UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the Quarterly Period Ended | ||
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:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of Principal Executive Offices) | (Zip Code) |
(
(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 |
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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.
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).
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Large Accelerated Filer ☐ Accelerated Filer ☐
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
The number of the registrant’s shares of common stock outstanding as of November 8, 2021 was
ASSURE HOLDINGS CORP.
FORM 10Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ASSURE HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and par amounts)
(unaudited)
| September 30, |
| December 31, | |||
2021 | 2020 | |||||
ASSETS | ||||||
Current assets |
|
|
|
| ||
Cash | $ | | $ | | ||
Accounts receivable, net |
| |
| | ||
Income tax receivable | | | ||||
Other current assets |
| |
| | ||
Due from PEs | | | ||||
Total current assets |
| |
| | ||
Equity method investments |
| |
| | ||
Fixed assets |
| |
| | ||
Operating lease right of use asset | — | | ||||
Finance lease right of use asset | | | ||||
Deferred tax asset, net | | — | ||||
Intangibles, net |
| |
| | ||
Goodwill |
| |
| | ||
Total assets | $ | | $ | | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
LIABILITIES | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | | $ | | ||
Current portion of debt |
| — |
| | ||
Current portion of lease liability |
| |
| | ||
Current portion of acquisition liability |
| |
| — | ||
Other current liabilities |
| |
| | ||
Total current liabilities |
| |
| | ||
Lease liability, net of current portion |
| |
| | ||
Debt, net of current portion |
| |
| | ||
Acquisition liability | | — | ||||
Acquisition share issuance liability |
| |
| | ||
Fair value of stock option liability |
| |
| | ||
Performance share issuance liability |
| — |
| | ||
Deferred tax liability, net |
| — |
| | ||
Total liabilities |
| |
| | ||
Commitments and contingencies (Note 8) | ||||||
SHAREHOLDERS’ EQUITY | ||||||
Common stock: $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Total shareholders’ equity |
| |
| | ||
Total liabilities and shareholders’ equity | $ | | $ | |
See accompanying notes to condensed consolidated financial statements.
2
ASSURE HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2021 |
| 2020 | 2021 |
| 2020 | ||||||
Revenue |
|
|
|
|
|
| |||||
Patient service fees, net | $ | | $ | | $ | | $ | ( | |||
Hospital, management and other |
| |
| |
| |
| | |||
Total revenue |
| |
| |
| |
| ( | |||
Cost of revenues |
| |
| |
| |
| | |||
Gross margin |
| |
| |
| |
| ( | |||
Operating expenses | |||||||||||
General and administrative |
| |
| |
| |
| | |||
Sales and marketing |
| |
| |
| |
| | |||
Depreciation and amortization |
| |
| |
| |
| | |||
Total operating expenses |
| |
| |
| |
| | |||
Income (loss) from operations |
| |
| ( |
| ( |
| ( | |||
Other income (expenses) | |||||||||||
Income (loss) from equity method investments |
| |
| ( |
| |
| ( | |||
Other income (expense), net |
| ( |
| ( |
| ( |
| | |||
Accretion expense | ( | ( | ( | ( | |||||||
Interest expense, net |
| ( |
| ( |
| ( |
| ( | |||
Total other expense |
| ( |
| ( |
| ( |
| ( | |||
Income (loss) before income taxes |
| |
| ( |
| ( |
| ( | |||
Income tax benefit (expense) |
| ( |
| |
| |
| | |||
Net income (loss) | $ | | $ | ( | $ | ( | $ | ( | |||
Income (loss) per share | |||||||||||
Basic | $ | | $ | ( | $ | ( | $ | ( | |||
Diluted | $ | | $ | ( | $ | ( | $ | ( | |||
Weighted average number of shares used in per share calculation – basic |
| |
| |
| |
| | |||
Weighted average number of shares used in per share calculation – diluted |
| |
| |
| |
| |
See accompanying notes to condensed consolidated financial statements.
3
ASSURE HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Nine Months Ended September 30, | |||||
2021 |
| 2020 | ||||
Cash flows from operating activities | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||
(Income) loss from equity method investments |
| ( |
| | ||
Stock-based compensation |
| |
| | ||
Depreciation and amortization |
| |
| | ||
Amortization of debt issuance costs |
| |
| — | ||
Provision for stock option fair value |
| |
| ( | ||
Accretion expense | | | ||||
Tax impact of equity component of convertible debt issuance | — | ( | ||||
Change in operating assets and liabilities | ||||||
Accounts receivable, net |
| ( |
| | ||
Prepaid expenses | | — | ||||
Right of use assets | | — | ||||
Accounts payable and accrued liabilities |
| ( |
| ( | ||
Due from related parties |
| ( |
| ( | ||
Lease liability | ( | ( | ||||
Income taxes |
| ( |
| ( | ||
Other assets and liabilities |
| ( |
| ( | ||
Net cash used in operating activities |
| ( |
| ( | ||
Cash flows from investing activities | ||||||
Purchase of fixed assets |
| — |
| ( | ||
Net cash paid for acquisitions |
| ( |
| ( | ||
Distributions received from equity method investments |
| |
| | ||
Net cash provided by (used in) investing activities |
| |
| ( | ||
Cash flows from financing activities | ||||||
Proceeds from exercise of stock options |
| |
| — | ||
Proceeds from share issuance, net | | | ||||
Proceeds from promissory note |
| — |
| | ||
Repayment of promissory note |
| — |
| ( | ||
Proceeds from Paycheck Protection Program loan |
| |
| | ||
Proceeds from line of credit | — | | ||||
Repayment of line of credit |
| — |
| ( | ||
Proceeds from debenture | | — | ||||
Repayment of short term debt | ( | — | ||||
Proceeds from convertible debenture | — | | ||||
Net cash provided by financing activities |
| |
| | ||
Increase (decrease) in cash |
| ( |
| | ||
Cash at beginning of period |
| |
| | ||
Cash at end of period | $ | | $ | | ||
Supplemental cash flow information | ||||||
Interest paid | $ | | $ | | ||
Income taxes paid | $ | — | $ | | ||
Supplemental non-cash flow information | ||||||
Purchase of equipment with finance leases | $ | | $ | |
See accompanying notes to condensed consolidated financial statements.
4
ASSURE HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(in thousands, except share amounts)
(unaudited)
|
| Additional |
| Retained |
| Total | ||||||||
Common Stock | paid-in | earnings | shareholders' | |||||||||||
| Shares |
| Amount |
| Capital |
| (deficit) |
| equity | |||||
Balances, June 30, 2020 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Share issuance, net |
| |
| — |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Settlement of payables |
| |
| — |
| |
| — |
| | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balances, September 30, 2020 |
| | $ | | $ | | $ | ( | $ | ( | ||||
Balances, June 30, 2021 | | $ | | $ | | $ | ( | $ | | |||||
Exercise of stock options |
| |
| — |
| |
| — |
| | ||||
Share issuance, net | — | — | — | — | — | |||||||||
Stock-based compensation |
| — | — | | — |
| | |||||||
Convertible debt converted into shares |
| | — | | — |
| | |||||||
Other |
| | — | — | — |
| — | |||||||
Net income |
| — |
| — |
| — |
| |
| | ||||
Balances, September 30, 2021 |
| | $ | | $ | | $ | ( | $ | |
|
| Additional |
| Retained |
| Total | ||||||||
Common Stock | paid-in | earnings | shareholders' | |||||||||||
| Shares |
| Amount |
| Capital |
| (deficit) |
| equity | |||||
Balances, December 31, 2019 |
| | $ | | $ | | $ | | $ | | ||||
Share issuance, net |
| |
| — |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Expected tax loss of future stock compensation option exercises |
| — |
| — |
| ( |
| — |
| ( | ||||
Equity component of convertible debt issuance |
| — |
| — |
| |
| — |
| | ||||
Fair value of finders’ warrants |
| — |
| — |
| |
| — |
| | ||||
Settlement of payables |
| |
| — |
| |
| — |
| | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balances, September 30, 2020 | | $ | | $ | | $ | ( | $ | ( | |||||
Balances, December 31, 2020 |
| | $ | | $ | | $ | ( | $ | | ||||
Exercise of stock options |
| |
| — |
| |
| — |
| | ||||
Share issuance, net | | — | | — | | |||||||||
Share issuance, acquisition related |
| |
| |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Convertible debt converted into shares | | | | |||||||||||
Equity component of debenture issuance |
| — |
| — |
| |
| — |
| | ||||
Settlement of performance share liability | | — | | — | | |||||||||
Other |
| |
| — |
| — |
| — |
| — | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balances, September 30, 2021 |
| | $ | | $ | | $ | ( | $ | |
See accompanying notes to condensed consolidated financial statements.
5
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.NATURE OF OPERATIONS
Assure Holdings Corp. (the “Company” or “Assure”), through its
IONM identifies real-time changes in spinal cord, brain, and peripheral nerve functions during high-risk surgeries to prevent injuries or accidental damage to patients that could lead to strokes, heart attacks, paralysis or other serious medical issues. IONM is well established and is regarded as the standard of care in U.S healthcare.
Assure employs highly trained IONM technologists, who provide a direct point of contact in the operating room to relay critical information to the surgical team while Company physicians deliver remote neurology services in support of the surgical team. In addition, Assure offers surgeons and medical facilities a value-added platform that manages patient scheduling, billing and collections, physician relationship management and patient advocacy services. The high quality IONM support that Assure provides results in decreased hospital and surgeon liability, abbreviated patient stays, fewer readmissions, reduced hospital costs, enhanced overall patient satisfaction and the efficient achievement of better clinical outcomes.
The Company maintains operations in twelve U.S. states. Assure believes that continued geographic expansion initiatives, facility-wide outsourcing agreements with medical facilities, the acceleration of its remote neurology services platform, and selective acquisitions will combine to generate substantial growth opportunities going forward.
The Company was originally incorporated in Colorado on November 7, 2016. In conjunction with a reverse merger with Montreux Capital Corp., a British Columbia corporation, the Company was redomesticated from British Columbia to Nevada on May 16, 2017.
Neuromonitoring was formed on August 25, 2015 in Colorado and it currently has multiple wholly-owned subsidiaries. The Company’s services are sold in the United States, directly through the Company.
Networks was formed on November 7, 2016 in Colorado and holds varying ownerships interests in numerous Provider Network Entities (“PEs”), which are professional IONM entities. These entities are accounted for under the equity method of accounting.
Networks also manages other PEs that Networks does not have an ownership interest and charges those PEs a management fee which is accounted for as service revenue.
The Company operates in the United States in
COVID-19
Our business and results of operations have been, and continues to be, adversely affected by the global COVID-19 pandemic and related events and we expect its impact to continue. The impact to date has included periods of significant volatility in various markets and industries, including the healthcare industry. The volatility has had, and we anticipate it will continue to have, an adverse effect on our customers and on our business, financial condition and results of operations, and may result in an impairment of our long-lived assets, including goodwill, increased credit losses and impairments of investments in other companies. In particular, the healthcare industry, hospitals and providers of elective procedures have been and may continue to be impacted by the pandemic and/or other events beyond our control, and further volatility could have an additional negative impact on these industries, customers, and our business. In addition, the COVID-19 pandemic and, to a lesser extent, the impact on other industries, including automotive, electronics and real estate,
6
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
increased fuel costs, U.S. restrictions on trade, and transitory inflation have impacted and may continue to impact the financial conditions of our customers and the patients they serve.
In addition, actions by United States federal, state and foreign governments to address the COVID-19 pandemic, including travel bans, stay-at-home orders and school, business and entertainment venue closures, also had and may continue to have a significant adverse effect on the markets in which we conduct our businesses. COVID-19 poses the risk that our workforce, suppliers, and other partners may be prevented from conducting normal business activities for an extended period of time, including due to shutdowns or stay-at-home orders that may be requested or mandated by governmental authorities. We have implemented policies to allow our employees to work remotely as a result of the pandemic as we reviewed processes related to workplace safety, including social distancing and sanitation practices recommended by the Centers for Disease Control and Prevention (CDC). The COVID-19 pandemic could also cause delays in acquiring new customers and executing renewals and could also impact our business as consumer behavior changes in response to the pandemic.
Since the start of the second quarter of 2021, there has been increased availability and administration of vaccines against COVID-19, as well as an easing of restrictions on social, business, travel, and government activities and functions, including healthcare and elective surgeries, and we have experienced a gradual resumption of economic activities in our industries. On the other hand, infection rates continue to fluctuate in various regions and new strains of the virus, including the Delta variant, remain a risk, which may give rise to implementation of restrictions in the geographic areas that we serve. In addition, there are ongoing global impacts resulting from the pandemic, including disruption of the supply chains, product shortages, increased delivery costs, increased governmental regulation, strains on healthcare systems, and delays in shipments, product development, technology launches and facility access.
We have been closely monitoring the COVID-19 pandemic and its impact on our business, including legislation to mitigate the impact of COVID-19 such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act which was enacted in March 2020, and the American Rescue Plan Act of 2021 which was enacted in March 2021. Although a significant portion of our anticipated revenue for 2021 is derived from fixed-fee and minimum-guarantee arrangements, primarily from large, well-capitalized customers which we believe somewhat mitigates the risks to our business, our per-unit and variable-fee based revenue will continue to be susceptible to the volatility, supply chain disruptions, microchip shortages and potential market downturns induced by the COVID-19 pandemic.
The full extent of the future impact of the COVID-19 pandemic on the Company’s operational and financial performance is uncertain and will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic; the availability, distribution and effectiveness of vaccines; the spread of new variants of COVID-19; the continued and renewed imposition of protective public safety measures; the impact of COVID-19 on integration of acquisitions, expansion plans, implementation of telemedicine, restrictions on elective procedures, delays in payor remittance and increased regulations; and the impact of the pandemic on the global economy and demand for consumer products. Although we are unable to predict the full impact and duration of the COVID-19 pandemic on our business, we are actively managing our financial expenditures in response to continued uncertainty. Further discussion of the potential impacts on our business from the COVID-19 pandemic is provided under Part I, Item 1A – Risk Factors of the Form 10-K.
2.BASIS OF PRESENTATION
Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, and majority-owned entities. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. 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. All significant intercompany balances and transactions have been eliminated in consolidation.
7
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For entities in which management has determined the Company does not have a controlling financial interest but has varying degrees of influence regarding operating policies of that entity, the Company’s investment is accounted for using the equity method of accounting.
Accounting Policies
There have been no changes to the Company’s significant accounting policies or recent accounting pronouncements during the nine months ended September 30, 2021 as compared to the significant accounting policies disclosed in the 10-K for the year ended December 31, 2020 as filed on March 30, 2021.
Common Stock Reverse Split
3. 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 on the 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 corporate office facilities under
Finance leases
The Company leases medical equipment under various financing leases with stated interest rates ranging from
The condensed consolidated balance sheets include the following amounts for right of use (“ROU”) assets as of September 30, 2021 and December 31, 2020 (stated in thousands):
| September 30, | December 31, | ||||
2021 |
| 2020 | ||||
Operating |
| $ | — |
| $ | |
Finance |
| |
| | ||
Total |
| $ | |
| $ | |
8
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Finance lease assets are reported net of accumulated amortization of $
The following are the components of lease cost for operating and finance leases (stated in thousands):
Nine Months Ended September 30, | ||||||
2021 |
| 2020 | ||||
Lease cost: | ||||||
Operating leases | $ | | $ | | ||
Finance leases: | ||||||
Amortization of ROU assets | | | ||||
Interest on lease liabilities | | | ||||
Total finance lease cost | | | ||||
Total lease cost | $ | | $ | |
The following are the weighted average lease terms and discount rates for operating and finance leases:
As of | As of | ||||
| September 30, 2021 | December 31, 2020 | |||
Weighted average remaining lease term (years): | |||||
Operating leases |
| ||||
Finance leases |
| ||||
Weighted average discount rate: | |||||
Operating leases |
| — | | ||
Finance leases |
| | |
The Company acquired ROU assets in exchange for lease liabilities of $
Future minimum lease payments and related lease liabilities as of September 30, 2021 were as follows (stated in thousands):
|
|
| Total | ||||||
Operating | Finance | Lease | |||||||
Leases | Leases | Liabilities | |||||||
Remainder 2021 | $ | — | $ | | $ | | |||
2022 |
| — |
| |
| | |||
2023 |
| — |
| |
| | |||
2024 | — | | | ||||||
2025 | — | | | ||||||
Thereafter |
| — |
| |
| | |||
Total lease payments |
| — |
| |
| | |||
Less: imputed interest |
| — |
| ( |
| ( | |||
Present value of lease liabilities | — | | | ||||||
Less: current portion of lease liabilities |
| — |
| |
| | |||
Noncurrent lease liabilities | $ | — | $ | | $ | |
Note: Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes.
9
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
4. DEBT
Paycheck Protection Program
During March 2021, the Company received an unsecured loan under the United States Small Business Administration Paycheck Protection Program (“PPP”) in the amount of $
Debenture
On June 10, 2021, the Company entered into definitive agreements to secure a credit facility under the terms of a commitment letter dated March 8, 2021 (the “Commitment Letter”) with Centurion Financial Trust, an investment trust formed by Centurion Asset Management Inc. (“Centurion”). Under the terms of the Commitment Letter, Assure issued a debenture to Centurion, dated June 9, 2021 (the “Debenture”), with a maturity date of June 9, 2025 (the “Maturity Date”), in the principal amount of $
The principal amount of the Debenture drawn and outstanding from time to time shall bear interest both before and after maturity, default and judgment from the date hereof to the date of repayment in full at the rate of the greater of
With respect to the Senior Revolving Loan, Assure may prepay advances outstanding thereunder from time to time, with not less than
The Credit Facility is guaranteed by the subsidiaries under the terms of the guarantee and secured by a first ranking security interest in all of the present and future assets of Assure and the Subsidiaries under the terms of the security agreement.
10
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Assure paid Centurion on first Advance of the Loan a commitment fee of
A portion of the proceeds from the Debenture were utilized to repay the Central Bank line of credit and the Central Bank promissory note.
Warrant Fee
In addition, Assure issued Centurion an aggregate of
The Company’s debt obligations are summarized as follows:
September 30, | December 31, | |||||
| 2021 |
| 2020 | |||
Central Bank line of credit | $ | — | $ | | ||
Central Bank promissory note |
| — |
| | ||
PPP promissory note |
| |
| — | ||
Total |
| |
| | ||
Face value of convertible debenture |
| |
| | ||
Less: principal converted to common shares | ( | — | ||||
Less: deemed fair value ascribed to conversion feature and warrants |
| ( |
| ( | ||
Plus: accretion of implied interest |
| | | |||
Total convertible debt |
| |
| | ||
Face value of Centurion debenture | | — | ||||
Less: deemed fair value ascribed to warrants | ( | — | ||||
Plus: accretion of implied interest | | — | ||||
Less: net debt issuance costs | ( | — | ||||
Total Centurion debt |
| |
| — | ||
Total debt |
| |
| | ||
Less: current portion of debt |
| — |
| ( | ||
Long-term debt | $ | | $ | |
11
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
As of September 30, 2021, future minimum principal payments are summarized as follows (stated in thousands):
|
| PPP |
| Convertible |
| Bank | ||||
|
| Loan |
| Debt |
| Indebtedness | ||||
Remainder 2021 | $ | — | $ | — | $ | — | ||||
2022 |
| — |
| — |
| — | ||||
2023 |
| — |
| |
| — | ||||
2024 |
| — |
| |
| — | ||||
2025 |
| — |
| — |
| | ||||
2026 | | — | — | |||||||
Total | | | | |||||||
Less: fair value ascribed to conversion feature and warrants |
| — |
| ( |
| ( | ||||
Plus: accretion and implied interest |
| — |
| |
| | ||||
Less: net debt issuance costs | — | — | ( | |||||||
$ | | $ | | $ | |
5. SHARE CAPITAL
Common stock
Common stock:
Reverse Share Split
During September 2021, the total number of shares of common stock authorized by the Company was reduced from
Additionally, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse split were adjusted by dividing the number of shares of common stock into which the options, warrants and other convertible securities are exercisable or convertible by
(5) and multiplying the exercise or conversion price thereof by (5), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.All shares of common stock, options, warrants and other convertible securities and the corresponding price per share amounts have been presented to reflect the reverse split in all periods presented within this Form 10-Q.
Acquisition shares
In connection with the acquisition of the Sentry Neuromonitoring, LLC (the “Seller”) assets, we issued to Seller or the Principals, as elected by Seller, shares of common stock of the Company with a value of $
12
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Company’s common stock with a value of $
Share issuance
In June 2020, in connection with common stock purchase agreements, the Company issued
Convertible debt
During the nine months ended September 30, 2021, certain holders of the convertible debenture exercised their right to convert $
Stock options
On December 10, 2020, our shareholders approved amendments to the Company’s stock option plan, which amended the plan previously approved on November 20, 2019 (the “Amended Stock Option Plan”). As of September 30, 2021, an aggregate of
Options under the Plan are granted from time to time at the discretion of the Board of Directors, with vesting periods and other terms as determined by the Board of Directors.
A summary of the stock option activity is presented below:
Options Outstanding | ||||||||||
|
| Weighted |
| Weighted |
| |||||
Average | Average | |||||||||
Number of | Exercise | Remaining | Aggregate | |||||||
Shares Subject | Price Per | Contractual | Intrinsic Value | |||||||
to Options | Share | Life (in years) | (in thousands) | |||||||
Balance at December 31, 2020 |
| | $ | | ||||||
Options granted |
| | | |||||||
Options exercised |
| ( | | |||||||
Options canceled / expired |
| ( | | |||||||
Balance at September 30, 2021 |
| | |
|
| $ | | |||
Vested and exercisable at September 30, 2021 |
| | |
|
| $ | |
13
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following table summarizes information about stock options outstanding and exercisable under the Company’s Stock Option Plan at September 30, 2021:
Options Outstanding | Options Exercisable | |||||||||
| Weighted |
|
|
| ||||||
Average | Weighted | Weighted | ||||||||
Remaining | Average | Average | ||||||||
Number of | Contractual | Exercise Price | Number | Exercise Price | ||||||
Outstanding | Life (in years) | Per Share | Exercisable | Per Share | ||||||
| $ | |
| | $ | | ||||
| $ | |
| | $ | | ||||
| $ | |
| | $ | | ||||
| $ | |
| | $ | | ||||
| $ | |
| | $ | | ||||
| $ | |
| | $ | | ||||
$ | | | $ | | ||||||
| $ | |
| | $ | | ||||
$ | | | $ | | ||||||
$ | | | $ | | ||||||
| $ | |
| | $ | |
The Company uses the Black-Scholes option pricing model to determine the estimated fair value of options. The fair value of each option grant is determined on the date of grant and the expense is recorded on a straight-line basis and is included as a component of general and administrative expense in the consolidated statements of operations. The assumptions used in the model include expected life, volatility, risk-free interest rate, dividend yield and forfeiture rate. The Company’s determination of these assumptions are outlined below.
Expected life — The expected life assumption is based on an analysis of the Company’s historical employee exercise patterns.
Volatility — Volatility is calculated using the historical volatility of the Company’s common stock for a term consistent with the expected life.
Risk-free interest rate — The risk-free interest rate assumption is based on the U.S. Treasury rate for issues with remaining terms similar to the expected life of the options.
Dividend yield — Expected dividend yield is calculated based on cash dividends declared by the Board for the previous four quarters and dividing that result by the average closing price of the Company’s common stock for the quarter. The Company has not declared a dividend to date.
Forfeiture rate — The Company does not estimate a forfeiture rate at the time of the grant due to the limited number of historical forfeitures. As a result, the forfeitures are recorded at the time the grant is forfeited.
14
ASSURE HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)