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What changed in VIEMED HEALTHCARE, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of VIEMED HEALTHCARE, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+223 added−258 removedSource: 10-K (2024-03-06) vs 10-K (2023-03-02)

Top changes in VIEMED HEALTHCARE, INC.'s 2023 10-K

223 paragraphs added · 258 removed · 154 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

34 edited+3 added−6 removed106 unchanged
Biggest changeShould a company fall out of compliance with the requirements of the accrediting body, expulsion from the Medicare program could follow. In December 2008, we became a Durable, Medical Equipment, Prosthetics, Orthotics, and Supplies accredited Medicare supplier by the Accreditation Commission for Health Care for our solutions.
Biggest changeIn December 2008, we became a Durable, Medical Equipment, Prosthetics, Orthotics, and Supplies accredited Medicare supplier by the Accreditation Commission for Health Care for our solutions. Our Medicare accreditation must be renewed every three years through passage of an on-site inspection. We last renewed our accreditation with Medicare in August 2021.
The Federal False Claims Act provides, in part, that the federal government or a private party on behalf of the government may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation to pay money to the federal government or who has knowingly retained an overpayment.
The Federal False Claims Act (“FCA”) provides, in part, that the federal government or a private party on behalf of the government may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement or used a false record to get a claim paid or to avoid, decrease or conceal an obligation to pay money to the federal government or who has knowingly retained an overpayment.
While Viemed is one of the top three providers of NIV and related services in the United States, its current competitors may gain market share, and any new entrants, with greater financial and technical resources, may provide additional competition. Accordingly, there can be no assurance that Viemed will be able to grow its operations organically to meet the competitive environment.
While Viemed is one of the top providers of NIV and related services in the United States, its current competitors may gain market share, and any new entrants, with greater financial and technical resources, may provide additional competition. Accordingly, there can be no assurance that Viemed will be able to grow its operations organically to meet the competitive environment.
CMS could issues new NCDs or the regional DME MACs could issue LCDs related to a full range of respiratory DME products. If such NCDs or LCDs are issued or revised, they could significantly alter the coverage under Medicare and materially impact our business.
CMS could issue new NCDs or the regional DME MACs could issue LCDs related to a full range of respiratory DME products. If such NCDs or LCDs are issued or revised, they could significantly alter the coverage under Medicare and materially impact our business.
Dollars, except per share amounts) December 31, 2022 and 2021 The Ethics in Patient Referrals Act, commonly known as the “Stark Law,” prohibits a physician from making referrals for certain “designated health services” payable by Medicare to an entity, including a company that furnishes DME, in which the physician or an immediate family member of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
Dollars, except per share amounts) December 31, 2023 and 2022 The Ethics in Patient Referrals Act, commonly known as the “Stark Law,” prohibits a physician from making referrals for certain “designated health services” payable by Medicare to an entity, including a company that furnishes DME, in which the physician or an immediate family member of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
Dollars, except per share amounts) December 31, 2022 and 2021 Competitive Bidding Process The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the Secretary of Health and Human Services ("HHS") to establish and implement programs under which competitive acquisition areas are established throughout the United States for purposes of awarding contracts for the furnishing of competitively priced items of durable medical equipment.
Dollars, except per share amounts) December 31, 2023 and 2022 Competitive Bidding Process The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the Secretary of Health and Human Services ("HHS") to establish and implement programs under which competitive acquisition areas are established throughout the United States for purposes of awarding contracts for the furnishing of competitively priced items of durable medical equipment.
The current Round 2021 contracts expire on December 31, 2023 and CMS has not announced a new round of competitive bidding. Historically, CMS announces new rounds of competitive bidding and starts the process approximately 18 months prior to the contract start date.
The current Round 2021 contracts expired on December 31, 2023 and CMS has not announced a new round of competitive bidding. Historically, CMS announces new rounds of competitive bidding and starts the process approximately 18 months prior to the contract start date.
Although we believe that we are in compliance with the Federal False Claims Act as well as the Civil Monetary Penalties Law, if we are found in violation of the same, we could be subject to various liabilities and penalties, including fines ranging from $13,508 to $27,018 for each false claim in violation of the Federal False Claims Act (as of 2023, and subject to annual adjustments for inflation) and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount of damages that the federal government sustained because of the act of that person.
Although we believe that we are in compliance with the Federal False Claims Act as well as the Civil Monetary Penalties Law, if we are found in violation of the same, we could be subject to various liabilities and penalties, including fines ranging from $13,946 to $27,894 for each false claim in violation of the Federal False Claims Act (as of 2023, and subject to annual adjustments for inflation) and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount of damages that the federal government sustained because of the act of that person.
Significant Customers For the years ended December 31, 2022 and 2021, Viemed had no customers that accounted for 10% or more of its consolidated traditional revenue streams. Viemed earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments.
Significant Customers For the years ended December 31, 2023 and 2022, Viemed had no customers that accounted for 10% or more of its consolidated revenue streams. Viemed earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments.
State fraud and abuse provisions . Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts that apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. In some states, these laws apply and we believe that we are in compliance with such laws.
Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts that apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. In some states, these laws apply and we believe that we are in compliance with such laws.
While the NCD for the DME Reference List has been updated, no separate NCD has been issued for ventilators. Monthly rental revenue from ventilators represented approximately 68% and 77%, respectively, of traditional revenue, excluding COVID-19 response sales and services, for 2022 and 2021.
While the NCD for the DME Reference List has been updated, no separate NCD has been issued for ventilators. Monthly rental revenue from ventilators represented approximately 59% and 68%, respectively, of traditional revenue, excluding COVID-19 response sales and services, for 2023 and 2022.
As with other medical devices, reimbursement for our products can differ significantly from payor to payor, and our products are not universally covered by third-party commercial payors. Further, third-party payors continually review existing technologies for continued coverage and can, with limited notice, deny or reverse coverage for existing products.
Third-party payors include private insurance plans and governmental programs. As with other medical devices, reimbursement for our products can differ significantly from payor to payor, and our products are not universally covered by third-party commercial payors. Further, third-party payors continually review existing technologies for continued coverage and can, with limited notice, deny or reverse coverage for existing products.
Revenues from Medicare and Medicaid accounted for 56% and 64%, respectively, of traditional revenue, excluding COVID-19 response sales and services, for the years ended December 31, 2022 and 2021.
Revenues from Medicare and Medicaid accounted for 46% and 56%, respectively, of traditional revenue, excluding COVID-19 response sales and services, for the years ended December 31, 2023 and 2022.
Monthly rental revenue from ventilators represented approximately 68% and 77%, respectively, of Viemed's 2022 and 2021 traditional revenue, excluding COVID-19 response sales and services.
Monthly rental revenue from ventilators represented approximately 59% and 68%, respectively, of Viemed's 2023 and 2022 traditional revenue, excluding COVID-19 response sales and services.
Products and Services Viemed’s services include the following: • Home Medical Equipment : Viemed provides respiratory and other home medical equipment solutions (primarily through monthly rental arrangements), including home ventilation (invasive and non-invasive), BiPAP (bi-level positive airway pressure) and CPAP (continuous positive airway pressure) devices, percussion vests, oxygen concentrators, and other medical equipment.
Dollars, except per share amounts) December 31, 2023 and 2022 Products and Services Viemed’s services include the following: • Home Medical Equipment : Viemed provides respiratory and other home medical equipment solutions (primarily through monthly rental arrangements), including home ventilation (invasive and non-invasive), BiPAP (bi-level positive airway pressure) and CPAP (continuous positive airway pressure) devices, percussion vests, oxygen concentrators, and other medical equipment.
Dollars, except per share amounts) December 31, 2022 and 2021 CMS, which is the agency within the HHS that administers both Medicare and Medicaid, has the authority to decline to cover particular products or services if it determines that they are not “reasonable and necessary” for the treatment of Medicare beneficiaries.
CMS, which is the agency within the HHS that administers both Medicare and Medicaid, has the authority to decline to cover particular products or services if it determines that they are not “reasonable and necessary” for the treatment of Medicare beneficiaries.
Dollars, except per share amounts) December 31, 2022 and 2021 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
If we are unable to expand coverage of our products by additional commercial payors, or if third-party payors that currently cover or reimburse for our products reverse or limit their coverage in the future, our business and results of operations could be adversely affected.
If we are unable to expand coverage of our products by additional commercial payors, or if third-party payors that currently cover or reimburse for our products reverse or limit their coverage in the future, our business and results of operations could be adversely affected. Page 12 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
If we are found to be out of compliance with accreditation standards, our enrollment status in the Medicare program could be jeopardized, up to and including termination.
Maintaining our accreditation and Medicare enrollment requires that we comply with numerous business and customer support standards. If we are found to be out of compliance with accreditation standards, our enrollment status in the Medicare program could be jeopardized, up to and including termination.
These reports and other information are also available, free of charge, at www.sec.gov. Information contained on any website referred to in this Annual Report on Form 10-K is not part of this Annual Report on Form 10-K.
These reports and other information are also available, free of charge, at www.sec.gov. Information contained on any website referred to in this Annual Report on Form 10-K is not part of this Annual Report on Form 10-K. Page 5 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Viemed’s registered and records office is located at Suite 2800, Park Place, 666 Burrard Street, Vancouver, British Columbia V6C 2Z7 Canada and its principal executive office is located at 625 E. Kaliste Saloom Road, Lafayette, Louisiana 70508.
The common shares of Viemed trade on the Nasdaq Capital Market under the trading symbol "VMD". Viemed’s registered and records office is located at Suite 2800, Park Place, 666 Burrard Street, Vancouver, British Columbia V6C 2Z7 Canada and its principal executive office is located at 625 E. Kaliste Saloom Road, Lafayette, Louisiana 70508.
Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).
Dollars, except per share amounts) December 31, 2023 and 2022 Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).
Dollars, except per share amounts) December 31, 2022 and 2021 ◦ Respiratory disease management , including treatment of Chronic Obstructive Pulmonary Disease (“COPD”), aims to improve quality of life and reduce hospital readmissions by using proven methodology and leading technologies, such as non-invasive ventilation (“NIV”), percussion vests, and other therapies.
Viemed provides home medical equipment through the following service programs: ◦ Respiratory disease management , including treatment of Chronic Obstructive Pulmonary Disease (“COPD”), aims to improve quality of life and reduce hospital readmissions by using proven methodology and leading technologies, such as non-invasive ventilation (“NIV”), percussion vests, and other therapies.
The Medicare and Medicaid statutory framework is subject to administrative rulings, interpretations and discretion that affect the amount and timing of reimbursement made under Medicare and Medicaid. Page 11 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
The Medicare and Medicaid statutory framework is subject to administrative rulings, interpretations and discretion that affect the amount and timing of reimbursement made under Medicare and Medicaid.
The HITECH Final Rule will continue to be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us, as well as referring providers.
The costs of complying with privacy and security related legal and regulatory requirements are burdensome and could have a material adverse effect on our results of operations. The HITECH Final Rule will continue to be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us, as well as referring providers.
In 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (“ARRA”) which included sweeping changes to HIPAA, including an expansion of HIPAA’s privacy and security standards.
Page 10 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 In 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (“ARRA”) which included sweeping changes to HIPAA, including an expansion of HIPAA’s privacy and security standards.
Nevertheless, a determination of liability under such laws could result in fines and penalties, as well as restrictions on our ability to operate in these jurisdictions. Page 9 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 The U.S. Foreign Corrupt Practices Act and Other Anti-Corruption Laws .
Nevertheless, a determination of liability under such laws could result in fines and penalties, as well as restrictions on our ability to operate in these jurisdictions. The U.S. Foreign Corrupt Practices Act and Other Anti-Corruption Laws . We may be subject to a variety of domestic and foreign anti-corruption laws with respect to our regulatory compliance efforts and operations.
Revenue derived from the rental and sale of home medical equipment represented a combined 93.8% and 98.1%, respectively, of Viemed’s 2022 and 2021 traditional revenue, excluding COVID-19 response sales and services. Viemed provides home medical equipment through the following service programs: Page 5 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Revenue derived from the rental and sale of home medical equipment represented a combined 94.2% and 93.8%, respectively, of Viemed’s 2023 and 2022 traditional revenue, excluding COVID-19 response sales and services.
In addition, amendments in 1986 to the Federal False Claims Act have made it easier for private parties to bring whistleblower lawsuits against companies.
In addition, amendments in 1986 to the Federal False Claims Act have made it easier for private parties to bring whistleblower lawsuits against companies. Further, on June 1, 2023, the United States Supreme Court issued a decision further clarifying the meaning of “knowingly” presenting a false claim for purposes of the FCA.
Third-Party Reimbursement In the United States and elsewhere, sales of medical devices depend in significant part on the availability of coverage and reimbursement to providers and patients from third-party payors. Third-party payors include private insurance plans and governmental programs.
Page 11 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Third-Party Reimbursement In the United States and elsewhere, sales of medical devices depend in significant part on the availability of coverage and reimbursement to providers and patients from third-party payors.
While Viemed currently has no immediate plans to draw on these facilities, the credit facilities allow flexibility in funding future operations. Government Regulation We are subject to extensive government regulation, including numerous laws directed at regulating reimbursement of our products and services under various government and commercial programs and preventing fraud and abuse, as more fully described below.
Page 6 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Government Regulation We are subject to extensive government regulation, including numerous laws directed at regulating reimbursement of our products and services under various government and commercial programs and preventing fraud and abuse, as more fully described below.
To attain and maintain accreditation, companies are required to institute policies and procedures that, among other things, formalize the interaction of the company with patients. Accrediting bodies that are approved by CMS will perform audits of these policies and procedures every three years.
Centers for Medicare and Medicaid Services CMS requires providers of products or services to attain and maintain accreditation in order to participate in federally funded healthcare programs. To attain and maintain accreditation, companies are required to institute policies and procedures that, among other things, formalize the interaction of the company with patients.
Page 12 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Page 9 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 State fraud and abuse provisions .
Page 10 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 The 2013 final HITECH omnibus rule (the “HITECH Final Rule”) modifies the breach reporting standard in a manner that makes more data security incidents qualify as reportable breaches.
The 2013 final HITECH omnibus rule (the “HITECH Final Rule”) modifies the breach reporting standard in a manner that makes more data security incidents qualify as reportable breaches. Any liability from a failure to comply with the requirements of HIPAA or the HITECH Act could adversely affect our financial condition.
Removed
The common shares of Viemed trade in the United States on the Nasdaq Capital Market under the trading symbol "VMD" and trade in Canada on the Toronto Stock Exchange (the "TSX") under the trading symbol “VMD.TO”.
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Accrediting bodies that are approved by CMS will perform audits of these policies and procedures every three years. Should a company fall out of compliance with the requirements of the accrediting body, expulsion from the Medicare program could follow.
Removed
Page 6 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 Centers for Medicare and Medicaid Services CMS requires providers of products or services to attain and maintain accreditation in order to participate in federally funded healthcare programs.
Added
This decision places newfound emphasis on the subjective beliefs of the person or entity making the claim, which may invite closer scrutiny of health care providers’ subjective beliefs as to the compliance of claims submitted to governmental healthcare programs.
Removed
Our Medicare accreditation must be renewed every three years through passage of an on-site inspection. We last renewed our accreditation with Medicare in August 2021. Maintaining our accreditation and Medicare enrollment requires that we comply with numerous business and customer support standards.
Added
Employees At December 31, 2023, Viemed had 996 permanent employees, in addition to temporary employees and independent contractors engaged through the Company's healthcare staffing and recruitment services to supplement the workforce needs of third party healthcare facilities. Page 13 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022
Removed
We may be subject to a variety of domestic and foreign anti-corruption laws with respect to our regulatory compliance efforts and operations. The U.S.
Removed
Any liability from a failure to comply with the requirements of HIPAA or the HITECH Act could adversely affect our financial condition. The costs of complying with privacy and security related legal and regulatory requirements are burdensome and could have a material adverse effect on our results of operations.
Removed
Employees At December 31, 2022, Viemed had 743 employees, in addition to consultants working directly with hospitals and other healthcare providers to help simplify the administrative process for patients transitioning from hospital to home care.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+27 added−45 removed148 unchanged
Biggest changeAs a result of any of these factors, the market price of our common shares at any given point in time may not accurately reflect our long-term value. Securities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation.
Biggest changeSecurities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
Accordingly, investors will only see a return on their investment if the value of our common shares appreciates. Canadian laws differ from the laws in effect in the United States and may afford less protection to holders of our securities.
Accordingly, investors may only see a return on their investment if the value of our common shares appreciates. Canadian laws differ from the laws in effect in the United States and may afford less protection to holders of our securities.
As a result of these announcements, we retain the ability to continue to furnish non-invasive ventilators and oxygen and PAP devices for all of our Medicare accredited areas. The current Round 2021 contracts expire on December 31, 2023 and CMS has not announced a new round of competitive bidding.
As a result of these announcements, we retain the ability to continue to furnish non-invasive ventilators and oxygen and PAP devices for all of our Medicare accredited areas. The current Round 2021 contracts expired on December 31, 2023 and CMS has not announced a new round of competitive bidding.
We are an emerging growth company until the earliest of: • the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion or more; • the last day of the fiscal year following the fifth anniversary of the first sale of common equity securities pursuant to an effective registration statement under the Securities Act; • the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or • the date on which we are deemed a “large accelerated filer” as defined under the federal securities laws.
We are an emerging growth company until the earliest of: • December 31, 2024, the last day of the fiscal year following the fifth anniversary of the first sale of common equity securities pursuant to an effective registration statement under the Securities Act; • the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion or more; • the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or • the date on which we are deemed a “large accelerated filer” as defined under the federal securities laws.
If insurers or managed care companies from whom we receive substantial payments were to terminate, amend or renegotiate contracts or reduce the amounts they pay for services, our profit margins may decline, or we may lose patients if we choose not to renew our contracts with these insurers at lower rates.
If insurers or managed care companies from whom we receive substantial payments were to terminate, amend or renegotiate contracts or reduce the amounts they pay for services, our profit margins may decline, or we may lose patients if we choose not to renew our contracts with these insurers at lower rates. Page 19 VIEMED HEALTHCARE, INC.
Additionally, HIPAA allows state Attorneys General to bring an action against a covered entity, such as us, for a violation of HIPAA. We insure some of our risk with respect to HIPAA security breaches, but operational costs and penalties associated with HIPAA breaches easily could exceed our insured limits. Page 20 VIEMED HEALTHCARE, INC.
Additionally, HIPAA allows state Attorneys General to bring an action against a covered entity, such as us, for a violation of HIPAA. We insure some of our risk with respect to HIPAA security breaches, but operational costs and penalties associated with HIPAA breaches easily could exceed our insured limits.
In addition, investors may find our common stock less attractive to the extent we rely on the exemptions available to emerging growth companies and/or smaller reporting companies for so long as we qualify as such.
In addition, investors may find our common stock less attractive to the extent we rely on the exemptions available to emerging growth companies for so long as we qualify as such.
Our business is subject to a number of risks and hazards generally. Such occurrences could result in damage to property, inventory, facilities, personal injury or death, damage to our properties, or the properties of others, monetary losses and possible legal liability. We may be subject to product liability and medical malpractice claims, which may adversely affect our operations.
Such occurrences could result in damage to property, inventory, facilities, personal injury or death, damage to our properties, or the properties of others, monetary losses and possible legal liability. We may be subject to product liability and medical malpractice claims, which may adversely affect our operations.
These post-payment reviews have increased as a result of government cost-containment initiatives. These additional post-payment reviews may require us to incur costs to respond to requests for records and to pursue the reversal of payment denials, and ultimately may require us to refund amounts paid to us by Medicare or Medicaid that are determined to have been overpaid.
These additional post-payment reviews may require us to incur costs to respond to requests for records and to pursue the reversal of payment denials, and ultimately may require us to refund amounts paid to us by Medicare or Medicaid that are determined to have been overpaid.
If the Medicare program were to slow payments of our receivables for any reason, we would be adversely impacted. In addition, both governmental healthcare programs and private health insurance companies may seek ways to avoid or delay reimbursement, which could adversely affect our cash flow and revenues.
If the Medicare program were to slow payments of our receivables for any reason, we would be adversely impacted. In addition, both governmental healthcare programs and private health insurance companies may seek ways to avoid or delay reimbursement, which could adversely affect our cash flow and revenues. Page 14 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Dollars, except per share amounts) December 31, 2022 and 2021 We are subject to extensive federal and state regulation, and if we fail to comply with applicable regulations, we could suffer severe criminal or civil sanctions or be required to make significant changes to our operations that could adversely affect our business, financial condition and operating results.
We are subject to extensive federal and state regulation, and if we fail to comply with applicable regulations, we could suffer severe criminal or civil sanctions or be required to make significant changes to our operations that could adversely affect our business, financial condition and operating results.
Dollars, except per share amounts) December 31, 2022 and 2021 Furthermore, our initial billing of and payments for services that are unsupported by the requisite documentation and satisfaction of any other conditions of payment, regardless of our awareness of the failure at the time of the billing or payment, could expose us to significant fines and penalties.
Furthermore, our initial billing of and payments for services that are unsupported by the requisite documentation and satisfaction of any other conditions of payment, regardless of our awareness of the failure at the time of the billing or payment, could expose us to significant fines and penalties.
Dollars, except per share amounts) December 31, 2022 and 2021 If we fail to comply with state and federal fraud and abuse laws, including anti-kickback laws, false claims acts, self-referral prohibitions, and anti-inducement laws, we could face substantial penalties and our business, operations and financial condition could be adversely affected.
If we fail to comply with state and federal fraud and abuse laws, including anti-kickback laws, false claims acts, self-referral prohibitions, and anti-inducement laws, we could face substantial penalties and our business, operations and financial condition could be adversely affected.
Government agencies or their contractors also periodically open investigations and obtain information from healthcare providers. Violations of federal and state regulations can result in severe criminal, civil and administrative penalties, damages, and sanctions, including debarment, suspension or exclusion from Medicare, Medicaid and other government reimbursement programs, any of which would have a material adverse effect on our business.
Violations of federal and state regulations can result in severe criminal, civil and administrative penalties, damages, and sanctions, including debarment, suspension or exclusion from Medicare, Medicaid and other government reimbursement programs, any of which would have a material adverse effect on our business.
On April 22, 2019, CMS added home ventilators used with a non-invasive interface to the Master List of Items Frequently Subject to Unnecessary Utilization. If CMS imposes prior authorization requirements for non-invasive home ventilation, it could materially impact our business, revenue and cash flow. Page 21 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
On April 22, 2019, CMS added home ventilators used with a non-invasive interface to the Master List of Items Frequently Subject to Unnecessary Utilization. If CMS imposes prior authorization requirements for non-invasive home ventilation, it could materially impact our business, revenue and cash flow.
In July 2021, the FDA identified the Philips recall as a Class I recall, the most serious type of recall. Patients using these devices have been instructed to contact their health care provider and doctor about a suitable treatment for their condition.
In July 2021, the FDA identified the Philips recall as a Class I recall, the most serious type of recall. Patients using these devices have been instructed to contact their health care provider and doctor about a suitable treatment for their condition. As of December 2023, Philips has announced remediation of 99% of actionable sleep therapy device registrations.
We are required by law in most instances to refund the full amount of the overpayment after becoming aware of it, and failure to do so within requisite time limits imposed by law could lead to significant fines and penalties being imposed on us. Page 18 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
We are required by law in most instances to refund the full amount of the overpayment after becoming aware of it, and failure to do so within requisite time limits imposed by law could lead to significant fines and penalties being imposed on us.
Securities litigation could result in substantial costs and damages and divert management’s attention and resources. The failure of our common shares to be included in various stock indices could result in the market for our common shares to become limited and volatile and the price at which you can sell your shares to decrease.
The failure of our common shares to be included in various stock indices could result in the market for our common shares to become limited and volatile and the price at which you can sell your shares to decrease.
Although we believe our practices are compliant with applicable safe harbors, we cannot assure you that a government regulator will not take the position that some of our practices do not meet all of the narrow criteria of an applicable safe harbor and otherwise violate the Anti-Kickback Statute.
Although we believe our practices are compliant with applicable safe harbors, we cannot assure you that a government regulator will not take the position that some of our practices do not meet all of the narrow criteria of an applicable safe harbor and otherwise violate the Anti-Kickback Statute. Page 21 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
We may not be able to gain access into certain ACOs. If we are not included in these programs, or if ACOs establish programs that overlap with our services, we could experience an adverse effect on our operations and financial condition.
We may not be able to gain access into certain ACOs. If we are not included in these programs, or if ACOs establish programs that overlap with our services, we could experience an adverse effect on our operations and financial condition. Page 22 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
The Federal False Claims Act prohibits, in part, any person from knowingly presenting or causing to be presented a false claim for payment to the federal government, or knowingly making or causing to be made a false statement to get a false claim paid.
Dollars, except per share amounts) December 31, 2023 and 2022 The Federal False Claims Act prohibits, in part, any person from knowingly presenting or causing to be presented a false claim for payment to the federal government, or knowingly making or causing to be made a false statement to get a false claim paid.
Furthermore, responding to governmental investigations, audits and reviews can also require us to incur significant legal and document production expenses, regardless of whether the particular investigation, audit or review leads to identification of underlying noncompliance or wrongdoing.
Furthermore, responding to governmental investigations, audits and reviews can also require us to incur significant legal and document production expenses, regardless of whether the particular investigation, audit or review leads to identification of underlying noncompliance or wrongdoing. Page 18 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Our common shares are listed and posted for trading in the United States on the Nasdaq Capital Market and Canada on the TSX. Securities of small-cap and healthcare companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved.
This volatility may impact the price at which shareholders can sell their common shares. Our common shares are listed and posted for trading on the Nasdaq Capital Market. Securities of small-cap and healthcare companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved.
We may be similarly impacted by increased enrollment of Medicare and Medicaid beneficiaries in managed care plans, shifting away from traditional fee-for-service models. Under the managed Medicare program, also known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits. Insurers may choose to offer supplemental benefits and impose higher plan costs on beneficiaries.
Dollars, except per share amounts) December 31, 2023 and 2022 We may be similarly impacted by increased enrollment of Medicare and Medicaid beneficiaries in managed care plans, shifting away from traditional fee-for-service models. Under the managed Medicare program, also known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
In 2019, CMS announced the inclusion of non-invasive ventilator products on the list of products subject to the competitive bidding program in Round 2021 which covers the period of January 1, 2021 through December 31, 2023.
In 2019, CMS announced the inclusion of non-invasive ventilator products on the list of products subject to the competitive bidding program in Round 2021 which covers the period of January 1, 2021 through December 31, 2023. Rental revenue from ventilator products represents a significant portion of our revenue (approximately 59.2% of total revenue in 2023).
(Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 HIPAA regulations impose additional requirements, restrictions and penalties on covered entities and their business associates to, among other things, deter breaches of security. Our electronic health records system is periodically modified to meet applicable security standards.
HIPAA regulations impose additional requirements, restrictions and penalties on covered entities and their business associates to, among other things, deter breaches of security. Our electronic health records system is periodically modified to meet applicable security standards.
We cannot predict the size of future issuances of our common shares or securities convertible into common shares or the effect, if any, that future issuances and sales of shares of our common shares will have on the market price of our common shares. Page 25 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
We cannot predict the size of future issuances of our common shares or securities convertible into common shares or the effect, if any, that future issuances and sales of shares of our common shares will have on the market price of our common shares.
Dollars, except per share amounts) December 31, 2022 and 2021 the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment, restructuring, or restricting of our operations.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment, restructuring, or restricting of our operations.
Risks Related to our Common Shares We are an "emerging growth company" and a "smaller reporting company" and the reduced disclosure requirements applicable to "emerging growth companies" and "smaller reporting companies" may make our common stock less attractive to investors.
Dollars, except per share amounts) December 31, 2023 and 2022 Risks Related to our Common Shares We are an "emerging growth company" and the reduced disclosure requirements applicable to "emerging growth companies" may make our common stock less attractive to investors.
As a result of increased post-payment reviews of claims we submit to Medicare and Medicaid for our services, we may incur additional costs and may be required to repay amounts already paid to us. We are subject to regular post-payment inquiries, investigations and audits of claims we submit to Medicare and Medicaid for payment for our services.
Dollars, except per share amounts) December 31, 2023 and 2022 As a result of increased post-payment reviews of claims we submit to Medicare and Medicaid for our services, we may incur additional costs and may be required to repay amounts already paid to us.
These disruptions could, among other things, make it more difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations. Access to additional capital may not be available to us on terms acceptable to us, or at all. Risks Relating to Government Regulation Healthcare reform legislation may affect our business.
These disruptions could, among other things, make it more difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations. Access to additional capital may not be available to us on terms acceptable to us, or at all. Page 16 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
These include specific requirements imposed by the DME MAC Supplier Manuals. To ensure compliance with Medicare and Medicaid requirements and other federal and state regulations, government agencies or their contractors often conduct routine audits and request customer records and other documents to support our claims submitted for payment of services rendered.
To ensure compliance with Medicare and Medicaid requirements and other federal and state regulations, government agencies or their contractors often conduct routine audits and request customer records and other documents to support our claims submitted for payment of services rendered. Government agencies or their contractors also periodically open investigations and obtain information from healthcare providers.
Dollars, except per share amounts) December 31, 2022 and 2021 Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees in 2022 or be subject to an annual penalty.
Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees in 2023 or be subject to an annual penalty. Page 23 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
As a U.S. public reporting company, we will incur, particularly after we are no longer an “emerging growth company,” significant legal, accounting and other expenses.
We will incur increased costs as a result of operating as a U.S. public reporting company, and our management is required to devote substantial time to new compliance initiatives. As a U.S. public reporting company, we will incur, particularly after we are no longer an “emerging growth company,” significant legal, accounting and other expenses.
Certain competitors will have vertically integrated manufacturing and services sectors of the market. We may have less capital and may encounter greater operational challenges in serving the market. Better capitalized competitors may also be able to borrow money or raise debt to purchase equipment more easily than us.
Certain competitors will be subsidiaries or divisions of larger, much better capitalized companies. Certain competitors will have vertically integrated manufacturing and services sectors of the market. We may have less capital and may encounter greater operational challenges in serving the market.
Initiatives undertaken by industry and government to contain healthcare costs affect our profitability. These payors attempt to control healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We believe that this trend will continue and may limit reimbursement for healthcare services.
These payors attempt to control healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We believe that this trend will continue and may limit reimbursement for healthcare services. Additionally, from time to time our contracts with payors are terminated, amended or renegotiated, sometime unilaterally through policies.
We face inspections, reviews, audits and investigations under federal and state government programs and contracts. These audits could have adverse findings that may negatively affect our business.
(Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 We face inspections, reviews, audits and investigations under federal and state government programs and contracts. These audits could have adverse findings that may negatively affect our business.
If we fail to maintain effective controls, investors may lose confidence in our operating results, the price of our common shares could decline and we may be subject to litigation or regulatory enforcement actions. Page 24 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
If we fail to maintain effective controls, investors may lose confidence in our operating results, the price of our common shares could decline and we may be subject to litigation or regulatory enforcement actions. The market price for our common shares may experience substantial volatility for reasons unrelated to our financial performance.
We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and does not anticipate declaring or paying any cash dividends on our common shares in the near term.
We may retain all available funds and any future earnings for use in the operation and expansion of our business and have no current plans to pay any cash dividends on our common shares.
At the federal level, Congress has continued to propose or consider healthcare budgets that substantially reduce payments under the Medicare and Medicaid programs. See “Business–Government Regulation” in Item 1 for more information. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential legislation on us is uncertain and difficult, if not impossible, to predict.
See “Business–Government Regulation” in Item 1 for more information. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential legislation on us is uncertain and difficult, if not impossible, to predict. That impact may be material to our business, financial condition or results of operations.
The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. If our operations are found to be in violation of any of Page 22 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
Our dependence on third-party suppliers involves several additional risks, including limited control over pricing, availability, quality and delivery schedules. In addition, there are a limited number of manufacturers of the equipment used for home treatment of patients with ventilation respiratory therapy.
We require the timely delivery of a sufficient supply of equipment we use to perform our home treatment of patients. Our dependence on third-party suppliers involves several additional risks, including limited control over pricing, availability, quality and delivery schedules.
Our dependence on key suppliers puts us at risk of interruptions in the availability of the equipment we need for our services, which could reduce our revenue and adversely affect our results of operations. We require the timely delivery of a sufficient supply of equipment we use to perform our home treatment of patients.
Dollars, except per share amounts) December 31, 2023 and 2022 Our dependence on key suppliers puts us at risk of interruptions in the availability of the equipment we need for our services, which could reduce our revenue and adversely affect our results of operations.
Healthcare reform laws significantly affect the U.S. healthcare services industry. In recent years, many legislative proposals have been introduced or proposed in Congress and in some state legislatures that would affect major changes in the healthcare system, either nationally or at the state level.
In recent years, many legislative proposals have been introduced or proposed in Congress and in some state legislatures that would affect major changes in the healthcare system, either nationally or at the state level. At the federal level, Congress has continued to propose or consider healthcare budgets that substantially reduce payments under the Medicare and Medicaid programs.
As a result, the potential costs associated with legal actions against us could adversely affect our business, financial condition, results of operations, cash flows or prospects. Page 16 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 Insurance and claims expenses could significantly reduce our profitability.
As a result, the potential costs associated with legal actions against us could adversely affect our business, financial condition, results of operations, cash flows or prospects. Insurance and claims expenses could significantly reduce our profitability. Our business is subject to a number of risks and hazards generally.
We insure some of our risk with respect to security breaches but the occurrence of any of the foregoing events could have a material adverse effect on our business, results of operations and our financial condition. Our products may be subject to future rounds of Medicare's Competitive Bidding Program, which may negatively affect our business and financial condition.
We insure some of our risk with respect to security breaches but the occurrence of any of the foregoing events could have a material adverse effect on our business, results of operations and our financial condition. Page 20 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
There are often timing delays when attempting to collect funds from Medicaid programs. Delays in receiving reimbursement or payments from these programs may adversely impact our working capital. We depend in part upon reimbursement by third-party payors. A substantial portion of our revenues are derived from private and governmental third-party payors.
We depend in part upon reimbursement by third-party payors. A substantial portion of our revenues are derived from private and governmental third-party payors.
Approximately one third of Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2022; a figure that continues to grow. Similarly, enrollment in managed Medicaid plans is also growing, as states are increasingly relying on managed care organizations to deliver Medicaid program services as a strategy to control costs and manage resources.
Similarly, enrollment in managed Medicaid plans is also growing, as states are increasingly relying on managed care organizations to deliver Medicaid program services as a strategy to control costs and manage resources. We may experience increased competition for managed care contracts due to state regulation and limitations.
In 2022, approximately 44% of our traditional revenue, excluding COVID-19 response sales and services, were derived collectively from managed care plans, commercial health insurers, workers’ compensation payors, and other private pay revenue sources while approximately 56% of our traditional revenue, excluding COVID-19 response sales and services, were derived from Medicare and Medicaid.
In 2023, approximately 54% of our revenues were derived collectively from managed care plans, commercial health insurers, workers’ compensation payors, and other private pay revenue sources while approximately 46% of our revenues were derived from Medicare and Medicaid. Initiatives undertaken by industry and government to contain healthcare costs affect our profitability.
We compete against companies that have longer operating histories and greater resources, which may result in reduced profit margins and loss of market share.
Item 1A. Risk Factors Risks Related to Our Industry and Business We compete against companies that have longer operating histories and greater resources, which may result in reduced profit margins and loss of market share. The respiratory care industry is highly competitive and dynamic and may become more competitive as new players enter the market.
Viemed cannot predict what additional actions will be required of the Company by the FDA or other state or federal agencies related to the recall. Page 15 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Viemed cannot predict what additional actions will be required of the Company by the FDA or other state or federal agencies related to the recall. We conduct all of our operations through our United States subsidiaries and our ability to extract value from these subsidiaries may be limited. We conduct all of our operations through our United States subsidiaries.
Additionally, accreditation is required by many payors. If we fail to obtain or maintain any required accreditation, it could have an adverse impact on our business. As a healthcare provider participating in governmental healthcare programs, we are subject to laws directed at preventing fraud, waste, and abuse, which subject our marketing, billing, documentation and other practices to government scrutiny.
Dollars, except per share amounts) December 31, 2023 and 2022 As a healthcare provider participating in governmental healthcare programs, we are subject to laws directed at preventing fraud, waste, and abuse, which subject our marketing, billing, documentation and other practices to government scrutiny. These include specific requirements imposed by the DME MAC Supplier Manuals.
The reimbursement Page 14 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 rates offered are outside of our control. On December 29, 2022, President Joe Biden signed the Consolidated Appropriations Act, 2023 (the "CAA”) into law.
Page 26 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Item 1B. Unresolved Staff Comments Not applicable.
If the COVID-19 PHE ends in 2023, the current 75/25 blended Medicare reimbursement rates for durable medical equipment in non-competitive bidding, non-rural areas will last until December 31, 2023. Reimbursement rates for our services, like much of the United States healthcare market, are subject to reductions.
Reimbursement rates for our services, like much of the United States healthcare market, are subject to reductions.
System problems, Medicare or Medicaid issues or industry trends may extend our collection period, adversely impact our working capital. Our working capital management procedures may not successfully negate Page 19 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 this risk.
System problems, Medicare or Medicaid issues or industry trends may extend our collection period, adversely impact our working capital. Our working capital management procedures may not successfully negate this risk. There are often timing delays when attempting to collect funds from Medicaid programs. Delays in receiving reimbursement or payments from these programs may adversely impact our working capital.
As of January 2023, Philips has announced completion of 90% of the production of replacement devices and repair kits. We cannot predict the potential legal, regulatory, and financial risks that may arise out of the recall. Some patients may discontinue use of their device, which could affect our ability to continue billing for service.
Some patients may discontinue use of their device, which could affect our ability to continue billing for service.
That impact may be material to our business, financial condition or results of operations. Page 17 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Additionally, accreditation is required by many payors. If we fail to obtain or maintain any required accreditation, it could have an adverse impact on our business. Page 17 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Page 23 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
These requirements increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Page 25 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Removed
Item 1A. Risk Factors Risks Related to Our Industry and Business The COVID-19 pandemic could adversely affect our business, financial condition and results of operations . On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic.
Added
Better capitalized competitors may also be able to borrow money or raise debt to purchase equipment more easily than us.
Removed
Various policies and initiatives were implemented to reduce the transmission of COVID-19, including travel bans and restrictions, postponement of non-essential medical surgeries, limiting access to medical facilities, and adoption of social distancing and remote working policies.
Added
The reimbursement rates offered are outside of our control. The CARES Act previously introduced a blended rate for HME furnished in non-rural or contiguous non-competitive bidding areas that is based on 75% of the adjusted fee schedule amount and 25% of the unadjusted fee schedule amount.
Removed
Employee and patient safety is our first priority, and as a result, we put preparedness plans in place for our employees, especially our clinical personnel, and modified our clinical protocols to limit unnecessary patient encounters.
Added
The 75/25 blended Medicare reimbursement rate expired on December 31, 2023, reverting to rates in place prior to the implementation of the 75/25 blend, adjusted for inflation. This change may lead to reduced reimbursement for competitive bid products and services in specific markets where we operate.
Removed
At this time, COVID-19 related measures do not appear to be negatively impacting our patient attrition rate, but we cannot assure you that future governmental policies and initiatives will not significantly disrupt our operations or adversely affect our ability to provide services to our patients in the future.
Added
In addition, there are a limited number of manufacturers of the equipment used for home treatment of patients with ventilation respiratory therapy, which has been further exacerbated by Philips Respironics' January 2024 decision to discontinue of many of its respiratory products.
Removed
During the COVID-19 public health emergency (“PHE”) our ability to assess potential patients in hospitals has varied by hospital and city, but overall our business of setting up new patients in the home has continued. On January 30, 2023, the Biden Administration announced that it plans to end the COVID-19 PHE on May 11, 2023.
Added
We cannot predict the potential legal, regulatory, and financial risks that may arise out of the recall. For example, we may be asked to notify patients of the recall, retrieve recalled devices from patients, and/or provide replacement devices, resulting in additional unreimbursed costs.
Removed
At the end of the COVID-19 PHE, many waivers and flexibilities applicable during the COVID-19 pandemic will become unavailable.
Added
No assurance can be given that individuals with the required skills will continue employment with us or that replacement personnel with comparable skills can be found. Page 15 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 We have significant ongoing capital expenditure requirements.
Removed
While COVID-19 related measures have not had a material impact on our consolidated operating results for the year ended December 31, 2022, we cannot predict at this time the impact that the end of the COVID-19 PHE will have on our business and financial condition.
Added
Dollars, except per share amounts) December 31, 2023 and 2022 Our strategic growth plan, which involves the acquisition of other businesses, may not succeed.
Removed
It is also possible that the U.S. government will ultimately decide not to end the COVID-19 PHE on May 11, 2023, creating additional uncertainties about our future business and financial condition.
Added
Our strategic growth plan calls for significant growth in our business over the next several years through an increase in our density in select markets where we are established as well as the expansion of our geographic footprint into new markets.
Removed
Accordingly, we cannot assure you that demand for our products and services will continue or that we will be able to maintain operations necessary to satisfy such demand, including sufficient personnel, supply chains and distributions channels. The COVID-19 pandemic has led to significant disruptions and volatility in capital and financial markets.
Added
This growth would place (and has placed) significant demands on our management team, systems, internal controls and financial and professional resources. As a result, we could be required to incur (and have incurred) expenses for hiring additional qualified personnel, retaining professionals to assist in developing the appropriate control systems and expanding our information technology infrastructure.
Removed
Broad economic factors resulting from the current COVID-19 pandemic, including high unemployment and underemployment levels and reduced consumer spending and confidence, could also affect our service mix, revenue mix, payor mix and patient base, as well as our ability to collect outstanding receivables.
Added
If we are unable to effectively manage growth, our financial results could be adversely impacted.Our strategic growth plan contemplates continued growth from future acquisitions of home medical equipment and service providers.
Removed
Business closures and layoffs in the geographic areas in which we operate may lead to increases in the uninsured and underinsured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services rendered.
Added
We may face increased competition for attractive acquisition candidates, which may limit the number of acquisition opportunities available to us or lead to the payment of higher prices for acquisitions. Without successful acquisitions, our future growth rate could decline. In addition, we cannot guarantee that any future acquisitions, if consummated, will result in further growth.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We own our headquarters, consisting of approximately 77,000 square feet, which is located on an approximately 8.2-acre parcel in Lafayette, Louisiana. During 2021, we acquired a 16,000 square foot office building and a 16,000 square foot climate controlled warehouse which we previously leased from a company owned by the Company’s CEO, Casey Hoyt, and President, Michael Moore.
Biggest changeItem 2. Properties We own our headquarters, consisting of approximately 77,000 square feet, which is located on an approximately 8.2-acre parcel in Lafayette, Louisiana. We also own and occupy a 16,000 square foot office building and a 16,000 square foot climate controlled warehouse located in Lafayette, Louisiana.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to various ongoing or threatened legal actions and proceedings, including those that arise in the ordinary course of business, which may include employment matters and breach of contract disputes.
Biggest changeItem 3. Legal Proceedings From time to time, we may be subject to various ongoing or threatened legal actions and other proceedings, including those that arise in the ordinary course of business, which may include employment matters, breach of contract disputes, as well as governmental and regulatory matters.
Please read Note 8 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K for more information. Such matters are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time.
Please read Note 9 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K for more information. Such matters are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis does not include shares held in the name of a broker, bank or other nominees (typically referred to as being held in “street name”). Dividends We have not declared or paid any cash or stock dividends on our common shares since our inception and do not anticipate declaring or paying any cash or stock dividends in the foreseeable future.
Biggest changeThis does not include shares held in the name of a broker, bank or other nominees (typically referred to as being held in “street name”). Dividends We have not declared or paid any cash or stock dividends on our common shares since our inception.
Our subsidiaries are restricted from making distributions or dividend payments to us by our existing commercial credit facilities, subject to certain exceptions. See Note 7 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K for further information. Recent Sales of Unregistered Equity Securities None.
Our subsidiaries are restricted from making distributions or dividend payments to us by the 2022 Senior Credit Facilities (as defined below), subject to certain exceptions. See Note 6 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K for further information. Recent Sales of Unregistered Equity Securities None.
Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common shares of Viemed trade in the United States on the Nasdaq Capital Market under the symbol "VMD" and in Canada on the TSX under the trading symbol “VMD.TO”. Shareholders We had nine shareholders of record as of February 15, 2023.
Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common shares of Viemed trade on the Nasdaq Capital Market under the symbol "VMD". Shareholders We had nine shareholders of record as of February 15, 2024.
Removed
Issuer Purchases of Equity Securities The following table sets forth certain information with respect to repurchases of our common shares during the three months ended December 31, 2022: Period Total number of shares (or units) purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (1) Maximum number of shares that may yet be purchased under the plans or programs Oct 1 - Oct 31, 2022 120,543 $5.89 120,543 189,851 Nov 1 - Nov 30, 2022 — — — 189,851 Dec 1 - Dec 31, 2022 — — — 189,851 Total 120,543 $5.89 120,543 189,851 (1) On March 7, 2022, the Company's Board of Directors authorized and approved a share repurchase program (the "2022 Share Repurchase Program") on the Nasdaq Capital Market.
Added
Any future determination as to the declaration and payment of cash dividends will be at the discretion of the Board and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors that the Board considers relevant.
Removed
Under the terms of the 2022 Share Repurchase Program, the Company may repurchase up to 1,984,014 of its common shares from time to time through open market purchases, block purchases or otherwise in accordance with applicable securities laws, including Rule 10b-18 of the Exchange Act.
Removed
The 2022 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+38 added−50 removed25 unchanged
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2022 and 2021: The following table summarizes our results of operations for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 % of Total Revenue 2021 % of Total Revenue $ Change % Change Revenue $ 138,832 100.0 % $ 117,062 100.0 % $ 21,770 18.6 % Cost of revenue 54,152 39.0 % 43,652 37.3 % 10,500 24.1 % Gross profit 84,680 61.0 % 73,410 62.7 % 11,270 15.4 % Selling, general and administrative 68,161 49.1 % 54,893 46.9 % 13,268 24.2 % Research and development 2,696 1.9 % 2,110 1.8 % 586 27.8 % Stock-based compensation 5,202 3.7 % 5,150 4.4 % 52 1.0 % Depreciation 1,012 0.7 % 851 0.7 % 161 18.9 % Loss on disposal of property and equipment 346 0.2 % 448 0.4 % (102) NM Other expense (income) (989) (0.7) % (1,622) (1.4) % 633 (39.0) % Income from operations 8,252 5.9 % 11,580 9.9 % (3,328) (28.7) % Non-operating income and expenses Income from equity method investments 935 0.7 % 1,241 1.1 % (306) (24.7) % Interest expense, net (197) (0.1) % (318) (0.3) % 121 (38.1) % Net income before taxes 8,990 6.5 % 12,503 10.7 % (3,513) (28.1) % Provision for income taxes 2,768 2.0 % 3,377 2.9 % (609) NM Net income $ 6,222 4.5 % $ 9,126 7.8 % $ (2,904) (31.8) % Page 31 VIEMED HEALTHCARE, INC.
Biggest changeDollars, except per share amounts) December 31, 2023 and 2022 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022: The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 % of Total Revenue 2022 % of Total Revenue $ Change % Change Revenue $ 183,008 100.0 % $ 138,832 100.0 % $ 44,176 31.8 % Cost of revenue 70,225 38.4 % 54,152 39.0 % 16,073 29.7 % Gross profit 112,783 61.6 % 84,680 61.0 % 28,103 33.2 % Selling, general and administrative 87,884 48.0 % 68,161 49.1 % 19,723 28.9 % Research and development 2,782 1.5 % 2,696 1.9 % 86 3.2 % Stock-based compensation 5,849 3.2 % 5,202 3.7 % 647 12.4 % Depreciation and amortization 1,391 0.8 % 1,012 0.7 % 379 37.5 % Loss on disposal of property and equipment 645 0.4 % 346 0.2 % 299 86.4 % Other income, net (98) (0.1) % (989) (0.7) % 891 (90.1) % Income from operations 14,330 7.8 % 8,252 5.9 % 6,078 73.7 % Non-operating income and expenses Income from equity method investments 485 0.3 % 935 0.7 % (450) (48.1) % Interest expense, net (424) (0.2) % (197) (0.1) % (227) 115.2 % Net income before taxes 14,391 7.9 % 8,990 6.5 % 5,401 60.1 % Provision for income taxes 4,148 2.3 % 2,768 2.0 % 1,380 49.9 % Net income $ 10,243 5.6 % $ 6,222 4.5 % $ 4,021 64.6 % Revenue The following table summarizes our revenue for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 % of Total Revenue 2022 % of Total Revenue $ Change % Change Net revenue from rentals Ventilator rentals, non-invasive and invasive $ 108,258 59.2 % $ 92,710 66.8 % $ 15,548 16.8 % Other home medical equipment rentals 38,315 20.9 % 21,446 15.4 % 16,869 78.7 % Net revenue from sales and services Equipment and supply sales 25,770 14.1 % 13,927 10.0 % 11,843 85.0 % COVID-19 response sales and services — — % 2,278 1.6 % (2,278) (100.0) % Service revenues 10,665 5.8 % 8,471 6.1 % 2,194 25.9 % Total net revenue $ 183,008 100.0 % $ 138,832 100.0 % $ 44,176 31.8 % For the year ended December 31, 2023, revenue totaled $183.0 million, an increase of $44.2 million (or 31.8%) from the comparable period in 2022.
Net Cash Used in Investing Activities Net cash used in investing activities during the year ended December 31, 2022 was $24.0 million, consisting of $22.9 million of purchases of property and equipment, $2.0 million in debt investments, and $0.1 million in equity investments, partially offset by $1.1 million of sales proceeds from the disposal of property and equipment.
Net cash used in investing activities during the year ended December 31, 2022 was $24.0 million, consisting of $22.9 million of purchases of property and equipment, $2.0 million in debt investments, and $0.1 million in equity investments, partially offset by $1.1 million of sales proceeds from the disposal of property and equipment.
The proceeds of the 2022 Revolving Credit Facility may be used to refinance existing indebtedness, for working capital purposes, capital expenditures and other general corporate purposes (including permitted acquisitions), and to pay transaction fees, costs and expenses related to the Senior Credit Facilities.
The proceeds of the 2022 Revolving Credit Facility may be used to refinance existing indebtedness, for working capital purposes, capital expenditures and other general corporate purposes (including permitted acquisitions), and to pay transaction fees, costs and expenses related to the 2022 Senior Credit Facilities.
It is not a measurement of our financial performance under GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of the Company's liquidity, and may not be comparable to other similarly titled measures of other businesses.
It is not a measurement of our financial performance under GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of the Company's liquidity, and may not be comparable to other similarly titled measures of other companies or businesses.
Our respiratory care programs are designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care. Our services include respiratory disease management (through the rental of various DME devices), neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, and the sale of associated supplies.
Our respiratory care programs are designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care. Our services include respiratory disease management (through the rental of various HME devices), neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, and the sale of associated supplies.
Dollars, except per share amounts) December 31, 2022 and 2021 Senior Credit Facilities On November 29, 2022, the Company refinanced its existing borrowings under the prior Commercial Business Loan Agreement with Hancock Whitney Bank and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent and collateral agent that provides for an up to $30 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $30 million delayed draw term loan facility (the "2022 Term Loan Facility"), both maturing in November 2027.
Dollars, except per share amounts) December 31, 2023 and 2022 Senior Credit Facilities On November 29, 2022, the Company refinanced its existing borrowings under the prior Commercial Business Loan Agreement with Hancock Whitney Bank and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent and collateral agent that provides for an up to $30.0 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $30.0 million delayed draw term loan facility (the "2022 Term Loan Facility"), both maturing in November 2027.
Recent Accounting Pronouncements See Note 2 – Summary of Significant Account Policies of the Notes to Consolidated Financial Statements for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial positions and cash flows.
Recently Issued Accounting Pronouncements See Note 2 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial positions and cash flows.
Net Cash Used in Financing Activities Net cash used in financing activities during the year ended December 31, 2022 was $15.3 million, consisting of 1,794,163 repurchased and canceled common shares at a cost of $9.6 million pursuant to the share repurchase program authorized by the Board of Directors on March 7, 2022 (the "2022 Share Repurchase Program"), $1.3 million in principal payments on the term note under the prior Commercial Business Loan Agreement with Hancock Whitney Bank (the “Term Note”), and $4.5 million in principal payments on the building term note under the prior Commercial Business Loan Agreement with Hancock Whitney Bank (the "Building Term Note"), and $0.1 million for shares repurchased and canceled for tax withholding in connection with RSUs vested in the period, partially offset by $0.3 million proceeds from the exercise of stock options.
Net cash used in financing activities during the year ended December 31, 2022 was $15.3 million, consisting of 1,794,163 repurchased and canceled common shares at a cost of $9.6 million pursuant to the share repurchase program authorized by the Board on March 7, 2022 and terminated on September 30, 2023 (the "2022 Share Repurchase Program"), $1.3 million in principal payments on the term note under the prior Commercial Business Loan Agreement with Hancock Whitney Bank (the “Term Note”),$4.5 million in principal payments on the building term note under the prior Commercial Business Loan Agreement with Hancock Whitney Bank (the "Building Term Note"), and $0.1 million for shares repurchased and canceled for tax withholding in connection with RSUs vested in the period, partially offset by $0.3 million proceeds from the exercise of stock options.
Based on our current plan of operations, we believe this amount, when combined with expected cash flows from operations and amounts available under our existing commercial credit facilities will be sufficient to fund our growth strategy and to meet our anticipated operating expenses, capital expenditures, and debt service obligations for at least the next 12 months from the date of this filing.
Based on our current plan of operations, we believe this amount, when combined with expected cash flows from operations and amounts available under our 2022 Senior Credit Facilities will be sufficient to fund our growth strategy and to meet our anticipated operating expenses, capital expenditures, and debt service obligations for at least the next 12 months from the date of this filing.
Accordingly, management believes that Adjusted EBITDA provides useful information in understanding and evaluating the Company's operating performance in the same manner as management. In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including interest, taxes, stock based compensation, and depreciation of property and equipment.
Accordingly, management believes that Adjusted EBITDA provides useful information in understanding and evaluating the Company’s operating performance in the same manner as management. In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including net interest expense (income), taxes, stock based compensation, depreciation of property and equipment, and amortization of intangible assets.
Matching employer contributions to the 401(k) plan totaled $1.1 million and $0.8 million for the years ended December 31, 2022 and 2021, respectively. Off Balance Sheet Arrangements The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its results of operations or financial condition.
Matching employer contributions to the 401(k) plan totaled $1.4 million and $1.1 million for the years ended December 31, 2023 and 2022, respectively. Off Balance Sheet Arrangements The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its results of operations or financial condition.
Page 28 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 Our primary sources of capital to date have been from operating cash flows.
Page 30 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Our primary sources of capital to date have been from operating cash flows.
Purchases of property and equipment during the year ended December 31, 2022 were primarily related to medical equipment rented to our patients. Cash purchases of property and equipment represents a $3.2 million, or 32.0%, increase year over year.
Purchases of property and equipment during the year ended December 31, 2023 were primarily related to medical equipment rented to our patients. Cash purchases of property and equipment represents a $3.2 million, or 14.0%, increase year over year.
Page 35 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Page 32 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at December 31, 2022. Sources of Funds Cash provided by operating activities during the year ended December 31, 2022 was $27.7 million compared to $22.5 million during the year ended December 31, 2021.
The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at December 31, 2023. Sources of Funds Cash provided by operating activities during the year ended December 31, 2023 was $45.2 million compared to $27.7 million during the year ended December 31, 2022.
We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 67.9% and 77.3% of our traditional revenue, excluding COVID-19 response sales and services for the years ended December 31, 2022 and 2021, respectively.
We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 59.2% and 67.9% of our traditional revenue, excluding COVID-19 response sales and services for the years ended December 31, 2023 and 2022, respectively.
Dollars, except per share amounts) December 31, 2022 and 2021 Leases Leases under which we assume substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lesser of its fair value and the present value of the minimum lease payments.
Leases Leases under which we assume substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lesser of its fair value and the present value of the minimum lease payments.
While ventilator rentals continue to make up the majority of our revenue, the growth of PAP and oxygen related sales and services, as well as our healthcare staffing offerings, is contributing significantly to the diversity of our overall revenue mix.
The increase in service revenue is primarily due to the addition of our healthcare staffing offerings. While ventilator rentals continue to make up the majority of our revenue, the organic and acquired growth of PAP and oxygen related sales and services, as well as our healthcare staffing offerings, is contributing significantly to the diversity of our overall revenue mix.
We expect to continue to employ more RTs in order to assure our high service model is accomplished in the home. As of December 31, 2022, we employed 292 licensed RTs, representing more than 39% of our company-wide employee count.
We expect to continue to employ more RTs in order to assure our high service model is accomplished in the home. As of December 31, 2023, we employed 372 licensed RTs, representing approximately 37% of our company-wide employee count.
The primary changes in operating assets and liabilities were an increase in gross accounts receivable of $12.6 million, an increase in prepaid expenses and other assets of $2.8 million, a net increase in income taxes payable of $1.9 million, and a decrease in accrued liabilities of $2.5 million.
The primary changes in working capital were an increase in net accounts receivable of $2.6 million and an increase in prepaid expenses and other assets of $2.8 million, offset by an increase in accrued liabilities of $2.5 million and a net increase in income taxes payable of $1.9 million.
The proceeds of the 2022 Term Loan Facility and any additional term loans established in accordance with the 2022 Senior Credit Facilities may be used to finance permitted acquisitions and to pay transaction fees, costs and expenses related to such acquisitions. At December 31, 2022, there were no borrowings outstanding under the 2022 Senior Credit Facilities.
The proceeds of the 2022 Term Loan Facility and any additional term loans established in accordance with the 2022 Senior Credit Facilities may be used to finance permitted acquisitions and to pay transaction fees, costs and expenses related to such acquisitions.
The increase in overall selling, general and administrative expense as compared to the prior period is primarily attributable to additional employee related expenses related to the overall growth of the Company.
The overall increase in selling, general and administrative expense as compared to the prior period is primarily due to additional employee related expenses to accommodate the overall growth of the Company and transaction costs related to the acquisition of HMP.
The following table presents our material contractual obligations and commitments to make future payments as of December 31, 2022: Within 12 Months Beyond 12 Months Debt Obligations, including interest $ — $ — Lease Obligations 520 209 Total $ 520 $ 209 Except for the funding of potential acquisitions and investments, we anticipate that our operating cash flows will satisfy our material cash requirements for the 12 months after December 31, 2022.
The following table presents our material contractual obligations and commitments to make future payments as of December 31, 2023: Within 12 Months Beyond 12 Months Debt Obligations, including interest $ 1,617 $ 7,911 Lease Obligations 1,130 2,666 Total $ 2,747 $ 10,577 Except for the funding of potential acquisitions and investments, we anticipate that our operating cash flows will satisfy our material cash requirements for the 12 months after December 31, 2023.
If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing may be dilutive to our stockholders. Page 36 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing may be dilutive to our stockholders.
For the year ended December 31, 2022, we generated revenues of $138.8 million and had net income of $6.2 million, compared to revenues of $117.1 million and net income of $9.1 million for the year ended December 31, 2021. Excluding COVID-19 response sales and services, net revenue increased $28.1 million (or 25.9%) from the comparable period in 2021.
For the year ended December 31, 2023, we generated revenues of $183.0 million and had net income of $10.2 million, compared to revenues of $138.8 million and net income of $6.2 million for the year ended December 31, 2022. Excluding COVID-19 response sales and services, net revenue increased $46.5 million (or 34.0%) from the comparable period in 2022.
Revenue growth has historically exceeded the growth in stock based compensation and stock-based compensation as a percentage of revenue is expected to continue to decline. Interest Expense, Net For the year ended December 31, 2022, net interest expense totaled $0.2 million, a decrease of $0.1 million from the comparable period in 2021.
Historically, revenue growth has outpaced the growth in stock-based compensation, and as a result, the percentage of stock-based compensation relative to revenue is expected to continue declining. Interest Expense, Net For the year ended December 31, 2023, net interest expense totaled $0.4 million, an increase of $0.2 million from the comparable period in 2022.
As of December 31, 2022, the Company had cash and cash equivalents of $16.9 million. Use of Funds Our principal uses of cash are funding our new rental assets and other capital purchases, operations, and other working capital requirements.
As of December 31, 2023, the Company had cash and cash equivalents of $12.8 million. Use of Funds Our principal uses of cash are funding the purchase of rental assets and other capital purchases, the repayment of debt, funding of acquisitions, operations, and other working capital requirements.
Non-GAAP Financial Measures The Company uses Adjusted EBITDA, which is a financial measure that is not prepared in accordance with GAAP to analyze its financial results and believes that it is useful to investors, as a supplement to GAAP measures.
Dollars, except per share amounts) December 31, 2023 and 2022 Non-GAAP Financial Measures The Company uses Adjusted EBITDA, which is a financial measure that is not prepared in accordance with generally accepted accounting principles in the United States ("GAAP") to analyze its financial results and believes that it is useful to investors, as a supplement to GAAP measures.
Selling, General and Administrative Expense For the year ended December 31, 2022, selling, general and administrative expenses totaled $68.2 million, an increase of $13.3 million (or 24.2%) from the comparable period in 2021.
Selling, general and administrative expenses totaled $87.9 million for the year ended December 31, 2023, an increase of $19.7 million (or 28.9%) from the comparable period in 2022.
Dollars, except per share amounts) December 31, 2022 and 2021 Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2022 2021 Net Cash provided by (used in): Operating activities $ 27,748 $ 22,494 Investing activities (23,976) (19,746) Financing activities (15,266) (5,321) Net decrease in cash and cash equivalents $ (11,494) $ (2,573) Net Cash Provided by Operating Activities Net cash provided by operating activities during the year ended December 31, 2022 was $27.7 million, resulting from net income of $6.2 million, increased by non-cash net income adjustments of $30.6 million, a change in net operating liabilities of $3.1 million, and $1.1 million of distributions from equity method investments, and decreased by a change in net operating assets of $13.2 million.
Dollars, except per share amounts) December 31, 2023 and 2022 Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 Net Cash provided by (used in): Operating activities $ 45,212 $ 27,748 Investing activities (52,113) (23,976) Financing activities 2,826 (15,266) Net decrease in cash and cash equivalents $ (4,075) $ (11,494) Net Cash Provided by Operating Activities Net cash provided by operating activities during the year ended December 31, 2023 was $45.2 million, resulting from net income of $10.2 million, increased by net income adjustments of $27.2 million and a change in net working capital of $7.8 million.
An accordion feature allows the Company to increase the size of such facilities by up to an additional $30.0 million, subject to certain conditions, for a total borrowing capacity of up to $90 million. Trends Affecting our Business On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic.
An accordion feature allows the Company to increase the size of such facilities by up to an additional $30.0 million, subject to certain conditions, for a total borrowing capacity of up to $90 million.
Excluding COVID-19 related revenues, selling, general and administrative expenses as a percentage of revenue decreased to 49.9% for the year ended December 31, 2022 compared to 50.6% for the year ended December 31, 2021.
Selling, General and Administrative Expense Selling, general and administrative expenses as a percentage of revenue decreased to 48.0% for the year ended December 31, 2023 compared to 49.1% for the year ended December 31, 2022.
We will continue to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC and with the relevant Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval (SEDAR) We are an "emerging growth company," as defined in the JOBS Act, and as such, we have elected to comply with certain reduced U.S. public company reporting requirements.
We will continue to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC and with the relevant Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval (SEDAR).
If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. We may seek to raise additional funds through equity, equity-linked or debt financings.
If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. We may seek to raise additional funds through equity, equity- Page 37 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 linked or debt financings.
Net cash used in investing activities during the year ended December 31, 2021 was $19.7 million, consisting of $19.7 million of purchases of property and equipment and $0.6 million in equity investments, partially offset by $0.6 million of sales proceeds from the disposal of property and equipment.
Net Cash Used in Investing Activities Net cash used in investing activities during the year ended December 31, 2023 was $52.1 million, primarily due to the net cash paid for the acquisition of HMP of $28.6 million and $26.1 million of purchases of property and equipment, partially offset by $2.6 million of sales proceeds from the disposal of property and equipment.
Liquidity and Capital Resources Cash and cash equivalents at December 31, 2022 was $16.9 million, compared to $28.4 million at December 31, 2021. The primary non-recurring uses of excess cash during the period were associated with the 2022 Share Repurchase Program and the repayment of debt.
Liquidity and Capital Resources Cash and cash equivalents at December 31, 2023 was $12.8 million, compared to $16.9 million at December 31, 2022. The primary non-recurring use of excess cash during the 2023 period was to fund the acquisition of HMP.
Dollars, except vent patients) For the quarter ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Financial Information: Revenue $ 37,508 $ 35,759 $ 33,310 $ 32,255 $ 31,962 $ 29,285 $ 27,399 $ 28,416 Gross Profit 22,896 21,651 20,390 19,743 19,662 18,381 17,625 17,742 Gross Profit % 61 % 61 % 61 % 61 % 62 % 63 % 64 % 62 % Net Income 2,438 1,055 967 1,762 4,087 1,789 1,566 1,684 Cash and Cash Equivalents (As of) 16,914 21,478 21,922 29,248 28,408 26,867 31,151 31,097 Total Assets (As of) 117,043 119,419 115,904 119,007 117,962 115,486 111,014 113,001 Adjusted EBITDA (1) 9,306 6,982 6,458 7,273 9,549 7,419 6,847 5,468 Operational Information: Vent Patients (2) 9,306 9,127 8,837 8,434 8,405 8,200 8,103 7,733 (1) Refer to "Non-GAAP Financial Measures" section below for definition of Adjusted EBITDA.
Dollars, except vent patients) For the quarter ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Financial Information: Revenue $ 50,739 $ 49,402 $ 43,311 $ 39,556 $ 37,508 $ 35,759 $ 33,310 $ 32,255 Gross Profit 32,111 30,562 26,106 24,004 22,896 21,651 20,390 19,743 Gross Profit % 63 % 62 % 60 % 61 % 61 % 61 % 61 % 61 % Net Income 3,477 2,919 2,330 1,517 2,438 1,055 967 1,762 Cash and Cash Equivalents (As of) 12,839 10,078 10,224 23,544 16,914 21,478 21,922 29,248 Total Assets (As of) 154,895 149,400 149,117 124,634 117,043 119,419 115,904 119,007 Adjusted EBITDA (1) 12,845 12,081 9,810 8,328 9,306 6,982 6,458 7,273 Operational Information: Vent Patients (2) 10,327 10,244 10,005 9,337 9,306 9,127 8,837 8,434 (1) Refer to "Non-GAAP Financial Measures" section below for definition of Adjusted EBITDA.
The Company utilizes short term leases with a major supplier that could be extended over a longer term if there was a need for additional liquidity. In addition, our existing commercial credit facilities were fully undrawn as of December 31, 2022. Page 34 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
The Company has also historically utilized short term financing arrangements with suppliers that could be extended over a longer term if there was a need for additional liquidity. Page 35 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Cost of Revenue and Gross Profit For the year ended December 31, 2022, cost of revenue totaled $54.2 million, an increase of $10.5 million (or 24.1%) from the comparable period in 2021. Gross profit percentage decreased from approximately 62.7% to approximately 61.0% from the year ended December 31, 2021 to year ended December 31, 2022, respectively.
Dollars, except per share amounts) December 31, 2023 and 2022 Cost of Revenue and Gross Profit For the year ended December 31, 2023, cost of revenue totaled $70.2 million, an increase of $16.1 million (or 29.7%) from the comparable period in 2022.
(Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2022 and 2021 revenue in 2023 as costs stabilize relative to revenue growth. Research and Development Costs For the year ended December 31, 2022, research and development costs totaled $2.7 million, an increase of $0.6 million (or 27.8%) from the comparable period in 2021.
Research and Development Costs For the year ended December 31, 2023, research and development costs totaled $2.8 million, an increase of $0.1 million (or 3.2%) from the comparable period in 2022.
The primary changes in operating assets were an increase in gross accounts receivable of $7.3 million, a net increase in income taxes receivable/(payable) of $2.2 million, and a decrease in accrued liabilities of $4.0 million. Included in operating cash flows for the period is the receipt of $1.5 million in Provider Relief Funds.
The primary changes in working capital were an increase in accrued liabilities of $5.0 million, a decrease in prepaid expenses and other assets of $2.2 million, and a net increase in income taxes payable of $2.2 million, offset by an increase in net accounts receivable of $1.1 million.
This increase is attributed to the expense of additional stock-based awards during 2022. We expect that as we continue to increase our employee count and utilize stock-based awards as an aspect of employee compensation, stock-based compensation expense will increase accordingly.
This increase is attributed to the expense of additional stock-based awards during 2023. We anticipate that as we expand our workforce, incorporating stock-based awards as a component of employee compensation, stock-based compensation expenses will correspondingly rise.
Net Income For the year ended December 31, 2022, net income was $6.2 million, a decrease of $2.9 million (or 31.8%) from the comparable period in 2021.
Our annual estimated effective tax rate for 2023 is 28.8%. Net Income For the year ended December 31, 2023, net income was $10.2 million, an increase of $4.0 million (or 64.6%) from the comparable period in 2022.
The decrease in gross profit percentage is due to migration of the revenue mix associated with product and service diversification. As inflationary cost pressures subside and inflation adjusted reimbursements increase in upcoming periods, gross profit percentage for our normal operations is expected to increase, offset by some decreases associated with product and service diversification.
Gross profit percentage is expected to remain relatively stable in upcoming periods due to subsiding inflationary cost pressures and the positive effects associated with reimbursement rates, offset by some decreases associated with product and service diversification.
The non-cash net income adjustments primarily consisted of $6.9 million in change of allowance for doubtful accounts, $11.3 million of depreciation, $3.9 million in change in deferred tax asset, $5.2 million of stock-based compensation, and $1.2 million of income from equity investments.
The net income adjustments primarily consisted of $15.6 million of depreciation and amortization, $5.2 million of stock-based compensation, $1.7 million of deferred income tax expense, and $1.1 million of distributions of earnings received from equity method investments, offset by a $1.4 million change in inventory reserve.
As we continue to invest in research and development related projects to support our technology initiatives, we expect that the associated costs will remain consistent in 2023 relative to 2022 costs. Other Expense (Income) The decrease of $0.6 million in other income was driven by reductions in current year state and federal government grants.
As we continue to invest in research and development related projects to support our technology initiatives, we expect that the associated costs will remain consistent in 2024 relative to 2023 costs. Stock-Based Compensation For the year ended December 31, 2023, stock-based compensation totaled $5.8 million, an increase of $0.6 million (or 12.4%) from the comparable period in 2022.
The following table is a reconciliation of Net income, the most directly comparable GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated: For the quarter ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Net Income $ 2,438 $ 1,055 $ 967 $ 1,762 $ 4,087 $ 1,789 $ 1,566 $ 1,684 Add back: Depreciation 4,373 4,120 3,740 3,397 3,120 2,867 2,716 2,609 Interest expense 32 42 59 64 69 75 83 91 Stock-based compensation 1,317 1,309 1,271 1,305 1,305 1,302 1,236 1,307 Income tax expense (benefit) 1,146 456 421 745 968 1,386 1,246 (223) Adjusted EBITDA $ 9,306 $ 6,982 $ 6,458 $ 7,273 $ 9,549 $ 7,419 $ 6,847 $ 5,468 Use of Non-GAAP Financial Measures Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The following table is a reconciliation of Net income, the most directly comparable GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated: For the quarter ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Net Income $ 3,477 $ 2,919 $ 2,330 $ 1,517 $ 2,438 $ 1,055 $ 967 $ 1,762 Add back: Depreciation & amortization 5,918 5,975 5,207 4,762 4,373 4,120 3,740 3,397 Interest expense (income) 256 237 (20) (49) 32 42 59 64 Stock-based compensation (a) 1,534 1,453 1,471 1,391 1,317 1,309 1,271 1,305 Transaction costs (b) 61 177 94 206 — — — — Income tax expense 1,599 1,320 728 501 1,146 456 421 745 Adjusted EBITDA $ 12,845 $ 12,081 $ 9,810 $ 8,328 $ 9,306 $ 6,982 $ 6,458 $ 7,273 (a) Represents non-cash, equity-based compensation expense associated with option and RSU awards.
Net cash provided by operating activities during the year ended December 31, 2021 was $22.5 million, resulting from net income of $9.1 million, non-cash net income adjustments of $26.9 million and an increase in net operating liabilities of $5.8 million, which was partially offset by an increase in net operating assets of $7.8 million.
Net cash provided by operating activities during the year ended December 31, 2022 was $27.7 million, resulting from net income of $6.2 million, increased by net income adjustments of $21.7 million and a change in net working capital of $0.1 million.
The non-cash net income adjustments primarily consisted of $10.0 million of provision for uncollectible accounts, $15.6 million of depreciation, $5.2 million of stock-based compensation, and $0.9 million of income from equity investments.
The net income adjustments primarily consisted of $21.9 million of depreciation and amortization, $5.8 million of stock-based compensation, and $1.0 million of distributions of earnings received from equity method investments, offset by a $1.4 million deferred income tax benefit.
Net income as a percentage of net revenue decreased from 7.8% for the year ended December 31, 2021 to 4.5% for the year ended December 31, 2022, primarily driven by a decrease in higher margin COVID-19 response sales and an increase to selling, general, and administrative expenses associated with inflationary pressures, as described above.
Net income as a percentage of net revenue increased from 4.5% for the year ended December 31, 2022 to 5.6% for the year ended December 31, 2023, primarily due to improvements in selling, general, and administrative expenses associated with increased efficiencies and stabilizing costs. Page 34 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
The Company evaluates the net realizable value of accounts receivable as of the date of Consolidated Balance Sheets. Specifically, we consider historical realization data, including current and historical cash collections, accounts receivable aging trends, other operating trends and relevant business conditions.
Due to the nature of the industry and the reimbursement environment in which we operate, certain estimates are required in order to record revenues and accounts receivable at their net realizable values. Management’s evaluation takes into consideration such factors as historical realization data, including current and historical cash collections, accounts receivable aging trends, other operating trends and relevant business conditions.
Provision (Benefit) for Income Taxes For the year ended December 31, 2022, the provision for income taxes was a $2.8 million expense, compared to a $3.4 million expense during the 2021 period. Excluding the effect of discrete items, our annual estimated effective tax rate for 2022 is 30.6%.
As a result of continued paydowns on debt issued to fund the acquisition of HMP, we expect net interest expense to decrease in 2024 relative to 2023. Provision (Benefit) for Income Taxes For the year ended December 31, 2023, the provision for income taxes was a $4.1 million expense, compared to a $2.8 million expense during the 2022 period.
Excluding COVID-19 response sales and services, net revenue increased $28.1 million (or 25.9%) from the comparable period in 2021. Ventilator rental revenue increased $8.9 million (or 10.6%) due to our organic growth in active ventilator patient base sustained throughout the year.
Excluding COVID-19 response sales and services, net revenue increased $46.5 million (or 34.0%) from the comparable period in 2022.
However, we do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating costs. Page 33 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Page 36 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Based on the annual assessment performed on June 30, 2022, the Company met the re-entry thresholds to qualify as a "smaller reporting company" under Rule 12b-2 of the Exchange Act, and, as such, has elected to comply with certain reduced U.S. public company reporting requirements.
As a result, this Annual Report on Form 10-K is only required to comply with the smaller company disclosure obligations. We are an "emerging growth company," as defined in the JOBS Act, and as such, we have elected to comply with certain reduced U.S. public company reporting requirements.
However, the policy noted below could be deemed to meet the SEC’s definition of a critical accounting estimate. Allowance for Doubtful Accounts The Company estimates that a certain portion of receivables from customers may not be collected and maintains an allowance for doubtful accounts.
However, the policies noted below could be deemed to meet the SEC’s definition of a critical accounting estimate. Accounts Receivable Accounts receivable are presented at net realizable values that reflect the consideration we expect to receive which is inclusive of adjustments for price concessions.
Removed
Various policies and initiatives were implemented to reduce the transmission of COVID-19, including travel bans and restrictions, the postponement of non-essential medical surgeries, limiting access to medical facilities, and adoption of social distancing and remote working policies.
Added
As of June 30, 2023, we determined that we no longer qualify as a “smaller reporting company,” but we are not required to comply with the larger company disclosure obligations (subject to certain exemptions and relief from various reporting requirements that are applicable to emerging growth companies) until our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
Removed
Employee and patient safety is our first priority, and as a result, we put preparedness plans in place for our employees, especially our clinical personnel, and modified our clinical protocols to limit unnecessary patient encounters.
Added
Trends Affecting our Business Home medical equipment markets are witnessing sustained expansion, with a notable focus on the complex respiratory and Obstructive Sleep Apnea ("OSA") device segments. Analysts in the industry anticipate a consistent and robust growth trajectory, projecting Compound Annual Growth Rates ("CAGR") of approximately 6% for respiratory devices and 8% for OSA devices.
Removed
At this time, COVID-19 related measures do not appear to be negatively impacting our patient attrition rate, but we cannot assure you that future governmental policies and initiatives will not significantly disrupt our operations or adversely affect our ability to provide services to our patients in the future.
Added
This upward trend underscores the increasing demand for innovative solutions in respiratory care and sleep apnea management, highlighting the industry's responsiveness to evolving healthcare needs.
Removed
On January 30, 2023, the U.S. government announced that it plans to end the COVID-19 PHE on May 11, 2023. At the end of the COVID-19 PHE, many waivers and flexibilities available during the COVID-19 pandemic will become unavailable.
Added
As technological advancements and awareness drive the adoption of these specialized devices, we believe the HME markets, particularly in respiratory and OSA, are positioned for continuous expansion, offering promising opportunities for both providers and consumers alike.
Removed
While COVID-19 related measures have not had a material impact on our consolidated operating results for the year ended December 31, 2022, we cannot predict at this time the impact that the end of the COVID-19 PHE will have on our business and financial condition.
Added
The aging population remains a pivotal driver for the industry, as the elderly, constituting a substantial portion of HME patients, are expected to represent a higher percentage of the overall population. Projections from industry analysts indicate a consistent annual growth in the number of Medicare beneficiaries, contributing to ongoing patient volume growth.
Removed
It is also possible that the U.S. government will ultimately decide not to end the COVID-19 PHE on May 11, 2023, creating additional uncertainties about our future business and financial condition.
Added
A significant contributing factor to the industry's growth is the rising incidence of chronic diseases. Factors such as increasing obesity rates, consequences of past smoking prevalence, under-diagnosis of certain health conditions, and higher diagnosis rates for chronic diseases collectively shape the industry. There is a notable shift towards home-based treatment for these conditions.
Removed
Accordingly, we cannot assure you that demand for our products and services will continue or that we will be able to maintain operations necessary to satisfy such demand, including sufficient personnel, supply chains and distributions channels. The COVID-19 pandemic has led to significant disruptions and volatility in capital and financial markets.
Added
The industry is undergoing a transition to value-based healthcare, with both government and commercial payors increasingly adopting models that emphasize the transition of patients from acute care settings to home care. We believe HME providers are well-positioned to benefit from this industry shift. Advancements in technology and medical equipment have led to an increased prevalence of in-home treatments.
Removed
Broad economic factors resulting from the current COVID-19 pandemic, including high unemployment and underemployment levels and reduced consumer spending and confidence, could also affect our service mix, revenue mix, payor mix and patient base, as well as our ability to collect outstanding receivables.
Added
The broader range of treatments administered in patient homes is expected to continue growing. Projections from industry analysts indicate that U.S. home healthcare spending will increase, reaching $250 billion by 2031, with a CAGR of approximately 7%. Market consolidation is a notable trend favoring larger, financially stable players.
Removed
Business closures and layoffs in the geographic areas in which we operate may lead to increases in the uninsured and under-insured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services rendered.
Added
The decline in the number of smaller regional players is attributed to the capital investment and scale required to compete effectively. This has led to a more consolidated and competitive landscape in the DME market. Despite these positive trends, the industry faces challenges such as cost containment efforts of payors.
Removed
Any increase in the amount or deterioration in the collectability of patient accounts receivable will adversely affect our financial results and require an increased level of working capital. In addition, we may experience supply chain disruptions, including delays and price increases in equipment and supplies.
Added
The consolidation of managed care payors into larger purchasing groups has increased negotiating power, resulting in pricing pressure on HME providers. In addition to ongoing negotiations contract management with third party payors to secure fair reimbursement, HME providers are engaging in value-based contracting, focusing on outcomes and patient satisfaction.
Removed
Staffing, equipment and supplies shortages may also impact our ability to assess potential patients in hospitals and set up and treat patients in the home.
Added
These value-based contracts leverage data analytics to demonstrate the cost-effectiveness and quality of durable medical goods and provide evidence-based data to payors demonstrating the long-term benefits and cost savings associated with the use of certain medical goods.
Removed
We believe we presently have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.
Added
Impact of Inflation The Company faces current and potential future inflationary pressures driven by factors such as general cost increases, supply chain disruptions, and governmental policies. The manufacturing and distribution costs of Viemed's patient equipment are affected by rising material, labor, and transportation expenses, including fuel costs.

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