☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ontario |
||
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Common Shares, no par value |
AKU |
The Nasdaq Stock Market | ||
Common Shares, no par value |
AKU |
The Toronto Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer |
☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Page |
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Item 1. |
2 |
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Item 1A. |
15 |
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Item 1B. |
40 |
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Item 2. |
40 |
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Item 3. |
40 |
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Item 4. |
41 |
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Item 5. |
41 |
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Item 6. |
45 |
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Item 7. |
46 |
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Item 7A. |
57 |
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Item 8. |
57 |
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Item 9. |
99 |
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Item 9A. |
99 |
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Item 9B. |
101 |
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Item 9C. |
101 |
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Item 10. |
101 |
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Item 11. |
101 |
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Item 12. |
101 |
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Item 13. |
101 |
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Item 14. |
102 |
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Item 15. |
102 |
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Item 16. |
103 |
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• | expected performance and cash flows; |
• | changes in laws and regulations affecting the Company; |
• | expenses incurred by the Company as a public company; |
• | future growth of the outpatient diagnostic imaging and radiation oncology markets; |
• | changes in reimbursement rates by payors; |
• | remediation and effectiveness of the design and effectiveness of our disclosure controls and procedures and internal control over financial reporting; |
• | the outcome of litigation and payment obligations in respect of prior settlements; |
• | competition; |
• | acquisitions and divestitures of businesses; |
• | potential synergies from acquisitions; |
• | non-wholly owned and other business arrangements; |
• | access to capital and the terms relating thereto; |
• | technological changes in our industry; |
• | successful execution of internal plans; |
• | compliance with our debt covenants; |
• | anticipated costs of capital investments; and |
• | future compensation of our directors and executive officers. |
• | our ability to successfully grow the market and sell our services; |
• | general market conditions in our industry; |
• | our ability to service existing debt; |
• | our ability to acquire new centers and, upon acquisition, to successfully integrate market and sell new services that we acquire; |
• | our ability to achieve the financing necessary to complete our acquisitions; |
• | our ability to enforce any claims relating to breaches of indemnities or representations and warranties in connection with any acquisition; |
• | market conditions in the capital markets and our industry that make raising capital or consummating acquisitions difficult, expensive or both, or which may disrupt our annual operating budget and forecasts; |
• | unanticipated cash requirements to support current operations, to expand our business or for capital expenditures; |
• | delays or setbacks with respect to governmental approvals, or manufacturing or commercial activities; |
• | changes in laws and regulations; |
• | the loss of key management or personnel; |
• | the risk the Company is not able to arrange sufficient cost-effective financing to repay maturing debt and to fund expenditures, future operational activities and acquisitions, and other obligations; |
• | the risks related to the additional costs and expenses associated with being a U.S. domestic issuer as opposed to a foreign private issuer; and |
• | the risks associated with legislative and regulatory developments that may affect costs, revenues, the speed and degree of competition entering the market, global capital markets activity and general economic conditions in geographic areas where we operate (including the adverse impact of the coronavirus (“COVID-19”) pandemic on the Company). |
• | no unforeseen changes in the legislative and operating framework for our business; |
• | no unforeseen changes in the prices for our services in markets where prices are regulated; |
• | no unforeseen changes in the regulatory environment for our services; |
• | a stable competitive environment; and |
• | no significant event occurring outside the ordinary course of business such as a natural disaster, public health epidemic or other calamity. |
• | Aging demographics |
• | Greater Consumer Awareness for Earlier Intervention and Preventative Screening long-run. |
• | Technological Advances Leading to More Use Cases for Radiology |
• | Three-dimensional conformal radiation therapy (“3D-CRT”): 3D-CRT uses three-dimensional imaging data and three-dimensional treatment planning to more accurately and effectively plan and deliver Linac radiation treatments. It is the most common form of technology used in practices and may be supplanted by intensity modulated radiation therapy (“IMRT”) or in conjunction with image guided radiation therapy (“IGRT”) when the specific case requires a higher level of precision or conformality. |
• | IMRT |
• | IGRT 3D-CRT, IMRT, stereotactic body radiotherapy (“SBRT”) and SRS. |
• | SRS and SBRT 3D-CRT, IMRT and IGRT. Due to the extremely high doses used for SRS and SBRT, the need for precision in the planning and delivery of the treatment is critical. SRS/SBRT is delivered with a range of advanced technologies such as the CyberKnife® , Gamma Knife® , BrainLab™ , Novalis-Tx ™ , TrueBeam STx™ , Trilogy™ , VERO, TomoTherapy® , Elekta Infinity™ and Axesse™ . |
• | Low dose rate brachytherapy (“LDR”) |
• | High dose rate brachytherapy (“HDR”) |
• | Significant costs have been incurred in connection with the consummation of the acquisition of Alliance and are expected to be incurred in connection with the integration of Akumin and Alliance into a combined company, including legal, accounting, financial advisory and other costs. |
• | We may not realize the anticipated benefits of the Alliance acquisition. |
• | We have identified material weaknesses in our internal control over financial reporting. If we fail to remediate these material weaknesses or experience material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our Common Shares. |
• | We may face litigation and other risks as a result of the material weaknesses in our internal control over financial reporting. |
• | We face various risks related to health epidemics and other outbreaks, including the global outbreak of COVID-19, which may have material adverse effects on our business, financial condition, results of operations and cash flows. |
• | We experience competition from other outpatient diagnostic imaging companies and hospitals, and this competition could adversely affect our revenue and business. |
• | If our contracted radiology and radiation oncology practices lose a significant number of physicians, our financial results could be adversely affected. |
• | We are and may from time to time become subject to additional professional malpractice liability, which could be costly and negatively impact our business. |
• | We may not be able to secure additional financing, which may impair our ability to complete future acquisitions. |
• | We may engage in litigation with our partners and contractors. |
• | The regulatory framework in which we operate is uncertain and evolving. |
• | Failure to structure our operations in compliance with federal and state laws and regulations, including anti-kickback, self-referral, false claims or other fraud and abuse laws, could result in substantial penalties. |
• | We may from time to time become the subject of legal, regulatory and governmental proceedings that, if resolved unfavorably, could have an adverse effect on us, and we may be subject to other loss contingencies, both known and unknown. |
• | Federal and state privacy and information security laws are complex, and if we fail to comply with applicable laws, regulations and standards, or if we fail to properly maintain the integrity of our data, protect our proprietary rights to our systems, or defend against cybersecurity attacks, we may be subject to government or private actions due to privacy and security breaches, and our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected. |
• | We have significant liabilities which require us to generate sufficient cash flows from operations in order to make mandated payments of principal and interest. |
• | We face liquidity risks and may encounter difficulty raising funds to meet our financial commitments. |
• | The effect of the uncertainty relating to potential future changes to U.S. healthcare laws may increase our and our partners’ and contractors’ healthcare costs, limit the ability of patients to obtain health insurance, increase patients’ share of health care costs and negatively impact our financial results. |
• | We operate outpatient diagnostic imaging and oncology centers in some regions that are exposed to natural disasters, public health epidemics and other calamities. |
• | We may be unsuccessful in evaluating material risks involved in completed and future investments, which could impact our ability to realize the expected benefits from future investments and acquisitions. |
• | Market rate fluctuations could adversely affect our results of operations. |
• | We may not be able to generate sufficient cash to service our debt obligations. |
• | the possibility we will fail to implement our business plans for the combined company, including as a result of legislation or regulation that affects the timing or costs associated with the operations of the combined company or our integration plan; |
• | possible inconsistencies in the standards, controls, procedures, policies and compensation structures of the two companies; |
• | limitations prior to the consummation of the acquisition on our ability to work with Alliance management to develop an integration plan; |
• | the increased scope and complexity of our operations; |
• | the entry by us into new lines of business; |
• | requirements, if any, to divest certain of our businesses; |
• | the potential loss of key employees; |
• | the costs associated with our efforts to retain key employees; |
• | provisions in our and Alliance’s contracts with third parties that may limit our flexibility to take certain actions; |
• | risks and limitations on our ability to consolidate corporate and administrative infrastructures or cultures of the two companies; |
• | undisclosed liabilities of Alliance for which we, as a successor owner, may be responsible; |
• | obligations we will have to holders of our indebtedness, including Stonepeak; and |
• | the possibility of unanticipated delays, costs or inefficiencies associated with the integration of Alliance’s operations with our own. |
• | a limited availability of market quotations for our securities; |
• | a limited amount of news and analyst coverage for us; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | a significant portion of our cash flows could be used to service our indebtedness; |
• | the covenants contained in the agreements governing our outstanding indebtedness may limit our ability to borrow additional funds, dispose of assets, pay dividends and make certain investments; |
• | our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry; |
• | a high level of debt would increase our vulnerability to general adverse economic and industry conditions; |
• | a high level of debt may place us at a competitive disadvantage compared to our competitors that are less leveraged and therefore may be able to take advantage of opportunities that our indebtedness would prevent us from pursuing; and |
• | a high level of debt may impair our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions or other purposes. |
• | federal healthcare program statutes and regulations, including those governing the Medicare, Medicaid and TRICARE programs; |
• | the U.S. federal civil and criminal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under U.S. federal and state healthcare programs such as Medicare, state Medicaid programs and TRICARE. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
• | the federal Ethics in Patient Referrals Act, commonly known as the Stark Law, which, in the absence of an applicable exception, prohibits a physician from making a referral for certain designated health services covered by the Medicare program, including certain diagnostic imaging, radiology services and radiation therapy services, if the physician or an immediate family member of the physician has a financial relationship with the individual or entity providing the designated health services. The Stark Law also prohibits the individual or entity furnishing the designated health services from billing, presenting or causing to be presented a claim for the designated health services furnished pursuant to the prohibited referral; |
• | the federal health care fraud statute and its implementing regulations, which imposes criminal liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
• | the federal Civil Monetary Penalties Statute and associated regulations, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know such remuneration is likely to influence the beneficiary’s selection of a particular provider or supplier of services reimbursable by Medicare or a state healthcare program, and which authorize assessments and program exclusion for various forms of fraud and abuse involving the Medicare and Medicaid programs; |
• | Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, and other data privacy and security laws and regulations (e.g., the California Consumer Privacy Act), which impose certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information by covered entities, such as health plans, healthcare clearinghouses and healthcare providers, as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information; |
• | state law equivalents of each of the above federal laws, including state anti-kickback, self-referral and false claims laws that may apply more broadly to healthcare items or services paid by all payors, including self-pay patients and private insurers, that govern our interactions with patients or restrict payments that may be made to healthcare providers and other potential referral sources; |
• | state laws that prohibit the practice of medicine by non-physicians and prohibit fee-splitting arrangements involving physicians; |
• | laws relating to facility, practitioner and provider licensure; |
• | laws relating to medical malpractice; |
• | federal and state billing and claims submission and other insurance laws and regulations; |
• | federal and state scope of practice and other laws pertaining to the provision of services by qualified health care providers; |
• | federal and state laws governing the diagnostic imaging and therapeutic equipment we use in our business concerning patient safety, equipment operating specifications and radiation exposure levels; |
• | federal and state statutes and regulations that govern workplace health and safety; |
• | federal and state laws pertaining to the services provided by non-physician healthcare providers in certain setting, including physician supervision of those services; and |
• | state laws governing reimbursement for diagnostic services related to services compensable under worker’s compensation rules. |
• | at least 25% of the issued shares of any class or series of our capital stock was owned by or belonged to one or any combination of (a) the Non-Canadian Holder, (b) persons with whom the Non-Canadian Holder does not deal at arm’s length, and (c) partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships, and |
• | more than 50% of the fair market value of the common shares was derived, directly or indirectly, from one or any combination of: (i) real or immoveable property situated in Canada, (ii) “Canadian resource properties” (as that term is defined in the Canadian Tax Act), (iii) “timber resource properties” (as that term is defined in the Canadian Tax Act) and (iv) options in respect of, or interests in, or for civil law rights in, property in any of the foregoing whether or not the property exists. |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Radiology |
89 | % | 100 | % | ||||
Oncology |
11 | % | — | |||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Patient fee payors: |
||||||||
Commercial |
$ | 226,843 | $ | 193,917 | ||||
Medicare |
51,238 | 27,874 | ||||||
Medicaid |
8,002 | 7,700 | ||||||
Other patient revenue |
11,499 | 8,833 | ||||||
|
|
|
|
|||||
297,582 | 238,324 | |||||||
Hospitals and healthcare providers |
118,491 | — | ||||||
Other revenues |
5,006 | 7,302 | ||||||
|
|
|
|
|||||
$ | 421,079 | $ | 245,626 | |||||
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
Radiology sites |
199 | 127 | ||||||
Oncology sites |
34 | — | ||||||
|
|
|
|
|||||
233 | 127 | |||||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Revenues |
$ | 421,079 | $ | 245,626 | ||||
Operating expenses: |
||||||||
Cost of operations, excluding depreciation and amortization |
359,735 | 205,635 | ||||||
Depreciation and amortization |
44,895 | 17,060 | ||||||
Stock-based compensation |
2,792 | 2,084 | ||||||
Other operating losses (gains) |
583 | (4,130 | ) | |||||
|
|
|
|
|||||
Total operating expenses |
408,005 | 220,649 | ||||||
|
|
|
|
|||||
Income from operations |
13,074 | 24,977 | ||||||
Other expense (income): |
||||||||
Interest expense |
62,575 | 32,781 | ||||||
Acquisition-related costs |
20,233 | 1,079 | ||||||
Settlement and related costs (recoveries) |
(539 | ) | 2,324 | |||||
Other non-operating losses (gains) |
(3,990 | ) | 22,387 | |||||
|
|
|
|
|||||
Total other expense, net |
78,279 | 58,571 | ||||||
|
|
|
|
|||||
Loss before income taxes |
(65,205 | ) | (33,594 | ) | ||||
Income tax expense (benefit) |
(30,391 | ) | 562 | |||||
|
|
|
|
|||||
Net loss |
(34,814 | ) | (34,156 | ) | ||||
Less: Net income attributable to noncontrolling interests |
8,477 | 2,585 | ||||||
|
|
|
|
|||||
Net loss attributable to common shareholders |
$ | (43,291 | ) | $ | (36,741 | ) | ||
|
|
|
|
|||||
Net loss per share attributable to common shareholders: |
||||||||
Basic and diluted |
$ | (0.56 | ) | $ | (0.52 | ) | ||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Radiology |
$ | 374,402 | $ | 245,626 | ||||
Oncology |
46,677 | — | ||||||
|
|
|
|
|||||
$ | 421,079 | $ | 245,626 | |||||
|
|
|
|
Year Ended December 31, |
||||||||||||||||
(in thousands) |
2021 |
2020 |
Change |
% Change |
||||||||||||
MRI scans |
539 | 326 | 213 | 65 | % | |||||||||||
PET/CT scans |
46 | 6 | 40 | 667 | % | |||||||||||
Other modalities |
1,097 | 911 | 186 | 20 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
1,682 | 1,243 | 439 | 35 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Oncology patient starts |
3 | — | 3 | nmf | ||||||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Employee compensation |
$ | 164,053 | $ | 84,038 | ||||
Third-party services and professional fees |
63,301 | 30,183 | ||||||
Reading fees |
42,842 | 37,818 | ||||||
Rent and utilities |
37,158 | 30,203 | ||||||
Administrative |
24,660 | 12,231 | ||||||
Medical supplies and other |
27,721 | 11,162 | ||||||
|
|
|
|
|||||
$ | 359,735 | $ | 205,635 | |||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Net loss |
$ |
(34,814 |
) |
$ |
(34,156 |
) | ||
Interest expense |
62,575 |
32,781 |
||||||
Income tax expense (benefit) |
(30,391 |
) |
562 |
|||||
Depreciation and amortization |
44,895 |
17,060 |
||||||
EBITDA |
42,265 |
16,247 |
||||||
Adjustments: |
||||||||
Stock-based compensation |
2,792 |
2,084 |
||||||
Acquisition-related costs |
20,233 |
1,079 |
||||||
Settlement and related costs (recoveries) |
(539 |
) |
2,324 |
|||||
Gain on revaluation of earn-out liability |
— |
(5,457 |
) | |||||
Loss on extinguishment of debt |
— |
18,279 |
||||||
Loss on settlement of interest rate cap derivative |
— |
4,162 |
||||||
Gain on conversion of debt to equity investment |
(3,360 |
) |
— |
|||||
Severance, restructuring and other charges |
3,368 |
— |
||||||
Other losses, net |
342 |
407 |
||||||
Deferred rent expense |
1,802 |
2,953 |
||||||
Adjusted EBITDA |
$ |
66,903 |
$ |
42,078 |
||||
Year Ended |
||||
(in thousands) |
December 31, 2021 |
|||
Adjusted EBITDA: |
||||
Radiology |
$ |
64,992 |
||
Oncology |
15,466 |
|||
Corporate |
(13,555 |
) | ||
$ |
66,903 |
|||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Cash and cash equivalents at beginning of period |
$ |
44,396 |
$ |
23,389 |
||||
Net cash provided by operating activities |
17,050 |
18,615 |
||||||
Net cash used in investing activities |
(779,171 |
) |
(9,007 |
) | ||||
Net cash provided by financing activities |
766,144 |
11,399 |
||||||
Cash and cash equivalents at end of period |
$ |
48,419 |
$ |
44,396 |
||||
Page |
||||
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) |
59 |
|||
60 |
||||
61 |
||||
62 |
||||
63 |
||||
65 |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Revenues |
$ | 421,079 | $ | 245,626 | ||||
Operating expenses: |
||||||||
Cost of operations, excluding depreciation and amortization |
359,735 | 205,635 | ||||||
Depreciation and amortization |
44,895 | 17,060 | ||||||
Stock-based compensation |
2,792 | 2,084 | ||||||
Other operating losses (gains) |
583 | (4,130 | ) | |||||
|
|
|
|
|||||
Total operating expenses |
408,005 | 220,649 | ||||||
|
|
|
|
|||||
Income from operations |
13,074 | 24,977 | ||||||
Other expense (income): |
||||||||
Interest expense |
62,575 | 32,781 | ||||||
Acquisition-related costs |
20,233 | 1,079 | ||||||
Settlement and related costs (recoveries) |
(539 | ) | 2,324 | |||||
Other non-operating losses (gains) |
(3,990 | ) | 22,387 | |||||
|
|
|
|
|||||
Total other expense, net |
78,279 | 58,571 | ||||||
|
|
|
|
|||||
Loss before income taxes |
(65,205 | ) | (33,594 | ) | ||||
Income tax expense (benefit) |
(30,391 | ) | 562 | |||||
|
|
|
|
|||||
Net loss |
(34,814 | ) | (34,156 | ) | ||||
Less: Net income attributable to noncontrolling interests |
8,477 | 2,585 | ||||||
|
|
|
|
|||||
Net loss attributable to common shareholders |
$ | (43,291 | ) | $ | (36,741 | ) | ||
|
|
|
|
|||||
Comprehensive loss, net of taxes: |
||||||||
Net loss |
$ | (34,814 | ) | $ | (34,156 | ) | ||
Other comprehensive income: |
||||||||
Unrealized loss on hedging transactions, net of taxes |
(10 | ) | — | |||||
Reclassification adjustment for losses included in net loss, net of taxes |
28 | — | ||||||
|
|
|
|
|||||
Other comprehensive income |
18 | — | ||||||
|
|
|
|
|||||
Comprehensive loss, net of taxes |
(34,796 | ) | (34,156 | ) | ||||
Less: Comprehensive income attributable to noncontrolling interests |
8,477 | 2,585 | ||||||
|
|
|
|
|||||
Comprehensive loss attributable to common shareholders |
$ | (43,273 | ) | $ | (36,741 | ) | ||
|
|
|
|
|||||
Net loss per share attributable to common shareholders: |
||||||||
Basic and diluted |
$ | (0.56 | ) | $ | (0.52 | ) | ||
|
|
|
|
Common Stock |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Total Shareholders’ Equity |
Noncontrolling Interests |
Total Equity |
|||||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||||||
Balance, December 31, 2019 |
69,840,928 | $ | 158,881 | $ | — | $ | (43,392 | ) | $ | 115,489 | $ | 3,500 | $ | 118,989 | ||||||||||||||
Net income (loss) |
— | — | — | (36,741 | ) | (36,741 | ) | 2,585 | (34,156 | ) | ||||||||||||||||||
Issuance of common stock under stock-based awards |
337,500 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation |
— | 2,084 | — | — | 2,084 | — | 2,084 | |||||||||||||||||||||
Distributions paid to noncontrolling interests |
— | — | — | — | — | (1,747 | ) | (1,747 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2020 |
70,178,428 | 160,965 | — | (80,133 | ) | 80,832 | 4,338 | 85,170 | ||||||||||||||||||||
Net income (loss) , net of the net income attributable to redeemable noncontrolling interests |
— | — | — | (43,291 | ) | (43,291 | ) | 7,715 | (35,576 | ) | ||||||||||||||||||
Issuance of common stock: |
||||||||||||||||||||||||||||
Acquisition consideration |
15,198,569 | 33,878 | — | — | 33,878 | — | 33,878 | |||||||||||||||||||||
Other issuance |
3,500,000 | 10,000 | — | — | 10,000 | — | 10,000 | |||||||||||||||||||||
Warrants issued |
— | 21,014 | — | — | 21,014 | — | 21,014 | |||||||||||||||||||||
Stock options exercised |
150,000 | 75 | — | — | 75 | — | 75 | |||||||||||||||||||||
Stock-based compensation |
— | 2,792 | — | — | 2,792 | — | 2,792 | |||||||||||||||||||||
Other comprehensive income |
— | — | 18 | — | 18 | — | 18 | |||||||||||||||||||||
Acquisition of noncontrolling interests |
— | — | — | — | — | 174,976 | 174,976 | |||||||||||||||||||||
Distributions paid to noncontrolling interests |
— | — | — | — | — | (9,969 | ) | (9,969 | ) | |||||||||||||||||||
Other equity transactions |
— | (129 | ) | — | — | (129 | ) | 1,430 | 1,301 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2021 |
89,026,997 | $ | 228,595 | $ | 18 | $ | (123,424 | ) | $ | 105,189 | $ | 178,490 | $ | 283,679 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating activities: |
||||||||
Net loss |
$ | (34,814 | ) | $ | (34,156 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
44,895 | 17,060 | ||||||
Stock-based compensation |
2,792 | 2,084 | ||||||
Deferred income taxes |
(30,432 | ) | 700 | |||||
Non-cash interest expense |
15,470 | 2,241 | ||||||
Amortization of deferred financing costs and accretion of discount on long-term debt |
1,508 | 3,241 | ||||||
Non-cash change in fair value of financial instruments |
(100 | ) |
(5,457 | ) | ||||
Loss on extinguishment of debt |
— |
18,279 | ||||||
Loss on settlement of derivative |
— | 4,162 | ||||||
Other non-cash items |
(2,888 | ) | 1,273 | |||||
Changes in operating assets and liabilities, net of acquisitions: |
||||||||
Accounts receivable |
12,308 | (3,075 | ) | |||||
Prepaid expenses and other assets |
3,175 | 273 | ||||||
Accounts payable and other liabilities |
4,134 | 9,037 | ||||||
Operating lease liabilities and right-of-use |
1,002 | 2,953 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
17,050 | 18,615 | ||||||
|
|
|
|
|||||
Investing activities: |
||||||||
Purchases of property and equipment |
(17,867 | ) | (5,344 | ) | ||||
Business acquisitions, net of cash acquired |
(758,114 | ) | (3,199 | ) | ||||
Other investing activities |
(3,190 | ) | (464 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(779,171 | ) | (9,007 | ) | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Financing activities: |
||||||||
Proceeds from long-term debt |
803,045 | 406,300 | ||||||
Principal payments on long-term debt |
(5,997 | ) | (371,524 | ) | ||||
Principal payments on finance leases |
(4,342 | ) | (1,525 | ) | ||||
Payment of debt issuance costs |
(22,037 | ) | (15,216 | ) | ||||
Payment of earn-out liability |
(4,689 | ) | (4,689 | ) | ||||
Proceeds from issuance of common stock |
10,505 | — | ||||||
Payment of issuance costs for common stock and warrants |
(1,334 | ) | — | |||||
Contributions received from noncontrolling interests |
1,239 | — | ||||||
Distributions paid to noncontrolling interests |
(11,541 | ) | (1,747 | ) | ||||
Other financing activities |
1,295 | (200 | ) | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
766,144 | 11,399 | ||||||
|
|
|
|
|||||
Net increase in cash and cash equivalents |
4,023 | 21,007 | ||||||
Cash and cash equivalents, beginning of period |
44,396 | 23,389 | ||||||
|
|
|
|
|||||
Cash and cash equivalents, end of period |
$ | 48,419 | $ | 44,396 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Interest paid |
$ | 35,028 | $ | 22,844 | ||||
Income taxes paid, net |
217 | 1,172 | ||||||
Supplemental disclosure of non-cash investing and financing activities: |
||||||||
Interest payable-in-kind |
15,470 | 2,241 | ||||||
Warrants issued with long-term debt |
21,918 |
— |
||||||
Embedded derivative related to long-term debt |
7,622 |
— |
||||||
Property and equipment purchases in accounts payable and other accrued liabilities |
9,534 | 334 |
Estimated Useful Life | ||
Medical equipment and equipment under finance leases |
2 to 10 years | |
Office and computer equipment |
2 to 7 years | |
Transportation and service equipment |
3 to 10 years | |
Furniture and fixtures |
5 to 10 years | |
Leasehold improvements |
Shorter of the lease term or estimated useful life |
(in thousands) |
||||
Balance, December 31, 2020 |
$ | — | ||
Fair value at time of Alliance Acquisition |
37,040 | |||
Net income attributable to redeemable noncontrolling interests |
762 | |||
Contributions received from redeemable noncontrolling interests |
1,239 | |||
Distributions paid to redeemable noncontrolling interests |
(1,572 | ) | ||
|
|
|||
Balance, December 31, 2021 |
$ | 37,469 | ||
|
|
• | Debt: |
• | Derivative instruments: period-end. |
• | Level 1 |
• | Level 2 |
• | Level 3 . |
(in thousands, except share and per share amounts) |
||||
Shares of common stock issued |
14,223,570 |
|||
Per share value of common stock issued |
$ |
2.17 |
||
Fair value of common stock issued |
$ |
30,865 |
||
Cash paid at closing |
748,490 |
|||
Working capital and other adjustments |
6,261 |
|||
Total purchase price |
$ |
785,616 |
||
(in thousands) |
||||
Assets acquired: |
||||
Cash and cash equivalents |
$ |
26,125 |
||
Net working capital |
14,221 |
|||
Property and equipment |
206,475 |
|||
Operating lease right-of-use assets |
69,919 |
|||
Goodwill |
455,760 |
|||
Intangibles – Customer contracts |
266,224 |
|||
Intangibles – Trade names |
69,108 |
|||
Intangibles – Third party management agreements |
10,200 |
|||
Intangibles – Certificates of need |
69,558 |
|||
Other assets |
8,170 |
|||
1,195,760 |
||||
Liabilities assumed: |
||||
Equipment debt |
54,673 |
|||
Obligations under finance leases |
9,041 |
|||
Obligations under operating leases |
74,290 |
|||
Deferred tax liabilities |
52,760 |
|||
Other liabilities |
7,364 |
|||
198,128 |
||||
Net assets acquired |
997,632 |
|||
Less redeemable noncontrolling interests |
37,040 |
|||
Less noncontrolling interests |
174,976 |
|||
Purchase price |
$ |
785,616 |
Year Ended December 31, |
||||||||
(unaudited; in thousands) |
2021 |
2020 |
||||||
Pro forma net revenues |
$ | 746,550 | $ | 741,834 | ||||
Pro forma net loss before income taxes |
(132,494 | ) | (181,554 | ) |
(in thousands) |
Fair value at September 1, 2021 |
Valuation Technique |
Unobservable Input |
Selected Assumptions | ||||||
Customer contracts |
$ | 266,224 | Attrition rate | Attrition rate Growth rate Discount rate |
2.8% - 5.8% 3.0% 9.0% - 12.3% | |||||
Trade names |
69,108 | Relief from royalty method | Royalty rate Discount rate |
1.5% 9.0% - 12.3% | ||||||
Certificates of need |
69,558 | Acquisition costs | Discount rate | 9.0% - 12.3% |
(in thousands) |
||||
Assets acquired: |
||||
Cash |
$ | 5 | ||
Accounts receivable |
59 | |||
Property and equipment |
329 | |||
Operating lease right-of-use |
1,413 | |||
Goodwill |
94 | |||
|
|
|||
1,900 | ||||
|
|
|||
Liabilities assumed: |
||||
Accounts payable and other accrued liabilities |
33 | |||
Obligations under operating leases |
1,413 | |||
|
|
|||
1,446 | ||||
|
|
|||
Purchase price |
$ | 454 | ||
|
|
(in thousands) |
||||
Assets acquired: |
||||
Accounts receivable |
$ | 3,594 | ||
Prepaid expenses |
83 | |||
Property and equipment |
483 | |||
Operating lease right-of-use |
6,874 | |||
Goodwill |
32,610 | |||
Other intangible assets |
841 | |||
|
|
|||
44,485 | ||||
|
|
|||
Liabilities assumed: |
||||
Accounts payable and other accrued liabilities |
350 | |||
Obligations under finance leases |
136 | |||
Obligations under operating leases |
6,874 | |||
|
|
|||
7,360 | ||||
|
|
|||
Purchase price |
$ | 37,125 | ||
|
|
(in thousands) |
||||
Assets acquired: |
||||
Property and equipment |
$ | 521 | ||
Operating lease right-of-use |
2,308 | |||
Goodwill |
279 | |||
|
|
|||
3,108 | ||||
Liabilities assumed: |
||||
Obligations under operating leases |
2,308 | |||
|
|
|||
Purchase price |
$ | 800 | ||
|
|
(in thousands) |
||||
Assets acquired: |
||||
Prepaid expenses |
$ | 33 | ||
Property and equipment |
412 | |||
Operating lease right-of-use |
2,428 | |||
Goodwill |
1,275 | |||
Other assets |
369 | |||
|
|
|||
4,517 | ||||
Liabilities assumed: |
||||
Obligations under operating leases |
2,428 | |||
|
|
|||
Purchase price |
$ | 2,089 | ||
|
|
(in thousands) |
||||
Assets acquired: |
||||
Property and equipment |
$ | 820 | ||
Operating lease right-of-use |
555 | |||
Goodwill |
400 | |||
Other assets |
6 | |||
|
|
|||
1,781 | ||||
Liabilities assumed: |
||||
Obligations under operating leases |
555 | |||
|
|
|||
Purchase price |
$ | 1,226 | ||
|
|
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Medical equipment |
$ | 227,796 | $ | 62,406 | ||||
Leasehold improvements |
39,763 | 19,360 | ||||||
Equipment under finance leases |
34,597 | 23,169 | ||||||
Office and computer equipment |
16,701 | 452 | ||||||
Transportation and service equipment |
8,996 | — | ||||||
Furniture and fixtures |
3,130 | 1,479 | ||||||
Construction in progress |
6,423 | — | ||||||
|
|
|
|
|||||
337,406 | 106,866 | |||||||
Less accumulated depreciation |
78,284 | 43,152 | ||||||
|
|
|
|
|||||
$ | 259,122 | $ | 63,714 | |||||
|
|
|
|
(in thousands) |
Radiology |
Oncology |
Total |
|||||||||
Balance, December 31, 2019 |
$ | 355,667 | $ | — | $ | 355,667 | ||||||
Acquisitions |
1,675 | — | 1,675 | |||||||||
Adjustments |
(5,732 | ) | — | (5,732 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance, December 31, 2020 |
351,610 | — | 351,610 | |||||||||
Acquisitions |
330,383 | 158,360 | 488,743 | |||||||||
|
|
|
|
|
|
|||||||
Balance, December 31, 2021 |
$ | 681,993 | $ | 158,360 | $ | 840,353 | ||||||
|
|
|
|
|
|
October 1, 2021 | ||
Discount rate |
9.5% | |
Perpetual growth rate |
2.5% | |
Tax rate |
26.0% | |
Risk-free interest rate |
2.5% | |
EBITDA multiple |
7.5x to 10.5x |
Weighted Average Useful Life (in years) |
December 31, 2021 |
December 31, 2020 |
||||||||||||||||||||||||||
(dollars in thousands) |
Gross Carrying Amount |
Accumulated Amortization |
Intangible Assets, Net |
Gross Carrying Amount |
Accumulated Amortization |
Intangible Assets, Net |
||||||||||||||||||||||
Finite-lived intangible assets: |
||||||||||||||||||||||||||||
Customer contracts |
20 | $ | 266,224 | $ | (4,437 | ) | $ | 261,787 | $ | — | $ | — | $ | — | ||||||||||||||
Trade names |
18 | 77,466 | (6,054 | ) | 71,412 | 7,823 | (3,258 | ) | 4,565 | |||||||||||||||||||
Management agreements |
17 | 10,200 | (200 | ) | 10,000 | — | — | — | ||||||||||||||||||||
Other |
4 | 4,814 | (3,425 | ) | 1,389 | 4,508 | (2,325 | ) | 2,183 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
$ | 358,704 | $ | (14,116 | ) | 344,588 | $ | 12,331 | $ | (5,583 | ) | 6,748 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Indefinite-lived intangible assets |
69,558 | — | ||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
Total other intangible assets |
$ | 414,146 | $ | 6,748 | ||||||||||||||||||||||||
|
|
|
|
(in thousands) |
||||
Year ending December 31: |
||||
2022 |
$ | 19,814 | ||
2023 |
18,837 | |||
2024 |
18,132 | |||
2025 |
17,475 | |||
2026 |
17,421 | |||
Thereafter |
252,909 | |||
|
|
|||
$ | 344,588 | |||
|
|
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
2028 Senior Notes |
$ | 375,000 | $ | — | ||||
2025 Senior Notes |
475,000 | 400,000 | ||||||
Subordinated Notes |
372,470 | — | ||||||
Equipment Debt |
58,827 | 1,129 | ||||||
|
|
|
|
|||||
1,281,297 | 401,129 | |||||||
Debt discount and deferred issuance costs |
(68,912 | ) | (11,143 | ) | ||||
|
|
|
|
|||||
1,212,385 | 389,986 | |||||||
Less current portion |
14,789 | 406 | ||||||
|
|
|
|
|||||
Long-term debt, net of current portion |
$ | 1,197,596 | $ | 389,580 | ||||
|
|
|
|
(in thousands) |
||||
Year ending December 31: |
||||
2022 |
$ | 14,789 | ||
2023 |
15,807 | |||
2024 |
13,009 | |||
2025 |
484,376 | |||
2026 |
2,570 | |||
Thereafter |
750,746 | |||
|
|
|||
$ | 1,281,297 | |||
|
|
(dollars in thousands) |
Standalone Fair Value |
Relative Fair Value % |
Allocation on Relative Fair Value Basis of |
Allocation of Proceeds Net of Transaction Costs |
Embedded Derivative |
Allocation of Cost to Stonepeak Prepaid Transaction Costs |
Allocation of Proceeds Net of Transaction Costs |
|||||||||||||||||||||||||
Gross Proceeds |
Transaction Costs |
|||||||||||||||||||||||||||||||
Stonepeak Notes |
$ | 318,082 | 90.8 | % | $ | 318,082 | $ | 13,116 | $ | 304,966 | $ | (7,622 | ) | $ | 6,649 | $ | 303,993 | |||||||||||||||
Stonepeak Shares |
10,430 | 3.0 | % | 10,430 | 430 | 10,000 | — | — | 10,000 | |||||||||||||||||||||||
Stonepeak Warrants |
21,918 | 6.2 | % | 21,918 | 904 | 21,014 | — | — | 21,014 | |||||||||||||||||||||||
Embedded Derivative |
— | — | — | — | — | 7,622 | — | 7,622 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
$ | 350,430 | 100.0 | % | $ | 350,430 | $ | 14,450 | $ | 335,980 | $ | — | $ | 6,649 | $ | 342,629 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Obligations under finance leases |
$ | 22,411 | $ | 15,574 | ||||
Less current portion |
6,460 | 3,265 | ||||||
|
|
|
|
|||||
Non-current obligations under finance leases |
$ | 15,951 | $ | 12,309 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Amortization expense for equipment under finance leases |
$ | 4,184 | $ | 2,927 | ||||
Interest expense on finance lease liabilities |
885 | 637 | ||||||
|
|
|
|
|||||
Finance lease cost |
$ | 5,069 | $ | 3,564 | ||||
|
|
|
|
(in thousands) |
||||
Year ending December 31: |
||||
2022 |
$ | 7,424 | ||
2023 |
5,906 | |||
2024 |
5,414 | |||
2025 |
3,652 | |||
2026 |
1,743 | |||
Thereafter |
587 | |||
|
|
|||
Total minimum lease payments |
24,726 | |||
Less amount of lease payments representing interest |
2,315 | |||
|
|
|||
Present value of future minimum lease payments |
22,411 | |||
Less current portion |
6,460 | |||
|
|
|||
Non-current obligations under finance leases |
$ | 15,951 | ||
|
|
Year Ended December 31, | ||||||||
2021 |
2020 | |||||||
Weighted average remaining lease term – finance leases (years) |
3.9 | 4.9 | ||||||
Weighted average discount rate – finance leases |
5.2 | % | 4.6 | % |
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Operating cash flows from finance leases |
$ | 877 | $ | 637 | ||||
Equipment acquired in exchange for finance lease obligations |
1,070 | 8,817 |
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Obligations under operating leases |
$ | 205,169 | $ | 132,299 | ||||
Less current portion |
20,794 | 9,345 | ||||||
|
|
|
|
|||||
Non-current obligations under operating leases |
$ | 184,375 | $ | 122,954 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Operating lease cost |
$ | 27,027 | $ | 20,625 | ||||
Variable lease cost |
4,515 | 4,109 | ||||||
Short-term lease cost |
671 | 247 | ||||||
|
|
|
|
|||||
Total operating lease cost |
$ | 32,213 | $ | 24,981 | ||||
|
|
|
|
(in thousands) |
||||
Year ending December 31: |
||||
2022 |
$ | 34,990 | ||
2023 |
33,294 | |||
2024 |
30,385 | |||
2025 |
26,430 | |||
2026 |
22,922 | |||
Thereafter |
175,681 | |||
|
|
|||
Total minimum lease payments |
323,702 | |||
Less amount of lease payments representing interest |
118,533 | |||
|
|
|||
Present value of future minimum lease payments |
205,169 | |||
Less current portion |
20,794 | |||
|
|
|||
Non-current obligations under operating leases |
$ | 184,375 | ||
|
|
Year Ended December 31, | ||||||||
2021 |
2020 | |||||||
Weighted average remaining lease term – operating leases (years) |
11.4 | 12.7 | ||||||
Weighted average discount rate – operating leases |
7.7 | % | 7.4 | % |
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Operating cash flows from operating leases |
$ | 25,245 | $ | 17,672 | ||||
Right-of-use |
3,769 | 10,818 |
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Accrued compensation and related expenses |
$ | 26,486 | $ | 3,831 | ||||
Accrued interest expense |
16,840 | 4,588 | ||||||
MAAPP funds (Note 24) |
2,398 | 3,085 | ||||||
Earn-out liability (Note 12) |
— | 4,689 | ||||||
Other |
42,089 | 6,578 | ||||||
|
|
|
|
|||||
Total |
$ | 87,813 | $ | 22,771 | ||||
|
|
|
|
Fair Value as of December 31, 2021 |
Fair Value as of December 31, 2020 |
|||||||||||||||||||||||||||||||
(in thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
Total |
Level 1 |
Level 2 |
Level 3 |
||||||||||||||||||||||||
Current and long-term liabilities: |
||||||||||||||||||||||||||||||||
Derivative in subordinated notes |
$ | — | $ | — | $ | 7,522 | $ | 7,522 | $ | — | $ | — | $ | — | $ | — | | |||||||||||||||
Interest rate contracts |
$ | — | $ | 53 | $ | — | $ | 53 | $ | — | $ | — | $ | — | $ | — | |
(in thousands) |
||||
Balance, December 31, 2020 |
$ | — | ||
Fair value at time of Alliance Acquisition |
7,622 | |||
Change in fair value |
(100 | ) | ||
|
|
|||
Balance, December 31, 2021 |
$ | 7,522 | ||
|
|
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
2028 Senior Notes |
$ | 345,938 | $ | — | ||||
2025 Senior Notes |
446,500 | 424,016 | ||||||
Subordinated Notes |
323,620 | — | ||||||
Equipment Debt |
56,879 | 1,122 | ||||||
|
|
|
|
|||||
Total |
$ | 1,172,937 | $ | 425,138 | ||||
|
|
|
|
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Financial assets measured at amortized cost: |
||||||||
Cash and cash equivalents |
$ | 48,419 | $ | 44,396 | ||||
Accounts receivable |
121,525 | 62,259 | ||||||
|
|
|
|
|||||
$ | 169,944 | $ | 106,655 | |||||
|
|
|
|
|||||
Financial liabilities measured at amortized cost: |
||||||||
Accounts payable |
$ | 34,326 | $ | 16,213 | ||||
Current portion of long-term debt |
14,789 | 406 | ||||||
Current portion of leases |
27,254 | 12,610 | ||||||
Non-current portion of long-term debt |
1,197,596 | 389,580 | ||||||
Non-current portion of leases |
200,326 | 135,263 | ||||||
Other accrued liabilities |
87,813 | 22,771 | ||||||
|
|
|
|
|||||
$ | 1,562,104 | $ | 576,843 | |||||
|
|
|
|
|||||
Financial liabilities measured at fair value through earnings: |
||||||||
Derivative in subordinated notes |
$ | 7,522 | $ | — | ||||
|
|
|
|
|||||
Financial liabilities measured at fair value through other comprehensive income: |
||||||||
Interest rate contracts |
$ | 53 | $ | — | ||||
|
|
|
|
Number of RSUs |
Weighted- Average Grant Date Fair Value |
Aggregate Fair Value (in thousands) |
||||||||||
Outstanding and unvested at December 31, 2019 |
337,500 | $ | 3.89 | |||||||||
Vested |
(337,500 | ) | 3.89 | $ | 1,313 | |||||||
|
|
|
|
|
|
|||||||
Outstanding and unvested at December 31, 2020 |
— | — | ||||||||||
Granted |
2,029,032 | 2.41 | ||||||||||
|
|
|
|
|
|
|||||||
Outstanding and unvested at December 31, 2021 |
2,029,032 | $ | 2.41 | $ | 4,890 | |||||||
|
|
|
|
|
|
Number of Options |
Weighted- Average Exercise price |
Weighted- Average Remaining Contractual Term (Years) |
Aggregate Intrinsic Value (in thousands) |
|||||||||||||
Outstanding at December 31, 2019 |
5,778,120 | $ | 2.47 | |||||||||||||
Cancelled |
(18,000 | ) | 3.74 | |||||||||||||
|
|
|
|
|||||||||||||
Outstanding at December 31, 2020 |
5,760,120 | 2.47 | ||||||||||||||
Granted |
70,000 | 3.58 | ||||||||||||||
Exercised |
(150,000 | ) | 0.50 | $ | 413 | |||||||||||
|
|
|
|
|
|
|||||||||||
Outstanding at December 31, 2021 |
5,680,120 | $ | 2.54 | 4.4 | $ | 2,344 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2021 |
5,060,719 | $ | 2.44 | 4.2 | $ | 2,344 | ||||||||||
|
|
|
|
|
|
|
|
Fair value |
$ | 1.39 | ||
Expected volatility |
35.5 | % | ||
Risk-free interest rate |
1.2 | % | ||
Expected life (years) |
7.0 | |||
Dividend yield |
— |
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Patient fee payors: |
||||||||
Commercial |
$ | 226,843 | $ | 193,917 | ||||
Medicare |
51,238 | 27,874 | ||||||
Medicaid |
8,002 | 7,700 | ||||||
Other patient revenue |
11,499 | 8,833 | ||||||
|
|
|
|
|||||
297,582 | 238,324 | |||||||
Hospitals and healthcare providers |
118,491 | — | ||||||
Other revenues |
5,006 | 7,302 | ||||||
|
|
|
|
|||||
$ | 421,079 | $ | 245,626 | |||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Employee compensation |
$ | 164,053 | $ | 84,038 | ||||
Third-party services and professional fees |
63,301 | 30,183 | ||||||
Reading fees |
42,842 | 37,818 | ||||||
Rent and utilities |
37,158 | 30,203 | ||||||
Administrative |
24,660 | 12,231 | ||||||
Medical supplies and other |
27,721 | 11,162 | ||||||
|
|
|
|
|||||
$ | 359,735 | $ | 205,635 | |||||
|
|
|
|
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Gain on revaluation of earn-out liability (Note 12) |
$ | — | $ | (5,457 | ) | |||
Loss on disposal of property and equipment, net |
748 | 1,327 | ||||||
Other gains |
(165 | ) | — | |||||
$ | 583 | $ | (4,130 | ) | ||||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Loss on extinguishment of debt (Note 8) |
$ | — | $ | 18,279 | ||||
Loss on settlement of interest rate cap derivative (Note 8) |
— | 4,162 | ||||||
Gain on conversion of debt to equity investment (Note 20) |
(3,360 | ) | — | |||||
Earnings from equity method investments |
(291 | ) | — | |||||
Other gains |
(339 | ) | (54 | ) | ||||
$ | (3,990 | ) | $ | 22,387 | ||||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Current: |
||||||||
Federal |
$ |
— |
$ |
— |
||||
State |
41 |
(138 |
) | |||||
Total current |
41 |
(138 |
) | |||||
Deferred: |
||||||||
Federal |
(25,362 |
) |
700 |
|||||
State |
(5,070 |
) |
— |
|||||
Total deferred |
(30,432 |
) |
700 |
|||||
Total income tax expense (benefit) |
$ |
(30,391 |
) |
$ |
562 |
|||
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Deferred tax assets: |
||||||||
Net operating losses |
$ |
54,050 |
$ |
16,559 |
||||
Lease-related liabilities |
45,367 |
31,615 |
||||||
Accruals not currently deductible |
27,538 |
13,332 |
||||||
Interest expense limitation |
25,123 |
2,025 |
||||||
Othe r |
11,760 |
6,192 |
||||||
Valuation allowanc e |
(2,398 |
) |
(16,852 |
) | ||||
Total deferred tax asset s |
161,440 |
52,871 |
||||||
Deferred tax liabilities : |
||||||||
Intangible assets |
(50,213 |
) |
(441 |
) | ||||
Operating lease right-of-use |
(42,642 |
) |
(30,349 |
) | ||||
Property and equipment |
(42,474 |
) |
(11,197 |
) | ||||
Basis difference in joint ventures |
(30,539 |
) |
— |
|||||
Goodwill |
(13,979 |
) |
(10,661 |
) | ||||
Other |
(5,620 |
) | (1,916 |
) | ||||
Total deferred tax liabilities |
(185,467 |
) |
(54,564 |
) | ||||
Net deferred tax liabilities |
$ |
(24,027 |
) |
$ |
(1,693 |
) | ||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Tax benefit at Canadian statutory rate |
$ |
(17,279 |
) |
$ |
(8,902 |
) | ||
Non-deductible items |
4,367 |
40 |
||||||
Stock-based compensation |
973 |
397 |
||||||
Noncontrolling interests |
(2,246 |
) |
(685 |
) | ||||
Valuation allowance |
(15,547 |
) |
8,916 |
|||||
Other |
(659 |
) |
796 |
|||||
Income tax expense (benefit) |
$ |
(30,391 |
) |
$ |
562 |
|||
(in thousands) |
2021 |
|||
Unrecognized tax benefits at January 1 |
$ |
— |
||
Increases for positions taken in current year |
112 |
|||
Decreases for positions taken in a prior year |
(7 |
) | ||
Decreases for lapses in the applicable statute of limitations |
(25 |
) | ||
Unrecognized tax benefits at December 31 |
$ |
80 |
||
Year ended December 31, |
||||||||
(in thousands, except share and per share amounts) |
2021 |
2020 |
||||||
Net loss attributable to common shareholders |
$ | (43,291 | ) | $ | (36,741 | ) | ||
Weighted average common shares outstanding: |
||||||||
Basic and diluted |
76,836,032 | 70,101,618 | ||||||
Net loss per share attributable to common shareholders: |
||||||||
Basic and diluted |
$ | (0.56 | ) | $ | (0.52 | ) | ||
Employee stock options, warrants and restricted stock units excluded from the computation of diluted per share amounts as their effect would be antidilutive |
2,215,163 | 1,664,231 | ||||||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Radiology |
$ | 374,402 | $ | 245,626 | ||||
Oncology |
46,677 | — | ||||||
$ | 421,079 | $ | 245,626 | |||||
(in thousands) |
Year Ended December 31, 2021 |
|||
Adjusted EBITDA: |
||||
Radiology |
$ | 64,992 | ||
Oncology |
15,466 | |||
Corporate |
(13,555 | ) | ||
$ | 66,903 | |||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Net loss |
$ | (34,814 | ) | $ | (34,156 | ) | ||
Interest expense |
62,575 | 32,781 | ||||||
Income tax expense (benefit) |
(30,391 | ) | 562 | |||||
Depreciation and amortization |
44,895 | 17,060 | ||||||
EBITDA |
42,265 | 16,247 | ||||||
Adjustments: |
||||||||
Stock-based compensation |
2,792 | 2,084 | ||||||
Acquisition-related costs |
20,233 | 1,079 | ||||||
Settlement and related costs (recoveries) |
(539 | ) | 2,324 | |||||
Gain on revaluation of earn-out liability |
— | (5,457 | ) | |||||
Loss on extinguishment of debt |
— | 18,279 | ||||||
Loss on settlement of interest rate cap derivative |
— | 4,162 | ||||||
Gain on conversion of debt to equity investment |
(3,360 | ) | — | |||||
Severance, restructuring and other charges |
3,368 | — | ||||||
Other losses, net |
342 | 407 | ||||||
Deferred rent expense |
1,802 | 2,953 | ||||||
Adjusted EBITDA |
$ | 66,903 | $ | 42,078 | ||||
December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Identifiable assets: |
||||||||
Radiology |
$ | 1,451,905 | $ | 662,191 | ||||
Oncology |
440,416 | — | ||||||
Corporate |
26,505 | 2,861 | ||||||
Total |
$ | 1,918,826 | $ | 665,052 | ||||
Year Ended December 31, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Capital expenditures: |
||||||||
Radiology |
$ | 12,478 | $ | 5,344 | ||||
Oncology |
5,117 | — | ||||||
Corporate |
272 | — | ||||||
Total |
$ | 17,867 | $ | 5,344 | ||||
(a) | The following documents are filed as part of this Annual Report on Form 10-K: |
1. |
All Financial statements |
2. |
Financial statement schedules |
3. |
Exhibits |
101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation | |||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Labels | |||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation | |||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition | |||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
AKUMIN INC. | ||
By: | /s/ Riadh Zine | |
Riadh Zine Chairman, Co-Chief Executive Officer and Director |
By: | /s/ Rhonda Longmore-Grund | |
Rhonda Longmore-Grund Co-Chief Executive Officer, President and Director |
Signature |
Title |
Date | ||
/s/ Riadh Zine Riadh Zine |
Chairman, Co-Chief Executive Officer and Director(Principal Executive Officer) |
March 16, 2022 | ||
/s/ Rhonda Longmore-Grund Rhonda Longmore-Grund |
Co-Chief Executive Officer, President and Director(Principal Executive Officer) |
March 16, 2022 | ||
/s/ William Larkin William Larkin |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
March 16, 2022 | ||
/s/ Stan Dunford Stan Dunford |
Chairperson Emeritus of the Board of Directors and Director | March 16, 2022 | ||
/s/ Murray Lee Murray Lee |
Director | March 16, 2022 |
/s/ James Webb |
Director | March 16, 2022 | ||
James Webb | ||||
/s/ Thomas Davies Thomas Davies |
Director | March 16, 2022 | ||
/s/ Haichen Huang |
Director | March 16, 2022 | ||
Haichen Huang | ||||
/s/ Paul Viviano Paul Viviano |
Director | March 16, 2022 | ||
/s/ James Wyper James Wyper |
Director | March 16, 2022 |
Exhibit 4.1
DESCRIPTION OF REGISTRANTS SECURITIES REGISTERED UNDER SECTION 12
OF THE SECURITIES EXCHANGE ACT OF 1934
The following is a description of Akumin Inc.s (the Company, we or us) shares of common stock, no par value per share (Common Shares) registered under Section 12 of the Securities Exchange Act of 1934, as amended. This description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Companys articles of amalgamation and bylaws, as amended, each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit is a part. We encourage you to read the Companys articles of amalgamation and bylaws and the applicable provisions of the Ontario Business Corporations Act (the OBCA), for additional information.
Authorized Share Capital
Our authorized share capital structure consists of an unlimited number of shares of the following classes (all classes are without nominal or par value): common shares and preferred shares. No preferred shares have been issued to date.
Voting Rights
Each holder of our Common Shares is entitled to one vote for each share on all matters submitted to a vote of our stockholders, including the election of our directors. The rights attached to the Common Shares do not provide for cumulative voting rights or preemptive rights. Accordingly, the holders of a majority of our outstanding Common Shares entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose. Subject to the Companys articles of amalgamation and bylaws, at all meetings of the Board, every question shall be decided by a majority of the votes cast.
Dividend Rights
The holders of Common Shares are entitled to receive dividends if, as and when declared by our Board of Directors (the Board), subject to the rights of the holders of any other class of our shares entitled to receive dividends in priority to the Common Shares. Certain of the instruments governing our existing indebtedness restrict our rights to pay dividends to the holders of the Common Shares.
Liquidation, Dissolution or Winding Up
If we liquidate, dissolve or wind up, the holders of our Common Shares are entitled to share ratably in all assets legally available for distribution to shareholders after payment of any liquidation or distribution preference payable with respect to any other then outstanding classes of stock entitled to such preference.
Rights and Preferences
Our Common Shares have no preemptive, conversion or subscription rights. There are no redemption or sinking fund provisions applicable to our Common Shares.
Board Classification
Members of our Board are elected on an annual basis and all directors will hold office for a term expiring at the close of the next annual meeting or until their respective successors are elected or appointed. Our Board is not classified.
Anti-Takeover Provisions of the Articles, By-Laws and the OBCA
Provisions of the Articles, By-Laws and the OBCA may delay or discourage transactions involving an actual or potential change in control of the Company or change in its management, including transactions in which shareholders might otherwise receive a premium for their Common Shares, or transactions that its shareholders might otherwise deem to be in their best interests. Among other things, such provisions include the following:
| In our by-laws, we have has included certain advance notice provisions with respect to the election of its directors (the Advance Notice Provisions). Only persons who are nominated by shareholders in accordance with the Advance Notice Provisions will be eligible for election as directors at any annual meeting of shareholders, or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors. Under the Advance Notice Provisions, a shareholder wishing to nominate a director would be required to provide us notice, in the prescribed form, within the prescribed time period. |
| While the OBCA does not contain specific anti-takeover provisions with respect to business combinations, rules and policies of certain Canadian securities regulatory authorities contain requirements in connection with, among other things, related party transactions and business combinations, including, among other things, any transaction by which an issuer directly or indirectly engages in the following with a related party: acquires, sells, leases or transfers an asset, acquires the related party, acquires or issues treasury securities, amends the terms of a security if the security is owned by the related party or assumes or becomes subject to a liability or takes certain other actions with respect to debt. |
| Under our articles of amalgamation, preferred shares may be issued in one or more series. Accordingly, our board of directors is authorized, without shareholder approval, but subject to the provisions of the OBCA, to determine the maximum number of shares of each series, create an identifying name for each series and attach such special rights or restrictions, including dividend, liquidation and voting rights, as our board of directors may determine, and such special rights or restrictions, including dividend, liquidation and voting rights, may be superior to the common voting shares. The issuance of preferred shares, or the issuance of rights to purchase preferred shares, could make it more difficult for a third-party to acquire a majority of our outstanding shares and thereby have the effect of delaying, deferring or preventing a change of control of us or an unsolicited acquisition proposal or of making the removal of management more difficult. |
| The OBCA does not prohibit a corporation from adopting a shareholder rights plan, or poison pill, which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares. However, pursuant to applicable Canadian securities laws, Canadian securities regulators have frequently ceased traded shareholder rights plans in the face of a take-over bid. |
Warrants
As of December 31, 20121, warrants to purchase an aggregate of 17,114,093 Common Shares with an exercise price of $2.98 per share and an expiry term of ten years from date of issuance were outstanding. The warrants contain standard antidilution provisions that may change the number of shares or exercise price per warrant share. For more information, see Note 8,Long-Term Debt to the Notes to the Consolidated Financial Statements.
Registration Rights
Certain holders of our Common Shares are entitled to certain rights with respect to registration of such shares under the Securities Act pursuant to the terms of a registration rights agreement. For more information, see Exhibit 10.8, Registration Rights Agreement, dated as of September 1, 2021.
Listing
The Common Shares are traded on the Nasdaq Stock Market and the Toronto Stock Exchange under the symbol AKU.
Transfer Agent and Registrar
The registrar and transfer agent for our common shares is TSX Trust Company, located at 301 - 100 Adelaide Street West, Toronto, Ontario M5H 4H1. Continental Stock Transfer & Trust is co-transfer agent for our common shares, located at 1 State Street, 30th Floor, New York, New York, 1004.
Foreign Ownership of Our Common Shares
There is no limitation imposed by the articles of amalgamation on the right of a non-Canadian resident to hold or vote our Common Shares.
Ownership and Exchange Controls
Competition Act
Limitations on the ability to acquire and hold common shares may be imposed by the Competition Act (Canada). This legislation establishes a pre-merger notification regime for certain types of merger transactions that exceed certain statutory shareholding and financial thresholds. Mergers that are subject to notification cannot be closed until the required materials are filed and the applicable statutory waiting period has expired or been waived by the Commissioner of Competition (the Commissioner). Further, the Competition Act (Canada) permits the Commissioner to review any acquisition of control over or of a significant interest in our company, whether or not it is subject to mandatory notification. This legislation grants the Commissioner jurisdiction, for up to one year, to challenge this type of acquisition before the Canadian Competition Tribunal if it would, or would be likely to, substantially prevent or lessen competition in any market in Canada.
Investment Canada Act
The Investment Canada Act requires notification and, in certain cases, advance review and approval by the Government of Canada of an investment to establish a new Canadian business by a non-Canadian or of the acquisition by a non-Canadian of control of a Canadian business, all as defined in the Investment Canada Act. Generally, the threshold for advance review and approval will be higher in monetary terms for a member of the World Trade Organization. The Investment Canada Act generally prohibits the implementation of such a reviewable transaction unless, after review, the relevant minister is satisfied that the investment is likely to be of net benefit to Canada.
The Investment Canada Act contains various rules to determine if there has been an acquisition of control. For example, for purposes of determining whether an investor has acquired control of a corporation by acquiring shares, the following general rules apply, subject to certain exceptions. The acquisition of a majority of the voting shares of a corporation is deemed to be acquisition of control of that corporation. The acquisition of less than a majority but one-third or more of the voting shares of a corporation is presumed to be an acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquiror through the ownership of voting shares. The acquisition of less than one-third of the voting shares of a corporation is deemed not to be acquisition of control of that corporation.
In addition, under the Investment Canada Act, national security review on a discretionary basis may also be undertaken by the federal government in respect of a much broader range of investments by a non-Canadian to acquire, in whole or in part, or to establish an entity carrying on all or any part of its operations in Canada, with the relevant test being whether such an investment by a non-Canadian could be injurious to national security. The Minister of Industry has broad discretion to determine whether an investor is a non-Canadian and therefore may be subject to national security review. Review on national security grounds is at the discretion of the federal government and may occur on a pre- or post-closing basis.
Any of these provisions may discourage a potential acquirer from proposing or completing a transaction that may have otherwise presented a premium to our shareholders. We cannot predict whether investors will find us and our common shares less attractive because we are governed by foreign laws.
Certain Canadian Federal Income Tax Considerations
The following summary describes, as of the date hereof, the material Canadian federal income tax considerations generally applicable to a purchaser who acquires, as a beneficial owner, Common Shares and who, at all relevant times, for the purposes of the application of the Income Tax Act (Canada) and the Income Tax Regulations
(collectively, the Canadian Tax Act), (1) is not, and is not deemed to be, resident in Canada for purposes of the Canadian Tax Act and any applicable income tax treaty or convention; (2) deals at arms length with us and each selling shareholder; (3) is not affiliated with us or any selling shareholder; (4) does not use or hold, and is not deemed to use or hold, common shares in a business or part of a business carried on in Canada; and (5) holds the common shares as capital property (a Non-Canadian Holder). This summary does not apply to a Non-Canadian Holder that is an insurer carrying on an insurance business in Canada and elsewhere or an authorized foreign bank, as that term is defined in the Canadian Tax Act. Such Non-Canadian Holders should consult their tax advisors for advice having regards to their particular circumstances.
This summary is based on the current provisions of the Canadian Tax Act, and an understanding of the current administrative policies of the Canada Revenue Agency published in writing prior to the date hereof. It takes into account all specific proposals to amend the Canadian Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the Proposed Amendments) and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative policy or assessing practice whether by legislative, regulatory, administrative or judicial action nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ from those discussed herein.
This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any particular shareholder, and no representations with respect to the income tax consequences to any particular shareholder are made. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, you should consult your own tax advisor with respect to your particular circumstances.
Generally, for purposes of the Canadian Tax Act, all amounts relating to the acquisition, holding or disposition of the common shares must be converted into Canadian dollars based on the exchange rates as determined in accordance with the Canadian Tax Act. The amount of any dividends, capital gains or capital losses realized by a Non-Canadian Holder may be affected by fluctuations in the Canadian exchange rate.
Dividends
Dividends paid or credited on the common shares or deemed to be paid or credited on the common shares to a Non-Canadian Holder will be subject to Canadian withholding tax at the rate of 25%, subject to any reduction in the rate of withholding to which the Non-Canadian Holder is entitled under any applicable income tax treaty or convention between Canada and the country in which the Non-Canadian Holder is resident. For example, under the Canada-United States Tax Convention (1980), as amended, where dividends on the common shares are considered to be paid to a Non-Canadian Holder that is a beneficial owner of the dividends and is a U.S. resident for the purposes of, and is entitled to benefits of, the Canada-U.S. Tax Treaty, the applicable rate of Canadian withholding tax is generally reduced to 15%. We will be required to withhold the applicable withholding tax from any dividend and remit it to the Canadian government for the Non-Canadian Holders account.
Dispositions
A Non-Canadian Holder will not be subject to tax under the Canadian Tax Act on any capital gain realized on a disposition or deemed disposition of a common share, unless such share is taxable Canadian property to the Non-Canadian Holder for purposes of the Canadian Tax Act at the time of disposition and the Non-Canadian Holder is not entitled to relief under an applicable income tax treaty or convention between Canada and the country in which the Non-Canadian Holder is resident.
Generally, the common shares will not constitute taxable Canadian property to a Non-Canadian Holder at a particular time provided that the common shares are listed at that time on a designated stock exchange (as defined in the Canadian Tax Act), which includes the Nasdaq, unless at any particular time during the 60-month period that ends at that time.
| at least 25% of the issued shares of any class or series of our capital stock was owned by or belonged to one or any combination of (a) the Non-Canadian Holder, (b) persons with whom the Non-Canadian Holder does not deal at arms length, and (c) partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships, and |
| more than 50% of the fair market value of the common shares was derived, directly or indirectly, from one or any combination of: (i) real or immoveable property situated in Canada, (ii) Canadian resource properties (as that term is defined in the Canadian Tax Act), (iii) timber resource properties (as that term is defined in the Canadian Tax Act) and (iv) options in respect of, or interests in, or for civil law rights in, property in any of the foregoing whether or not the property exists. |
Notwithstanding the foregoing, in certain circumstances, common shares could be deemed to be taxable Canadian property. Non-Canadian Holders whose common shares may constitute taxable Canadian property should consult their own tax advisors.
Exhibit 21.1
SUBSIDIARIES
Name of Subsidiary |
Jurisdiction of Organization | |
Advanced Diagnostic Group, LLC | FL | |
Advanced Diagnostic Resources, LLC | FL | |
Affiliated PET Systems, LLC | FL | |
AFO Imaging, Inc. | FL | |
Akumin Corp. | DE | |
Akumin FL, LLC | FL | |
Akumin Florida Holdings, LLC | FL | |
Akumin Health Illinois, LLC | IL | |
Akumin Holdings Corp. | DE | |
Akumin Imaging Texas, LLC | TX | |
Alliance Healthcare Services, Inc. | DE | |
Alliance Imaging NC, LLC | DE | |
Alliance Oncology of Alabama, LLC | DE | |
Alliance Oncology, LLC | DE | |
Alliance Radiosurgery, LLC | DE | |
Alliance-HNI Leasing Co., LLC | MI | |
Alliance-HNI, L.L.C. | MI | |
Broad River Oncology, LLC | DE | |
CAMC Cancer Centers, LLC | DE | |
Central Illinois Imaging, LLC | IL | |
Charleston Area Radiation Therapy Centers, LLC | DE | |
Columbus CyberKnife, LLC | DE | |
CyberKnife Center of Philadelphia, LLC | DE | |
Decatur Health Imaging, LLC | AL | |
Delaware Open MRI Radiology Associates, LLC | DE | |
Diagnostic Health Center of Anchorage, LLC | DE | |
Doylestown PET Associates, LLC | PA | |
East Bay Radiation Oncology, LLC | RI | |
Elite Imaging, LLC | FL | |
Elite Radiology of Georgia, LLC | GA | |
Greater Boston MRI LP | MA | |
Greater Boston MRI Services, LLC | MA | |
Greater Springfield MRI, LP | MA | |
Illinois CyberKnife, LLC | DE | |
Imaging Center of West Palm Beach LLC | FL | |
InMed Diagnostic Services of MA, LLC | MA | |
Jeanes Radiology Associates, LLC | PA | |
LCM Imaging, Inc. | FL | |
Lebanon Diagnostic Imaging, LLC | PA | |
Los Alamitos Imaging Center LLC | CA | |
Medical Diagnostics, LLC | DE | |
Medical Outsourcing Services, LLC | DE | |
MetroWest Imaging Center, LLC | MA | |
Mid-American Imaging Inc. | OH | |
Mobile Imaging Partners of North Carolina, LLC | NC | |
Monroe PET, LLC | DE | |
Montvale PET/CT, LLC | DE | |
MSA Management, LLC | DE | |
Mt. Baker PETCT, LLC | DE | |
MUSC Health Cancer Care Network, LLC | DE | |
MUSC Health Cancer Care Organization, LLC | DE | |
NEHE/WSIC II, LLC | ME |
Name of Subsidiary |
Jurisdiction of Organization | |
NEHE-MRI, LLC | ME | |
Neospine Blocker Corp | GA | |
New Brunswick CK Leasing, LLC | NJ | |
New England Health Enterprises Business Trust | MA | |
New England Health Enterprises, Inc. | MA | |
New England Health ImagingHoulton, LLC | MA | |
New England Molecular Imaging LLC | NH | |
Newburyport, MA Radiation Center, LLC | DE | |
North Alabama Cancer Care Organization, LLC | AL | |
Oklahoma CyberKnife, LLC | DE | |
Pacific Cancer Institute, LLC | DE | |
PCI Maui Holdings, Inc. | DE | |
PET Scans of America Corp. | DE | |
Phoenix Imaging, LLC | WY | |
PMI Partners, LLC | TX | |
Preferred Imaging of Amarillo, LLC | TX | |
Preferred Imaging of Austin, LLC | TX | |
Preferred Imaging of Corinth, LLC | TX | |
Preferred Imaging of Denton, LLC | TX | |
Preferred Imaging of Fort Worth, LLC | TX | |
Preferred Imaging of Frisco, LLC | TX | |
Preferred Imaging of Garland, LLC | TX | |
Preferred Imaging of Grapevine/Colleyville, LLC | TX | |
Preferred Imaging of Irving, LLC | TX | |
Preferred Imaging of McKinney, LLC | TX | |
Preferred Imaging of Mesquite, LLC | TX | |
Preferred Imaging of Plano, LLC | TX | |
Preferred Imaging on Plano Parkway, LLC | TX | |
Preferred Open MRI, LLC | TX | |
Premier Health Services, Inc. | IL | |
Premier Open MRI, Inc. | KS | |
RAMIC Des Moines, LLC | DE | |
REA Management, LLC | DE | |
Red Rocks Radiation Oncology Management, LLC | CO | |
Reno CyberKnife, LLC | DE | |
Reno Management Services, LLC | DE | |
Rhode Island PET Services, LLC | RI | |
Rittenhouse Imaging Center, LLC | PA | |
Rose Radiology Centers, LLC | FL | |
Round Rock Imaging, LLC | TX | |
San Francisco CyberKnife, LLC | DE | |
Shared P.E.T. Imaging, LLC | OH | |
SMT Health Services LLC | DE | |
Southeastern Massachusetts PET/CT Imaging Center, LLC | DE | |
St. Louis CyberKnife, LLC | DE | |
SyncMed, LLC | TX | |
Thaihot Investment Company US LTD | DE | |
Three Rivers Holding, LLC | DE | |
TIC Acquisition Holdings, LLC | FL | |
Tower Health CyberKnife, LLC | DE | |
Tri-City PETCT, LLC | CA | |
U.S. Radiosurgery of Austin, LLC | DE | |
U.S. Radiosurgery of Chicago, LLC | DE | |
U.S. Radiosurgery of Columbus, LLC | DE | |
U.S. Radiosurgery of Illinois, LLC | DE |
Name of Subsidiary |
Jurisdiction of Organization | |
U.S. Radiosurgery of Philadelphia, LLC | DE | |
U.S. Radiosurgery of Reno, LLC | DE | |
U.S. Radiosurgery of Tulsa, LLC | DE | |
U.S. Radiosurgery Rush-Chicago, LLC | DE | |
U.S. Radiosurgery, LLC | DE | |
UniMed Mobile MRI, LLC | MI | |
United MRI Services, LLC | DE | |
USR Holdings, LLC | DE | |
Vista PEM Providers, LLC | TX | |
Western Massachusetts Magnetic Resonance Services, LLC | MA | |
Western Massachusetts PET/CT Imaging Center LLC | DE | |
Wilkes-Barre Imaging, L.L.C. | PA | |
Woodland Diagnostic Imaging, LLC | OH |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8 File No. 333-261695) pertaining to the Akumin Inc. Amended and Restated Stock Option Plan and the Akumin Inc. Amended and Restated Restricted Share Unit Plan of our report dated March 16, 2022, with respect to the consolidated financial statements of Akumin Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2021.
/s/ Ernst & Young LLP |
Orlando, Florida
March 16, 2022
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Riadh Zine and Rhonda Longmore-Grund each certify that:
1. | I have reviewed this annual report on Form 10-K of Akumin Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Akumin Inc. | ||||||
Date: March 16, 2022 | By: | /s/ Riadh Zine | ||||
Riadh Zine | ||||||
Co-Chief Executive Officer | ||||||
By: | /s/ Rhonda Longmore-Grund | |||||
Rhonda Longmore-Grund | ||||||
Co-Chief Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William Edward Larkin, certify that:
1. | I have reviewed this annual report on Form 10-K of Akumin Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Akumin Inc. | ||||||
Date: March 16, 2022 | By: | /s/ William Edward Larkin | ||||
William Edward Larkin | ||||||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350 of chapter 63 of title 18 of the United States Code), the undersigned officers of Akumin Inc. (the Company), hereby certify, to such officers knowledge, that:
This annual report on Form 10-K for the fiscal year ended December 31, 2021 (the Report) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 16, 2022 | By: | /s/ Riadh Zine | ||||
Riadh Zine | ||||||
Co-Chief Executive Officer | ||||||
By: | /s/ Rhonda Longmore-Grund | |||||
Rhonda Longmore-Grund | ||||||
Co-Chief Executive Officer |
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350 of chapter 63 of title 18 of the United States Code), the undersigned officer of Akumin Inc. (the Company), hereby certifies, to such officers knowledge, that:
This annual report on Form 10-K for the fiscal year ended December 31, 2021 (the Report) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 16, 2022 | By: | /s/ William Edward Larkin | ||||
William Edward Larkin | ||||||
Chief Financial Officer |