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 September 30, 2022
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 500 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 November 10, 2022 was 18,512,605

Table of Contents

ASSURE HOLDINGS CORP.

FORM 10Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS


	PAGE
Part I – Financial Information	2
Item 1. Financial Statements (unaudited)	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’ Equity	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
Item 4. Controls and Procedures	28

Part II – Other Information	28
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	30
Item 6. Exhibits	30

Signatures	31

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,
	2022		2021
ASSETS
Current assets
Cash	$	3,798	$	4,020
Accounts receivable, net		20,860		27,810
Income tax receivable		157		136
Other current assets		217		151
Due from MSAs		6,602		5,886
Total current assets		31,634		38,003
Equity method investments		474		525
Fixed assets		35		85
Operating lease right of use asset, net		725		956
Finance lease right of use asset, net		469		743
Deferred tax asset, net		2,536		—
Intangibles, net		3,311		3,649
Goodwill		4,448		4,448
Total assets	$	43,632	$	48,409
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	$	2,585	$	2,194
Current portion of debt		—		515
Current portion of lease liability		622		702
Current portion of acquisition liability		306		306
Other current liabilities		133		—
Total current liabilities		3,646		3,717
Lease liability, net of current portion		1,102		1,482
Debt, net of current portion		12,628		13,169
Acquisition liability		255		459
Fair value of stock option liability		—		25
Deferred tax liability, net		—		601
Total liabilities		17,631		19,453
Commitments and contingencies (Note 8)
SHAREHOLDERS’ EQUITY
Common stock: $0.001 par value; 180,000,000 shares authorized; 18,512,605 and 12,918,866 shares issued and outstanding, as of September 30, 2022, and December 31, 2021, respectively		19		13
Additional paid-in capital		49,044		43,387
Accumulated deficit		(23,062)		(14,444)
Total shareholders’ equity		26,001		28,956
Total liabilities and shareholders’ equity	$	43,632	$	48,409

See accompanying notes to condensed consolidated financial statements.

Table of Contents

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,
	2022		2021		2022		2021
Revenue
Technical services	$	1,190	$	4,421	$	2,653	$	11,649
Professional services		4,278		2,738		7,605		3,704
Other		736		1,387		2,292		4,180
Total revenue		6,204		8,546		12,550		19,533
Cost of revenues, excluding depreciation and amortization		3,685		4,254		11,564		9,956
Gross margin		2,519		4,292		986		9,577
Operating expenses
General and administrative		3,340		3,180		11,177		10,275
Sales and marketing		198		247		688		748
Depreciation and amortization		243		293		761		965
Total operating expenses		3,781		3,720		12,626		11,988
(Loss) income from operations		(1,262)		572		(11,640)		(2,411)
Other income (expenses)
Income from equity method investments		9		139		18		136
Gain on Paycheck Protection Program loan forgiveness		—		—		1,665		—
Other income (expense), net		(37)		(27)		29		(29)
Accretion expense		(170)		(171)		(511)		(386)
Interest expense, net		(471)		(264)		(1,317)		(500)
Total other expense		(669)		(323)		(116)		(779)
(Loss) income before income taxes		(1,931)		249		(11,756)		(3,190)
Income tax benefit (expense)		498		(158)		3,138		743
Net (loss) income	$	(1,433)	$	91	$	(8,618)	$	(2,447)
(Loss) income per share
Basic	$	(0.09)	$	0.01	$	(0.63)	$	(0.21)
Diluted	$	(0.09)	$	0.01	$	(0.63)	$	(0.21)
Weighted average number of shares used in per share calculation – basic		15,220,948		11,838,032		13,686,686		11,528,371
Weighted average number of shares used in per share calculation – diluted		15,220,948		15,724,103		13,686,686		11,528,371

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(8,618)	$	(2,447)
Adjustments to reconcile net loss to net cash used in operating activities
Income from equity method investments		(18)		(136)
Stock-based compensation		464		818
Depreciation and amortization		408		599
Amortization of debt issuance costs		120		53
Provision for stock option fair value		(25)		24
Gain on Paycheck Protection Program loan		(1,665)		—
Accretion expense		511		386
Change in operating assets and liabilities
Accounts receivable, net		6,950		(5,723)
Prepaid expenses		(66)		177
Right of use assets		585		291
Accounts payable and accrued liabilities		391		(1,045)
Due from MSAs		(716)		(1,121)
Lease liability		(540)		(399)
Income taxes		(3,158)		(743)
Other assets and liabilities		117		(86)
Net cash used in operating activities		(5,260)		(9,352)
Cash flows from investing activities
Purchase of fixed assets		(26)		—
Net cash paid for acquisitions		(204)		(204)
Distributions received from equity method investments		69		312
Net cash provided by (used in) investing activities		(161)		108
Cash flows from financing activities
Proceeds from exercise of stock options		4		19
Proceeds from share issuance, net		5,195		832
Proceeds from Paycheck Protection Program loan		—		1,665
Proceeds from debenture		—		7,360
Repayment of short-term debt		—		(4,100)
Net cash provided by financing activities		5,199		5,776
Decrease in cash		(222)		(3,468)
Cash at beginning of period		4,020		4,386
Cash at end of period	$	3,798	$	918
Supplemental cash flow information
Interest paid	$	1,093	$	301
Income taxes paid	$	—	$	—
Supplemental non-cash flow information
Purchase of equipment with finance leases	$	79	$	431

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)


				Additional				Total
	Common Stock			paid-in		Accumulated		shareholders'
	Shares	Amount		Capital		deficit		equity
Balances, June 30, 2021	11,833,431	$	12	$	38,136	$	(14,226)	$	23,922
Exercise of stock options	3,000		—		19		—		19
Stock-based compensation	—		—		210		—		210
Convertible debt converted into common shares	2,858		—		20		—		20
Other	15		—		—		—		—
Net income	—		—		—		91		91
Balances, September 30, 2021	11,839,304	$	12	$	38,385	$	(14,135)	$	24,262

Balances, June 30, 2022	12,919,666	$	13	$	43,963	$	(21,629)	$	22,347
Share issuance, net	5,576,087		6		5,189		—		5,195
Stock-based compensation	16,852		—		(108)		—		(108)
Net loss	—		—		—		(1,433)		(1,433)
Balances, September 30, 2022	18,512,605	$	19	$	49,044	$	(23,062)	$	26,001


				Additional				Total
	Common Stock			paid-in		Accumulated		shareholders'
	Shares	Amount		Capital		deficit		equity
Balances, December 31, 2020	11,275,788	$	11	$	30,886	$	(11,688)	$	19,209
Exercise of stock options	3,000		—		19		—		19
Share issuance, net	503,148		1		3,105		—		3,106
Stock-based compensation	—		—		818		—		818
Convertible debt converted into common shares	13,384		—		60		—		60
Equity component of debenture issuance	—		—		1,204		—		1,204
Settlement of performance share liability	43,968		—		2,293		—		2,293
Other	15		—				—		—
Net loss	—		—		—		(2,447)		(2,447)
Balances, September 30, 2021	11,839,304	$	12	$	38,385	$	(14,135)	$	24,262

Balances, December 31, 2021	12,918,866	$	13	$	43,387	$	(14,444)	$	28,956
Exercise of stock options	800		—		4		—		4
Share issuance, net	5,576,087		6		5,189		—		5,195
Stock-based compensation	16,852		—		464		—		464
Net loss	—		—		—		(8,618)		(8,618)
Balances, September 30, 2022	18,512,605	$	19	$	49,044	$	(23,062)	$	26,001

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.NATURE OF OPERATIONS

Assure Holdings Corp. (the “Company” or “Assure”), through its two wholly owned subsidiaries, Assure Neuromonitoring, LLC (“Assure Neuromonitoring”) and Assure Networks, LLC (“Assure Networks”), provides technical and professional intraoperative neuromonitoring (“IONM”) surgical support services for neurosurgery, spine, cardiovascular, orthopedic, ear, nose, and throat, and other surgical procedures that place the nervous system at risk. These services have been recognized as the standard of care by hospitals and surgeons for risk mitigation. Assure Holdings, Inc., a wholly owned subsidiary, employs most of the corporate employees and performs various corporate services on behalf of the consolidated Company. Assure Neuromonitoring employs interoperative neurophysiologists (“INP”) who utilize technical equipment and their technical training to monitor evoked potentials (”EPS”), electroencephalographic (“EEG”) and electromyography (“EMG”) signals during surgical procedures and to pre-emptively notify the underlying surgeon of any nervous related issues that are identified. The INPs perform their services in the operating room during the surgeries. The INPs are certified by a third-party accreditation agency.

Assure Networks performs similar support services as Assure Neuromonitoring except that these services are provided by employed or third party contracted neurologists or certified readers. The support service provided by the neurologist occurs at an offsite location at the same time and for the same surgery as the support services provided by the interoperative neurophysiologist.

The Company was originally incorporated in Colorado on November 7, 2016. In conjunction with a reverse merger, the Company was redomiciled in Nevada on May 16, 2017.

Neuromonitoring was formed on August 25, 2015, in Colorado and 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. Additionally, Networks manages other PEs that Networks does not have an ownership interest and charges those PEs a management fee.

COVID-19

The Company’s commitment to the health, well-being and peace of mind of our employees and the people we serve remains our focus as the pandemic environment evolves. We continue to leverage our resources, expertise, data, and actionable intelligence to assist customers, clients and care providers throughout this time.

The situation surrounding COVID-19 remains fluid with continued uncertainty and a wide range of potential outcomes. We continue to actively manage our response and assess impacts to our financial position and operating results, as well as mitigate adverse developments in our business. 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 filed on March 14, 2022.

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.

Table of Contents

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, 2022, as compared to the significant accounting policies disclosed in the 10-K for the year ended December 31, 2021 as filed on March 14, 2022.

Common Stock Reverse Split

During September 2021, the Company effectuated a five-for-one reverse stock split. All share, stock option and warrant information has been retroactively adjusted to reflect the stock split. See Note 6 for additional discussion.

Reclassifications

Certain amounts for the three and nine months ended September 30, 2021 have been reclassified to conform to the 2022 presentation.

3. REVENUE

The Company disaggregates revenue from contracts with customers by revenue stream as this 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. Facility billing consists of neuromonitoring cases whereby the company has an agreement with the facility for services. In these cases, the hospital’s patient may be uninsured or have government insurance.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

Commercial insurance	$	4,283	$	6,164	$	6,801	$	12,507
Facility billing		1,185		995		3,457		2,846
Managed service agreements		400		965		1,247		3,024
Other		336		422		1,045		1,156
Total	$	6,204	$	8,546	$	12,550	$	19,533

Accounts Receivable

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


	September 30,			December 31,
	2022		2021

Technical service	$	9,539	$	18,904
Professional service		10,971		8,209
Other		350		697
Total accounts receivable, net	$	20,860	$	27,810

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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


	As of September 30,		As of December 31,
	2022		2021

Commercial insurance	91	%	91	%
Facility billing	6	%	2	%
Other	3	%	7	%
Total	100	%	100	%

4. 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 an operating lease which expires October 31, 2025. The incremental borrowing rate for this lease was 10%.

Finance leases

The Company leases 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.

The condensed consolidated balance sheets include the following amounts for right of use (“ROU”) assets as of September 30, 2022 and December 31, 2021 (in thousands):


	September 30,			December 31,
	2022		2021
Operating	$	725	$	956
Finance		469		743
Total	$	1,194	$	1,699

Finance lease assets are reported net of accumulated amortization of $2.3 million and $2.0 million as of September 30, 2022 and December 31, 2021, respectively.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The following are the components of lease cost for operating and finance leases (in thousands):


	Nine Months Ended September 30,
	2022		2021
Lease cost:
Operating leases:
Amortization of ROU assets	$	231	$	227
Interest on lease liabilities		68		—
Total operating lease cost		299		227
Finance leases:
Amortization of ROU assets		353		372
Interest on lease liabilities		64		69
Total finance lease cost		417		441
Total lease cost	$	716	$	668

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


	As of	As of
	September 30, 2022	September 30, 2021
Weighted average remaining lease term (years):
Operating leases	3.0	—
Finance leases	2.6	3.1
Weighted average discount rate (%):
Operating leases	10.0	—
Finance leases	7.8	8.1

The Company acquired ROU assets in exchange for lease liabilities of $79 thousand upon commencement of finance leases during the nine months ended September 30, 2022.

Future minimum lease payments and related lease liabilities as of September 30, 2022 were as follows (in thousands):


					Total
	Operating		Finance		Lease
	Leases		Leases		Liabilities
Remainder of 2022	$	84	$	165	$	249
2023		303		360		663
2024		328		268		596
2025		279		152		431
2026		—		23		23
Total lease payments		994		968		1,962
Less: imputed interest		(145)		(93)		(238)
Present value of lease liabilities		849		875		1,724
Less: current portion of lease liabilities		231		391		622
Noncurrent lease liabilities	$	618	$	484	$	1,102

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.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

5. DEBT

The Company’s debt obligations are summarized as follows:


	September 30,		December 31,
	2022		2021
Paycheck Protection Program loan	$	—	$	1,687

Face value of convertible debenture		3,450		3,450
Less: principal converted to common shares		(60)		(60)
Less: deemed fair value ascribed to conversion feature and warrants		(1,523)		(1,523)
Plus: accretion of implied interest		990		705
Total convertible debt		2,857		2,572

Face value of Centurion debenture		11,000		11,000
Less: deemed fair value ascribed to warrants		(1,204)		(1,204)
Plus: accretion of implied interest		402		176
Less: net debt issuance costs		(427)		(547)
Total Centurion debt		9,771		9,425
Total debt		12,628		13,684
Less: current portion of debt		—		(515)
Long-term debt	$	12,628	$	13,169

During the nine months ended September 30, 2022, the Company recognized a gain of $1.7 million related to the January 2022 forgiveness of the balance of the Paycheck Protection Program loan.

The following table depicts accretion expense and interest expense (excluding debt issuance cost amortization) related to the Company’s debt obligations for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Accretion expense
Convertible debenture	$	95	$	95	$	285	$	285
Centurion debenture		75		76		226		101
	$	170	$	171	$	511	$	386

Interest paid
Convertible debenture	$	—	$	—	$	221	$	220
Centurion debenture		324		190		872		236
	$	324	$	190	$	1,093	$	456

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As of September 30, 2022, future minimum principal payments are summarized as follows (in thousands):


	Convertible
		Debt	Debenture
Remainder of 2022	$	—	$	—
2023		965		—
2024		2,425		—
2025		—		11,000
Total		3,390		11,000
Less: fair value ascribed to conversion feature and warrants		(1,523)		(1,204)
Plus: accretion and implied interest		990		402
Less: net debt issuance costs		—		(427)
	$	2,857	$	9,771

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 $1.7 million. Assure executed a PPP promissory note, with an original maturity date of February 25, 2026 (the “PPP Loan”). The PPP Loan carried an interest rate of 1.0% per annum, with principal and interest payments due on the first day of each month, with payments commencing on the earlier of: (i) the day the amount of loan forgiveness granted to Assure was remitted by the Small Business Administration to the Bank of Oklahoma; or (ii) 10 months after the end of the 24-week period following the grant of the Loan. Under the terms of the PPP Loan, all or a portion of the PPP Loan may be forgiven if the Company maintains its employment and compensation within certain parameters during the 24-week period following the loan origination date and the proceeds of the PPP Loan were spent on payroll costs, rent or lease agreements dated before February 15, 2020, and utility payments arising under service agreements dated before February 15, 2020. The Company submitted its application for forgiveness of the PPP Loan during the fourth quarter of 2021 and in January 2022, the Company received forgiveness of the $1.7 million PPP Loan resulting in no balance due.

Convertible Debt

From November 2019 through May 2020, the Company closed multiple non-brokered private placements of convertible debenture units (“CD Unit”) for gross proceeds of $3.5 million. Each CD Unit was offered at a price of $1. Each CD Unit included, among other things, one common share purchase warrant that allows the holder to purchase shares of the Company’s common stock at prices ranging from $5.00 to $9.50 per share for a period of three years and the right to convert the CD Unit into shares of the Company’s common stock at a conversion prices ranging from $3.35 to $7.00 per share for a period of four years. The CD Units carry a 9% coupon rate.

The fair value of the convertible debt was determined to be $1.7 million, the conversion feature $1.2 million and the warrants $600 thousand. The difference between the fair value of the debt of $1.7 million and the face value of convertible debt of $3.5 million will be accreted over the four-year life of the CD Units.

Centurion Debt

In June 2021, Assure issued a debenture to Centurion (the “Debenture”) with a maturity date of June 9, 2025 (the “Maturity Date”), in the principal amount of $11 million related to a credit facility comprised of a $6 million senior term loan (the “Senior Term Loan”), a $2 million senior revolving loan (the “Senior Revolving Loan”) and a $3 million senior term acquisition line (the “Senior Term Acquisition Line” and together with the Senior Term Loan and the Senior Revolving Loan, the “Credit Facility”). Additionally, the Company issued 275,000 warrants with an exercise price of $7.55 which expire on June 14, 2025. During November 2021, the Company and Centurion entered into an amendment to allow the Senior Short Term Acquisition Line to be utilized for organic growth and general working capital purposes. Under the terms and conditions of the debt arrangement, Centurion temporarily modified their debt covenant

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

calculations to allow bad debt expense to be excluded for the first and second quarter of 2022. The Company’s was in compliance with the debt covenants as of September 30, 2022.

The Credit Facility matures in June 2025 and bears interest at the rate of the greater of 9.50% or the Royal Bank of Canada Prime Rate plus 7.05% per annum.

The fair value of the Debenture was determined to be $6.8 million and the warrants $1.2 million. The difference between the fair value of the debt of $6.8 million and the face value of the Debenture of $8.0 million will be accreted over the four-year term of the Debenture.

6. SHARE CAPITAL

Common stock

Common stock: 180,000,000 authorized; $0.001 par value. As of September 30, 2022, and December 31, 2021, there were 18,512,605 and 12,918,866 shares of common stock issued and outstanding, respectively.

Reverse Share Split

During September 2021, the total number of shares of common stock authorized by the Company was reduced from 900,000,000 shares of common stock, par $0.001, to 180,000,000 shares of common stock, par $0.001, and the number of shares of common stock held by each stockholder of the Company were consolidated automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the reverse split divided by five (5): effecting a five (5) old for one (1) new reverse stock split.

No fractional shares were issued in connection with the reverse split and all fractional shares were rounded up to the next whole share.

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 five (5) and multiplying the exercise or conversion price thereof by five (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.

2022 Equity Financing

In August 2022, the Company completed an underwritten public offering with gross proceeds to the Company of approximately $6.2 million, before deducting underwriting discounts and other estimated expenses payable by the Company. Under the offering 5,576,087 common shares were issued at a price to the public of $1.12 per share. The Company is utilizing the net proceeds from this offering for general corporate purposes, including, but not limited to, repayment of indebtedness and increasing working capital expenditures.

In addition, the Company granted the underwriter a 45-day option to purchase additional shares of common stock, representing up to 15% of the number of the shares offered in the base deal, solely to cover over-allotments, if any, which would increase the total gross proceeds of the offering to approximately $7.2 million, if the over-allotment option is exercised in full. The overallotment expired unexercised in October 2022.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Stock options

In November 2021, the Company adopted and approved the 2021 Stock Incentive Plan and the 2021 Employee Stock Purchase Plan. The intent of the Company and the Board is that while the Amended 2020 Stock Option Plan and the 2020 Equity Incentive Plan will continue in existence in relation to the options and awards previously granted, the Board will not grant future options or awards thereunder. Instead, only the 2021 Stock Incentive Plan will be used for the grant of options and awards to eligible participants.

As of September 30, 2022, an aggregate of 1,870,000 shares of common stock were available for issuance under the 2021 Stock Option Plan. As of September 30, 2022, no transactions have occurred under the 2021 Employee Stock Purchase Plan.

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, 2021	1,204,233	$	5.56	3.6
Options granted	130,000	$	5.16
Options exercised	(800)	$	5.04
Options canceled / expired	(103,633)	$	5.45
Balance at September 30, 2022	1,229,800	$	4.98	3.0	$	78
Vested and exercisable at September 30, 2022	882,542	$	5.14	2.3	$	78

The following table summarizes information about stock options outstanding and exercisable under the Company’s Stock Option Plan at September 30, 2022: