UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2024
OR
☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40785

ASSURE HOLDINGS CORP.

(Exact Name of Registrant as Specified in its Charter)


Nevada		82-2726719
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7887 E. Belleview Ave., Suite 240 Denver, Colorado		80111
(Address of principal executive offices)		(Zip Code)

(720) 287-3093

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	IONM	Nasdaq Stock Market LLC (Nasdaq Capital Market)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☒ Smaller Reporting Company ☒ Emerging Growth Company ☒

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

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

The number of the registrant’s shares of common stock outstanding as of September 22, 2024, was 3,134,054.

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ASSURE HOLDINGS CORP.

FORM 10Q

FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS


	PAGE
Part I – Financial Information	2
Item 1. Condensed Consolidated Financial Statements	2
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Operations	3
Condensed Consolidated Statements of Cash Flows	4
Condensed Consolidated Statements of Changes in Shareholders’ Deficit	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36

Part II – Other Information	37
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	39
Item 6. Exhibits	39

Signatures	40

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par amounts)


	June 30,		December 31,
	2024		2023
		(unaudited)
ASSETS
Current assets
Cash	$	45	$	123
Accounts receivable, net		3,301		3,601
Other current assets		521		562
Earnout from sale of assets		776		—
Assets held for sale		—		2,437
Total current assets		4,643		6,723
Equity method investments		175		175
Operating lease right of use asset, net		457		616
Total assets	$	5,275	$	7,514
LIABILITIES AND SHAREHOLDERS’ DEFICIT
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	$	8,100	$	7,411
Current portion of debt		13,551		13,679
Current portion of lease liability		398		621
Current portion of acquisition liability		153		454
Short-term promissory notes		1,519		—
Other current liabilities		64		53
Total current liabilities		23,785		22,218
Lease liability, net of current portion		135		505
Acquisition liability, net of current portion		—		126
Total liabilities		23,920		22,849
Commitments and contingencies (Note 9)
SHAREHOLDERS’ DEFICIT
Common stock: $0.001 par value; 13,888,888 and 500,000 shares authorized; 605,024 and 373,359 shares issued and outstanding, as of June 30, 2024, and December 31, 2023, respectively		1		—
Additional paid-in capital		55,599		55,299
Accumulated deficit		(74,245)		(70,634)
Total shareholders’ deficit		(18,645)		(15,335)
Total liabilities and shareholders’ deficit	$	5,275	$	7,514

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	1	$	67	$	10	$	182
Cost of revenue		229		697		704		1,376
Gross margin		(228)		(630)		(694)		(1,194)
Operating (income) expenses
General and administrative		1,160		3,208		5,071		6,422
Gain on settlement of accounts payable		—		—		(181)		—
Total operating expenses		1,160		3,208		4,890		6,422
Loss from operations		(1,388)		(3,838)		(5,584)		(7,616)
Other income (expenses)
Income from equity method investments		—		13		—		38
Income from ERTC (Employee Retention Tax Credit)		85		—		85		—
Failed merger fees		(2,000)		—		(2,000)		—
Interest expense		(591)		(491)		(1,118)		(992)
Other income, net		121		324		277		382
Accretion expense		(75)		(171)		(177)		(341)
Total other income (expense), net		(2,460)		(325)		(2,933)		(913)
Loss from continuing operations before income taxes		(3,848)		(4,163)		(8,517)		(8,529)
Income tax benefit (expense) on continuing operations		—		(9)		—		788
Loss from continuing operations		(3,848)		(4,172)		(8,517)		(7,741)
Income (loss) from discontinued operations, net of tax		3,593		(1,880)		4,501		(1,455)
Net income (loss)	$	(255)	$	(6,052)	$	(4,016)	$	(9,196)
Income (loss) per share
Loss from continuing operations, basic and diluted	$	(7.68)	$	(23.23)	$	(19.13)	$	(64.82)
Income (loss) from discontinued operations, basic and diluted	$	7.18	$	(10.47)	$	10.11	$	(12.18)
Income (loss) per share, basic and diluted	$	(0.50)	$	(33.70)	$	(9.02)	$	(77.00)
Weighted average number of shares used in per share calculation – basic		500,758		179,575		445,316		119,432
Weighted average number of shares used in per share calculation – diluted		500,758		179,575		445,316		119,432

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities
Net loss	$	(4,016)	$	(9,196)
Adjustments to reconcile net loss to net cash used in operating activities
Income from equity method investments		—		(38)
Stock-based compensation		(454)		56
Depreciation and amortization		—		—
Amortization of debt issuance costs		81		78
Accretion expense		177		341
Short term promissory notes issued		1,692		—
Gain on sale of assets		(666)		—
Gain on settlement of account payable		(181)		—
Right of use assets		159		191
Deferred income taxes, net		—		(198)
Change in operating assets and liabilities
Accounts receivable		300		6,055
Accounts payable and accrued liabilities		1,469		507
Lease liability		(185)		—
Other assets and liabilities		63		(694)
Operating cash flows from discontinued operations		—		182
Net cash used in operating activities		(1,561)		(2,716)
Cash flows from investing activities
Proceeds from sale of assets		2,320		—
Distributions received from equity method investments		—		37
Net cash provided by investing activities		2,320		37
Cash flows from financing activities
Proceeds from share issuance, net of share issuance costs		—		5,383
Repayment of debt		(82)		—
Repayment of short-term promissory notes		(173)		—
Finance lease principal payments		(408)		(358)
Payment of acquisition liability		(174)		(102)
Net cash (used in) provided by financing activities		(837)		4,923
Increase (decrease) in cash		(78)		2,244
Cash at beginning of period		123		905
Cash at end of period	$	45	$	3,149
Supplemental cash flow information
Interest paid	$	668	$	977
Income taxes paid	$	—	$	—
Supplemental non-cash investing and financing activities
Settlement of accounts payable and other liabilities for common shares	$	706	$	—
Debenture principal and interest exchanged for common shares	$	141	$	—
Convertible debt converted to common shares	$	334	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share amounts)

(unaudited)

Changes in shareholders’ equity for the three months ended June 30, 2024, and 2023:


				Additional				Total
	Common Stock			paid-in		Accumulated		shareholders'
	Shares	Amount		Capital		deficit		equity (deficit)
Balances, March 31, 2023	61,173	$	—	$	50,311	$	(47,700)	$	2,611
Share issuance, net	224,537		—		5,083		—		5,083
Stock-based compensation	14,893		—		66		—		66
Other	620		—		—		—		—
Net loss	—		—		—		(6,052)		(6,052)
Balances, June 30, 2023	301,223	$	—	$	55,460	$	(53,752)	$	1,708

Balances, March 31, 2024	462,588	$	—	$	55,380	$	(73,990)	$	(18,610)
Stock-based compensation	556		—		(628)		—		(628)
Debenture principal and interest settled in common shares	13,120		—		141		—		141
Accounts payable settled in common shares	104,468		1		436		—		437
Other liabilities settled in common shares	24,292		—		270		—		270
Net loss	—		—		—		(255)		(255)
Balances, June 30, 2024	605,024	$	1	$	55,599	$	(74,245)	$	(18,645)

Changes in shareholders’ equity for the six months ended June 30, 2024, and 2023:


				Additional				Total
	Common Stock			paid-in		Accumulated		shareholders'
	Shares	Amount		Capital		deficit		equity (deficit)
Balances, December 31, 2022	58,394	$	—	$	50,021	$	(44,556)	$	5,465
Share issuance, net	227,315		—		5,383		—		5,383
Stock-based compensation	14,893		—		56		—		56
Other	620		—		—		—		—
Net loss	—		—		—		(9,196)		(9,196)
Balances, June 30, 2023	301,223	$	—	$	55,460	$	(53,752)	$	1,708

Balances, December 31, 2023	373,359	$	—	$	55,299	$	(70,634)	$	(15,335)
Adoption of new accounting standard ASU 2006-20	—		—		(427)		405		(22)
Stock-based compensation	15,487		—		(454)		—		(454)
Convertible debt converted into common shares	74,298		—		334		—		334
Debenture principal and interest settled in common shares	13,120		—		141		—		141
Accounts payable settled in common shares	104,468		1		436		—		437
Other liabilities settled in common shares	24,292		—		270		—		270
Net loss	—		—		—		(4,016)		(4,016)
Balances, June 30, 2024	605,024	$	1	$	55,599	$	(74,245)	$	(18,645)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.NATURE OF OPERATIONS

Overview

Assure has been a provider of Intraoperative neuromonitoring (“IONM”). The Company delivered a turnkey suite of clinical and operational services to support surgeons and medical facilities during invasive surgical procedures. IONM has been well established as a standard of care and risk mitigation tool for various surgical verticals such as neurosurgery, spine, cardiovascular, orthopedic, ear, nose, and throat (“ENT”), and other surgical procures that place the nervous system at risk. Assure’s mission was to provide exceptional surgical care and help make invasive surgeries safer. Our strategy focused on utilizing best of class personnel and partners to deliver outcomes that are beneficial to all stakeholders including patients, surgeons, hospitals, insurers, and stockholders.

During each procedure, Assure provided two types of services, the Technical Component and Professional Component of IONM. Our in-house Interoperative Neurophysiologists (“INP”) provide the Technical Component IONM services from the operating room throughout the procedure, while telehealth-oriented supervising practitioners provide a level of redundancy and risk mitigation in support of the onsite INPs and the surgical team. In addition, Assure offered a comprehensive suite of IONM services, including scheduling the INP and supervising practitioner, real time monitoring, patient advocacy and subsequent billing and collecting for services provided.

Historically, the foundation of Assure’s business has been providing the Technical Component of IONM via our INP staff. We employed highly trained INPs, which provided a direct point of contact in the operating room during the surgeries to relay critical information to the surgical team. In this one-to-one business model, Assure paired a team of INPs with third-party surgeons to promote a level of familiarity, comfort, and efficiency between the surgeon and the INP. Our INPs monitored the surgical procedure using state of the art, commercially available, diagnostic medical equipment. The success of our service depended upon the timely recognition and successful interpretation of the data signals by our INPs and remote supervisors to quickly determine if the patient was experiencing a deficiency and advised the surgeon to determine if surgical intervention is required to positively impact the patient and surgery.

During September 2023, the Company’s Board of Directors initiated a process to explore strategic alternatives for the business. In consultation with financial and legal advisors, a comprehensive strategic review process began immediately and evaluated a broad range of options to maximize shareholder value. As part of this review process, Assure’s board agreed to conduct an auction process for the sale of its clinical operations. On March 11, 2024, the Company, and its subsidiaries, Assure Neuromonitoring, LLC, Assure Networks, LLC, Assure Networks Texas Holdings, LLC and Assure Networks Texas Holdings II, LLC (collectively, the “Sellers’) entered into an asset purchase agreement (the “APA”) with National Neuromonitoring Services, LLC (“Purchaser”). Upon the terms and subject to the satisfaction of the conditions described in the APA, the Company and the Sellers sold to Purchaser certain assets of the Sellers and Purchaser assumed certain liabilities and obligations of the Sellers (the “Sale Transaction”). See Note 3 for a complete disclosure of the sale of assets and discontinued operations. On March 26, 2024, Assure closed the sale transaction resulting in the disposal of most of the Company’s clinical operations, equipment, and contracts. As of the filing date of this Quarterly Report on Form 10-Q, Assure is providing IONM services in limited markets, primarily Arizona and Montana.

Corporate Structure

Assure Holdings Corp.

Assure Holdings Corp., formerly Montreux Capital Corp, a Canadian Capital Pool Company (“Montreux”), was formed under the British Columbia Business Corporations Act in British Columbia, Canada on September 24, 2007, is a Nevada corporation, existing under the laws of the State of Nevada pursuant to its Articles of Domestication filed with the Nevada Secretary of State on May 15, 2017.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Assure Holdings, Inc.

Assure Holdings, Inc. is a direct subsidiary is Assure Holdings, Corp., is a Colorado corporation, formed under the laws of the State of Colorado on November 7, 2016. Assure Holdings, Inc. became a wholly owned subsidiary of Assure Holdings Corp. on May 15, 2017 when Assure Holdings Inc. and its stockholders and Montreux and its stockholders entered into a Share Exchange Agreement pursuant to which the stockholders of Assure Holdings, Inc. received shares of Montreux as consideration for their assignment of their shares in Assure Holdings, Inc. to Montreux in the “Qualifying Transaction” under the rules of the TSX Venture Exchange (“TSX-V”). One of the primary objectives of the Qualifying Transactions was to facilitate our going public and listing on the TSX-V.

Assure Holdings, Inc. is the sole member of Assure Neuromonitoring, LLC (“Assure Neuromonitoring”), a Colorado limited liability company formed under the laws of the state of Colorado on August 25, 2015. Assure Neuromonitoring became a wholly owned subsidiary of Assure Holdings, Inc. on November 7, 2016, when its members assigned their interest in Assure Neuromonitoring to Assure Holdings, Inc. for shares of Assure Holdings, Inc.

Assure Holdings, Inc. is the sole member of Assure Networks, LLC (“Assure Networks”), a Colorado limited liability company formed under the laws of the state of Colorado on November 2, 2016. Assure Networks became a wholly owned subsidiary of Assure Holdings, Inc. on November 7, 2016, when its members assigned their interest in Assure Networks to Assure Holdings, Inc. for shares of Assure Holdings, Inc.

Assure Holdings, Inc. is the sole member of Assure Equipment Leasing, LLC (“Assure Equipment Leasing”), a Colorado limited liability company formed under the laws of the state of Colorado on April 20, 2020.

Assure Neuromonitoring, LLC.

Assure Neuromonitoring, LLC exists for the purpose of facilitating the performance of the Technical Component of IONM support to surgeons and patients. This includes a Technical Component via our INP staff who utilize technical equipment and technical training to monitor EEG, EMG, and a number of complex modalities during surgical procedures to pre-emptively notify the underlying surgeon of any nerve related issues that are identified.

Assure Networks, LLC.

Assure Networks, LLC exists for the purpose of facilitating the performance of the Professional Component of IONM support to surgeons and patients. Assure Networks provides off-site tele-neurology services for IONM. These services are provided by and through the Assure Networks, LLC’s subsidiaries, which own interest in entities that either (i) directly perform the Professional Component through third-party contracted neurologists or oversight reading physicians, or (ii) provide management services for entities owned by licensed physicians. These oversight services support the INP and strengthen our capacity to pre-emptively notify the underlying surgeon of any nerve related issues that are identified during a surgical procedure.

Current Strategy

As of June 30, 2024, the Company had sixteen active employees with operations limited to Montana and Arizona. The Company plans for the business to continue to operate in these markets while management continues to assess other strategic opportunities in the near term, which may include the acquisition of additional operational assets, acquiring new lines of business or engaging in other strategic transactions. As a result, the financial results of our past business operations may not be indicative of our financial results in the future.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Financial Reporting and Classification

As a result of the corporate actions previously described, the Company’s technical and professional services met the criteria to be considered “held for sale” as that term is defined in accounting principles generally accepted in the United States (“GAAP”). Accordingly, the assets associated with these services are classified and reflected in the condensed consolidated balance sheets as “held for sale” as of December 31, 2023, and their results of operations are classified as “discontinued operations” in the condensed consolidated statements of operations for the three and six months ended June 30, 2024, and 2023. Certain financial disclosures including major components of the assets and results of operations related to discontinued operations are provided in Note 3. Our continuing operations consists of our billing and collections services and costs to maintain our public company listing and are presented as such for all periods presented herein and until such time a strategic transaction is completed.

Merger Agreement

On February 12, 2024, Assure entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Danam and Assure Merger Corp., a newly formed wholly owned subsidiary of Assure (“Assure Merger”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the stockholders of Assure and Danam, Assure Merger would have merged with and into Danam (the “Merger”), with Danam surviving the Merger as a wholly-owned subsidiary of Assure. The Merger was intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

The parties were able to terminate the Merger Agreement upon mutual consent. Either party may have terminated the Merger Agreement (i) if any of the representations or warranties of the other party set forth in the Merger Agreement shall not be true and correct or if the other party failed to perform any covenant or agreement on the part of such party set forth in the Merger Agreement, (ii) the Merger was not consummated by the outside date (May 15, 2024), (iii) there was a governmental order prohibiting the Merger, and (iv) failure to obtain the stockholder vote. Danam was able to terminate the Merger Agreement if (i) the Board changes its recommendation to stockholders with respect to the Merger, (ii) the Board failed to reaffirm its recommendation to stockholders with respect to the Merger following a tender offer for Assure, (iii) the Board failed to reaffirm its recommendation to stockholders with respect to the merger following a publicly announced acquisition proposal for Assure, (iv) Assure breaches its non-solicitation provisions, or (v) the Board resolved to do any of the above. Assure was able to terminate the Merger Agreement for acceptance of a superior proposal.

In the event Danam or Assure terminated the Merger Agreement pursuant to certain of the sections set forth above, Assure was required to pay Danam a termination fee of $1,000,000, less any reimbursed expenses. Upon termination in other contexts in which a termination fee is not due, the breaching party would have owed the non-breaching party reimbursement of expenses up to $250,000.

On April 8, 2024, the Company entered into a partial waiver and amendment agreement (the “Waiver Agreement”) which waived and amended certain provisions of the Merger Agreement.

Pursuant to the terms and conditions of the Waiver Agreement, Danam partially waived its right to terminate the Merger Agreement pursuant to breaches of Section 6.8(a) and 6.20 of the Merger Agreement. The Waiver Agreement required the following:

Assure obtain the Preliminary Shareholder Vote required by Section 6.20 of the Merger Agreement no later than April 30, 2024;

Assure file the proxy statement and registration statement on Form S-4 required by the Section 6.8(a) Covenant no later than April 26th, 2024;

Assure issues Danam a $1,000,000 convertible promissory note;

Assure receive shareholder approval for the Merger five (5) Business Days prior to the Termination Date and effects the Reverse Split prior to the Termination Date;

Assure was not in default under the Convertible Note; and

Assure was not in breach of any other covenants set forth in the Merger Agreement, subject to any necessary notice requirements and cure period set forth therein.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Further the Waiver Agreement amended the Merger Agreement to change the definition of “Termination Date” to mean July 22, 2024.

In connection with the Waiver Agreement, on April 8, 2024, the Company issued a convertible note to Danam in principal amount of $1 million. The note accrues interest on the then outstanding principal balance at a rate equal to 10% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. The note has a maturity date of July 22, 2024. Upon the occurrence of certain events, the note is convertible into shares of common stock at the Nasdaq “Minimum Price” in accordance with Listing Rule 5635(d). The note will become immediately due and payable upon the occurrence of an event of default under the note, including but not limited to: a failure to pay, voluntary bankruptcy or insolvency of Assure, involuntary bankruptcy or insolvency proceedings of Assure, breach of the Merger Agreement or termination of the Merger Agreement.

On June 11, 2024, Assure delivered a letter to Danam pursuant to which Assure terminated the Merger Agreement with Danam and Assure Merger, pursuant to Section 8.1(b) thereof. According to the terms of the Merger Agreement, Danam may be entitled to a $1 million termination fee. Assure accrued the termination fee as of June 30, 2024, which is included as a component of the Accounts payable and accrued expenses balance in the accompanying condensed consolidated balance sheet. Additionally, the $1 million convertible note matured on July 22, 2024, and as of the date of this filing, is currently in default. The note is included as a component of the short-term promissory notes balance in the accompanying condensed consolidated balance sheet as of June 30, 2024.

Pursuant to Section 8.1(b) of the Merger Agreement, Assure terminated the Merger Agreement based on Assure’s assertion of certain misrepresentations by Danam regarding its representations and warranties set form in Article 4 of the Merger Agreement, including but not limited to, its representations regarding its financial condition and ability to complete the Acquisition Transactions, and the Company’s assertion that Danam was failing to perform its covenants under the Merger Agreement, including but not limited to its covenant to meet the closing condition to complete the Acquisition Transactions prior to or concurrent with the closing of the Merger and such breaches could not be cured within the time periods set forth in Section 8.1(b) thereof.

As a result of the termination of the Merger Agreement, in addition to reserving its right to seek other remedies, pursuant to Section 8.3(c) of the Merger Agreement, Assure is seeking reimbursement for all of its fees, costs and expenses (including all fees and expenses of counsel, accountants, investment bankers, experts and consultants) in relation to the Merger Agreement and its performance thereunder.

As of June 30, 2024, the Company has recorded $1 million of termination fees in accrued expenses and $1 million convertible note in short-term promissory notes within the condensed consolidated balance sheet.

2.BASIS OF PRESENTATION

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s financial statements were prepared on a consolidated basis and include the accounts of the Company and its wholly owned subsidiaries, as well as an entity in which the Company has a controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Unaudited Interim Financial Statements

The accompanying unaudited interim condensed consolidated financial statements are presented in accordance with the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The amounts as of December 31, 2023, have been derived from the Company’s annual audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023, filed on April 26, 2024 (the “Form 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, which consist of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Form 10-K. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024, or any future period and the Company makes no representations related thereto.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, difficult, and subjective judgment include the recognition and measurement of patient service fees, net, hospital, management and other revenue, the collectability of accounts receivable, the fair value measurements of goodwill and intangible assets, the assessment of the recoverability of goodwill, the assessment of useful lives and recoverability of intangible assets and long-lived assets, fair value measurement of earnout from sale of assets, recognition and measurement of current and deferred income tax assets and liabilities, the assessment of unrecognized tax benefits, the valuation and recognition of stock-based compensation expense, among others. Actual results experienced by the Company may differ from management’s estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised and also in future periods when the revision affects both current and future periods. Significant assumptions, judgments, and estimates that management has made at the end of the reporting period that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following: patient service fees, net; hospital, management, and other revenue; accounts receivable; and due to/from related parties.

Liquidity and Going Concern

The Company’s current cash balance and estimated cash from operations for the next 12 months is not sufficient to meet the Company’s working capital needs for the next 12 months, which raised substantial doubt as to the Company’s ability to continue as a going concern. The Company intends to seek equity or debt financing and have implemented significant cost cutting measures to mitigate its going concern. Such financings may include the issuance of shares of common stock, warrants to purchase common stock, convertible debt or other instruments that may dilute current stockholders. Financing may not be available on acceptable terms depending on market conditions at the time the Company seeks financing. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

Common Stock Reverse Split

In March 2023, the Company effectuated a twenty-for-one reverse stock split. In July 2024, the Company effectuated an eighteen-for-one reverse stock split. All share, stock option and warrant information has been retroactively adjusted to reflect these stock splits. See Note 10 for additional disclosure.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Accounting Policies

There have been no changes, except as noted below, to the Company’s significant accounting policies or recent accounting pronouncements during the three and six months ended June 30, 2024, as compared to the significant accounting policies disclosed in the 10-K for the year ended December 31, 2023, as filed on April 26, 2024.

Sale of Assets

As a result of the sale of assets, disclosed in notes 1 and 3, the Company has recorded contingent consideration receivable in the amount of $776 thousand noted as Earnout from sale of assets in the condensed consolidated balance sheet as of June 30, 2024. In accordance with accounting standard 805: Business Combinations, the Company recognized the fair value of the contingent consideration as of the date of the sale of assets and as of each reporting period. Gains or losses resulting from the change in fair value will be recorded in the condensed consolidated statement of operations each reporting period.

Accounting Policies Recently Adopted

In August 2020, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models such that the embedded conversion features are no longer separated from the host contract. The convertible debt instrument will be accounted for as a single liability measured at amortized cost. This guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within the year. The Company adopted the standard on January 1, 2024 utilizing the modified retrospective method, that resulted in a reclassification of a charge of $405 thousand from Accumulated Deficit to Additional Paid In Capital related to previously recognized accretion expense of the beneficial conversion feature and the recognition of a $22 thousand charge to Additional Paid In Capital and a corresponding increase in debt related to the recognition of the remaining balance of the beneficial conversion.

Recent Accounting Pronouncements Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires significant segment expenses and other segment related items to be disclosed on an interim and annual basis. The new disclosure requirements are also applicable to companies with a single reportable segment. This guidance is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures within its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. This guidance is effective on a prospective or retrospective basis for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures within its consolidated financial statements.

Reclassifications

Certain amounts for the three and six months ended June 30, 2023, have been reclassified to conform to the 2024 presentation as it relates to assets held for sale and discontinued operations. Total assets, liabilities, equity, and net loss did not change for the prior periods due to the reclassifications.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Credit Risk

Credit risk arises from cash and accounts receivables. The exposure to credit risk was as follows (in thousands):


	June 30,		December 31,
	2024		2023

Cash	$	45	$	123
Accounts receivable, net		3,301		3,601
Total	$	3,346	$	3,724

Cash

Cash is held in financial institutions with good standing, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Accounts receivable

On January 1, 2023, the Company adopted Accounting Standards Update No, 2016-13, Measurement of Credit Losses on Financial Instruments, and its related amendments using the prospective method. The new standard requires the use of a current expected credit loss impairment model to develop and recognize credit losses for financial instruments at amortized cost when the asset is first originated or acquired, and each subsequent reporting period.

The cash collection cycles of the Company may be protracted due to the majority of its revenue being billed to third-party commercial insurance payors on an out-of-network basis. The collection cycle for IONM to out-of-network payors may require an extended period to maximize reimbursement on claims, which results in accounts receivable growth tied to the Company’s overall growth in technical and professional service revenues. The collection cycle may consist of multiple payments from out-of-network private insurance payors, as the collection process entails multiple rounds of denials, underpayments, appeals and negotiations as part of the process to maximize the reimbursement yield on claims. Based on the Company’s historical experience, claims generally become uncollectible once they are aged greater than 24 months; as such, included in the Company’s allowance for implicit price concessions is an estimate of the likelihood that a portion of the Company’s accounts receivable may become uncollectible due to age. The Company continues collection efforts on claims aged over 24 months. Collections on claims are recorded as revenue in the period received as such collections represent a subsequent change to the initial estimation of the transaction price.

3. DISCONTINUED OPERATIONS

On March 26, 2024, the Company closed the sale of certain clinical assets with National Neuromonitoring Services, LLC for up to $4.5 million, of which $2.3 million was paid in cash at the initial closing and up to an additional $2.2 million to be paid in relation to a potential earnout payment tied to case volume from the acquired assets during the 12-month period following the initial closing. The asset sale includes most of the Company’s healthcare facility contracts and clinical equipment, and a majority of the Company’s clinical employees. The Company retained certain of its assets, including but not limited to, its accounts receivable, certain clinical employees, its employees in the revenue cycle management team and management and office personnel.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As a result of the corporate actions described above, the Company’s technical and professional services meet the criteria to be considered “held for sale.” Accordingly. the assets associated with these services were classified and reflected on our consolidated balance sheets as “held for sale” as of December 31, 2023, and their results of operations are classified as “discontinued operations” in the condensed consolidated statements of operations for the three and six months ended June 30, 2024, and 2023. Since the sale of clinical assets closed on March 26, 2024, the assets held for sale balance was zero as of June 30, 2024. During June 2024, the Company recorded arbitration revenue from discontinued operations originating from professional services which qualified for federal or state arbitration under the no-surprises act.

The following table presents the major classes of assets of the discontinued operations as of December 31, 2023 (stated in thousands):


	December 31,
	2023
Fixed assets	$	311
Finance lease right of use asset, net		118
Intangibles, net		98
Goodwill		1,910
Total assets	$	2,437

The following table summarizes the results of operations of the discontinued operations (stated in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue
Technical services	$	240	$	98	$	1,558	$	1,332
Professional services		3,684		490		4,995		2,364
Other		(21)		507		17		836
Revenue, net		3,903		1,095		6,570		4,532
Cost of revenues, excluding depreciation and amortization		309		2,705		2,672		5,399
Gross margin		3,594		(1,610)		3,898		(867)
Operating expenses
Sales and marketing		1		69		55		197
Depreciation and amortization		—		183		—		365
Total operating expenses		1		252		55		562
Income from discontinued operations		3,593		(1,862)		3,843		(1,429)
Other income (expense)
Gain on sale of assets		—		—		666		—
Interest expense		—		(18)		(8)		(26)
Total other income (expense)		—		(18)		658		(26)
Income from discontinued operations		3,593		(1,880)		4,501		(1,455)
Income tax expense		—		—		—		—
Net income from discontinued operations	$	3,593	$	(1,880)	$	4,501	$	(1,455)

4. REVENUE

The Company disaggregates revenue between continuing operations and discontinued operations. Revenue streams from contracts with customers depicts the nature, amount, timing and uncertainty of its revenue and cash flows as affected by economic factors. Commercial insurance consists of neuromonitoring cases whereby a patient has healthcare insurance that we bill. Facility billing consists of neuromonitoring cases whereby the Company has an agreement to bill the medical facility for patients that do not have health care insurance.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company does not have any contract assets or contract liabilities as of or during the six months ended June 30, 2024, or 2023 or as of December 31, 2023.

The Company’s revenue is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Managed service agreements and other	$	1	$	67	$	10	$	182

Accounts Receivable

A summary of the accounts receivable, net, by revenue stream is as follows (in thousands):


	June 30,		December 31,
	2024		2023
Technical service	$	317	$	1,308
Professional service		97		2,293
Arbitration receivable		2,887		—
Total receivables, net	$	3,301	$	3,601

The concentration of accounts receivable, net, by payor as a percentage of total accounts receivable is as follows:


	As of June 30,		As of December 31,
	2024		2023
Commercial insurance	100	%	82	%
Facility billing	—	%	18	%
Total	100	%	100	%

5. LEASES

Under ASC 842, Leases, a contract is a lease, or contains a lease, if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. To determine whether a contract conveys the right to control the use of an identified asset for a period of time, an entity shall assess whether, throughout the period of use, the entity has both of the following: (a) the right to obtain substantially all of the economic benefits from the use of the identified asset; and (b) the right to direct the use of the identified asset. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Lease agreements generally do not contain material residual value guarantees or material restrictive covenants.

Leases with an initial term of 12 months or less are not recorded in the condensed consolidated balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. As a practical expedient, the Company elected not to separate non-lease components for the corporate office facility (e.g., common-area maintenance costs) from lease components (e.g., fixed payments including rent) and instead to account for each separate lease component and its associated non-lease components as a single lease component.

Operating leases

The Company leases a corporate office facility in Denver, Colorado under an operating lease which expires October 31, 2025. The Company entered a sublease for this space during November 2023 for the remaining lease term. The incremental borrowing rate for this lease was 10%.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

During November 2023, the Company entered into a month-to-month lease for corporate office space in Denver, Colorado which expired on June 30, 2024, and was renewed under a new month-to-month lease expiring on August 31, 2024. The Company does not plan to review this lease.

During April 2023, the Company entered a lease for corporate offices space in Houston, Texas, which expires May 2025. The Company set a notice of termination in April 2024. The incremental borrowing rate for this lease was 7%.

Finance leases

The Company historically leased medical equipment under various financing leases with stated interest rates ranging from 5.2% — 13.4% per annum which expire at various dates through 2026. Finance lease assets are included in assets held for sale as of December 31, 2023. On March 26, 2024, in relation to the sale of certain clinical assets, the Company paid the remaining principal amount due on its outstanding finance leases. As a result, there are no assets remaining under finance leases nor outstanding amounts due.

The condensed consolidated balance sheets include the following amounts for right-of-use (“ROU”) assets as of June 30, 2024, and December 31, 2023 (in thousands):


	June 30,			December 31,
	2024		2023
Operating	$	457	$	616

The following are the components of lease cost for operating and finance leases (in thousands). Finance lease costs are included as a component of loss from discontinued operations in the condensed consolidated statements of operations for the periods presented.


	Six Months Ended June 30,
	2024		2023
Operating leases:
Amortization of ROU assets	$	190	$	151
Interest on lease liabilities		17		37
Total operating lease cost, included in general and administrative expenses		207		188
Finance leases:
Amortization of ROU assets		—		152
Interest on lease liabilities		8		25
Total finance lease cost, included in discontinued operations		8		177
Total lease cost	$	215	$	365

During the six months ended June 30, 2024, the Company incurred operating and finance lease principal payments of $183 thousand and $408 thousand, respectively, and $104 thousand and $358 thousand related to operating and finance lease principal payments, respectively, during the six months ended June 30, 2023.

The following are the weighted average lease terms and discount rates for operating and finance leases:


	As of	As of
	June 30, 2024	June 30, 2023
Weighted average remaining lease term (years):
Operating leases	2.6	2.3
Finance leases	NA	2.3
Weighted average discount rate (%):
Operating leases	9.9	10.0
Finance leases	NA	7.9

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Future minimum lease payments and related lease liabilities as of June 30,2024, were as follows (in thousands):


					Total
	Operating		Finance		Lease
	Leases		Leases		Liabilities
Remainder of 2024	$	233	$	—	$	233
2025		352		—		352
Total lease payments		585		—		585
Less: imputed interest		52		—		52
Present value of lease liabilities		533		—		533
Less: current portion of lease liabilities		398		—		398
Noncurrent lease liabilities	$	135	$	—	$	135

Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes.

6. DEBT

The Company’s debt obligations are summarized as follows:


	June 30,		December 31,
	2024		2023
Face value of convertible debt	$	3,450	$	3,450
Less: principal converted to common shares		(394)		(60)
Less: deemed fair value ascribed to warrants and beneficial conversion feature		(1,096)		(1,523)
Plus: accretion of implied interest		1,096		1,467
Total convertible debt		3,056		3,334

Face value of Centurion debt		10,918		11,000
Less: deemed fair value ascribed to warrants		(1,204)		(1,204)
Plus: accretion of implied interest		927