |
Net finance expense | $ 1,125,410 | $ 1,624,875 | $ 5,696,343 | $ 2,846,822 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Fair Value of Financial Instruments (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | $ 973,094 | $ 2,920,583 |
Earn-out obligation [Member] | ||
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 973,094 | 2,920,583 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | 973,094 | 2,920,583 |
Fair Value, Inputs, Level 3 [Member] | Earn-out obligation [Member] | ||
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items] | ||
Total Liabilities | $ 973,094 | $ 2,920,583 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Measurements, Recurring [Member] | ||||
Financial Instruments [Line Items] | ||||
Accretion expense related to earn-out obligation | $ 15,938 | $ 77,095 | $ 49,978 | |
Fair Value, Inputs, Level 3 [Member] | ||||
Financial Instruments [Line Items] | ||||
Payments on partial amount of earn-out obligation | 4,795,822 | |||
Remaining obligation payable | $ 973,094 | $ 973,094 | ||
Expects to pay the remaining obligation period | 1 year | |||
Increase (decrease) in fair value of earn-out obligation | $ 2,771,238 | |||
Accretion expense related to earn-out obligation | $ 77,095 |
Financial Instruments - Summary
Financial Instruments - Summary of Reconciliation of Level 3 Fair Values (Detail) - Fair Value, Inputs, Level 3 [Member] | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance as at January 1, 2019 | $ 2,920,583 |
Payment | (4,795,822) |
Accretion expense | 77,095 |
Fair value adjustment | 2,771,238 |
Balance as at September 30, 2019 | $ 973,094 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Abstract] | ||||
Product sales | $ 14,095 | $ 7,285 | $ 28,095 | $ 22,685 |
Amounts owing by or to related party | $ 7,000 | $ 0 | $ 7,000 | $ 0 |
Segmented Information - Additio
Segmented Information - Additional information (Detail) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of segments | 2 |
Segmented Information - Summary
Segmented Information - Summary of Revenues Relating to Geographic Segments (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Total revenue | $ 30,414,803 | $ 28,731,593 | $ 90,016,052 | $ 80,727,612 |
Canada and Other [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Total revenue | 51,489 | 56,065 | 175,747 | 167,253 |
United States [Member] | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Total revenue | $ 30,363,314 | $ 28,675,528 | $ 89,840,305 | $ 80,560,359 |
Segmented Information - Summa_2
Segmented Information - Summary of Revenue from Contract with Customer (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 30,414,803 | $ 28,731,593 | $ 90,016,052 | $ 80,727,612 |
Commercial Insurers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,801,819 | 22,077,401 | 67,830,007 | 61,492,066 |
Federal Insurers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,040,136 | 3,948,549 | 14,408,155 | 10,866,851 |
Physicians [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,448,174 | 2,658,131 | 7,330,147 | 7,868,907 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 124,674 | $ 47,512 | $ 447,743 | $ 499,788 |
Segmented Information - Summa_3
Segmented Information - Summary of Property and Equipment, Intangibles and Other Assets Located in Geographic Regions (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment | $ 266,740 | $ 303,291 |
Intangible assets | 157,806,356 | 179,384,263 |
Total assets | 196,433,169 | 218,987,996 |
Canada [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment | 230,734 | 276,621 |
Intangible assets | 31,226 | 32,735 |
Total assets | 2,988,156 | 9,293,796 |
United States [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment | 36,006 | 26,670 |
Intangible assets | 157,775,130 | 179,351,528 |
Total assets | $ 193,445,013 | $ 209,694,200 |
Segmented Information - Summa_4
Segmented Information - Summary of Operating Segments (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 30,414,803 | $ 28,731,593 | $ 90,016,052 | $ 80,727,612 |
Operating costs | 26,702,177 | 24,232,260 | 77,891,445 | 67,360,680 |
Operating income (loss) | 3,712,626 | 4,499,333 | 12,124,607 | 13,366,932 |
Finance expense | 1,125,410 | 1,624,875 | 5,696,343 | 2,846,822 |
Depreciation and amortization expense | 8,555,909 | 8,208,760 | 25,974,283 | 23,147,980 |
Anesthesia Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 27,966,629 | 26,073,462 | 82,685,905 | 72,858,705 |
Operating costs | 23,774,049 | 21,405,928 | 69,804,891 | 59,105,405 |
Operating income (loss) | 4,192,580 | 4,667,534 | 12,881,014 | 13,753,300 |
Finance expense | 191,950 | 708,674 | 2,894,543 | 359,686 |
Depreciation and amortization expense | 8,530,610 | 8,185,957 | 25,899,621 | 23,079,832 |
Product Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,448,174 | 2,658,131 | 7,330,147 | 7,868,907 |
Operating costs | 1,089,316 | 1,181,976 | 3,441,207 | 3,757,518 |
Operating income (loss) | 1,358,858 | 1,476,155 | 3,888,940 | 4,111,389 |
Depreciation and amortization expense | 5,383 | 17,055 | 19,936 | 51,088 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating costs | 1,838,812 | 1,644,356 | 4,645,347 | 4,497,757 |
Operating income (loss) | (1,838,812) | (1,644,356) | (4,645,347) | (4,497,757) |
Finance expense | 933,460 | 916,201 | 2,801,800 | 2,487,136 |
Depreciation and amortization expense | $ 19,916 | $ 5,748 | $ 54,726 | $ 17,060 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) | Oct. 22, 2019USD ($) | Sep. 30, 2019USD ($) |
Subsequent Event [Line Items] | ||
Fixed coverage ratio | 1.15 | |
Revolving Credit Facility [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility, initiation date | Oct. 22, 2019 | |
Line of credit facility, maturity period | 3 years | |
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | |
Line of credit facility, committed amount | 125,000,000 | |
Line of credit facility, additional borrowing capacity | $ 75,000,000 | |
Line of credit facility, maturity date | Oct. 22, 2022 | |
Debt to EBITDA ratio | 3 | |
Fixed coverage ratio | 3 | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Borrowings, adjustment to interest rate basis | 1.25% | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Borrowings, adjustment to interest rate basis | 1.75% |